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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (38455)	11/25/2002 2:52:44 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68710

by Chris Curran November 25, 2002 [space] [red] [space] Last week, the NASDAQ Composite added 58 points, the Dow rallied 226 points, while the S&P gained 21 points. Volume picked up late in the week after the major indexes posted a technical breakout. The Dow made it 7 winning weeks in a row, as the counter-trend rally continues to march on after a brief pause. The catalysts for gains were an upbeat report from Hewlett-Packard, General Electric raising its dividend, and several bullish analyst calls. But, there was a fair share of negative news such as a rare profit warning from General Electric, a warning from Analog Devices, a dismal Semiconductor Book-to-Bill report, and downbeat news from retail companies such as Home Depot and Wal-Mart, all giving the indexes an excuse to sell off. Nevertheless, we are experiencing a period where bad news is largely being ignored, so market players took this information with a grain of salt. The technical breakout of both the NASDAQ Composite and S&P 500 on heavier volume may have been the most critical events that took place, telling us that there is still aggressive buying of dips going on. The upcoming week is one of the most bullish weeks historically for equities, as most of the big players are out of the market. Also, Friday is the last day for market players to take advantage of the so-called "doubling up" strategy to take a tax deduction for a loss but not wanting to miss out on a year-end rally. Technically speaking, the NASDAQ Composite closed out the week holding its breakout above August's high at 1,427, and is poised to test the 38% retracement of this year's decline at 1,487, with the 200-day MA, which the index hasn't touched since March, at 1,502. The December S&P 500 contract remains above September's high at 927, with upside resistance at August's high at 965. However, the VIX has formed a possible bullish butterfly (see chart), giving a heads-up that caution should be used for playing on the long side. hardrightedge.com