Mar 3, 2008 - Issue #100
Mixed Bag, for sure!
It's amazing. If you only look at the daily charts, it looks as though everything just
fell apart. However, on the weekly charts, the Dow components are all over the place.
Is it any wonder then that investors are confused when all they look at is the Dow-Jones
Industrial Average as their measure of the market? Truely, it's as though, purposefully
or not, the average is designed to deceive rather than enlighten (see Inside the Dow, for
How to deal with the situation? In Trade like Jesse Livermore, we are told to
look for pivot points (bars with long tails, bullish or bearish) to initiate positions.
Oliver Velez, in Swing Trading, we are told the same thing. In fact, Oliver Velez
says some traders make their living following this one rule alone.
For example, AA, (weekly chart) week of 7/19/07 high, 8/16/07 low, 11/02/07 high,
01/24/08 low. 02/29/08 high???
Dow score card for the week ending 2/29/08.
DJ-30: 12266.39 -114.63 -0.93%. The Real World (arithmetical) DJ-30: 50.22 -0.47 -0.93%.
UP: 9, Down: 21.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 5 (-1) 17%:
AA, CAT, CVX, HPQ, IBM.
Consolidating (Generally Lower Highs/Higher Lows) 15 (-2) 50%:
AIG, BA, DD, DIS, INTC, JNJ, KO, MCD, MMM, PFE, PG, +*T, +*VZ, WMT, -*XOM.
Declining (Generally Lower Highs/Lower Lows) 10 (+3) 33%:
-*AXP, BAC, C, GE, GM, -*HD, -*JPM, -*MRK, MSFT, -*UTX.
+/- 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!