CHARTING MONEY: Stock Market Makes Sense In Any Case
01 Apr 12:00
By Stephen Cox, CMT
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--You hear often during times of tedious sideways money
markets, such as now, that this or that market move is somehow "purely
technical."
In fact, there's no such thing as a market move that's purely technical, or
purely fundamental for that matter.
News reports suggest that a lot of market observers are nonplussed by the
coincidence of Tuesday's weaker-than-expected ISM manufacturing index and
Tuesday's firmer stock market.
But the real and the anticipated fundamental influences on a market at any
time are innumerable. To zero in on a single economic report in this
circumstance is a case of the blind man grabbing the elephant.
And, under these circumstances, it's far easier to point out that the stock
market is firmer Tuesday because the indexes fell Monday to technical support,
having retraced 50% of their uptrends during the last half of March.
The 50% retracement level for the Dow Jones Industrial Average is 7969.41.
The average's close Monday was 7992.13 The 50% retracement point for the Nasdaq
Composite is 1339.48. Nasdaq's Monday close was 1341.17.
Viewed in the short term, the Nasdaq Composite is pointed down to 1326.75 as
long as 1355.93 daily resistance holds. The DJIA is likely to retest 7957.95
support, which is a breakdown level on the daily chart.
Nonetheless, that strong corrective uptrend in the last half of March has
obliged me to recalculate long-term downside targets for the market.
It appears that my projection of a dive of the Nasdaq to somewhere between
900 and 850 by the end of this month is out the window. Perhaps the steepest
downtrend will take the Nasdaq down to 930 by mid-May. And it's also reasonable
to consider a slower move down, to 1073 by late June.
At best, the Nasdaq will edge more or less sideways towards 1318 by early
July, and at that point, the long-term downtrend will be ended by default.
The DJIA, I had thought, would move down to 6800 by the end of April. I
calculate now that a 6800 target is still good, but it may not be tested before
the end of June.
For more technical analysis see: Dow Jones Newswires, N/DJTA; Telerate, page
4073; Bloomberg, NI DJTA; and Reuters key word search "Charting Markets."
-By Stephen Cox; 201-938-2064; stephen.cox@dowjones.com
(Stephen Cox, a chartered market technician, is chief technician for Dow
Jones Newswires.)
(Data by CSI, Commodity Research Bureau)
(END) Dow Jones Newswires
04-01-03 1200ET |
