Best Eight Months

June ends NASDAQ's "Best Eight Months"

The OEX Rules of Trading: We are in an overbought market so we must show upturn with a close at least 100 points higher to show reversal to the bias.

If this continues we calculate the highest the market will turn upward is 586 points from the lowest low.

We believe we hit our lowest low yesterday, and are bullish on the market.

We hit a theoretical Dow low of 9717, lower than the strong resistance at 9774.
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First, read the great living American journalist, the first to uncover Goldman Sachs, Mat Taibi at http://www.rollingstone.com/politics/news/12697/64824

This is gut wrenching journalism and explains the context of the situation we have created for ourselves.


I am saddened that Helen Thomas, the veteran reporter, was "RETIRED" for her honest point of view offered on Israel. Don't all White House journalists have the right to say what they speak?
Rush Limbaugh and Glen Beck do, and they are not retired.

I am also saddened that Toyoyta months back took the hit on their "car problems" and since then EACH American manufacturer has had safety recalls, some even larger than Toyota.

As your cynic, this looks like lobbyists trying to play up American cars.

Most subscribers know me as an extreme liberal, far removed from whether Obama is a citizen, whether we are following the constitution, or whether war is good.

I simply believe there is no free enterprise in this country, and that the rich only get richer while the middle class disappears. And in our mindless thought of "taxes" we now eliminate the "slaves" we allow to immigrate, as we have done for over 200 years.

I am most concerned that a large government (which I believe in) use its power to regulate circumstances that the greedy create. Wall Street comes to mind. Halliburton, the no bid company, is another. And BP is our best. There were NO regulations. During the Bush administration we learned that "environment" did not matter, and that there was no global warming. We learned that a man can be President and "not read books or papers." We learned about how greed moves within the White House inner circle. Study through this, and see that nothing was planned, and that BP lied to us consistently about the controls and the amount of oil being spilled.

To the far right Christians this is all in the Bible and only they will be saved, so go live it up.

To the far left we just shake our head at the lobbying, and that no one stops it (too good a deal)

To the middle of all faiths, we just watch our jobs, net worth, home value, and future disappear.

And create a third party. Yawn.

Playing The Games

Much of the world thinks the world is ending. The trading range around 9950 kept the market humming in a flat area through 1.30 p.m., with little moves down of fear, or up on excitement.
Gold continues, and Silver follows, on strong upturn. We are sharing with our Blue Chip Option (www.bluechipoptions.com) subscribers to be "short Gold and Silver," as we think both are strongly overbought. FEAR drives gold, and we suggest one more upturn to 10,350 area, and on through our Dow projections.

Yesterday through 1.30 p.m. it was hard to even stay awake with the flat lining.
Mid-afternoon Arthur Hill with www.stockcharts.com reported:

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-- EMPLOYMENT REPORT WEIGHS ON STOCKS AND LIFTS BONDS
-- EURO AND EUROPEAN STOCKS FALL SHARPLY
-- MACD FORMS DIVERGENCE ON WEEKLY GOLD CHART
-- INVERSE GOLD EURO CORRELATION UNDER THREAT
-- GOLD MINERS ETF HITS RESISTANCE AT GAP
-- JUNIOR MINERS LAG SENIOR MINERS

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Trading range, says Michael Santolli at Barrons, might seem to suggest that the market is not ready to puncture outlooks. But this market is erratic, suggestible, and irresolute.

Santolli uses pnf charts to see strong support at 1040, and a bottom between 1016 and 1020 as possible. He further sees upside no higher than 1200, "as that is all the market deserves."
We'll use this as the week continues to "remember" how deep we could go, especially if we break the 9774 area on the Dow.

There is NO fundamental need for a further collapse in U.S. equities, and 1040, or in the 9800's. We've hit so close or to these numbers several times now that the oversold conditions may begin to actually be "calmed" and realized, and the market short term build up again. When and if this happens we have clear instructions on stocks and bonds written to our subscribers at www.bluechipoptions.com

Bernanke just said, "One particularly difficult issue is the continued high unemployment it imposes on workers and their families."
It is good to know such a "smart" man can share with us all such an obvious thing. It may be that he just learned it, so far removed from reality.

This is what we must be afraid of. Those "playing the games" have never really worked. This makes a big difference in how we think.


Please think:

46.4% of a baseball team's revenues is the "national average" for percentage of salary paid out. This is another stupid fact, but sadder when you realize just what these salaries can amount to :)

The majority of Americans believe drilling around our coastlines, with regulations, is prudent and responsible. Drill, baby, drill.

My son died for a just war.

My son died for nothing in an unjust war.

I bribe you to vote for my needs, so you can keep your job and "advertise yourself," get paid well, and have a great life.

I bribe you because the only way you will give me the business is if I "kickback" to you. It means my job whether I get the business or not.

My God is the only God.

Without my God you will die.

"We need to instill classic American values," is the best line I know. We all agree on this, perhaps not on values, but there is no need for discussion. Act your values and you are spreading them.



And life goes on.

More History Made

More history was made with a 300 point plus drop Friday, taking the market below some critical support lines. This will continue, and the whipsaw will also. We may see ups and more downs. We consider 9774 a critical juncture,and if the market closes below it, there is more possibility of extended downside. As the market closed with moves 365 points down, to below 9890, we began to see the test of deterioration.

