2-22-10
CURRENT BUY – 100% of portfolio stock allocation $$$
KEYLINE 7-25-09 BUY 50% allocation only (S&P @ 970)
SIGNAL 10-9-09 BUY balance of 50% (S&P @ 1071)
1-25-10 SPECIAL INSTRUCTIONS ALL SUBSCRIBERS:
Establish stops on volatile stocks 12% below highest high last six months.
Use 20% stop for “steady eddie” stocks. Check each day to see if close
below stops. If so, execute that exit the next day at the open. These
instructions hold until we close above S&P 1160 (if we do).
Beginning this issue, I will have a section at the start of each Weekly Keyline Report that sifts through the Dow 30 stocks and some randomly selected Top 5 Sector stocks to identify stocks that are in what I call a candidate position for addition to your portfolio. These candidates represent stocks that are (1) ABOVE their individual Keyline price, and (2) below their MOMENTUM SECTION green line (fast sto) 68 level.
These stocks are just candidates for purchase, and do not represent a recommendation for buying. Remember, I do not know your portfolio needs, your personal financial condition, or your normal trading habits. But what I can do is provide you my interpretation of the Keyline chart of these stocks and list the stocks that might be good BUY candidates. It will be up to you to do your own “due diligence” to determine if they actually fit your portfolio and personal investment guidelines. The decision is up to you, as it should be
Now, all that said, here are the stocks that fit the Keyline criteria as BUY candidates. First the DOW 30 stocks. I will list the symbol only:
AXP, CAT, CSCO, DD, DIS, HPQ, IBM, INTC, JNJ, KFT, KO, MMM, MRK, MSFT, PFE, UTX, WMT.
Now for the Top 5 Sector stocks. Again, by symbol only:
TV, SALM, CJR, WPRT, RRD, SGK, VALE, HL, IAG, KGS,
NVLS, AEIS
You can do some further checking on the data tables for the Dow 30 and the Top 5 sectors at the end of this report if that help, also. The stock symbols are also listed the top of each of these data tables.
Note: Been having some problems sizing those tables. If they don’t appear, I’m working on it. Thanks
OK, with that out of the way, let’s get to the S&P and Bonds. First the S&P:
The most important feature of the S&P chart is that it held ABOVE the Keyline and that with a test that came near to breaking the 1040 level! It was only intraday that that test came (on Fri. 2-5-10). The fact that we held and rallied sharply higher on the following Monday is truly significant of the power that the bulls still maintain.
The next important level to cross above now is the S&P 1150 level. This was the high of the rally that began almost a year ago (3-10-09). That high occurred on 1-19-10 and was the day before the President declared war on the banks, if you recall. I would also add that there are two other “in-between” levels that need to be hurdled before we get to the 1150 mark. They are 1130, the point where we cross up the “Cap” price on the Keyline, and the 1140 level, which represents a second interim resistance level before we get to the 1150.
Now, if we can close over the 1150 mark, I would say that the likelihood that we will see the target of the original Head and Shoulders clearly moves into the 75-80% possibility level, quite a major change from even two weeks ago. By the way, you might note on the Dow Data spreadsheet that the average gain in price of the Dow 30 stocks this week was $1.25 a share or a 2.8% gain overall on the average price of the Dow 30. Just thought you might like to know that info.
Lastly, do note that in the S&P MOMENTUM SECTION the green line (fast sto) is at the 45 mark, while the black line (slow sto) is still quite high at the 77 level. We need to watch this relationship during the coming week, but it is still one of the “classic” setups for rally that I have told you many times I look for on the Keyline Super Chart. So, this week should be an exciting one.
The Big Bond Guys have taken note of the stock market’s reversal to the bullish side last week and sold off the bonds right down to the Keyline! Frankly, there is not a lot that can be said when you are right on the Keyline. But, this much I can say from the MOMENTUM SECTION green line (fast sto) position. Having backed down from the 50 level to the 35 mark (while the black line (slow sto) has pretty much held position), we might see another try for higher prices in the next week or so. But, again, being on the Keyline is a very tough place to call direction. So, I will keep you advised during the week in the MUNCHIN’ daily report. This one should be fascinating to watch. Let’s hope it resolves to the upside for both indices.
