"The Sunny Side of the Street"

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Commentary

SUNDAY NIGHT--11/03/2002:

Monday morning should prove interesting, that is if you find volatility interesting.  The after-hours and weekend trading of the QQQs has changed our position from a robust $4,000 profit to a solid $2,000 profit.  Not that I'm complaining, mind you, I'm thankful for $2,000.  But, that's a lot for the afterhours markets to move.

INDU - DOW JONES INDUSTRIALS

The Dow Jones is holding nicely above its 200 day moving average, with the 30-day Linear Regression line sloping upward at about 45 degrees.  RSI is still in divergent formation with the daily chart of the Dow.  All of that is positive.  The only worrisome technical sign I see is the conjunction of the long-term downtrend line with the 30-day uptrend Linear Regression line.  That sort of conjunction usually means the market will be indecisive for a short time before choosing which line it wants to follow--the up one or the down one.  At the moment it is following both.  (See the following chart.)  In doing so, it is composing a broadening formation, with the lows following the trendline that goes downward and the highs following the trendline that goes upwards.  To see this more clearly, look at the next chart, which is an enlargement of the area I'm talking about.

My current expectation is for the Dow to continue on upward to 9000 over the next two months.  (It is currently at 8517.)  But, there is a high likelihood that the Dow will go downward first, before it moves all the way on up to 9000.  On this next chart of the Dow notice that I have drawn in the most significant Attractor, which is sitting right there at 9000.

This chart shows a clear example of how I draw the lines that I call Attractors.  I have drawn little yellow circles around the places where price clusters form the Attractor, as price is pulled toward the zone and then pushed away, like magnets with north and south poles.  The Attractor at 9000 should draw prices upward on the Dow, and then momentarily release the attraction before drawing them on up again.  Whether or not we push through the Attractor at 9000 is something that will be revealed to us through price action as it happens. 

Long, long range (on the monthly Dow chart) we have just now pushed through the trendline that comes down from April 2002.  We are only 2 days into the month, so the bar is still very short, but as it forms it will likely expand to the length of the current ATR.  Again, whether it forms upward adding the 900 ATR points upward, or whether it forms it downward is yet to be revealed.

QQQ - NASDAQ TRUST

The weekly chart of the QQQ shows potential for movement from its current 1007 level on up to the Attractor at 1139.  This is a powerful Attractor as it is not only formed from horizontal hits along a price level, but it is also hit in conjunction with a downtrend line that comes off the ultimate NASDAQ high in March 2000 with September 2000.  

From the weekly chart we are long, cautiously, with a stop at 918 and a possible upswing to 1337 before once again seeing strong downward action.

The daily QQQ chart model is long since 10/18/02 and still climbing.  The Attractor of import is at 26.22, and that's when I will again start worrying about which direction the market is going to go.  Until that point, I think we are moving on up.

Short-term we are still long the QQQs since 10/30 at 24.02.  The QQQs are currently sitting at 25.30.  Tomorrow should prove an interesting trading day.   

S&P 500 SPooS

Our 15-minute S&P model is long since 8:45amPT Friday.  We had a quick whipsaw short trade on Thursday afternoon that I advised against taking in an email alert.  So, actually we are holding long since 10/29 at 12:30pmPT.  We are sitting tight up against resistance at 903, and it will take some power behind the move for it to push through tomorrow.  We have been trading in a very narrow channel for 12 days.  13 is my lucky number, so I think maybe tomorrow we can push on through.

Weekend Stock Alerts

Click Here to go to the Weekend Stock Alerts Archives to view prior weeks' performance.

We had a mixed bag for the stock picks from last weekend (10/28/02).  We won on some, we lost on some.  But the net result was that we made an even $3,000 profit! 

Sunny Side of the Street Weekend Stock Alerts 
for the week beginning 11/03/02:

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