Feb 11, 2008 - Issue #097

Jury Still Out!

Jury still out! The Jan 22nd low is under assault. Will it hold? Undetermined.

Opinions of guest authorities appearing on CNBC range from 'If we go into a recession, it will be shallow and short lived' to 'We are already in recession and it could be the worst in 25 years'. As you can see, that's a lot of room for argument.

Should we take a side? No. It doesn't matter, in my judgement, which economic forecast is correct. It only matters that we be on the winning side, whichever side that happens to be. Right now, it's too early to tell. Remain flexible. We are 'serial opportunists' after all, are we not? Always calculate the odds of success vs. failure on every trade.

The sub-prime mess has now spread to car loans, credit cards, and who knows what else. The important thing, from a trading point of view, is what effect is it having on the markets and to take positions accordingly. If the news panics sellers, look for reasons to go contrary.

Dow score card for the week ending 2/8/08.

DJ-30: 12182.13 -561.06 -4.40%. The Real World DJ-30: 49.96 -2.29 -4.39%.

UP: 2, Down: 28.

Trends (weekly charts): This is the subjective part.

Rising (Generally Higher Highs/Higher Lows) 1 (-14) 3%:


Consolidating (Generally Lower Highs/Higher Lows) 28 (+14) 94%:

-*AA, AIG, -*AXP, -*BA, -*C, -*CAT, DD, -*GE, -*GM, -*HD, -*HON, HPQ, -*IBM, -*INTC, JNJ, -*JPM, KO, MCD, -*MMM, MO, MRK, PFE, PG, T, -*UTX, VZ, -*WMT, XOM.

Declining (Generally Lower Highs/Lower Lows) 1 (n/c) 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!

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