THE REST OF THE STORY
GOLD last week, in almost a mirror repeat of the week of 2-12-10, rose over $26 and that does tell us again that, even though the DOLLAR held its own, that Gold traders remain quite concerned about the dollar’s viability long term. Both charts are now above their Keylines and that means the fear of the dollar vs. the need to have a safe haven for currency investments are just about in perfect balance. One day that will change. But, for now both seem to be good investments.
CRUDE OIL has still not broken out of the trading range I told you about last week, but the gain of nearly $6 a barrel this last week is surely a display of power by the crude traders. It says a lot about how they perceive the stock market’s move. But, remember the Keyline is still at $85.55 and that is a +$5.00 move from here to just challenge the Keyline. That is a tall order, as they say.
COPPER gained a quite respectable $0.26 this week, following a very respectable hike of $0.35 the previous week. That is just short of a 20% gain in two weeks and that says a lot about inflation expectations! For now, all we can do is watch, but somewhere the dollar strength and the inflation expectations will meet and the outcome will be what tells us who wins –- the Fed or Mr. Market. Frankly, my bets are with Mr. Market. He never loses in the long run and the huge leverage that still exists in the world’s markets needs to be wound down. And Mr. Market will see that it is, despite the best tries of the Fed to make deflation go away. But, that seems still down the road a bit. So, in the meantime we just watch. Will keep you up to date in the daily MUNCHIN’.
THE BOTTOM LINE THIS WEEK
So, now . . . . . will the S&P 1100 hold this week? It is a lot to ask of a recently embattled index, but it really must if the rally is to resume with any flair at all. So, keep close to the daily Munchin’ and I will do all I can to keep your perspective clear. Bonds will likely continue to challenge the Keyline, as I seldom see such a challenge of a major index just walk away from that moment. We will see.
For now, I am looking for the Big Bond Guys to tread water until they see what the stock market Guys do. Isn’t it a funny game that everyone watches someone else to make decisions before they do. Well, truth be told I am mildly betting on the bulls for this week. Only a Presidential declaration of war on some new industry would change that. Oh, me.
So, here we are, rooting for the S&P, but hoping the bonds hold too. What a dilemma. But, as always, hope you have a good investing week. And be sure you keep in touch. I do! See you next week.
*The name Super Chart Keyline is a registered Trademark of Max Whitmore.
Disclaimer
** The top five sector stocks shown are stocks that are above their Super Chart Keyline and between $5 and $35 in price have been randomly selected from the stocks in the each sector. Their inclusion in the Report is not to be interpreted as a buy recommendation nor is the exclusion of others above their Super Chart Keyline to be interpreted as a sell recommendation. This data is given for informational and research purposes only, as we do not make buy or sell recommendations at any time under any circumstances.
?***Max Whitmore, “The Keyline Report”, and “MUNCHIN’ On the Number”report does not endorse or suggest any of the securities which are mentioned in any way in its Reports. They are provided purely for informational and research purposes only. Max Whitmore, “The Keyline Report,” and “MUNCHIN’ On the Number” do not recommend particular securities to anyone, ever, under any circumstances. The statements made herein include information obtained from sources we believe to be reliable, but no independent verification has been made and we do not guarantee its accuracy or completeness in any manner whatsoever. You should not make any investment decisions of any sort based solely on what you read in the Keyline or MUNCHIN’ Reports. The statements made herein contain general information and do not constitute an offer to buy or sell any security of any description. Subscription to any of the Reports mentioned above is consent by the subscriber of full release of Max Whitmore and the Reports mentioned herein from any claims or actions of any description, legal or otherwise, against Max Whitmore, all of his associates and affiliates and all of the Reports he authors or approves in any way. All material herein is Copyright 2010 by Max Whitmore. All rights reserved.
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