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All,
I didn't learn much this week. My portfolio was flat for the week and
the DJI is still the only market indicator that has broken out to a new
high. The bad news was that Guy did get one of his short-term sell signals
and I'm always cautious when that happens. However, all of the other market
indices I watch are still in the bottom half of Short Term Up Trend
Channels (STUTC). If the STUTCs hold they will all turn back up and break
out of the top of their longer term Horizontal Channels (HC). If Guy's sell
signal holds for a while without turning, they could fall through the bottom
of their STUTCs and retest the bottom of their HCs. Given this lack of
information, the question is what to do <G>?
My gut tells me that the market is going to break out and go on up, but
my head says to be careful. The first thing I did was to check the stops on
all my open positions and tightened them where I could. Then I compromised
and looked for a momentum high flyer that had just broken out in the last
week then pulled back a little. I wanted one with a good buy stop point. A
point that gave a good indication that the up trend had resumed but was
still close enough to the stop for adequate protection. I think I have
found a relatively new, speculative internet issue that meets that criteria.
This week's pick is E-Loan Inc (EELN). It is an on-line mortgage
broker that offers the opportunity to peruse thousands of mortgage products
from more than 70 lenders on its Web site and through partnerships with such
companies as Yahoo, MarketWatch.com, and The Motley Fool. E-Loan provides
mortgage calculators and rate checkers, as well as online applications and
loan status checks. On 08/23/99, E-LOAN announced plans to acquire
CarFinance.com in a purchase transaction for 2.88 million shares of E-LOAN,
representing a purchase price of approximately $67 million. Several analyst
's liked that move and now rate EELN as a buy.
See description and chart at http://www.geocities.com/WallStreet/Highr
ise/1025/
JimG
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