The Sunny Side of the Street

Today's 282 point up move was probably predicated on leaks of tonight's speech by President Bush, telling Sadam Hussein he has 48 hours to get out of town.  War is often a positive influence for our economy, at least initially, leading to new jobs and people making money. 

The Dow today moved right through the Gann line I had drawn at 8100 (81 is 9*9), stopping at 8141.  I would expect the market to test the 8100 line tomorrow, but probably keep on going up.

The Dow has touched the SunnyBand, and turned it upward.  The likely progress is for the market to now push the band upward for a while.  I'll be watching for signs of it losing steam and turning back away from the upper band as it progresses.

Intraday the Dow put in most of its move in the morning, slowing as it approached the Gann 8100 number (3*3=9, 9*9=81).  And, at the end of the day, jumped over the line and went on to score 8141.92 finally.  Since the Dow is now above the SunnyBands on the intraday chart, I would expect it to continue above the line again tomorrow.

Someone on my inquired as to how they might follow my SunnyBands intraday.  The only way is to purchase the indicator for TradeStation.  I don't have a way of distributing live TradeStation charts on this website.  Currently the price for SunnyBands is $795.

Figure 3- QQQ 15-minute chart

Just blur your eyes and look back and forth from the chart in Figure 2 to the chart in Figure 3.  You can see just how similar the movement is in the two trading vehicles: the Dow and the QQQ.  That's why I often will just pick one to talk about, because the others (the SPY included) just are moving in the same way.

The intraday QQQ stopped "magically" at 26.81, the Attractor which emanates from mid-January.

RSI is weakening above the 65 line, heading down while price moves up.  That is a sign of divergence and lends itself to the possibility of a correction.  But, this time I think it all depends on what Bush says and does about war.  And, if we do start action against Baghdad, I'm going to be sitting on the sidelines until it stabilizes.  In 1991, when we had the Gulf War, the market reacted every time a scud missile was launched and the market was far too volatile to trade. 

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