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May 5, 2008 - Issue #109

Reaction to Fed?

True, the average has risen, leading CNBC personalities to 'root' for the market as usual. You can't blame them. That's their job. Viewers, advertisers, etc., prefer 'optimism'. But then, of course, you must realize that people whose primary source of financial information is their TV is probably not a very sophisticated audience. All of which makes it easier for the 'pros' to win.

Probably, the best use of CNBC is to get a psychological handle on what the viewers are being told (and therefore believing) and comparing that to what is actually happening in the market. When markets are clearly contradicting 'popular opinion', it's time to be a contrarian. Isn't that what a 'serial opportunist' does, after all?

The market, as measured by the Dow 30, still seems to be losing momentum to the upside.

KO, for whatever reason, continues to lose ground. It doesn't look strong, in my judgement, on either daily or weekly charts. My technical analysis (T/A) indicates that a target of 53 by late May is not unreasonable. We will see.

Dow score card for the week ending 5/2/08.

DJ-30: 13058.20 +166.34 +1.29%. The Real World (arithmetical) DJ-30: 53.46 +0.68 +1.29%.

UP: 23, Down: 7.

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

Rising (Generally Higher Highs/Higher Lows) 15 (+5) 50%:

+*AIG, AXP, BA, +*BAC, +*CVX, DIS, GM, +*HD, INTC, JNJ, JPM, MCD, +*T, +*UTX, +*VZ.

Consolidating (Generally Lower Highs/Higher Lows) 13 (-3) 43%:

AA, -*C, CAT, DD, GE, HD, HPQ, IBM, +*MMM, MSFT, +*PFE, +*PG, -*WMT, XOM.

Declining (Generally Lower Highs/Lower Lows) 2 (-2) 7%:

KO, -*MRK.

+/- denotes change of direction.

* denotes change of category.