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PART I
 
On Tuesday we said:
"The 20 day EMA for the DJIA comes at 9125, we believe that
without a "positive" catalyst, the DJIA will be unable
to get thru it."
And we followed up yesterday by pointing out:
"...Today the venerable DJIA closed at 9124, right on the 20
day EMA! Will the market get tomorrow the "positive
catalyst" that will enable it to break the short-term
downtrend? We do not know, a market that is solely news driven,
without much attention to the underlying fundamentals, anything
is possible..."
Today we saw the first sign of fatigue. The DJIA is
resting at its 20 day EMA, waiting for something to happen. We
continue to believe, that without the "positive
catalyst" it will be rather difficult to continue its march
upwards.
 
Yesterday we said:
"If you recall , on 9-19-01 (see market timing) our
forecasting model showed a 41.72% probability that the SP500
could reach 1150, we find it rather unlikely that the SP500 can
reach that level without pulling back first. NASDAQ is also up
against its 20 day EMA, since June, it has made contact with
this important short-term EMA 5 times, and it has rolled over,
in each and every one of them. Is this time different? We have
no evidence to believe so, but again a market that is
solely news driven, without much attention to the underlying
fundamentals, anything is possible."
Today -just like the DJIA- the SP500 and NASDAQ
showed signs of exhaustion after making contact with the 20 day
EMA. Now we got to see if the resent rally ends here, just like
every rally since June, or it finds reasons to accelerate
futher.
Click here for PART
2
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