Pre-Christmas Stock Portfolio Clean-Up

SELLS

American Express Company (AXP)

BUYS

Exxon Mobil Corp (XOM)

American Express Company (AXP) had resurfaced in the black for sometime since we established a BUY position, but has now reached our -5% sell-stop (several times) and simply put, the stock seems entangled with the entire financial group debacle to really make any real profitable headway for us here. We will use our cash from this sell to establish a new BUY position in the following stock experiencing a pullback... Exxon Mobil Corp (XOM).

This may be another opportunity to increase our holdings in oil since selling half of our position in the middle of the 2007 year to protect our gains. Momentum may have returned for the entire oil sector and additionaly XOM pays out a nice dividend to all shareholders as we continue to hold this stock.

XOM is a BUY and we are adding 109 shares, at the purchase cost of $91.00 per share ($10,000 total) to the existing 70 shares we already have.

Our Defensive Stocks Ruled in November

... and the Dean Jones Trader portfolio (DJT) is flirting with new highs for the year thus far. (See Portfolio Details Below).

Suffice to say our defensive stocks not only ruled our portfolio in November, but they continue to ensure we can hold onto our gains as we approach the end of the 2007 calendar year!

Our biggest downfall remains the false entry point in buying the financials, (AIG & C) and also DIS and GE prematurely. As advised in the November 10, 2007 blog, we have cut our losses in all of these positions, and we will continue to monitor our current holdings which seem to be holding up just fine. Some positions however may be over-extended and we will lock-in some profits.

That said, it seems prudent to continue to hold our defensive stocks, especially since the latest gauge of manufacturing activity (U.S. FACTORY INDEX) fell slightly, confirming a possible slowing economic trend given it was the fifth consecutive drop. These facts are real, and frankly, are more cause for concern than the latest isolated sub-prime crisis the media seems to be solely stuck on emotionally reporting. BOTTOM LINE: If productivity drops, so will earnings, and subsequently the value of many stocks.

On most recent portfolio news, doubling up on Altria/ Philip Morris (MO) has paid off, and so has the ongoing holding of KO, MCD, and PG.

(See below for complete DJT portfolio holdings).

Wall Street Stampede

... Stampede of stock buyers that is.

The Dow has the biggest single-day gain in eight weeks, and the "Best Bullish Day of Year on NASDAQ since April 2003"...

You don't say?!

These are the new headlines in the media suddenly today... Just yesterday, the media exclaimed investors should be extremely concerned about the future direction of the stock market, and furthermore confirmed a market crash and a recession is now imminent (... they forgot to add the end of the world is near and there's a sale at Macy's!)

For some perspective on the latest stock market action, the chart below presents the FACTS -- The current trend of the S&P 500. The recent decline in the S&P 500 has been relatively sharp, BUT the S&P 500 remains within its five-year trend channel, and support (green line) is being tested.

Where we will go from here is not clear yet. BUT the fact is the DOW was up +320 points today alone on high volume, and that said we'll go out on a limb and state we believe to be another day away (further) from the upcoming Stock Market Crash! ... (To see what a real Bear Market looks like, simply look at the time period from 2000-2003 in the chart below). Nothing has changed since June 2007 of this year, when the financials met Pandora's Box for the first time.

For now, we prefer to call this simply a time of ... "froth removal from the party punch bowl"... or if you prefer, a pre-Christmas house cleaning before Grandma and the reindeer come home for the end of 2007 year holiday market rally -- hopefully to empty the rest of the punch bowl.

And if the facts are just too plain boring and you prefer dark drama instead of "what ifs", then we recommend the following 11/12/07 dissertation by Bill Fleckenstein a good read. Like a good ole generic Hollywood thriller, how can one simply pass up reading a blockbuster title like, "The Stage is set for a stock crash".

Too bad this article wasn't published on Halloween!

... Can you go short on Pop Corn?

DJT Portfolio Surges Above +25% Gains

... Goldman Sachs Offsets Wall Street Worries and our DJT Portfolio surges upwards above +25% gains year to date once again.

(See below for complete portfolio positions)

Note: Given the recent rally in the financial stocks from their lows last week, we have not sold off our positions in C and AIG. Interesting to note also, AXP has resurfaced in the black and we have gains somewhat once again. Stay tuned for any updates.

Stock Market Gyrating Machine Eating Our ...

... Gains.

It seems there was no place to hide this past week unless you were invested in .... not sure really, I have to research that!

