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

To: Johnny Canuck who wrote (40508)	12/22/2003 3:07:47 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69211

by Chris Curran December 22, 2003 Once again, it was the SP 500 and the Dow turning in impressive performances, while the tech-heavy NASDAQ lagged significantly. The major indexes all looked ready to start the week in a very strong fashion, thanks to news of Saddam Hussein's capture over the weekend. However, the market did its best job of inflicting pain on the most amount of players as the opening levels proved to be the highs for Monday's session. Nevertheless, there was no follow-through to the downside on Tuesday, which seemed to give the bulls some confidence. From there, stocks and stock futures rallied for the remainder of the week with Cyclical/Industrial names paving the way higher. Overall breadth was solid, which is always nice to see during strength. The March SP 500 futures closed Friday's session with a loss of -3.00 points, and finished out the week with a gain of +12.50 points. Volume in the ES was estimated at 539,000 contracts, which was behind Thursday's pace but just above the daily average. On a weekly basis, the ES posted a dragonfly doji and is becoming extended above its 10-week MA. Looking at the daily chart, the contract posted a market structure high off of the top of its trading channel, and also has some room to consolidate down to its 10-day MA in the 1,072 area. On an intraday basis, the 60-min, 30-min, and 13-min charts all confirmed the bearish Butterfly patterns, but retraced some ahead of the weekend and settled on 60-min and 13-min support. Moving forward, market conditions should be quiet over the next 2 weeks due to the holidays. Since there really aren't any foreseeable negative catalysts at the moment, equities could continue to work their way higher in a slow manner. It would not surprise me if technology and small-cap shares re-emerged as the market leaders. Both the NASDAQ Composite and the Russell 2000 historically do very well in January, so it may not be long before rotation back into these shares gets underway. Overall, I continue to view the current environment as a pretty benign one. Market fundamentals appear to still be solid, while the economic recovery still remains in decent shape. There are still many longer-term concerns such as valuations, debt, and the consumer. However, in the near-term, I don't see these issues causing much trouble for stocks, and the path of least resistance could continue to be upward. That doesn't mean that every single day will be up, up, and away. My eyes are starting to glaze over from all the top-pickers continually spamming me every time we have a down day with "This is it, sell your stocks! We have a rare Wave 159 that is lining up with the orbit of Venus. This has only occurred twice in the last 3,000 years blah blah blah blah blah" If they followed their own top-picking signals this past year, they'd all be living in cardboard boxes. Who knows, maybe some are!