Analysis - Thursday, April 5, 2001 8 pm
On our Sunday evening update of April 1, we stated the
following regarding our expections for this week: "... even if
we see a decline early in the week, we should still see higher
prices before this week is out. We believe the rally we
expect this week should carry the Dow above 9961 on a print
basis and 10013 intraday." On our April 3 evening update we
also stated: "We are not totally convinced that this is the
decline which will carry the Dow to new lows below 9106 on
print basis and 9047 intraday. This decline, at least in the
Dow, could hold above 9047 intraday and then be followed by
another rally before the real decline below 9047 intraday
begins." The Dow fell a total of 503 points from last
Friday's close to the 9375 print low seen on 4/04/01. Today
the Dow closed up 402 points and the Nasdaq closed up 146
points.
We believe the odds favor this rally taking the Dow above
9992 on a print basis and 10043 intraday. Now if we are
correct about this, any subsequent decline in the Dow back
below this week's lows, next week, will give a new sell signal
off the Gann Weekly Chart. So far the lows have been 9375 on
a print basis and 9303 intraday in the Dow. If that occurs it
will signal another test of the March 22 lows of 9106 on a
print basis and 9047 intraday. If both of those two support
levels are broken at any time from here on a far more serious
decline is going to follow. We believe this will ultimately
occur, although we also believe it will take some time before
those levels are broken. The street knows the importance of
the March 22 lows. If the Dow breaks below those levels
selling is going to accelerate dramatically. As we stated
earlier, we believe this is going to happen, but it may take
weeks before it occurs, or it could occur next week. That is
something we cannot be sure of just yet.
We have been asked about the Bradley forecast for this
period. Now technically the Bradley calls for a high near
April 9, plus or minus 2 trading days. We entered that time
frame today. A few weeks ago we stated that we thought an
inversion in the Bradley was possible for this time
frame, with a short-term low coming in near April 9, plus or
minus 2 days instead of a high. However, given today's
rise, the Bradley forecast for a top near April 9, plus or
minus 2 days may well prove correct. The Bradley calls for
the high near April 9, plus or minus 2 days to be followed by
a decline into April 27, plus or minus 2 days.
The Cycles call for a high near April 5, plus or minus 1
day, and today was April 5.
Conservative investors are still 70% in cash and 30%
invested. Those instructions are for those subscribers who
for whatever reason are uncomfortable with shorting or with
the Bear Market Funds. Specific stocks to short are given on
our Short-Term Stock Trader's Hotline. Keep in mind that this
line is different than our regular Short Term Trader's
Hotline. The Short-Term Traders Hotline is intended for short-
term options traders, or futures traders, or anyone looking to
get in, take a quick profit, and get out. But if you are
interested in specific stock signals, long or short, that is
what the Stock Traders Hotline is for.
For subscribers willing to take a position in the Bear
Funds, we are 50% long the Rydex Ursa Fund. Take no new action
here until we give you a new signal |