Markets are gyrating with greater force as buyers and sellers attempt to digest rising oil prices, a weak dollar, and consumer sentiment more pessimistic than it's been in years. Meanwhile, Federal Reserve Chairman Ben Bernanke says the centralbank is concerned about both inflation and recession. Stock market volatility is nothing new, but we all seem to forget when euphoric new highs are being formed and everyone is practically falling over themselves by the party punch-bowl.

As of yesterday (Friday) the Dean Jones Trader Portfolio (DJT) was no exception in becoming another victim to the mad Wall Street free-fall. Just one month ago we were sitting on +28% gains for the year. Today we are fortunate our DJT remains up +21% based on realized gains established in the first half of the year.

Thanks mainly to our premature financial positions we eagerly established back in October with Citigroup (C), and American International Group (AIG), (which seemed to have formed a short term base at the time and a buying opportunity), it further proves you simply have to cut your losses no matter what. In a (DJT) back-study over time, it became evident that using a -6% "sell rule" seems to be the threshold in keeping gains in tact and losers out from possibly further deteriorating a portfolio.

That said, come Monday the following stocks would need to be SOLD:

AIG
C
DIS
GE

(Side Note: Plain sloppiness or lack of time, is no excuse for mediocre management of what should be a fine tuned stock portfolio, but I personally have a darn good excuse for being M.I.A. in the last few weeks -- negotiating the purchase for a new California home at -30% below last year's selling price, is quite the dramatic event in this sub-prime age of frenzy. Now that's a whole other market and story for other blogs to rationalize!)

In the last post we established a BUY in Wal-Mart Stores (WMT), which by the way never made it in our overall portfolio screen shot(!) since it was SOLD within 10 days following a quick reversal and downtrend.

Last month we also increased our BUY position in Altria Group (MO), (which I still prefer to call Philip Morris, or as the Street calls them; 'Big -MO'). The stock is clearly enjoying support in this time of market turmoil, as it is a defensive play and best of all, it also pays a fat dividend to boot.

(... or is it P-H-A-T?!)

Dow Jones Industrial Averages & Global Markets "Flexing Muscle”

... These were the new financial headlines this morning - by the same "financial professionals" when exactly one entire day prior, (yes, yesterday/ 24 hours ago) they exclaimed, "Stock Market Outlook Gloomy", "Recession and Correction Near", "The Fed May Lower Rates" (huh? what's the other 50% of the probability forecast?!) etc, etc ... With the similar impulsiveness we simply respond, "Drink ethanol and let solar shine!"

Forget the fair-weather zealots' headlines. Rely only on the facts, whether the trend is currently up or down, and starting today we'd rather focus on Earnings Season which are currently underway. This is the catalyst that will determine the market's direction and where individual stocks really go next.

On that note and speaking of facts, Wal-Mart Stores, Inc (WMT) the world's largest retailer, was one of the first DOW components on Thursday to report earnings. Plainly put, they were somewhat favorable and furthermore WMT has increased its profit outlook lifting market optimism about its earnings. The stock seems to have found a bottom at approximately $42 and seems to have reversed from a previous down trend since mid September. All that said, we're BUYING it here.

We continue to stand by the statement made in our DeanJonesTrader blog back on September 13th (days before the Fed lowered rates), and we are also BUYING here the following for our Dow Jones Trader Portfolio (DJT):

AIG - American International Group, Inc

DIS - Walt Disney Company

PFE - Pfizer Inc

WMT - Wal-Mart Stores, Inc

Click below to enlarge and view current Dow Jones Trader Portfolio (DJT) positions:

DJT Portfolio Up +27% YTD

Third Quarter Report Card

Hard to believe we are entering the last quarter of 2007. While the major financial headlines are back to flashing, "Investors Ponder the Fed's Next Move", and professional financial managers are making cerebral statements such as, "We're trying to read the tea leaves of what they're going to do on Halloween" (no joke), we instead will keep this blog honest and simply broadcast the facts with our end of quarter results.

In the third quarter; Dow industrials were up 3.6%, Nasdaq up 3.8%, S&P up 1.5% and our Dean Jones Trader Portfolio edged up 8.3% hitting an overall record high. (See 3-month chart below)

With a sense of relief knowing we remain at +25.4% for the year and following a challenging summer with a Wall Street correction, we can now start focusing on this upcoming 4th and final quarter of 2007.

