Please Note - There will be no report next weekend. I'm spending some profits, taking a break and heading to the beach !

Summary for Week Ending 1st November 2002

Another tight week of trading with both the S&P and the DJIA settling into a relative continuation of the sideways compression that begun last week. I was expecting a down on Monday and was instead greeted with an Up day followed by a reversal day on Tuesday which provided an opportunity to take an upside position ( but you had to be quick). This was the end of any excitement left in the week as the market crawled painfully back towards the Monday high.

Looking at the DJIA chart after the Tuesday reversal, we had a lower swing high and lower Swing Low pattern, although the latter was partially negated by the springboard action during the day. Either a long call near Tuesday's lows or early Wednesday when the direction showed an Up day forming would be legitimate, but close attention had to be paid for the rest of the week to ensure that Mondays High was taken out, thus giving a higher swing High, and a little more confidence in the upside.

On the whole, market direction appears to be bursting to get out, with all this sideways creeping around only building up energy in the System. The Bears had a chance on Tuesday but they didn't even last the session, yet the bulls had their chance for the rest of the week and yet they too appeared to hit and retreat, giving us a very confusing, turbulent week and little if any real pointer to direction in the coming week.

Since there is little to discuss about the present market, I have decided to look at a 'curiosity' I found this week whilst playing around with the Software. Looking at S&P it is easy if not obvious that there is a price/time cluster occurring around the 18th Nov 2002. the S&P chart is made up of a Price retracement from the 7th Jan High to the 10th Oct low. There are Speed Angles highlighting the angle of ascent of the first wave forward and assigning it to the current move forward. the parallel channel is a long term one coming from the Sept 2000 high to the March 2002 high and there is a 1x2 Gann Angle from the 7th Jan high. All these lines appear to 'meet' at roughly the same point.

The big Question is.... "What Does This Mean..?"

Well to be honest ...absolutely nothing, but the object of this exercise is to highlight how easy it is to arrive at these kind of coincidences. The Lesson is that whilst this kind of analysis is a valid approach, it is very important not to project your analysis onto the market itself. This only creates an expectation, of which, the market itself knows nothing about. The best approach is to take a note of the alignments in a diary and revisit them when the day is approaching.

S&P 500 See Chart