Daily Report November 13th, 2003
Dear Member,
-Stock Indices: Nasdaq Comp, DJI, S&P500
After three days of very little activity of a consolidation, the volume has returned. The indices have rebounded from the support levels that were tested on Tuesday. The resistance levels at 1952/1956 for the Nasdaq, 1051/1055 for the S&P500 and 9795/9820 for the Dow were attained and even surpassed following the buying and the shorts covering. The wedge is still alive and the signals for resumption for the trend are very close. Each time the indices show tiredness in the rise and they form a technical reversal pattern, the shorts were “squeezed”. We spoke about the support from the Fed during this rise, without any news justifying a rally, it still proves that one should not oppose.
Technically, the signals to resume the rise at 1057 for the S&P500, 9860 for the Dow and 1976 for the Nasdaq are close to being confirmed. Only the S&P500 had closed above this level by 1 point. We would like to see today a follow thru from the buyers above the resistance levels defined higher to confirm the resumption for the rise towards the medium term objectives at 2050/2077 for the Nasdaq, 1080/1100 for the S&P500 and 10000/10200 for the Dow. There is no fear in the market at this stage. Above the resistance levels, we will be able to work a new thrust for the indices. The short term risk is now if the markets go below the support levels of 1926 for the Nasdaq, 1044 for the S&P500 and 9730 for the Dow.
Following the weekly analysis published on Tuesday, Gold has formed a break out above 391.0. The objective for this last surge remains at 420/427, corresponding to 90.00/89.00 for the Dollar Index. A consolidation for Gold and a rebound for the Dollar are expected after.
For this morning, the weekly initial claims are due out with expectations of 364k vs. 348k and the expected trade balance at -$40.0B. Tomorrow, the PPI, Retail Sales, Industrial Production and the U of M Confidence Index for November are scheduled for release.
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