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?