NAVIGATION:

"The Sunny Side of the Street"

MONDAY NIGHT--12/23/2002

Figure 1 - Monthly Dow 'Tis the week to have low volume, have low volume, market goes sideways, 'tis the week to take a vacation fa la la la...

symbol  close upper Attractor lower Attractor INDU 8493 9075 8236 QQQ 25.69 33.23 20.60 SPh03 897.5 963 875

My proprietary model got long at 7:30 am on the 20th, and is still holding long.  The model is thus sitting on a $1600 open position overnight, and we'll just wait and see what tomorrow brings.

Figure 2 - Daily Dow 

In Figure 2, I have marked another smaller Head and Shoulders pattern and have shown it completion of the measured move by drawing yellow rectangles.  If you remember from your basic Technical Analysis reading, the measurement from the neckline to the top of the head gets echoed below the line for an equal distance.  The H&S I have highlighted did a pretty good job of meeting the criterion.

Following the completion of the pattern prices have been following the neckline on up, though it has been in a pretty volatile fashion.  My expectation is for the Dow to hit the line at 9062 as it follows the trendline upward and reflect off from there.  The Attractor I have drawn at 9062 is formed by the top of the head in the H&S pattern and the low of March 2001.  It looks to me like the Dow will attempt to hit that line and then go into channel trading mode between 9062 and 8027 for a while.  The Average True Range on the Dow is continuing to diminish, but this time I think it will stay diminished for a while rather than using the low ATR as an excuse for a breakout.

Figure 3 - 15-minute QQQs

On the 15-minute chart of the QQQs (Figure 3) you can see the magenta trendline I have drawn across the bottoms of the RSI as it climbs higher and higher until it finally broke 65 today.  On the same chart, but with a zoomed out view (Figure 4) you'll see that I have drawn matching Attractors in the same colors so you can see where I think the channel trading ranges will be.

Figure 4 - 15-minute QQQs zoomed out

The smallest channel was played for a few days, and is shown above in red.  Out from there you can see the cyan horizontal lines, showing the top Attractor at 26.13 and the matching lower Attractor at 25.00.  I believe the market will play between these two Attractors at least until the end of the year, before breaking out and extending the size of the trading channel with the top Attractor at 26.50 and the lower one at 24.50 (not shown on this chart).

The RSI on the daily charts, both of the QQQs and the INDU pretty low, giving the markets room to move up, but the turn would be very bullish if it doesn't first go on down a little further.  A turn before hitting 40, in fact without hitting 40, would be bullish and call for a strong move on up to the 65 boundary, taking the QQQs on up to about 26.13.  The reason I don't think we are quite ready for that yet, is because of the little rectangle I have drawn on the RSI in the chart of the Dow in Figure 2.  Notice in that rectangle that RSI did not penetrate 65.  It did not show strong bullishness before pulling back.  Because of that little clue, I think the market will pull back a bit more and set up some indecisive range trading while institutional investors and mutual fund managers reposition their portfolios for end-of-year window dressing.

TRADERS:  I'm continuing to just blindly do what my 15-minute QQQ model tells me to do, and I will email alert you as it happens.  I'm long at the moment and that's where I'll stay until the model says something different.

INVESTORS: The double cycle is pulling downward on prices now, and yet the long-term model is long, so in my long-term accounts I'm staying long until signaled otherwise.  On the long-term charts I think the Dow will make a run for 9075, but will fail because of the magnetism of the double cycle.

I'LL MAKE YOU ANOTHER OFFER.  Send a friend my way for one of the upcoming seminars, and I'll give you $250 cash.  Take your loved on to a nice dinner out on me.

So, be nimble, be quick and be ready to exit questionable trades, take small losses and capture profits when you can.   This next few weeks should be pretty much zig and then zag.

   Don't miss it--Sunny only gives a few trading seminars each year.  She calls them "Solving the Puzzle" because she puts all the pieces together into one cohesive plan for you to become a better trader.  Make it your business!  View the syllabus--she only takes 15 students. January 17-19, 2003.  AND..to match Larry Williams' offer, on Friday we will be trading real-time, with real money.  I will split the winnings with the class, and if there are losses I'll keep them for myself.  Just think...the seminar could be free!

Weekly Stock Picks for the week beginning 12/15/2002:

(Last week's picks made a profit of $0.  Click Here to view the picks for last week, in the Archives.)

12/17/2002 -- We are getting really close to some of the breakout lines, so keep watching.  NSOL did break the line today, so the model is now long NSOL.  

  AND... if you are a TradeStation user, you need to attend "TradeStation Made Easy" February 7-9, 2003.  Sunny knows TradeStation and EasyLanguage as only another Trader could, and the class is more engaging and jam packed with useful information than any other class you can find, at any price.  Enroll Now--she only takes 15 students.  And, the same real-time trading offer applies.

CHART OVERVIEW:  for the real scoop, visit Yahoo Finance

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