Apr 2, 2012 - Issue #312
SCOTUS vs. Obamacare: Decision expected late June. Dilemma: Investment decisions must be
made now. What to do?
Solution: Do as we always do. Buy attractive stocks. Protect them with Puts.
Result: If the stocks go up, you win. If the stocks go down, you're not locked in. Simple.
Limited downside. Unlimited upside plus dividends.
When in doubt: Write ATM front month calls thereby increasing cash flow (premium collection
mode) thus converting (morphing) the position into a protected collar. It may not always
be the best move but it's never the worst move. Institutional investors do it all the time.
Corporate stock earnings yields still above corporate bond yields thus favoring stocks.
Political situation: Stalemate. Solution: Regime change. Anyone but Obama.
Dow Dogs (10 highest yielding): T, VZ, MRK, PFE, JNJ, GE, PG, DD, KFT, INTC.
Dow Small Dogs (5 lowest priced of the 10 highest yielding): KFT, T, INTC, PFE, GE.
Countdown till 2012 elections: 31 weeks.
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?
4/6 Friday - Full Moon.
4/21 Saturday - New Moon (Beware!) Observe market action Friday & Monday.
During the next two weeks, the following DJ-30 components report earnings. Keep a sharp eye
out for price swings, up or down, (possible trading on 'inside information'?) leading up to
'earnings day' (Subject to revision):
Dow score card for the week ending 3/30/12.
DJ-30: 13212.04 +131.31 +1.00%. The Real World (arithmetical) DJ-30: 58.19 +0.56 +0.98%.
UP: 23, Down: 7.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 13 (+6) 43%:
AXP, CSCO, +*DIS, HD, +*IBM, INTC, +*JNJ, JPM, KO, +*MRK, +*PFE, +*WMT, +*XOM.
Consolidating (Generally Lower Highs/Higher Lows) 15 (-5) 50%:
AA, BA, -*BAC, +*CVX, DD, GE, +*HPQ, KFT, +*MCD, MMM, MSFT, PG, T, TRV, UTX.
Declining (Generally Lower Highs/Lower Lows) 2 (-1) 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!