But prior to doing so I will respond to the several e-mails and questions received which basically ask, "how can this Dean Jones Trader Portfolio be ahead for the summer, after knowing it was the worst past two months on Wall Street since 2002?" ... The answer remains quite simply, because we locked-in some gains by shedding the portfolio from several stocks and particularly all the financial stocks, keeping only the defensive plays while riding out this downward trend. (Furthermore one can also read this blog's previous entries back to June 2007 until present for details).

To highlight this fact, the 3-month performance chart above clearly illustrates that at the time the S & P 500 suffered its second-biggest plunge of the year (second half of July through August), our DJT Portfolio more or less leveled off during the same time period.

Ironically, last month was also the best September on record since 1992. Therefore the question remains, where were all those "professional" tea leaf readers back then?

When Interest Rates Fall, These Go Up +25%

TODAY'S DOW JONES TRADER PORTFOLIO FACT$:

1. Coca-Cola Company (KO) Hit a 52-week high: $57.68

2. Procter & Gamble (PG) Hit a 52-week high: $70.73
3. Our DJT Portfolio hit a new year high at +25.4%

Last Tuesday, we got the biggest buy signal since November 6, 2002. When we received that buy signal, the Dow closed at 8,771. That market trough coincided with the last time the Fed cut interest rates by 0.5%. Since then, the markets have done extremely well and that buy signal kicked off a five year bull market.

... But, while the Dow (overall) has returned a mere +57% since that time, there have been a lot of much better performing stock investments. Two of the best performers since that time were Energy and Health Care. Since the bull market began on October 9, 2002, the FACT is that only 18 of the 500 stocks in the S & P 500 Index have seen their share prices decline during this bull market run.

Can this time be different? Of course it can, but we're betting that long term stocks will rise handsomely and short term we intend to maximize our returns by riding overall market momentum and individual stock trends.

FUN $ FACTS:

The best performing current S&P 500 stock since the bear market began on March 24, 2000 is: XTO Energy (XTO) ... Which leads the top 25 list with a whopping return of over +2,188% ! The worst? ... JDS Uniphase Corp. (JDSU) ... it has fallen over -98.9%.
(We say, "Let bad dogs lie ...")

Fed Cut Rates and We're Up +24.6% ...

While Wall Street hails central bank's decision to cut the fed funds rate by a half-percentage point, we hail to Sam Adams and the ongoing performance of our Dow Jones Trader Portfolio.

That about sums it up! ...

The past several weeks of infinite media speculation and lingering financial analysts reciting crystal balled forecasts in unison all came to an abrupt end at 2:20 PM (EST) ... and like a sling shot, the Dow shot up +335.97 (+2.51%) as the market welcomed the news of the surprise rate cut. On a percentage basis, the Dow added 2.5 percent, its best one-day gain since April 2, 2003, when it gained 2.67 percent.

Last Thursday we did state our indicators pointed to a trend reversal for the first time in awhile, and coincidentally at 2:20 PM today our Dow Jones Trader Portfolio did profit from the Fed's half point decrease with the 4 new positions we purchased.

Additionally, today we also increased our holdings by adding the following two new positions;

American Express Company (AXP) and once again, General Electric Company (GE), which the stock broke-out and just hit a new 52-week high along with PG. Worth noting here, we have now gone from 6 stock holdings to 12 in less than one week.

Below is a complete portfolio list of all our holdings:

YTD % Change:

DJTP ........... +24.6%

S & P 500 ..... + 7.16%

NASDAQ ........+ 9.79%

FUN $ FACT: ... And for shits and grins, when we say ALL "media speculation and lingering financial analysts reciting crystal balled forecasts in unison all came to an abrupt end at 2:20 PM", we really meant that! The charts below illustrate a Wall Street phenomena which is rarely seen ... I guess you can call it "the power of the Fed!"... This Dow 30 snapshot was literally taken less than 30 seconds into the decision announcement to cut the fed funds rate by a half-percentage point...

Sodas, Burgers and Dirty Diapers ... and 4 New Buys

As of Thursday these two blue chip stocks, Coca Cola (KO) and McDonald's (MCD), were the best one month performers on Wall Street, and meanwhile Procter & Gamble (PG) just hit its 52-week high at $67.72 soon after the ringing of the opening bell.

When we sold off more than half of our portfolio holdings back in early August to protect our profits (from 15 to only 6 stocks!), we kept 2 of the 3 above mentioned companies in our Dow Jones Trader Portfolio, and today we are benefiting from their new record highs with a gain of +22%.

