(9-30-02)Although the markets recovered somewhat from their morning lows, the indicators are still suggesting lower prices, and the charts are showing "continuation patterns" which also suggest lower prices!  For the short-term the picture is still quite bearish. Pay attention to support levels, at some point over the next several trading days, one of them will hold and we will see a trend reversal.  We believe the downside targets given by our forecasting models are the levels more likely to see a reversal of trend from (see market timing) 

(9-26-02)  Today the SP was the only index to continue to make solid progress. NASDAQ's un-inspiring performance raises questions, and a devastating decline in after market hours in the stock of Philip Morris do not bode very well for tomorrow. More worrisome is the fact that volume has declined as the markets advanced the past two days. Take a look at the charts for the SPY and DIA below. A picture is worth a thousand words, charts like the ones above make it very difficult to be bullish with any degree of confidence. The Thrust Oscillators are pointing up, suggesting that  the markets do have some room to run on the upside, but unless buyers come in, the markets can't go very far. For tomorrow's trading pay special attention to today's lows, if they are taken out, the picture will get even more bearish. (Today's lows; Dow: 7844, SP500:841, NASDAQ:1206) 

(9-25-02) Today -at last- we got the bounce we have been expecting for the past couple of days. Breadth was decent, but volume was not. All the indicators are telling us that -at least for now- the current bounce is nothing more than  a counter-trend move within a larger down-trend. We should be looking for the bounce to run out of steam as the markets approach the 1st upside targets. Only if volume picks up as the market advances will give us a hint that this bounce may develop into something bigger. 

(9-24-02)The markets continued to trade lower while getting even more oversold. In fact the markets have been down 8 out of the past 10 trading days, underlying the lack of buyers, a development that  has bedeviled the markets since they topped out in August. We have pointed out several times that  given how oversold the markets are, a rally can erupt at any time, on the other hand, given their abysmal technical condition they can keep on selling off. At this point we strongly suggest that you   pay attention to support and resistance levels and wait to see at what level the markets find support to go long. We do not believe this is the place to be establishing new short positions. Notice how the Thrust Oscillators are slowing down their decline, indicating that a turn around is imminent. 

(9-23-02)The markets continued to trade lower after a warning from Walmart, a  decline in the LII for the 3rd straight month, and continuing tensions in the Middle East.  As we pointed out in the weekly report, and as it can be seen also today, the markets are at a point from where they usually rally of  at least 5%. On the other hand, the Quantifiers are at -24, implying that the technical condition is as bad as it can get, and the SI25s are in free fall territory, implying that the markets can go into a free fall, despite how oversold they are already. As you know, we have said numerous times that the July lows were not of any significance, they would be re-tested and more likely violated.  The markets are in the process of doing so now. The good news is, that our forecast has also called for a strong rally after the July lows are penetrated. So far we have been right, of course it does not mean that we will continue to be so, but if we do, then we should get another bear market rally between 30% to 35% in the SP500, and 40% to 45% in NASDAQ, once this leg down is over. 

(9-19-02) We have said several times that our indicators  suggested that the July lows were not of an intermediate term significance, and they would be re-tested, and possibly violated ( see weekly extra for 9-7-02, and weekly report for 9-16-02 ) The question is whether those lows  will re-tested over the next 1-2 days, or later. We thought that given the oversold levels of the market we would see a bounce from current levels for 1-3 days, before the markets descended into the July lows. At this point, the odds based on the McClellan Oscillators  as we pointed out on page 3, plus the SI10s (see charts below the Thrust Oscillators) favor a bounce, but given that the SI25s are in  "free fall territory"  and the  Thrust Oscillators are pointing down, the deeply oversold levels illustrated by the McClellan oscillators may not be enough to bring about a bounce. After all, oversold bear markets can get more oversold. However, the key thing t keep in mind going forward is this: if we do get a bounce from today's levels, the Quantifiers and the BSEs are telling us that it will last for 1-3 days, and it should be followed by a another leg down to test the July lows. If we do not get a bounce from today's closing levels and the markets go straight down to the July lows, we should get a bounce back up to today's closing levels, followed by another leg down that will violate the July lows (see page 1) 

(9-16-02) All the major indices continue to be stuck in the same trading range they have been in for the last three weeks, and although the deterioration in the technicals continues, price is holding up. Notice that the Thrust Oscillators turned down, and also the NASDAQ a/d line just made new lows, while the NASDAQ cumulative volume is close to making new lows as well.  We can't rule out a rally back up towards the August highs, any piece of good news -a postponement of the war with Iraq for example- can spark a rally. However, given the technical underpinnings of the market, we must conclude that the infrastructure is not there for anything bigger that a revisit of the August highs. Keep an eye on the support and resistance levels, and trade accordingly. 

