Dec 6, 2010 - Issue #244
Is This Upsurge for Real?
Is the upsurge for real? It stopped short of establishing a new high. What is it waiting for? Next week???
CNBC, if they're honest, must admit Friday's price action was pathetic. Doug Kass, on CNBC's Fast Money, expects
markets to pull back. If they do, his 'long' book will get longer. He likes financials. Jon 'Dr. J' Najarian
thinks Kass is 'wrong on this one', expecting markets to move substantially higher rather than pulling back.
Therefore, buy now.
There you have it: Two very astute traders with opposite views.
Will the markets explode to the upside if Congress aggrees to extend the Bush tax cuts? Will the markets crash
if they do not?
One thing is certain: The VIX is low, therefore Options should be cheap. If you think the market is going
up, buy calls or go long stocks/long puts. If you think the market is going down, skip buying the stocks. See
how flexible Puts can be?
Countdown till 2012 elections: 100 weeks.
W. D. Gann, a keen market observer, although not an astronomer, nevertheless, was fascinated by the apparent
coincidence of important market 'pivot points' and astronomical dates. Theories exist for estimating time and
price of important market turning points but astronomical occurrences are computed with mathematical certainty.
There is no logical reason why these occurrences should coincide yet, empirically, they have.
The 'Full Moon' and 'New Moon', among others, have been cited. Therefore, one might be well advised to be aware
of their occurrence. Note: The first 5 business days of 2008 concluded on a 'New Moon' and we all know how that
worked out. Coincidence?
12/5 Sunday - New Moon (Observe Friday & Monday market activity).
12/21 Tuesday - Full Moon.
During the next two weeks, the following DJ-30 components report earnings. Keep a sharp eye
out for possible price swings leading up to 'earnings day' (Subject to revision):
Dow score card for the week ending 12/3/10.
DJ-30: 11382.09 +290.09 +2.62%. The Real World (arithmetical) DJ-30: 50.13 +1.33 +2.73%.
UP: 28, Down: 2.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 7 (+6) 23%:
+*AA, +*AXP, CAT, +*DD, +*HD, +*KO, +*UTX.
Consolidating (Generally Lower Highs/Higher Lows) 22 (+4) 73%:
BA, +*BAC, CVX, DIS, +*GE, HPQ, IBM, INTC, +*JNJ, JPM, +*KFT, MCD, +*MMM, MRK, +*MSFT, +*PFE, +*PG, +*T, +*TRV,
VZ, WMT, XOM.
Declining (Generally Lower Highs/Lower Lows) 1 (-10) 3%:
+/- denotes change of direction.
* denotes change of category.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!