Investment Newsletter

Investment Newsletter

Japanese Candlesticks Technical Analysis

Technical Analysis System for use with the Trade Navigator platform, a product of Genesis Financial Technologies, Inc. Japanese Candlesticks price charting analysis is an integral component of candelaabra.

Monday evening, May 12, 2008

Please see my new article on Crude Oil (“Contrarian Takeaway”) at http://jutiagroup.com The bottom line is that I think that Crude Oil prices are stabilizing, and may decline a bit.

A. The Indexes

Our guess was right: the blue chips were dragged down on Friday by Citi and AIG, and the lesser indexes were a better predictor of the way that prices would move today. However, the Dow Industrials, the S&P 500. and the S&P 100 were the laggards today, while the higher-flyers such as the Russell 2000 and the S&P SmallCap 600, together with the NASDAQs, made the best gains. That tells me that speculation still rules the day. The Transports held up well as crude oil declined 1.73 points.

Prices in all Indexes could continue to rise before this bounce is over. The NASDAQs, the Russell 2000, and the SmallCap 600 are closer to tops than the blue chips. We think the best course of action is just to freeze in place for the time being and allow the bounce to play out. The big story is in Crude Oil, not in the stock Indexes.

STAND FAST. STAY SHORT. MAINTAIN YOUR PROTECTIVE BUY-STOPS.

ELIMINATE ALL DOUBTFUL SECURITIES FROM YOUR PORTFOLIO.

KEEP MOST OF YOUR LIQUID ASSETS IN THE FORM OF CASH, IN THE SAFEST SANCTUARIES YOU CAN FIND.

B. Gold

Prices closed lower today, so the bearish “Hanging Man” pattern which we discussed on Friday has been confirmed – although not powerfully so. Stay short if you are already short, with appropriate safety buy-stops; otherwise, stand aside for the moment.

C. Silver

Silver advanced 31.5 cents today, so it clearly outperformed Gold. Silver is closer to a top and a reversal than is Gold. Watch your protective buy-stops. Stay short if you are already short, but hold off making further investments in Silver for the moment.

D. Crude Oil

We didn’t get our “Abandoned Baby Top,” but we did get our confirmed “Hanging Man” and, so far, an Island Top. The bottom line is that I’m bearish on Crude Oil. Tighten up your safety sell-stops,. Give very serious thought to exiting some of your Long or Call positions. Don’t be greedy. Consider acquiring a Put.

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Always use protective stops. Always. No exceptions.

When you purchase options, always buy them in two’s, or in units of two.

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Investors’ biggest mistake is Staying Too Long At The Fair, hoping against hope that the Fair will reopen tomorrow, the day after, or next week. But the Bull Fair is almost certainly dead. The facts have changed. Have you changed your mind? What do you do, Sir? What are you going to do now? Are you……

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