The market has flirted in the high 9800 range, and continue to try to hover near 10,000. This means, simply, that what is decided already by cycles and supply and demand is being shown to us, and we are truly at a market settling point. There is more bullish news long term for corporations, and the manufacturing sector is growing. Disaster, as does war, will create work while it also destroys work, and our fish and oceans.

Beyond someone paying for this and all our grandiose ideas as we continue to use oil let's at least be smart. Regulate, inspect. Do not trust the corporation. Question all authority.

Use the government to truly enforce, not create bipartisan jabs.

The world order is truly changing, from whatever perspective you wish to see it. Let's use it wisely in trading. We'll repeat dual trades this week. Last week we made money on 3 calls, and Friday some could have profited from the OTM put, but more still hold it. Our call profits were good. It is hard to trade right now. The profits are certainly there, but it takes hairpin trading to hone in on bid/ask.

The Worst May in Half a Century

Yesterday morning showed slightly positive futures, and the market gapped up quickly, hitting tops on the theoretical Dow of 10,355 by 10.30 a.m.

I'm glad we did not have a new signal yesterday, as my concern on if we would stop a support line (we did not by 2 pm.) or start trade ranging again (we were by 1.00 p.m.)
Volatility spikes occur with electronic traders, hedge funds, but the last few days have seemed "slower" despite the swings. That's just my personal read on it.

We continue to hold our OTM July OEX 400 Put. It's priced now at .30 average yesterday, and we think remains a buy. We have two positions now. Again, we are choosing a very OTM issue because of the risk of the market. If there is a large downturn, this cheap put will make lots of money. If not, it's a better return on investment stop loss candidate for what the stock market has become.



We experienced the Worst May in half a century. How has this week fared? Look at the Dow opening Monday morning of 10,136. Study the closing for each day of the week, and compare to our Dow projections. We've never experienced a bell curve count (1-10) that has been so extreme as to register 12 and 13 until a week ago, to only move to almost a 0 bell curve in one day.

This is the sign of a uncontrolled market. Your study of what has occurred this week may help you gain the perspective of the general trend of the market. Study your PNF charting on both the OEX and the Dow in different settings. Remember, it's all free on www.stockcharts.com

In zero velocity the human brain will will scan endlessly, like a computer, in the attempt to impose order on chaos.

This is in our characterology.

Bonds?

Many people, superb investors, believe that the bonds in countries that can print money will be good investments. Our overall concern is that the decline we have experienced does not go below the prior low. This is true in each country with this debt, and in the case that the decline worsens beyond the lowest low will not be a sign of "good bonds." If the decline holds to our prior bottom, bonds may appear to be attractive investments.
Learn more at : www.bluechipoptions.com

Yet again, we had perfect entry to the OEX JUN 19 2010 500.00 CALL, as the market gapped down at opening, and it was available at opening at $6.30, selling to 7.60 within hours. The call continued to be profitable throughout the trading day.

We took a larger second buy on our OTM OEX put. If the market does crash, as the doomsayers see, this position will skyrocket, and we've given ourselves plenty of time to let that happen.

We will not make a new signal for the put, but hold our position, and will repeat again (falling in love with an option) our recommendation to the call, noting to watch all news and futures in this volatile market.

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The body is merely glass around a lightbulb. The bulb does not go out, it is just encased. -Johnny K

We are spiritual beings having a human experience.

And, a rock is not hard.

These lessons, which you'll find the teachings on throughout our website, will help you understand the market, and yourself. The market is merely a breathing mechanism of the Collective Man.

And if anyone has interest in our soapbox on the oil crisis, why it occurred, has occurred and been hidden from us, and will occur again, around our insatiable demand, just write me. I'm saving my disdain and anger up just for a soapbox rant. As an example, the stupidest phucking thing the consumer can do is boycott BP stores.

BP doesn't' even own them, franchisees do.

Ongoing Whipsaw

Yesterday the market opened with huge negative futures, and the market dropped to 9998 before 11 a.m. This allowed us great entry to the OEX JUN 19 2010 500.00 CALL as low as 6.80, with sales to 9.30 by 2.30 pm.
Step # 1 of our ongoing whipsaw began. Study your Dow projections again carefully, and we will be playing the same positions again.



Fitch just downgraded Spain's AAA bonds. Automakers report May sales, which analysts expect to rise. The May ISM index also will come out. will show a dip, but still at strong levels.

Today the SEC sponsors a round-table discussion on market structure. Kool aid and cookies will be served.

Tomorrow any big retailers (Limited, Costco, Abercombie and Fitch, TJX, Target and Kohls report May sales.

The Poor Average Trader

It is almost too much to take in, what is going wrong, and in so many places. We blame the technical electronic traders, but as the days continue, see massive whipsaw.

The poor average American has lost most of what they gained back, and it could get much worse.
Billions of dollars have left stock funds, and now more than 50% of retail investors are bearish for the first time since November.

We traded well last week, but it took true discipline:

1. Have buy and sell prices in at all times, and adjust them
2. Run 1 to 5 minute Point and Figure Charts to see movement
3. Keep track of support and resistance
4. Sell in and out fast. Always leave money on the table.

We will trade as straddlers in a sense this week as we gamble on an upsurge, before a true potential of correction.