Jim:     The big boys are like retailers, evaluating merchandise before they load up on it... Our job is to figure out exactly what is going on inside their minds...

But... just like Lady GaGa says... I can't read their poker faces and neither can you...

The best way we can do it is to try to figure out a way to approximate what the big money guys are thinking...

Which is why, even though I don't personally put much stake in technical analysis, we go "Off the Charts" every week... looking at pictures of the action... of what the big institutions have been doing in the past... so we can get a feel for what they're going to do next... Also, because the technicians have called some of the biggest moves lately, more and more of the big boys are using the charts to make their decisions.

I called then a number of chartists, I watched the charts and, this week, I want to take a look at the chart of CMI... a classic industrial company that makes engines, power generation equipment, filtration and exhaust systems, as well as the components that go into all of these things...

Alright, Dan Fitzpatrick, my colleague at RealMoney.com... In his column, he's got all the stuff that he's been talking about... he's a go-to guy... when it comes to technical analysis... He thinks CMI has a sweet chart that indicates it is going higher...

At the end of March, Cummins Inc. (CMI) broke out of its 50-day moving average... that's very important to Dan... that's a short-term measure of its trajectory. And, ever since, Dan is saying that investors have been buying the stock on any pullback... see... look at this... I mean, it's really interesting... Dan's got a good point here... on a pullback, buyers come in... see that... every time... where they have been selling into rallies... This is a phenomenon that technicians call "resistance"...

Now Fitzpatrick thinks the 50-day moving average is going from "resistance"... to now "support"... when it got to that crucial level, this is now support... So it's gone from the ceiling, right here... to a floor, which is a pattern that technicians see pretty frequently...

Now, he interjects... the 200-day moving average... that's a longer-term measure, and one that I used to use in my hedge fund...

The reason that he likes CMI, is that he thinks that CMI stock could do the same thing with the 200-day moving average that it did with the 50-day one... he's saying that it should break through the resistance of the 200-day, and then shoots higher, especially as the two lines converge...

The stock's most recent pullback was on light volume... technicians use that as a polygraph... light volume means profit-taking, not that there is something wrong like concerted selling... That's another reason why Fitzpatrick now believes, with the bulls now holding their ground, CMI will breakout of this current range that it's been stuck in...

Fitzpatrick likes CMI based on the chart. We are not chartists. We are fundamentalists, meaning we believe looking at the underlying company... we don't care about the chart, okay... We like pictographs, and I get the pictographs delivered every Saturday morning to my house... big Standard & Poor's books... still hand-delivered... that's how important I think it is... but, ultimately, the big money is going to react to the fundamentals. And, if they're no good -- even on a stock with the best-looking chart -- too dangerous to own.

I think Fitzpatrick could end up being very right on CMI... if the dollar gets weak... It's got a huge business internationally... 59%... The rest of the world is coming back, and we are printing money like crazy... That should be a recipe for the dollar going down... the dollar is already down 7% from its peak in March... and every time it declines, CMI's sales internationally become more and more valuable, because of currency translation.

However, if the dollar strengthens like many pundits say, I think wrongly... then I believe that CMI will have a hard time breaking through that resistance, because business, quite simply, at CMI... is awful. I've got to tell you, it needs overseas sales to make a comeback. It will not be able to do with domestic orders.

Now we know how bad things are from the first quarter where, even those CMI delivered earnings that were better than the Street's very low expectations, engine segment, down 32%... power generation, down 17%... components, down 35%... distribution, down 7%... whoa...

The company said it expects sales to decline by 30% in 2009... you want to buy that stock?... I mean, they also said the global economy won't bottom until late this year at the earliest...

Given all that weakness, how can Fitzpatrick be right?... How can the charts signal a bottom when business stinks?... Perhaps because this is precisely when the big boys like to buy an out-of-favor stock like CMI...

The company, and the analysts who cover it, are assuming the worst!... So, when news comes out and expectations are so low, it might go up. CMI does look expensive, trading at 16 times forward estimates of the future... but the possibility of an eventual recovery is not in the numbers... and, if we do get a recovery, I think we'll have a much much lower multiple, but you have to buy before we are in the midst of an economic rebound, in order to get in before all the big institutions.

If you think the worldwide economy will snap back in the not-too-distant future... if you think the dollar is going to get weaker... hey, then you're going to want to be in CMI...

My problem here is, if we really believe those things, then as good as CMI would be, I would much rather be in Caterpillar Inc. (CAT), which I own for my charitable trust, ActionAlertsPlus.com... because the expectations are just as low for CAT, but it's an accidentally-high yielder, twice the size of CMI's yield... twice... Even as some people are worried that CAT's dividend isn't protected, I think it has a much better rebound potential, because it has more direct exposure to infrastructure proposals around the world, like the one in China... and the one that I think is coming in India.

Here's the bottom line...