Ian Woodward's Investing Blog

Here is a bonus blog for you tonight…there is another one right behind this one!  We have had five Hindenburg Omen signals trigger in the last two weeks so be warned that we can expect at least a 5% correction in the S&P 500.  Three of these signals were “Strong” as shown by the dark red lines in the lower window of the HGSI stock chart.  Now the only question is how far can the drop go?  We may be lucky to get a Santa Claus Rally in which case the downdraft of yet another 362 point down day is just a blip due to Citigroup downgrading and credit fears.  On the other hand, there is more than usual hits being made on the Leaders, though the really solid Gorillas as I gave you in the RonIandex Gorilla Index a few weeks ago still seems intact.   

Since we are having a good deal of success in milking the process I developed over 15 years ago of having an Index of really strong leaders act as a surrogate as to when the market will topple, Ron and I have built on work the participants did at the stock seminar to identify Chinese Silverbacks!  The claim to fame for these stocks is that they were selected from the list of ~ 75 stocks we identified at the Seminar, but we have pruned them to consist of stocks over $20 and are still above their 4-dma as of last night.  In addition to all the work we did on suitable Wolf Packs at the seminar, this gives us a further dimension in embracing the very hot Chinese Market.  Ron and I strongly suggest you put this Chinese Silverbacks list in your User Groups and keep a beady eye on them as our Winky-Winky to you for whatever you wish to do with it.  It’s always “Your Call”!

Have fun and keep your powder dry!  Best regards, Ian.

Many thanks from all of us the HGSI Team to all who attended the October Seminar for making it a “happening”, your strong contributions and interaction, your friendship and your support.  I had a lazy day today recuperating from the three day seminar, but happened to spy what may either be profit taking prior to the FOMC meeting tomorrow or the first signs of Rotation in the Leading Wolf Packs.  The pictures below for the Transportation- Shipping and Chemicals – Specialty Wolf Packs speak for themselves:

Keep your powder dry and watch how the market behaves tomorrow after the FOMC Meeting Report which may either be a Trick or Treat for the Market.  The next Seminar will be held on March 29 to 31, 2008 so put it on your calendar and don’t let the grass grow under your feet in signing up as seating priority is “first come, first served”.

Best Regards, Ian.

A quick heads up on the fly…The Hindenburg Omen Strikes again.

Ron and I are feverishly working on getting the Seminar DVD’s completed, but I felt I should give you a quick picture to chew on. 

Best regards, Ian.

On Sunday I told you watch these Market Leaders to see which way the wind was blowing, and I am pleased to say so far so good.  The numbers speak for themselves.   

Lest we get too euphoric, let me put some perspective on this picture. If I use a simple filter of  $3, and 40,000 average daily volume on the data base, I see that there are 241 stocks with an “A” Accumulation and 492 stocks with an “E” for Distribution.  So what you ask?  One item we watch is that when the number of “E” stocks are greater than “A”, and as you can see by a factor of 2 to 1, be careful of the underlying internals of the market.  Note also that we are back up to over 2200 on the NDX, so you might want to go back and look at the Fly Specking I gave you on that number several blogs ago. 

More importantly, when you look at the Gorilla Index where it was down over 3% the other day and it comes back to deliver all stocks up with 5.48%  it is showing that these extended stocks are getting more peaky.  Yes, I know it is not equal dollar weighted, but that is not the thrust of my point.  It reminds of the days when we had the Nifty Fifty…probably before many of the young tigers can remember.  They can go on for ages, but then the majority of them die never to be heard of again.  So if you want to make good profits quickly you know where to play, but play close to the exits.  I say yet again “As GOOG, AAPL, RIMM and GRMN go, so goes the market”. 

I note that AMZN got hit hard in after hours, so you might expect another see-saw yo-yo affair tomorrow.  One day up and the next day down is what we have come to expect.  Well folks, this was a quick blog note to keep you tuned, but Ron and I are already working feverishly to put our Case Studies together for the seminar, so I will wind down for a few days as I would rather tell you than disappointment you when there is no blog.  I’ll be back when I can. Best Regards, Ian.

We had a decent snapback today after the downdraft of over 100 points on the Dow at the start, so the first round goes to the bulls after Friday’s big drop.  But don’t count your chickens before they hatch.  We have achieved the first leg which was a positive day on the next day after a big correction, but we still have to achieve the market being up by the end of the week.   

At any rate, it is encouraging that for starters the Market preferred Scenario #2 of the two I gave you yesterday and that suggests we are still intact for this being similar to 2000 rather than 2001 and are still possibly searching for a higher top.  More importantly, we need a bridge to the FOMC meeting on October 31^st. and we got a shot in the arm after the market closed with the stellar EPS Report from AAPL.  In addition, as you would expect, the Gorilla Index confirmed the direction was up and three of the key horsemen of GOOG, AAPL, RIMM and GRMN were positive with RIMM being the only one down.  Watch those four is the clue. 

Here is the updated picture for the 2000 scenario compared to 2007, with one “Question Mark” replaced with a positive number “0.33%” for today, and one question mark for the end of the week.  We badly need a positive week and AAPL may have given us hope. Best regards, Ian. 

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