My Mom, Genius Trader

I tried to make this as large as possible, but I expect it still is hard to read, but anyway this is a 2 year chart of BNI (Burlington Northern).

It got caught in the Summer selloff of 2006, which took it down 20 points or so.

Then my Mom bought a bunch during that August. I remember replying with some mumbo jumbo about how it looked like the economy is slowing down and how the transport stocks are good proxies for the overall stock market, etc etc. Generally I expressed a cynical attitude towards anything marketwize, thinking that the bear had arrived and everyone else didn't know it yet.

Well wouldn't you know it...Mom was right! BNI bottommed last August, and has had a lovely run.

OK...so what, you say?

Here's the point: during May of 2006, BNI very kindly gave us an indicator that she was ready to hit some distribution. A major support level right around $76. was violated, and then the stock sold off hard in the following weeks.

And fast forward to the present: NOW WE HAVE A SUPPORT LEVEL OF APPOX. $86 that has been holding since April. We are near the bottom of the range; if BNI penetrates this long term support I think this stock could easily go back to the mid $70's, and perhaps lower.

In a broader sense I think (and I am just guessing now) that accordingly the overall market may be headed for some sort of summer correction that is, incidently, way, way overdue!