(9-12-02) We got  the McClellan Oscillators still above zero, the BSEs still climbing, and the Thrust Oscillators are also still climbing. Against these positives we got the S25s below zero, the Quantifiers below zero, and the Trend indicators declining. In other words, we got  a truly mixed and ambiguous picture, no wonder why price has neither broken support, or, resistance yet. Obviously, that can't go on for too long. Within the next two trading days we should have a resolution. In making decisions, we got the same suggestion we gave two days ago: Is price breaking above resistance and meeting upside targets, or, is it breaking support and meeting downside targets? If support levels hold and resistance levels are broken open "pilot" long positions (30%-35% of capital) If resistance levels hold, and support levels are broken, open "pilot" short positions (30%-35% of capital) or stay in cash. 

(9-10-02) Nothing changed today, the markets advanced marginally higher flirting with their 20 and 50 day SMAs. We continue to believe that the markets can make additional marginal progress rallying to the upside targets we have  listed in the table below. However, we also want to reiterate that unless the technical condition improves, at best, we can see a rally back towards the August highs. At the moment, the technicals do not even support getting that far.  Can the market pull a rabbit out a hat and roar on the upside? Anything is possible, but given the current technical and fundamental background, we must conclude that  it is possible,  but it is not very probable.  We would advise that investors stay on the sidelines for a couple of days, however, if you must be in the market, use the following as a guideline:  Is price breaking above resistance and meeting upside targets, or, is it breaking support and meeting downside targets? If support levels hold and resistance levels are broken open "pilot" long positions (30%-35% of capital) If resistance levels hold, and support levels are broken, open "pilot" short positions (30%-35% of capital)

(9-5-02)Our forecasting model for NASDAQ (see market timing) was projecting a rally into tomorrow under both scenarios, thus, today's rally shouldn't be a surprise. We also mentioned that our model is still neutral on the SP500, meaning it can go either way. The plurality of our indicators are negative, but the McClellan Oscillators are positive and price has not reached more resistance resistance yet. Thus, the markets may rally further to the upside targets we have listed in the table below. However, if the technical condition does not improve quickly, we do not see how the indices can gain significant ground from here. 

(9-5-02) The Dow and NASDAQ broke marginally below support, but the SP500 did not. In any case, today's action was negative in many respects. All of our indicators imply that the rally from the July lows has failed, In fact this morning we sent you via email the change in our market position for NASDAQ from "neutral" to "sell" Notice that NASDAQ is back where it was on 7-22-02, when our model became "neutral" indicating that we should not expect further deterioration, or, progress over the next 3-4 weeks. Now our model is indicating lower prices ahead with a target of 1080 and a probability of 67.23% of achieving this target over the next 3-4 weeks.  (see also your message box under the "USER" tab in the upper right corner) Given that tomorrow is Friday, and close to September 11th, we do not think too many traders are going to want to hold long positions over the weekend. Thus, the odds favor lower prices.

(9-4-02) Today we had  the rally we suspected that we may get. However, it is too early to conclude that yesterday's decline constituted the "buy spike" we had originally hoped for. The only indicators that suggest such are the McClellan Oscillators, the rest of the indicators we use suggest that the rally off the July's lows has come to an end, and at best, we can expect another run towards the most recent highs. For now we suggest that intermediate term  investors stick with what we said yesterday in regards to opening new positions, either long, or, short. 

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In any case, we urge to use tight stops and do not hesitate to get out of a position that turns against you.

(9-3-02)

  Today's decline was a setback for the bulls. All of our indicators fell beyond levels that signify "buy spikes." On the other hand, the indices stopped at strong support points as we pointed out on page 1. Usually the markets bounce from "quadruple support points" thus, we may get a rally tomorrow. However, the sharp decline below zero  by all of our own indicators suggests that the markets may push lower. We will repeat the same thing we said yesterday:

Do not make it difficult and agonizing for yourself to decide what to do. This is the question you need to ask: "Is price breaking above resistance and meeting upside targets, or, is it breaking support and meeting downside targets? If support levels hold and resistance levels are broken open "pilot" long positions (30%-35% of capital) If resistance levels hold, and support levels are broken, open "pilot" short positions (30%-35% of capital) or stay in cash. "