10 Next TAIPAN its way along the top Bollinger band in much the
same fashion as the penultimate rallies of the late,
great tech bubble. Similarly, we are still bouncing
off the ten-month average.       On the corollary oscillators, we see Momentum
remaining positive and MACD-H showing the lead-
ing average beating the lagging average (although
not by much), and both are well into the sort of
positive figures that induce a competent analyst to
begin looking for a reversal. Close to the edge All told, the monthly chart is a bit edgy, and while I would not immediately bet against the S&P
based on this info, I would certainly be loath to put
any long-term money down on the long side.       There is even less comfort to be found in the
daily chart, where the same series of indications—
trend position, Momentum and MACD-H—have
moved from the hard bullish confirmation shown in
the earlier rising phase of this rally into a vacillating
month on, month off pattern. This vacillation yield-
ed a pretty lousy January, with positive monthly,
negative daily Momentum and MACD-H, followed
by a strong six-week run in February and March
accompanied by matching Positive/Positive signals.
Now, however, we are seeing a Positive/Negative
split similar to January's signal that could indicate
another bogging down of the index. My original
prediction for the year, based on a combination of
waveform studies and Dentian seasonal predilec-
tions, called for one more strong rally running
through late March and possibly into early April that would carry the S&P as far as 1,400 before a
capping pattern and a downside arc took back as
much as 66% of the year’s gains. I stand by most of
this prediction. The flag on the mountaintop       I do see a strong potential for one more good
surge ahead, although the top itself may not nail
1,400 and will, in all likelihood, only hold for hours.
Nor will all stocks enjoy this last push.       We have seen this pattern before, most recently
in the last days of the tech bubble, when most
investors knew the thing was on its last legs but
figured that their superior vision, talent, luck, what-
ever, would enable them to make sure that some
other guy got stuck holding the bag. (And you
know, a very few of them were right.)       Think of the next 60 days as a shoplifter’s rally:
lots of marked spikes followed by selloffs every
time there is the slightest perturbation in the ether. Climber’s gear for a spiking
market Your best tool to take advantage of this volatility? Large cap stocks? Out of the question.       The varying fates of dueling sectors tend to can-
cel out signals in the larger market. Instead, focus
on options on select stocks with charts showing
clear leading tendencies. Overall direction is mean-
ingless in a top like this, but I would not deploy
options contracts with expirations more than eight
weeks or less than four weeks out.       When I was a kid, the Goodyear
blimp was everywhere. Every major
event I watched on television always
had a quick photo shot of the blue
and yellow helium airship: over
baseball stadiums, football fields,
even parades.       The blimp’s constant presence,
soaring over clouds and across
cities, was the quintessential symbol
of the company. Why? Well, while giving the impression of being everywhere, they
actually were, and still are. As the number-one tire
company in the world, Goodyear Tire & Rubber
(GT:NYSE) services can be found in 47 countries,
ranging from the United States to Russia to Thailand.       Created in 1898 by Frank Sieberling with
US$3,500 borrowed from his brother-in-law, GT
incorporated with a capital stock of US$1,000. With
its creation came the company logo, a winged foot,
symbol of the messenger Mercury, whose swiftness
embodied Sieberling’s expectations for the company. A good year for the tire: Put the pedal to the metal and burn some rubber on this
undervalued stock Ann Sosnowski