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Jun 25, 2007 - Issue #064
Low and Inside!
Dow score card for the week ending 6/22/07.
DJ-30: 13360.26 -279.22 -2.05%. In the Real World: 54.79 -1.14 -2.05%.
UP: 5, Down: 25.
Trends (weekly): This is the subjective part.
Rising 17 (-2) 57%:
AA, AXP, CAT, GE, GM, HD, HON, HPQ, IBM, INTC, JPM, KO, MCD, MMM, UTX, VZ, WMT.
Consolidating 10 (+1) 33%:
AIG, BA, DD, DIS, MO, MRK, MSFT, -*PFE, T, -*XOM.
Declining 3 (+1) 10%:
C, JNJ, -*PG.
+/- denotes change of direction.
* denotes change of category.
Low and Inside!
Notice a gradual deterioration of the internals of the Dow.
Although the daily charts clearly reflected weakness, the weekly chart of the Dow
actually formed an "inside" bar (lower high but higher low).
Inside bars, especially on high volume, usually indicate the changing of tides in
progress. In my judgement, the tides appear to have crested and are in the process of
reversing and on their way out. I could be wrong, of course, but that's the way it
appears to be unfolding so far. Be forewarned!
The big news was the debut of The Blackstone Group (BX). Those who bought at the open
paid a heavy premium (over 24%) above the IPO price of 31 set the night before for the
dubious privilage of getting in on this "hot" deal and by the close of the first day's
trading were down over 9%. Too bad they didn't read my page on Initial Public Offerings
Fortress Investment Group (FIG) started it off back in February and, so far, the "hot"
IPO chasers are down at least 30% on their money in that deal. Refer to my "What are we
going to do Monday morning?" e-zine archives.
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!