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To: Softechie who wrote (5127)	1/26/2003 11:55:59 AM
From: Softechie	Read Replies (1) \| Respond to of 29602

CHARTING MONEY: A Note Of Caution 24 Jan 12:00 By Stephen Cox, CMT A Dow Jones Newswires Column NEW YORK (Dow Jones)--Readers of this column have for weeks now been watching long-term resistance to the CBOT nearby 10-year note at 114-25. And now it's here. The Friday intraday high as of this writing is 114-26. This is the hard part. The market has made its move. What do you do? Readers also know my opinion. I believe that 114-25 will be taken out by a move up to the 116-16 resistance area, the first step in a multi-year bull market in price. But that really doesn't answer the immediate practical question. The breakout that I'm expecting doesn't have to follow immediately, and, in the meantime, a lot can happen. The nearby 10-year has hit a long-term target, and, because it's literally on the edge of a long-term move, it's dangerous to short-term players, bull and bear alike. For a lot of these guys, doing nothing Friday, and doing it aggressively, may be the perfect short answer. The contract has been hanging on 114-25 most of the morning. If it settles Friday near that level, then - in my experience, anyway - it's liable to make a wide gap on Monday's opening, especially given what's come to be known as the "geopolitical" state of affairs. The short-termer on the wrong side of that gap could be paying off creditors for a very long term. A failure here means that the contract is liable to dip to 113-16 at least, and that will confirm ongoing consolidation. And the IMM March three-month eurodollar is edging above 98.70 consolidation resistance. A settlement above that number will have completed a nearly two-month bullish saucer pattern on the daily continuation chart. In that case, a test of 98.87 will be on the way. Stocks Probing Support The suspense extends to the stock market of course, because important indexes, despite Friday morning's steep selloff, are flirting with bounce-point resistance. For theDow Jones Industrial Average, on a daily closing basis the number is 8242.91. That Dec. 31 low is strong. Effectively, it touched off Thursday's roughly 50-point bounce. A close below 8242.91 will tentatively point the average down to first long-term support somewhere between 7835.92 and 7579.70. The next bounce point on the way down will be 8115.05. The Nasdaq Composite has slipped just below support at the Jan. 22 low of 1358.23 and a close below that number means an extended move, down to 1335.09, minimum. All of which means that a close above 1358.23 may touch off a corrective rally. Euro Pausing At Target Resistance Under the circumstances, it's not surprising that the dollar is likewise at a critical level against the euro. The euro has taken out $1.0789 target resistance, and late-day trading above that number will hasten a test of $1.0923. But daily technical momentum readings were flat late Thursday, and so late-day Friday trading below $1.0789 increases the chance for a pullback, perhaps to $1.0620. To try out the Charting Money weekly technical newsletter go to djnewswires.com 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 01-24-03 1200ET