The Sunny Side of the Street

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SUNDAY NIGHT - March 2, 2003
My main computers are down tonight, so we will stick to email with no charts until tomorrow.  Short term, we are looking at an ascending triangle beginning with 2/13/2003 .  According to Bulkowski, this is a pattern with great certainty to produce a strong breakout to the upside.  In fact, Bulkowski says 44%, which would amount to an upshoot to about 36 on the QQQ 15-minute chart.  Be on the alert.  On the 15 minute SPY I am looking at an ascending wedge, which Bulkowski reads as a bearish reversal, although it has a poor failure rate of 24%.  And the 15-min INDU seems to be in a Head-and-Shoulders pattern.  The expectation here would take the INDU down to about 7800.

With these three indexes in disagreement as to formation, I suspect we are still in for more congestion and confusion.

On the daily charts, taking a longer term view, price on the daily QQQ is bumping up against 25.20 and hasn’t been able to push through it for 9 days.  Last time it spent 9 days like this, it had a failure down to 23.80.  I think that’s what we are once again going to see on the daily charts.  Each of these charts have been in consolidation for too long, and the likely direction will be down.

The old adage is buy the rumor, sell the news.

The rumor here has been of war in the mid-east.  I think that all were expecting it to start tonight, on the new moon.  If it doesn’t start within the next day or two, the market will consider that to be disappointing news at some level and begin the trickle down.

In short, I’ll primarily be watching for short positions this week unless I send out Alerts to the contrary.