Feb 23, 2009 - Issue #151

MRK Correction

MRK Correction:

Previously, I identified the MRK 1/22 low of 22.82 as a 'significant' pivot point. As they are want to say on Monday Night Football, 'Upon further review...', even though the stock held above that price for the week, by my definition, the next significant pivot point low on the weekly chart has yet to be put in (probably lower). The Option strategy, although valid (IMO), was predicated upon the 'timing' of a new intermediate (weekly) time frame line of support being established. Nothing transpired that would have 'triggered' an entry signal on that time frame.

Speaking of lower, the 30 stock DJIA took out its November low. The S&P 500 did not (so far) although the S&P 100 (OEX) has. My read has 26 Dow components (87% of the total) in declining trends on the weekly charts. As 'Sully' says: "Brace for impact!" Are you listening, Mr. President?

CNBC's Larry Kudlow (Kudlow Report) on Thursday evening, asked three panelists, "Have we seen the bottom or are we headed lower?". Two of the three said, " their opinion, probably lower." The third, Doctor Bob 'Slam Dunk!' Froelich, (my favorite contrary indicator) stated emphatically, "Absolutely not!" Given that he's been wrong for the last 7,000 points, within the hour, as if on cue, when the Asian markets opened, the route was on.

Heads Up

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?

2/24 Tuesday - New Moon.

During the next two weeks, the following Dow components report earnings. Keep a sharp eye out for possible price swings leading up to 'earnings day' (Subject to revision):

2/22 GM (Sunday???).

2/24 HD.

3/2 (Transportations) OSG.

Dow score card for the week ending 2/20/09.

DJ-30: 7365.67 -484.74 -6.17%. The Real World (arithmetical) DJ-30: 30.83 -2.02 -6.17%.

UP: 1, Down: 29.

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

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


Consolidating (Generally Lower Highs/Higher Lows) 3 (-13) 10%:


Declining (Generally Lower Highs/Lower Lows) 26 (+12) 87%:

AA, -*AXP, BA, -*BAC, -*C, -*CAT, CVX, DD, DIS, -*GE, GM, -*HD, -*HPQ, -*IBM, -*INTC, -*JNJ, -*JPM, KFT, MCD, MMM, PFE, PG, T, UTX, -*VZ, XOM.

+/- 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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