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CLARK'S GATE TIMING SYSTEM WEEKEND EDITION FOR 18 SEPTEMBER 2009

|Includes: ADBE, AMAT, Amgen Inc. (AMGN), BAC, C, DBO, DHI, DWSN, EA, EL, ELY, ENMDD, EOC, FXB, HOV, IBM, SLM, UHN, UUP
CGTS WEEKEND EDITION 
18 SEPTEMBER 2009


I do not think it reasonable that public money --taxpayer money -- be indirectly available to support risk-prone capital market activities simply because they are housed within a commercial banking organization.

Paul Volcker, 2009.


Readers should check out a couple of instablogs from Bob English this week.  Bob has found the smoking gun showing that the Fed has been financing this phantom rally in stocks; and Bob has many insights into why and when the rally won't end, and why and when the rally may begn to get into trouble.

seekingalpha.com/article/162305-funding-a-rally-extension#comment-683606

seekingalpha.com/article/161925-another-185b-could-soon-hit-the-markets-as-u-s-approaches-debt-ceiling#comment-683613

I'm not sure that the Fed's funding stock and bond market rallies is legal.    The Fed impetus is to help preserve the capital of banks and insurance companies they have already bailed out to the tune of ???billions of dollars -- essentially helping to provide private companies with avenues to acquire more money without directly involving bailouts using tax-payer money, which is politically costly.  This seems like insider trading in its most naked form -- fixing the markets so that all the casinos can get healthy again.  Is this what free-market capitalism is all about?

I'm not sure I'm much a believer in free-market capitalism -- I think the game has been fixed for centuries and what we are seeing today is just a fluke nakedness of the game the way it has always been played, although a very extreme version today -- the tide has come down to expose all the corruption and the criminality in the light of day.

We keep trading.  The markets keep floating upward -- the markets are being fellated upward....seems to have no intention of coming back down again.  That's what bubbles are -- until they pop or develop a leak.

Keep your eye on your money market funds.  Late this week the federal protection of money markets expired.  Make sure your balance doesn't start to diminish.  I would be surprised if it did -- but this has been a year of surprises, hasn't it?

We continue to be almost 95% long in the market.  Our weekly portfolio is up 49.19% for the year.  Our best trading systems  are our short-term trading systems M5 7 (up 145.75%) and M5 10 (up 222.93%) -- and then our long-term system M4 Sum Plus Long-Term (up 88.14%)


% Gain Weekly Trades Profit Active Active First
  9/20/09     Trades Cost Trade
             
145.75% M5 7 Tr Syst   $160,323 11 110000 1/9/09
222.93% M5 10 Tr Syst   $89,171 4 40000 3/6/09
4.09% M2F alt Trade   $1,638 4 40000 8/14/09
5.70% M2F alt LT   $2,851 5 50000 7/9/09
14.05% Momentum   $66,049 47 470000 6/26/09
20.07% M4 Sum Plus   $90,334 45 450000 7/17/09
88.14% M4 Sum Plus LT   $431,896 49 490000 2/20/09
46.12% MA5 MA 40 LT   $161,422 35 350000 3/20/09
11.85% M4 Sum Plus Rev   $4,738 4 40000 8/21/09
0.01% M5 Sum Plus Avg   $1 1 10000 9/5/09
49.19% Total   $1,008,424 205 $2,050,000  

This rally is for real -- and we are still long and adding to our long positions but we are looking at some issues through the lens of our M5 Indicator to try to gauge the real momentum of the markets.  M5 tends to lead the price of issues, pulling up before the price does, and pulling down while the price is still climbing.  We want to show a few issues this week and look at what M5 is telling us about them.

First we look at a few indexes: We show three pictures of the Taiwan Index, hoping to show how the M5 Indicator looks in different stages: the first chart shows mainly the healthy rally, with M5 leading the rally; also, we can get a glimpse of the M5 fall on the right side of the chart.  The second TWII chart shows how M5 led the TWII down.  The third chart is the current chart of TWII -- the price has been rallying strongly -- but M5 seems to have been expecting a decline.



How do other indexes look now.  Almost all the American and European indexes look fine.  Asian indexes do not look so good.  I show the DJIA (Industrials) and tell you that American and European indexes all look much the same in term of M5.  It looks like Asian stocks really want to go lower, in terms of M5.



How do individual stocks look?  Please note: the Adobe stock is not a current picture, but a picture back in March 09 showing what a healthy rally looks like, in the beginning.  Adobe's current picture is relatively healthy, although it has topped for the short-term.  Applied Materials (NASDAQ:AMAT) does not look so good.  AMGN is currently attempting to bottom but the M5 is not especially positive.  Citicorp is quite negative; we expect this one to go lower.  DHI seems to be hitting overhead resistance; and M5 could go either way.  Dawson is a very negative M5 picture at the moment.  The rally in Callahan Golf seems to still be in good shape.  I would remind the reader that trend readings are even more important than momentum readings in terms of see where the market is going.  Momentum indicators can be overpowered by strong trends.  Momentum indicators 'predict' what the trends will do; but trends have the last word.



