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Point & Go Figure



Here are some charts that caught my eye this morning, as well as some requested by Minyans. If you have a chart request let me know by sending me a note here.

I have added text and illustrations to the charts where necessary.

(Charts courtesy Dorsey, Wright & Associates)

Microsoft has been a hot topic of conversation recently. Chartists have largely ignored the special dividend the stock paid last November (some explanations for not reflecting the special situation are better than others). But before we get too excited about MSFT, let's look at a long-term 10-year PnF chart for larger context.

The chart below shows on this long-term scale, MSFT violated structural trend support in October 2000. The stock's last buy signal was in June 2001, though that buy signal occurred below the downtrend line. A move above 32 would be the first "positive" trend establishment for MSFT since 2000.

Microsoft Corporation (MSFT)

Cisco Systems, Inc. (CSCO)

Nokia Corporation - ADR (NOK)

NYCE U.S. Dollar Index Spot (DX/Y)

The chart below looks very familiar. Compare it to the chart of Nokia (NOK) above. If you hide the price, it is impossible to tell which chart is which. A coincidence? I don't think so. It is simply the result of the global reflation, which has affected all financial assets causing increased correlation among them. We will talk about this more in the breakout session Scott Reamer and I hold at Ojai, but part of the danger is that investors who believe they are "diversified" may not be diversified at all.

Soybeans Continuous (S/)

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No positions in stocks mentioned.

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