Jun 9, 2008 - Issue #114
Yoi and double yoi! Something bad this way comes. Its's not just the Dow, it's worldwide.
Take a look at broad based indexes all over the world. Europe, Asia, everywhere. Not a
pretty sight. Was Soros right when he appeared on CNBC?
If you find yourself tempted to 'bottom fish' by taking advantage of perceived 'bargains',
do the prudent thing: Buy protective Puts as insurance. You'll be glad you did.
In Way of the Turtle, one of their rules for deciding if a position should be
entered was what they called a 'filter'. Long positions were only allowed if the price
was above its 20ma, 40ma, and 200ma. MarketClub has similar rules. They like trading
with the trend in their favor. Works for them.
Short positions were only allowed when prices were below their moving averages, again
trading with the trend.
The Turtles had a complete 'mechanical' trading system that took all the major decisions
out of their hands. Their rules covered every facet of trading from money management to
trade selection. Rules for entering and exiting. Everything. A complete system.
Richard Dennis said even if he published his rules in the Wall Street Journal, he
believed most people wouldn't have the disipline to follow them. He was right. Those that
couldn't or wouldn't follow the rules were dropped from the program. The rest made
huge fortunes. Their results are legendary.
Dow score card for the week ending 6/6/08.
DJ-30: 12209.81 -428.51 -3.39%. The Real World (arithmetical) DJ-30: 49.99 -1.75 -3.39%.
UP: 3, Down: 27.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 1 (n/c) 3%:
Consolidating (Generally Lower Highs/Higher Lows) 8 (-16) 27%:
CVX, HD, HPQ, -*IBM, +*INTC, JNJ, PG, VZ.
Declining (Generally Lower Highs/Lower Lows) 21 (+16) 70%:
-*AA, AIG, -*AXP, -*BA, -*BAC, -*C, -*CAT, -*DD, -*DIS, -*GE, GM, -*JPM, -*KO, MCD, MMM,
-*MRK, -*MSFT, PFE, -*T, -*UTX, -*XOMF.
+/- 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!