(4-24-03) The markets pulled back  after making contact with resistance. They are still coiling within  triangles without a break yet. We wish we had something more to add to yesterday's comments, but there is nothing new to add today,  we still have the same three scenarios to consider, and use them as a roadmap to trade over the next 3-5 trading days.

(4-23-03)The indices moved right up to resistance closing marginally above, with the exception of the Dow, which closed marginally below. At the same time, we saw volume contract a bit, but breadth remained strong, while several divergences continue to build on, and the Quantifiers were once again unchanged. When we put it all together, we believe that the indices have basically three possibilities:

Dow: a) retest of support at 8250, b) further rally to 8600, and c) a run all the way up to 9050.

SP: a) retest of support at 888, b) further rally to 935, and c) a run all the way up to 955.

NASDAQ: a) retest of support at 1430, b) further rally to 1480, and c) a run all the way up to 1525. "

 (4-22-03)The more "substantial move" we were expecting by Wednesday, or, Thursday due to  the unchanged readings in the Quantifier, came today which is unusual. Moreover, the indices are breaking out, while the dollar is breaking down. One can argue that a lower dollar can help U.S. multinationals, and thus it makes sense for the market to move up. Well, if this is true, then the leading index today should have been the Dow, which is full of multinationals! That was not the case, instead the SP was the day's star due to the spectacular performance of the financial sector, which incidentally stands to lose the most if the dollar continues to move lower, because a continuous weakness in the dollar,  will inevitably force interest rates higher. In addition, as the markets broke out volume shrank by as much as 12% in the SP, and 18% in NASDAQ, as reported by our good friend Mr. Tim Ord. Thus, although there may be some additional upside over the next day, the risk/reward at this point doesn't favor playing the break-out, unless one's objective is to get back out within a day.  Having said that, we want to reiterate that although we believe the market is vulnerable in the short term, the Price/Volume Oscillators we mentioned in the monthly report on Sunday, are still rising which means  any pullback will be met with buying, thus, we would expect any pullback to hold at support providing a more favorable risk/reward ratio to add to, or, initiate new longs."

 (4-16-03) The indices once again sold off as they got into the "reversal zones" we have mentioned several times (NASDAQ:1405-1425, SP: 895-906, DOW: 8525-8600) However, they did not violate short term support at 1390, 875 and 8250 respectively, which means we can see still yet another reversal tomorrow. However, the scenario we talked about over the weekend called for two days up, three days down, or, two days down three days up, since we already got the two days up, and one day down, if we were to see a violation of the short term support tomorrow, that should be confirmation that we will get two more down days.  Thus for tomorrow's trading keep an eye on short term support, if it holds, we can have another reversal, if it doesn't, the market is going down for another couple of trading days.

  (4-15-03) Today's action did not even take the indices up to the first upside targets, however, the internals were quite positive, we got a positive cross-over in the Thrust Oscillators, and a sharp move up n the Quantifiers, both of which suggest that we should see continuation on the upside tomorrow. Moreover, volume increased slightly, it didn't shrink, which is also a plus. Thus, we have to conclude that tomorrow the indices will take out the first resistance target, and they will challenge the second. We want to reiterate that  unless, the markets are about to embark on another leg up, similar to what we had in mid-March, we believe that the advance will stall -at least for the short term- somewhere between the first and second upside targets. Our belief is based on the high McClellan Oscillator readings, and in the sharp drop in the volatility indexes (see charts on page 7) which suggest limited upside potential. 

(4-10-03) The 20 DMA, and the still positive overall technical environment -as illustrated by all the indicators- brought about today's bounce. The key thing going forward is whether the indices can get above the resistance indicated in the table below. If they do on a closing basis, the probability of further rally to the 1st upside targets, is 76.34% according to our short term model. However, if resistance can't be overcome, then look for a decline back below support and to the first downside targets. Noteworthy development: The Volatility Indexes shown on the next page are flashing a warning sign.