What about Oil, the US. Dollar, the VIX index?  DBO (Oil ETF) is suggesting that oil is going lower.  It is trying to bottom at the moment, and might have another leg up, in fact.  The U.S. Dollar (UUP, Bullish Dollar ETF) hasn't had a chance, not since Ben Bernanke has made it his personal mission to further emasculate the money in our pocket.  An attempted streangthening was quashed in early September.  I don't see much hope for the Dollar until Ben decides that bond yields should move with supply and demand instead of with Ben's ideology.   The VIX is predicting a rally (a concurrent decline in stocks), but as long as Ben and his thugs at the investment banks are playing Hans Brinker with their thumbs stuck in NYSE holes that sprout up, we have to understand that their will be no stock correction until the Fed demands it or loses its power to hold back a wall of water building by the second.  How strong is Ben Bernanke?  He doesn't look that strong -- but he has a lot of goons behind him that don't want prices (of anything) to come down.  Clearly the rich like the poor paying more and more for the goods and services that they own.  Deflation is God's way of punishing the greedy for their distemper and their lack of modesty.



MOMENTUM READINGS


Our strongest momentum readings in our database of stocks for the whole year remain fairly consistent with last week.  Along with this list we are also showing issues with the strongest momentum gains in the last three weeks.  You will notice a lot of precious metals appearing again in this second group.  With Bernanke's insistence upon buying every TBond that no one else wants, in order to keep interest rates down, dollar weakness is a given and gold strength continues to go along with that.  What happens when Ben hiccups, or leaves the room for an emergency of continence, no telling what will happen.  But for now, gold and silver look like the only currencies in the world that are worth their weight in gold.

The weakest momentum 'leaders' in our database are old songs: ETF Shorts, bankrupt bailout-kings and relaltives of the same (AIG, Citicorp, SLM), and some surprise names: McDonalds, Walmart, Conoco Phillips), and a few issues that seem destined to crash through March lows before any others do: Electronic Arts, Dry Ships, Verizon and First Solar.

Those showing special weakness over the last three weeks -- such as Amgen, Merck, Teva Labs, SGP, BAC and HOV -- should be watched carefully as they may either be pulling back for another buying opportunity or they may be beginning the topping process.  Interesting to see all the pharmaceuticals showing up together.  Are they a buy?  In fact, we are getting buy signals on AMGN, HOV, and ENMD from our list of weakest-momentumed issues over the last three weeks.  (See below.)

TOP 30 MOMENTUM WINNERS (M5 INDICATOR: YEAR
   
HAL HALIBURTON
PCLN PRICELINE
MRK Merck Pharmaceuticals Weekly
EMC EMC Corp
SGINX DWS GNMA S. FUND
AMSC AMERICAN SUPERCONDUCTOR
IAU IShares Comex Gold Trust
RHT RED HAT INC.
ECH I-SHARES MSCI CHILEAN INDEX
TEVA Teva Labs
GG Goldcorp
EDU NEW ORIENTAL EDUCATION & TECH GROUP
BWLD BUFFALO WILD WINGS
SSTGX DWS GLOBAL BOND FUND
AAPL Apple Computer
SBUX Starbucks
SGP Schering Plough Weekly
^HUI Gold Stock Index
JPM JP Morgan Chase
IBM International Business Machines
HD Home Depot
BEN Franklin Resources
^XAU Philadelphia Gold and Silver Stock Index
IBB Biotech ETF
HPQ Hewlett-Packard
ORCL Oracle Inc.
GES GUESS INC
HMY Harmony Gold Mining
^KS11 KOSPI South Korean Index
RGR STURM RUGER INC.


TOP 30 MOMENTUM WINNERS (M5 INDICATOR: LAST THREE WEEKS
   
TBT Ultrashort T-Bond 20+ Year ETF
HMY Harmony Gold Mining
IAU IShares Comex Gold Trust
HAL HALIBURTON
GG Goldcorp
NEM Newmont Mining
^HUI Gold Stock Index
HURN HURON CONSULTING
^XAU Philadelphia Gold and Silver Stock Index
HK PETROHAWK ENERGY
UPS United Parcel Services
PDE PRIDE INTERNATIONAL
KO Coca-Cola
BJS BJ Services
SCGDX Scudder Gold Fund
ABX Barricks Gold Company
FSLR FIRST SOLAR
RHT RED HAT INC.
PG Procter & Gamble
EQR Equity Residential
FXE Euro vs Dollar ETF
XME Spider Metals and Mining ETF
UDN POWERSHARES DB US DOLLAR BEARISH
RS RELIANCE STEEL
CDE Coeur D'Alene Silver Mining
AMSC AMERICAN SUPERCONDUCTOR
KBH KBH Home Builders
YHOO Yahoo Weekly
KSU KANSAS CITY SOUTHERN
^DJT Dow Jones Transport Index


