Daily Report November 17th, 2003
Dear Member,
-Stock Indices: Nasdaq Comp, DJI, S&P500
The indices have once again tested the highs for the year but had failed to surpass them. We keep the thought that we are in a wedge. The buyers are tired and they lack strength. You can just notice that following after the positive numbers from the confidence index that the profit taking intensified and not by following the retail sales that were weaker than expected. We see the stock markets have been exceedingly controlled where the large long positions needed the strength to “unload” without creating panic. It will be necessary to understand this component. Any strength shown by the buyers in the markets should be for a short duration because it will inevitably meet a wall of sellers.
Technically, the wedge is now quite advance by price and by time. We are seeing the last movements which will probably be to the medium term targets from the Fibonacci projections at 2050/2080 for the Nasdaq, 1080/1100 for the S&P500 and 10000/10200 for the Dow. There is too little of a performance from this side to seek out any fortune. Even the short term trading is risky by the risk/reward ratio of 1 to 2 or 1 to 3 maximum. We will nevertheless keep a bias on the long side for the short term as long as the risk levels at 1890 for the Nasdaq, 1025 for the S&P500 and 9500 for the Dow remain unbroken.
Resistances Short term
Nasdaq: 1958, 1976, 2000, 2020, 2050
S&P500: 1054, 1062, 1070, 1080, 1100
Dow: 9809, 9860, 9890, 9920, 9985, 10000
Supports Short term
Nasdaq: 1926,1915, 1890, 1870, 1840
S&P500: 1050, 1043,1041, 1027, 1020
Dow: 9744, 9700, 9680, 9625, 9500
The performance is now coming from the Pharmaceutical Sector (RXS) that has found life again after a 5 month correction. The rotation into the stocks for this sector can be explained by new perspectives. Up to now there has been strong competition that has obscured the prospects, but their buying power enables them to turn to the biotechs and thus be able to market new products. The complete analysis for this sector will be discussed in the weekly analysis of the S&P500/Dow for tomorrow.
For the commodities, the Gold Spot has tested the 400 level with a final objective at 420/427 before a correction occurs to 340/350. Oil on Nymex is close to breaking out pass 32.60. This sector will be the one to look at this week. A close above this level will initially cause acceleration in the price of oil to 37/38. Once the signal is given, we will start to buy in this sector.
For this week; the earnings for Hewlett-Packard (HPQ) are due out before tomorrow’s opening as well as the CPI for the month of October. The Real Estate numbers are on Wednesday and the Leading Indicators for Thursday.
Have a nice day,
Jean M Bourgineau
arthusanalysis.com |
