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October 28, 2001

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Charts courtesy of BigCharts.com

MARKET COMMENTARY 

October 28, 2001 - Sunday night

The weekly chart of the QQQs is just beginning to form a base.  There is a little bit of resistance at about 39, with support at 33.  The long-term model has not yet turned positive, so we can expect a little struggle as we move upward.  But that is what I expect we will do in the coming days.  There is nothing like a little war and terrorism to rally the United States behind the flag, and cause us to join together as patriotic force like no other.  This force will bind us as we muster the power to defeat the enemy.  And with that effort comes production.  I expect we will see 52 on the QQQs within the next month to 6 weeks.

Our daily model turned positive October 12th at 34.70 and is now showing a profit.  It looks like it has some more room to go on the upside.

In contrast, the short-term model is just about to turn negative, though it hasn't yet.  The last few negative runs on the model have been shallow and short lived, so I don't think this is in too much conflict with the longer term models.  A run up to 40 would be possible this week.

The S&P futures model is poised to make a run for 1122 this week.  Resistance from April 4th will probably attract and then hold it there for a short while, perhaps even into December.  Again, the overall trend in this contract is down, and we should form a cyclical base before heading upward again.

Nothing overhead looks like it would hold the Dow down until the 9700 area.  I don't expect this first run toward 9700 to pull through to the 10,000 mark.  I think it would congest and then cycle down a bit before trying again to burst through to 10,000.

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