BOTTOM 30 MOMENTUM LOSERS (M5 INDICATOR: YEAR
   
SLM Sallie Mae Inc.
TWX Time Warner Weekly
XGCSX Scudder Global Commodities Fund
PEIX PACIFIC ETHANOL
AIG American International Group
PG Procter & Gamble
FMCN FOCUS MEDIA HOLDING GROUP
PNC PNC Financial Svc Weekly
VZ Verizon Communications
FXM Mexican Peso ETF
FSLR FIRST SOLAR
COP Conoco Philips Inc
ELY Callahan Golf
FST FOREST OIL CORP
XOM Exxon Mobile
C Citigroup
DRYS Dry Ships Weekly
ERTS Electronic Arts
MCD McDonald's
WMT Wal-Mart Stores
^VIX CBOE Volatility Index
DOG Short DOW 30
UUP POWERSHARES DB US DOLLAR BULLISH
MYY Short Midcap Index ETF
SH Short SP 500 ETF
DXD Short Dow Index ETF
QID Short Nasdaq Index ETF
PSQ Short QQQ Index ETF
HURN HURON CONSULTING
TBT Ultrashort T-Bond 20+ Year ETF


BOTTOM 30 MOMENTUM LOSERS (M5 INDICATOR: LAST THREE WEEKS
   
PCLN PRICELINE
^TYX 30 YEAR TREASURY BOND
PSQ Short QQQ Index ETF
SH Short SP 500 ETF
FITB Fifth Third Bancorp Weekly
MKL Merkel Weekly
PFE Pfizer
INTC Intel
TXN Texas Instruments
MCD McDonald's
PDLI Protein Design Labs Inc.
CA Computer Associates Inc
AMGN Amgen Corp
DOG Short DOW 30
DHI DR Horton Inc.
SGP Schering Plough Weekly
UNH United Healthcare
BAC Bank of America Weekly
ENMD Entremed Corp
HOV Hovnanian Enterprises
MYY Short Midcap Index ETF
ORCL Oracle Inc.
WMT Wal-Mart Stores
VZ Verizon Communications
F Ford Weekly
RGR STURM RUGER INC.
MRK Merck Pharmaceuticals Weekly
QCOM QUALCOM CORP
UUP POWERSHARES DB US DOLLAR BULLISH
TEVA Teva Labs





NEW SIGNALS FOR THE WEEK
We sold Sallie Mae's long positon for a loss of 7%.  We sold our long position in the Semiconductor Index for a gain of 8.36%.  We have new short and long positions for the week (see below).

9/18/09          
Weekly          
M2F alt Trading System        
Issue Price Position Shares    
IBM 122.11 Enter Long 81.89    
UHN (30) 25.33 Enter Long 394.79    
ENMD 30) 0.475 Enter Long 21052.63    
           
M5 7 Trading System        
Issue Close @ Position Open @ Date % Gain
SLM 8.81 Exit Long 9.47 8/7/09 -6.97%
Issue Price Position Shares    
EL 36.79 Enter Long 271.81    
FXB (30) 162.07 Enter Short -61.70    
HOV (30) 4.61 Enter Long 2169.20    
ENMD (30) 0.475 Enter Long 21052.63    
           
M5 10 Trading System        
Issue Close @ Position Open @ Date % Gain
SOXX 326.48 Exit Long 301.3 8/21/09 8.36%
Issue Price Position Shares    
AMGN (30) 60.8 Enter Long 164.47    
EL (30) 36.79 Enter Long 271.81    
           
M2F ALT LT 2 Trading System      
Issue Price Position Shares    
EOC 47.53 Enter Long 210.39    
AMGN 60.8 Enter Long 164.47    
           
M4 sum Plus Trade        
no trades          
           
Momentum          
No Trades.          
           
M4 Sum Plus LT        
No Trades.          
           
MA5/MA 40 T        
No Trade          
           
M4 Sum Reverse        
No Trades          
           
M5 Average Sum Plus        
No Trades          


Everyone, have a good weekend.

More information on this system can be found at
www.home.mindspring.com/~mclark7/CGTS09.htm


Those interested in reading a draft of 'Turn Out the Lights', my description of the metaphysical causes of the financial collapse, can find it at:

www.hoalantrangallery.com/Turnoutlights.htm

 

Michael J. Clark
Clark's Gate Timing System
Hanoi, Vietnam
84 4 221 92210

Disclosure: the author personally owns none of the issues mentioned in this article.