While almost all the financial talking heads and experts have been too busy for sometime debating whether the "Fed" will lower its benchmark rate or not come Tuesday September 18, the "trend" simply kept us invested in what many refer to as the boring defensive stocks ... In other words, the current sub-prime crisis presumes a doomsday scenario where if people continue to lose their homes and land in the streets, chances are they will still consume a $1.00 Big Mac, supersize on a diet Coke, slap-on some shiny white Pampers diaper on their bottomless kid ... and then spark up a Marlboro while fueling up their SUV at the pumping station.

(In case you're wondering, the ticker sequence to this award winning apocalyptic film would be; MCD, KO, PG, MO & XOM)

On a more serious note now … interestingly today, for the first time since early summer 2007 the stock market confirmed a trend reversal for several of the DOW component stocks - shifting from a negative trend to a positive.

Whether this trend reversal is real or setting up to be a fake-out, it remains to be seen. This type of action is personally more interesting than whether come next Tuesday Mr. “Fed” Bernanke will show up in a Disney or Wal-Mart tie. The timing can also prove to be lucrative.

Having said that we now finally commit some of our 50% cash to work in buying some positions.

For now we are establishing positions in:

C - Citigroup, Inc (NYSE)
JNJ - Johnson & Johnson (NYSE)
MCD - McDonald's Corporation (NYSE)
MSFT - Microsoft Corporation (NASDAQ GS)

Bulls Charge But Dow Down -10% In One Month

This market can be labeled as a classic textbook "correction". In the recent market sell-off our technicals got us out of Hewlett-Packard (HPQ) the same day before the company released earnings at the market's close. Unfortunately the stock rallied the following day (along with all the others in the stock universe!), but until we return to a confirmed rally, capital preservation now rules and prevails over capital appreciation ...

That said we are currently at 50%+ in cash, and our Dow Jones Trader Portfolio today is up +20% for the year. Considering the latest Wall Street stampede, this portfolio's performance provides additional motivation to stay the course as we are well into the second half of the calendar year.

Dow Jones Trader Portfolio (DJTP) Year To Date % Change as of 8/17/07:

Subsequent to Friday's rally, the Dow Jones Industrials are still off 1,000 points for the same month. It would be entirely in this market's character to follow Friday's euphoria with another fire sale next week or next month ... And as horrible as August has been, historically September is the worst time of the year on Wall Street for average monthly performance.

Got Bull?

"Be fearful when others are greedy, and greedy when others are fearful."
- Warren Buffett

Wall Street Crumbles and Global Markets Tumble ...

... But the Dean Jones, Dow Jones Trader Portfolio is still in the green, and the essence of this blog is beginning to show it's true colors (no pun).

The blue-chip index's plunge occurred as credit concerns (surprise, surprise) came back to the forefront, and global financial stocks dragged the market lower on continued concerns about the health of the nation's mortgage market and the ability of mortgage lenders to continue to fund their operations and, ... (Someone forgot to mention there is still some good news out there - JC Penney stated 'back to school' sales are strong!)

Where's the market bottom? No one knows. This is a financial liquidity driven crisis and it must play itself out - pure and simple. (By the way, liquidity to individuals is one thing. Liquidity to companies of solid reputation is an entirely different thing. In this new environment the reputable corporations will get stronger and the weak entities will perish - hence the essence of this blog and trading the Dow 30 companies. Someday soon stocks of companies like Citigroup (C), JP Morgan Chase (JPM), etc, will be buys once again for future gains in our Dow Jones Trader Portfolio to profit from).

Probabilities or potential scenarios developing two or three weeks from now, and whether "the Fed" will cut rates or not, is irrelevant to this blog as well. Irregardless of all the drama and current noise of what is being said, the trend of any given stock is all we really care about, and there is no need to spend more time than necessary than to simply understand the current trend.

Here are the FACTS:

The S & P is now DOWN -10% since its high on July 19, 2007, the overall Market Trend is DOWN, and on that note this swift yet relentless market sell-off is now forcing us to further protect our gains. Of the total 12 stock holdings in our portfolio, we are selling our 2 losers, including taking additional profits in 4 of our remaining winning positions which have turned negative.

Dow Jones Trader Portfolio (DJTP) vs. S&P 500 Index
(3 Month % Change) :

Dow Jones Trader Portfolio (DJTP) Year To Date % Change as of 8/15/07:



Dow Jones Trader Portfolio (DJTP) Buy & Sell Log:

YTD % Change:

DJTP ........... +18.8%

S & P 500 ..... - 2.8%

NASDAQ ........ - 0.3%

Side Note: Ironically technology, and more specifically the semiconductors, continue to hold strong here in the recent market sell-off. We will be increasing our position in Intel Corporation (INTC) if the overall market trend will return positive soon.

