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Jun 8, 2009 - Issue #166

Upside Surprise!

Upside surprise! The market was happy about something this past week, although on lower volume.

CNBC reported lower than expected job losses. Is that the reason?

Changes in the DJ-30: CSCO replaces GM and TRV replaces C.

Changes in the SP-500: DV replaces GM. One wonders what took so long?

Technically: Is the Dow in the process of putting in an inverted head-and-shoulders formation (very bullish)? Left shoulder and head are already installed.

Speaking of surprises: BA. Big surge in price and volume. News not all that positive, yet the stock shows strength. Technically, BA hasn't had a strong upward line of support since '07. Get out your Fibonacci retracement tool. If BA pulls back to approximately 40, then turns upward from there, it would be the first significant bullish line of support since Feb-Jul '07. Notice the close correlation of TIE (a major supplier of Titanium, very important to aircraft construction, as well as medical instruments).

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?

6/7 Sunday - Full Moon (Observe Friday 6/5 & Monday 6/8 market price action).

6/22 Monday - 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):

6/17 (Transportations) FDX.

Dow score card for the week ending 6/5/09.

DJ-30: 8763.13 +262.80 +3.09%. The Real World (arithmetical) DJ-30: 36.67 +1.10 +3.08%.

UP: 23, Down: 6, N/C: 1.

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

Rising (Generally Higher Highs/Higher Lows) 12 (+8) 40%:

+*AA, +*BA, +*HPQ, +*IBM, +*KFT, KO, MCD, +*MMM, MSFT, +*UTX, +*WMT, +*XOM.

Consolidating (Generally Lower Highs/Higher Lows) 16 (-9) 53%:

AXP, BAC, CAT, CVX, DD, DIS, GE, +*GM, HD, INTC, JNJ, -*MRK, PFE, PG, T, VZ.

Declining (Generally Lower Highs/Lower Lows) 2 (+1) 7%:

-*C, -*JPM.

+/- denotes change of direction.