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October 7, 2001

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Charts courtesy of BigCharts.com

MARKET COMMENTARY 

On the weekend we conduct a full market scan, looking through all stocks for congestion patterns.  Stocks in congestion often lead to significant short-term moves and can provide a quick trading play.  Stocks that met our criterion include: AAPL, DNY, CSPLF, and TALX.  Watch them for the next few days.  To view the full list of stocks that met the criteria, join the Sunny Side of the Street at http://www.moneymentor.com.

Friday's market closed with the QQQs reaching for Thursday's highs in a nice, steady move up, without making it.  That leaves room for an opening gap to Thursday's high on Tuesday morning, as the markets are closed for Columbus Day on Monday.  In spite of the steady move up, we are short from mid-day Thursday in the 15-minute model, and short the long-term model from July 9.

Both models appear to be snaking their way upward, with a potential for changing to the long side in the near future.  Of course, that would require that the market continue to show strength into the coming days.

We have nearly met the 33.60 objective on the QQQs, with the week's high at 32.75.  After that objective is actually met, I expect a quick run to 35.90, followed by some sideways, choppy action around that resistance.

The DOW has considerable overhead resistance at 9250 and could easily begin forming a protracted range trading scenario below that area. 

The S&P 500 Cash met its resistance at 1079 this week and could still go higher.

All three indices are posed to make further upside headway, barring any war news or terrorist attacks.  In the Gulf War of 1991 all bets on technical studies were off, as the market rose and fell with every scud missile.

Disclaimer

The risk of loss in trading can be substantial. Trading and investing are speculative and include risk of loss.  Past performance is no indication of future results.

Sunny J. Harris, Sunny Harris & Associates, Inc. and Doyen Capital Management accept no liability whatsoever for any loss arising from any use of any information in this website, any materials contained or offered herein, and any materials presented by us.  Sunny J. Harris and Sunny Harris & Associates, Inc. do not offer trading advice of any kind herein or elsewhere.  We are solely involved in the business of education.  This column is strictly commentary and is not to be construed as advice.

This information is in no way a representation to buy or sell securities, bonds, options or futures.  Always check with your licensed financial planner, broker, money manager or commodity trading advisor before buying or selling on any advice, whether contained herein or elsewhere.

It should not be assumed that the methods, techniques, or indicators presented herein will be profitable or that they will not result in losses.  Past results are not necessarily indicative of future results.  Examples presented herein are for educational purposes only.  This is not a solicitation of any offer to buy or sell.

Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor do they purport to be complete.  No responsibility is assumed with respect to any such statement, nor with respect to any expression of opinion herein contained.  All trade recommendations should be discussed with your broker and made at your own risk.

You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. 

Whenever viewing hypothetical trading results you should remember the following:

Hypothetical or simulated performance results have certain inherent limitations.  Unlike an actual performance record, simulated results do not represent actual trading.  Also, since the trades may not have been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity.  Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight.  No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

In considering whether to trade or to authorize someone else to trade for you, you should be aware of the following:

If you purchase a commodity option, you may sustain a total loss of the premium and of all transaction costs.

If you purchase or sell a commodity future or sell a commodity option, you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position.  If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position.  If you do not provide the requested funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.

Under certain market conditions, you may find it difficult or impossible to liquidate a position.  This can occur, for example, when the market makes a "limit move".

The placement of contingent orders by you or your trading advisor, such as a "stop-loss" or "stop-limit" order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.

A "spread" position may not be less risky than a simple "long" or "short" position.

The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you.  The use of leverage can lead to large losses as well as gains.

In some cases, managed commodity accounts are subject to substantial charges for management and advisory fees.  It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets.

This brief statement cannot disclose all the risks and other significant aspects of the markets.

There is risk of substantial loss in trading.

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2001