Wall Street Bears And 13,000 Headless Rubber Chickens

... Suffering from the Summer heat or Wall Street paralysis by analysis?!

Either way, as we find ourselves in the "eye of the storm" in what many are referring to as the current Wall Street stock market meltdown, there is also an increasing amount of noise generated by the media, augmenting exponentially simply infusing nothing more than ... useless panic.

While it seems natural to be experiencing some of the Wall Street Stock Market Jitters, one can easily fall victim to the "worry trap" and spend countless hours, days, (if not weeks!) just reading and trying to make sense of the latest market financial "news"... only to further cloud one's vision by finding MORE useless layers of infinite doom-and-gloom media reports, digital financial dissertations, etc, all popping-up over the Internet like wild mushrooms in a dark and mildewy basement.

Drama is for Hollywood, not for Wall Street.

The reality and facts are as such;

No one financial "professional" can tell us where the markets will go from here. Therefore, it should be business as usual --- (1) continue to follow the large financial institutional trends (i.e. SELL if warranted), (2) protect your profits and gains, (once again, SELL if warranted), and (3) turn-off all media and ignore the noise (... and go to the beach and enjoy the last few weeks of summer - It will be a wiser and healthier decision).

Note: To enlarge graphics, please 'click' on any image below:

Dow Jones Trader Portfolio (DJTP) Year To Date % Change as of 8/13/07:


We currently have 12 holdings total;
11 winners with profits and gains
1 stock in the negative ...

Sold All The Large Financials Ahead of Time, We Ride The Bull

Wall Street Tempest or Opportunity?

Last week’s 2-day bounce was short lived as once again renewed fears of potential “subprime spillover” and surging oil prices overshadowed some solid earnings reports. Unfortunately, even though many earnings news are favorable (and should prevail) the change in the winds and trend reversal now leave the Dow Jones Trader Portfolio with one objective… to protect our gains.

Our call to sell all of our large Dow “financials” stocks back in June seemed to be perfectly timed. (See ‘sells’ for AIG, AXP, C and JPM on Friday June 15, 2007 below). Today General Electric (GE) seems to be the last standing pseudo-“financial” stock we are selling to protect any profits. Given the recent shift of overall market trend, we are now quicker to act on locking in on profits and cashing out. We can always easily repurchase the same stocks if necessary when time confirms Wall Street's bullish uptrend has returned.

This volatile market also presents an opportunity for the Dow Jones Trader to sell any weak stock showing trend deterioration, especially discarding any stock which demonstrated an overall anemic performance since the position was established … And note of interest: Thanks to several confirmed consecutive down sessions on Wall Street last week, The Dow Jones Trader Portfolio (DJTP) is finally off margin for the first time this year…

Simply put, “The Trend is Your Friend”. All we continue to do here is follow the same ol' boring rules, which remains the essence of The Dow Jones Trader Portfolio --- that of navigating the trend and piggy-backing on the large institutions ... of course only limiting ourselves to any of the DOW 30 stocks.

As many worry of the current Wall Street tempest to date, the ongoing strong performance of the Dow Jones Trader Portfolio still remains a winner and in the lead, and this fact is the silver lining.

YTD % Change:

DJTP ........... +20.7%
S & P 500 ..... + 1.4%
NASDAQ ....... + 3.9%

See below for the complete Dow Jones Trader Portfolio holdings:

Wall Street Tempest or Opportunity?

See below for the complete listing of the latest Dow Jones Trader Portfolio stock activity:

Bulls Run, Bears Hide and our DJTP Flies

As many expected a pullback or correction thus far this summer, the Bulls showed who's in charge on Wall Street once again yesterday. (What can I say? In my options portfolio, even yours truly is down on SPY puts).

.

No matter what all the "professional" talking heads' predictions are (or were), the facts are all we care about. The trend is up and the results (YTD) for the DeanJonesTrader Portfolio (DJTP) in comparison with the other benchmarks remain, shall we say ... "bull-ish".

YTD % Change:

DJTP ...........+26.7%
S & P 500 .... + 6.9%
NASDAQ ..... +11.9%

.

"Do you wish to gamble blindly in the hope of getting a great big profit, or do you wish to speculate intelligently and get a smaller but more probable profit?"