(4-9-03) The markets lost ground today, however, notice that all three indices finished the day above support, and despite that all the indicators have formed double tops, they are still above zero. Consequently, we can't get too bearish yet, we need a break of support, and the indicators to turn negative. Since all the indices are above support, it is conceivable that we can see a bounce tomorrow, if that happens pay attention to intra-day resistance at the 8340 level for the Dow, the 880 level for the SP, and the 1385 level for NASDAQ. Any bounce that fails at these levels, will suggest that the first downside targets will be taken out, and that we should look for support at the second downside targets.  

(4-8-03) The markets gapped up at the opening -therefore preserving the up-trend- and then spent the rest of the day losing ground to finish the day at support. In addition, all the indicators are also holding at support, maintaining an overall positive picture which can support modestly higher prices if there is the proper catalyst. It seems as if the market is trying to hold on until the next piece of good news from the war, gives it an  excuse  to rally further. The problem with this, is the simple fact that most of the good news is already out of the way. The market can celebrate the death of Hussein -if and when it takes place- and then what?  For tomorrow's trading the key thing is today's lows. As shown very clearly in the intra-day charts below, the indices finished the day right at support. If these lows are violated tomorrow, then we should look for test of support in the 850-860 zone for the SP, and in the 1330-1340 zone for NASDAQ. Keep in mind that -once again- the indices must rally right from the start in order for the up-trend to be preserved. 

(4-7-03)The markets gapped up at the opening, rallied up to  resistance and then reversed managing to close slightly higher. On the surface, today's action can be seen as negative. However, all the indicators remain in positive territory which means that under the surface the technical picture is still positive. Therefore, the market can continue to grind higher for  a a few more days. As we have mentioned several times in the past few days, we believe  that the markets can rally on a closing basis another 3%-5%. In order for today's reversal to end up being a "key reversal day" we would need a close below intra-day support, which we do not have yet, but in order to avoid such event, the indices must reverse to the upside almost immediately at the opening tomorrow. If the markets do not reverse back to the upside tomorrow, then we would expect further price erosion, and test of daily support listed below. 

(4-2-03) The market gapped up above resistance, taking advantage of the "bullish set-up" we mentioned yesterday. Given that the the Thrust Oscillators had a positive cross-over, and the Quantifiers found support at the zero line, we would expect additional gains, unless negative developments on the war front conspire to turn the market back down again. Since most of the indicators are near the top of their respective ranges, we do not expect the Dow to exceed 8600, the SP 906, and NASDAQ 1447, before another pullback takes place. Those of you who are long, keep a stop either at break-even, or, at today's lows. Keep in mind, that the market is moving in tandem with the war in Iraq, and thus it is subject to both positive and negative developments.

(4-1-03)Today -as expected- we got the bounce from the 20/50 DMAs, and all the indices traded up to resistance before pulling back a bit towards the close. There are two important observations at this point, one bullish, one bearish! On the bullish side, the indices bounced from their respective 20/50 DMAs, while most of the indicators remained in positive territory, in addition,  the  Quantifiers managed to stay above zero, as well, which is consistent with what happens during short term pullbacks within larger intermediate up-trends. Therefore, the market has a "bullish set-up" the key thing is whether the market can take advantage of that favorable set-up and rally above resistance. If it does so tomorrow, we would expect further gains back towards the highs made on Friday 3-21-03. If the market can't take advantage of the bullish set up, and it fails to overcome resistance, then that should be a warning sign, suggesting that  the rally is failing.  On the bearish side, NASDAQ has been under-performing the Dow and the SP for the last four consecutive days. Thru-out the bear market, under-performance by NASDAQ has preceded multi-day/week declines. A failure to overcome resistance, coupled with the underperformance by NASDAQ, will provide further confirmation that the rally is about over. For tomorrow, given the "bullish set-up" we would be looking for further gains, and for resistance to be overcome, if it is, we will go 25%-40%% net long, if the market is turned down again, we will go 25%-40% net short."