Sep 1, 2008 - Issue #126
Meaningless, in that most of the traders, after the close of business last
Wednesday, went home for the Labor Day weekend and weren't coming back till Tuesday.
CNBC, of course, had to be there along with various exchange personnel but you can
take it as an article of faith that if you didn't have to be there you weren't there.
Attempting to trade under those conditions is similar to trading after hours when the
spreads are wider, markets lack depth, and it's difficult to get things done favorably.
Note that 26 Dow components are in consolidation, 2 rising, and 2 declining. Pretty
If you haven't learned by now not to initiate new positions in the days leading up to
national holidays, you should probably take up another line of work.
The real market impact of events is about to be felt, starting tomorrow morning.
One of most important things to be aware of is when a particular market is reversing
its major trend.
A valuable technique, in this regard, is tracking the highest high and the lowest low
of the last three months. Note how close MRK and PFE (on the monthly charts) are to
signaling a major change of trend.
During the next two weeks, the following Dow components will report earnings. Keep a
sharp eye for 'surprises'. You might be able to catch a nice swing in the week or two
leading up to 'Earnings Day':
Dow score card for the week ending 8/29/08.
DJ-30: 11543.55 -84.51 -0.73%. The Real World (arithmetical) DJ-30: 47.26 -0.35 -0.73%.
UP: 11, Down: 19.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 2 (-1) 7%:
Consolidating (Generally Lower Highs/Higher Lows) 26 (+4) 87%:
AA, +*AIG, BA, +*BAC, C, CAT, -*CVX, DD, DIS, GE, +*GM, HD, -*HPQ, INTC, JNJ, +*JPM,
MCD, MMM, MRK, MSFT, PFE, -*PG, UTX, VZ, WMT, XOM.
Declining (Generally Lower Highs/Lower Lows) 2 (-3) 7%:
+/- 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!