--- Jesse Livermore

Dean Jones Trader Portfolio (DJTP) Up +23% YTD for The Week Ending July 6, 2007

Here are the latest updates and action taken on each position within the portfolio...

This past 4th of July week marked another bull run for all top performing averages on Wall Street, and especially for our "less flashy" names held in our DJTP. As of writing this morning, the Dean Jones Trader Portfolio is Up +24% YTD ... (Screenshot below is taken from Sunday July 8, 2007 when all markets were closed):


"There is a serious tendency toward capitalism among the well to-do peasants"
--- Mao Tse-Tung

Second Quarter 2007 Results: DJTP Up +13.9% for 3 Months

The Wall Street trading session ending Friday June 29, 2007 marked the end of the Second Quarter for; April - June 2007, and the results for the DeanJonesTrader Portfolio (DJTP) in comparison with the other benchmarks, is illustrated below:

DJTP ............+13.9%
S & P 500 .... + 4.9%
NASDAQ ..... + 6.2%

DJTP vs. S&P 500

DJTP vs. NASDAQ

Off The Beaten Path:
THIS WEEK'S REAL ESTATE STORIES - Here's proof that celebrities are like the rest of us: Even MarthaStewart had to sell below her asking price. The Wall Street Journal reports that she recently sold her estate inWestport, Conn., for $6.7 million, a -26% discount from the asking price.The property was first put on the market last year, for just under $9million.

4 New SELLS on June 14

Ticker:- Action: - Price - Date: ------- Comments:

AIG -----Sell ------$72 ---- 6/14/07 ----DOWN trend confirmed
AXP ----Sell ------$63 ---- 6/14/07 ----DOWN trend confirmed
C --------Sell ------$54 ---- 6/14/07 ----DOWN trend confirmed
CAT ----Sell ½ ---$84 ---- 6/14/07----Overextended / take some profits
DIS -----Sell ------$36 ---- 5/30/07 --- Wash Sale - 1 week after entry
JPM ----Sell ----- $51------5/24/07 ----DOWN trend confirmed
MRK ----Sell -----$54 ------5/27/07--- DOWN trend confirmed

China’s Stock Market Drops off – 8%, But Dow Jones Trader Portfolio Remains Buoyant

Today, regardless of China’s stock market drop of – 8% at last closing, the US indices bounced back this afternoon in positive territory. Friday, the S&P 500 made a new all-time high. This is an impressive feat considering the severity of the dot-com bust seemed not long ago. For some perspective, being in new territory last couple of days for the major stock indices means the market is at a critical juncture.

The sign of "exuberance", or simply better valued equities today since estimates were previously guided lower?!...

The two components working in the market's favor continue to be:

1. Company "earnings"
2. Continued, "low interest rates"
3. Liquidity in the market (i.e.: money coming in)

Furthermore, as we saw last week the real key to the recent rally is the fact that "inflation pressures seem to remain contained”. Thus the catalyst is forever present for stock prices to gain new territory.

- The Dow Jones Index is up .......+ 9.70% year to date.
- The DeanJonesTrader is up + 20.70% year to date.

Bottom Line? The overall data shows steady economic growth and confirms the underlying strength of the equities market; furthermore inflation has fallen back into the Federal Reserve's comfort zone.

If it's good enough for the big boys in corporate America, it's good for us small portfolio holders.

Amongst others, today we are selling holdings of MRK prior to closing bell and possibly locking in on partial (or all gains) in other stocks within the next few days. This is all contingent on market strength or weakness at this critical juncture. GE seems to be poised to break-out to new highs, or possibly reverse? This will be true for all blue chip companies nearing or at their 52 week highs.

The bottom line remains that the market is at a critical juncture. The next few weeks will be telling if we go much higher on volume, or expect a pull back...

BLOG INTRO: * Mission Statement *

Welcome, new readers!

On April 18, 2007, the Dow completed its recovery of losses from the correction to close at a new record high above 12,800 points. One week later, on April 25, 2007, the Dow passed 13,000 for the first time in trading and closed above the milestone at 13,089.89.

Today, we continue higher.

Everyday, stock investing individuals are subjected to an infinite onslaught of financial investment ideas and data, which thanks to the information age, only seems to increase exponentially over time. As the financial noise that forever surrounds us is amplified, we are distracted and derailed further from the objective of what should be a tangible task at hand – that of making money in stocks; minimizing risk and maximizing returns.

