The primary trend is the most powerful force underlying the movements of the markets. Knowing its direction is the most valuable information an investor can possess.
The Primary Trend Fund, Inc.
3960 Hillside Drive
Suite 204
Delafield, WI 53018
ph: 262.303.4850
fax: 509.271.2726
alt: 800.443.6544
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Chart of the Week (4/16/09)
As we discussed in our most recent issue of The Primary Trend investment letter, the stock market has generated a 'breadth thrust' or 'breakaway momentum' as of March 23. This is a highly powerful underlying current that usually ... usually ... occurs at the onset of a new cyclical bull market. When advance/decline momentum over a 10-day period averages a 2-to-1 ratio, it historically has been a harbinger of further gains looking out months! The Breakaway Momentum ratio hit 2.21 on 3/23/09. Stay tuned ... stay invested.
Chart of the Week (12/8/08)
BUY: Schlumberger
After cratering from its double-top at $110, SLB common is now at levels that we feel are very compelling looking out 2-3 years. Oil service operator SLB has made its way back into the Primary Trend Fund portfolio with recent purchases under $40 per share.
Oct. 24, 2008 -- DJIA: ENOUGH ALREADY!
"May we live in interesting times" ... some say this is an Ancient Chinese proverb and others say it is a curse. We said it during the portfolio insurance fiasco of 1987; and now in today's stock market upheaval caused by many storm fronts; the latest of which is forced selling by hedge funds.
Fundamentals be damned! Nobody wants to hear about how cheap stocks are becoming during the latest stock market swoon. As a whole, the stock market is entering its bottom 20th-percentile in terms of valuations.
Technicals haven't worked either. However, in the midst of all of this doom & gloom, there appears to be one glimmer of light ... the LONG-TERM chart of the DJIA below. This is a nearly 20-year chart, not some minute-by-minute gyration that CNBC proudly displays [a disservice to its viewers in our minds].
By connecting the 1990 and 1994 bear market bottoms, an upward trendline comes in near 8000 on the Dow. By connecting the 2000, 2001 and 2002 tops, a downward trendline comes in near 8000. Both lines converge near 8000. Where are we going with this? The Dow is trading currently near the 8000 level. It may find some technical support here during this capitulation phase of October.
Everyone is in panic mode ... desperation is fueling the selling stampede. This at least lends an interesting, if not optimistic, element to today's ugly investment landscape. And oh by the way, we are approaching November -- the best 6-month seasonal period is on our doorstep.
Have questions regarding this chart or our market commentary?
Please contact us anytime!
We look forward to sharing our portfolio strategy with you because ... an informed investor stays one step ahead of the crowd.
The Primary Trend Fund, Inc.
3960 Hillside Drive
Suite 204
Delafield, WI 53018
ph: 262.303.4850
fax: 509.271.2726
alt: 800.443.6544
info
