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Commentary

THURSDAY NIGHT, OCT 3, 2002:

Both today's and yesterday's bars were inside bars to Tuesday's bar.  We are retracing the large up day, but only in bits and pieces.  So far there has been no dramatic buyer's remorse.

Last night I said that I saw enough positive signs to believe we could make a run upward for the midline Bollinger Band today.  But, we didn't do it.  Today closed near today's low, which is not a positive sign, but on the daily chart, we are still near the midline and not at the bottom line.

We also stopped all downward motion today right at the Attractor 7684.50.  That is a positive sign.

I'm still holding out positive inclinations for tomorrow's action.  Technically we are still carving out a bottom, with the Average True Range just over 200 points per day.  In my book, today was a Type IV day--sharply sideways, in spite of the quick jump up and immediate retracement.  Basically it was a sideways day, with the Dow begin down just under 40 points.

Intraday INDU

Today's intraday action on the Dow was sideways on higher than recent volume, with one exception.  At 7:15aPT we had an upside blip, followed by an immediate retracement back down to the path it was on.  The sideways action on higher volume speaks to accumulation, to me.  If the big boys are accumulating, then we are going to be in for a few more up days as they recommend and sell stock to the commoners.  That's the kind of play we on which we like to ride the coattails.  RSI is still meandering down around 40, and looks like it could begin the climb to 65 at anytime.  The lower Attractor is at 7659 and the next upper Attractor at 7797 and then at 7879.  If we head down first, watch for a bounce off the lower Attractor.  If we head upward, look to take profits at or near the upper Attractors.

QQQs

The daily QQQ is poking its head lower, exploring to see if there are any more sellers below this level.  While volume was up today on the Dow, it did not show the same enthusiasm on the QQQ.  Average True Range is still expanding inch by inch, and we didn't fall out of bed and drop to the lower Bollinger Band.  Those are positive signs.  As we've been saying for the past weeks, we are slowly carving out a bottom, and we did it again today.  We have now had three recent lows at the current attractor, at or about 20.595.  It's time for a bounce.  ATR is at 0.89; add that to today's low and we might see 21.59 tomorrow.  If not, remember that the long-term model is still in a sell signal, so get short on any evidence of weakness.

Our short-term (15-minute) model is also still short, but we had a profit taking opportunity that we Alerted you to midday at 9:45aPT.

For tomorrow, we should try to peak our QQQ head up above today's high, rising at least to 21.22, if not on up to the important Attractor at 21.53.  If we don't do that, then we are showing further signs of weakness and can expect to continue on down for dismal weeks to come.

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