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Feb 9, 2009 - Issue #149

Strong Enough?

Strong enough? Perhaps. If you bought Puts, you can now buy stock with impunity because you already have your insurance in place. If not, you can buy Calls for limited risk and unlimited upside potential while able to instantly 'morph' into synthetic Puts by shorting stock if necessary.

CNBC should be asking why is the market showing strength? Is it because the Senate is unable to gather the required 60 votes to pass the biggest spending plan in history? Is the market betting against the proposed legislation? What does the market know that we don't? What is the market up to? By the way, have you noticed Monday is a full moon? How strange.

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?

2/9 Monday - Full Moon.

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):

2/10 GM.

2/12 KO.

2/17 WMT.

2/18 HPQ.

Dow score card for the week ending 2/6/09.

DJ-30: 8280.59 +279.73 +3.50%. The Real World (arithmetical) DJ-30: 34.65 +1.17 +3.49%.

UP: 23, Down: 7.

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

Rising (Generally Higher Highs/Higher Lows) 6 (+5) 20%:

+*CVX, IBM, +*INTC, +*JPM, +*MRK, +*XOM.

Consolidating (Generally Lower Highs/Higher Lows) 17 (-4) 57%:

+*AA, AXP, BA, C, +*CAT, +*DD, HD, HPQ, JNJ, KO, MCD, +*MSFT, +*PFE, T, UTX, VZ, +*WMT.