In a so called “financial black-hole”, thousands of equity investment vehicles can be found for any individual to choose from. While many are represented by professional talking heads who at least guarantee to profess fortune telling wisdom, nothing can be more frustrating than to later discover that the vast majority of mutual funds and their respective financial gurus, under-perform the returns of the stock market averages (as represented by the S&P 500 benchmark index) year in and year out.

It has often been said if one prefers to eliminate most Wall Street odds associated with stock investing, along with the demanding time required for company research (and not to mention the brain damage!) you are best served by simply investing in an S&P 500 Index fund, and then just walk away. Many investors spend time chasing hot stocks (sometimes only to ride them back down!), including jumping in and out from a pool of 14,000 funds, only to under perform the market every year.

In the long run, the S & P 500 and many Index Funds for that matter, are a better choice than virtually all other alternatives for passive investors. (FYI: for the past five years, the S&P 500 has beaten approximately 73 percent of large-cap managed mutual funds, while the S&P MidCap 400 has outperformed 79.7 percent of midcap funds. This does not even take into account the "hidden" fees the said institutions charge yearly. If you buy mutual funds from a broker, you could pay a commission, or "load," of up to 5.75%. Annual expenses can also vary among funds, from 1.5% or more a year to as little as 0.1%. Fix: Choose no-load mutual funds with low expense ratios. You can buy them directly from investment companies such as Fidelity, T. Rowe Price, and Vanguard).

So let’s take a step back in an attempt to turn off all the noise ...

First off, there will always be investment opportunities in certain equities which can potentially better the averages, and secondly, passive vs. active fund debates will continue on forever. (This is not the intent of this blog and the topic can be discussed at a later time). But the fact remains that whether in life, on Wall Street (or in lost Vegas), understanding and evaluating the odds presented before you is the key for greater success and a winning outcome overall.

Having stated the above however, and finally unveiling the fundamental nature of this blog, there is one strategy I have explored, fine tuned and back-tested for sometime which seems to continue to outperform the S&P Indexes considerably in both short and longer term. Though it may initially come as a surprise to many, this reliable and profitable strategy simply focuses on a collective stock universe of only ... 30 companies!

In essence, this Dow Jones Trader “blog” is best summed up and represented as follows;

• 
  If The Dow Jones Industrial Average is a price-weighted average of ultimately 30 top blue-chip stocks that are generally the leaders within their industry, then how successful can one really be if we were to limit ourselves to only trade the Dow 30 component stocks, and nothing more?!

Recognizing these are all real proven solid companies, with real earnings, and which constantly have tremendous institutional support at any given time, The Dean Jones Trader (DJTP) is a trading portfolio with a focus in capitalizing on positive momentum shifts and riding the trend until a reversal confirms it is time to "sell". We are using a relatively straightforward proprietary technical system: When price moves above the prime average and money flow is positive, we "buy". When price moves below the prime average and money flow is negative, we "sell"!

The Rules?

The Dow Jones Trader portfolio began with a cash position of $100,000 in January 1, 2007, and every "buy" position is executed with an initial commitment of $10,000 flat or in $5,000 increments thereafter. In turn, all "sell" orders are executed when diminishing or weak institutional support and a breakdown in technicals is confirmed. The process then continues full circle.

Furthermore, there is no minimum or maximum number of stock positions the portfolio can hold at any given time. Depending on both the market's strength and individual stock strength, the portfolio can contain holdings of say 5, 10, or 20 stocks at once.

The Philosophy?

Simple. Like with any investment and as best said by the legendary Warren Buffet, "Capital preservation is Rule #1 ... and Rule #2? ... Don't forget Rule #1 --- In our Dow Jones Trader portfolio you will notice there are rarely any losing stock positions! ... With an aversion to risk, all losers dipping below -5% in the Dow Jones Trader portfolio are almost thrown out immediately, and we let the winning stocks run. Conversely, if the entry "buy" point is proven to be wrong, (i.e. a losing position), we figure at $9.99 per trade there is no shame in tossing out that sour acquisition and then continue to focus on the next opportunity. It can be viewed as a small price to be pay for say, "insurance"!

Again, Rule #1 is the only rule to invest by, period.

In having communicated this strategy to several friends and family members who subsequently then seemed to say, "now show me the money!", I have decided to expose this Dean Jones Trader portfolio (DJTP) in the cyberspace spotlight for anyone to follow along and monitor its progress, all within the comfort of this easy access public platform! I will continue to attempt posting any updates regularly and in real time.

Like everything else, in measuring success only time will actually determine its true net worth.

So let the bulls run!

- Dean

“The market is not an invention of capitalism. It has existed for centuries. It is an invention of civilization.”


--- Composition of the Dow ---

At present the Dow Jones Industrial Average consists of the following 30 companies:

3M Co. NYSE: MMM conglomerates, manufacturing

ALCOA Inc. NYSE: AA aluminum

Altria Group Inc. NYSE: MO tobacco, foods

American Express Co. NYSE: AXP credit services

American International Group Inc. NYSE: AIG property & casualty insurance

AT&T Inc. NYSE: T telecoms

Boeing Co. NYSE: BA aerospace/defense

Caterpillar Inc. NYSE: CAT farm & construction equipment

Citigroup Inc. NYSE: C money center banks

Coca-Cola Co. NYSE: KO beverages

Du Pont de Nemours E.I. & Co. NYSE: DD chemicals

Exxon Mobil Corp. NYSE: XOM major integrated oil & gas

General Electric Co. NYSE: GE conglomerates, media

General Motors Corp. NYSE: GM auto manufacturers

Hewlett-Packard Co. NYSE: HPQ diversified computer systems

Home Depot Inc. NYSE: HD home improvement stores

Honeywell International Inc. NYSE: HON conglomerates

Intel Corp. NASDAQ: INTC semiconductors

International Business Machines Corp. NYSE: IBM diversified computer systems

Johnson & Johnson NYSE: JNJ consumer and health care products conglomerate

JPMorgan Chase & Co. NYSE: JPM money center banks

McDonald's Corp. NYSE: MCD restaurant franchise

Merck & Co. Inc. NYSE: MRK drug manufacturers

Microsoft Corp. NASDAQ: MSFT software

Pfizer Inc. NYSE: PFE drug manufacturers

Procter & Gamble Co. NYSE: PG consumer goods

United Technologies Corp. NYSE: UTX conglomerates

Verizon Communications Inc. NYSE: VZ telecommunications

Wal-Mart Stores Inc. NYSE: WMT discount, variety stores

Walt Disney Co. NYSE: DIS entertainment


Recent Changes in the Dow companies:

On November 1, 1999, Home Depot (NYSE:HD), Intel (Nasdaq:INTC), Microsoft (Nasdaq:MSFT), and SBC Communications (NYSE:SBC) joined the Dow Jones Industrial average, replacing; Sears, Roebuck & Co. (NYSE:S), Chevron (NYSE:CHV), Goodyear Tire & Rubber (NYSE:GT), and Union Carbide (NYSE:UK)

On March 17, 1997, Hewlett-Packard, Johnson & Johnson, Travelers Group, and Wal-Mart joined the Dow Jones Industrial average, replacing; Bethlehem Steel, Texaco, Westinghouse Electric and Woolworth.

PRELUDE

Stock investing: Is it a Mystery or is it a Science?

Neither really. Even in this unprecedented information age where the Internet has essentially provided us all with another priceless tool in our arsenal, a cerebral extension enriching our existence, many financial professionals and gurus continue to profess that investing in stocks is like a complicated science where every common person should stand free and clear from.

With any content imaginable now being readily available online with just a few clicks, nothing can be further than the truth. Consequently the increase of accessible information online became power multiplied ten fold. Until approximately ten years ago only high powered Wall Street entities were privy to such information. Whether it be accessing market conditions, company announcements or conference calls, earnings reports, charts and technicals, etc., today the playing field has leveled off and it’s basically a "free for all" if you really crave it.

Like with any discipline, education is freedom and any topic can be mastered when supplemented with passion. Thanks to the Internet, we have arrived.

So profit from it!

- DeanJonesTrader

DISCLOSURE: With its fair share of thrills and spills, I've studied many readings from several of the most popular financial theorists and mercenaries of the investing world. From Benjamin Graham's value investing techniques, to Philip Fisher, Gerald M. Loeb, Peter Lynch, Warren Buffett, William O'Neal, and yours truly's school of "hard knocks" (no not the book!), I 've been riding the Wall Street stock investment wave since 1993. I am not a professional Wall Street trader but you can say I've graduated as a Wall Street aficionado, and remain a student since 1993. After all, Jesse Livermore was a student and mercenary who re-wrote the rules along the way ... an individualist and probably the most successful stock trader who ever lived.

"Vegas is for losers, Wall $treet is for Winners"

- Dean