Summary for Week Ending 5th October 2002

A turbulent week in all three markets this week starting on Monday with a weak continuation of the downward swing although a strong rally through the day saw it finish off the lows for the day. Major Dow stocks gave a hint of what was to follow with many giving solid reversal signals on the day. Tuesday saw the Dow and S&P take off like a bandit giving a wide range day, the Dow rising over 300 points. Wednesday there was expectation that the markets may get on with it but this was dispelled early and finished the day offering yet another weak reverse signal day. The big push was short lived and was relegated to yet another 2 day counter-trend rally, albeit a big one. The rest of the week fell in line with expectations and the Big Rally was quickly enveloped. The Dow has managed to push past the July 24 lows but as yet has failed to close below this mark. The S&P on the other hand is still about 25 points away from this technically significant level.

Regarding the DOW, it is also hovering marginally above the Sept.Oct 1998 low. We have had two attempts at this level, with the second attempt still underway.

Regarding the NASDAQ, should the orderly decline continue, then we will soon approach the July 1996 low of 1008. The previous rally was a bounce off the April 1997 lows so we can expect this level to provide a bounce as well. A decline below 1000 points in this index would be considered a significant event with the next significant technical support level at the July 1994 level of 690.

As per last week the next Time frame of importance is the 10/11th Oct which is 30 deg from the Sept 11 COT (Sat 12th Oct) as well as being a half square ( 153/4) from the 21st Sept 2001 low(10th Oct). Looking at volume we have had consistently rising volumes for this decline but as yet have not experienced the blowout we usually associate with a trend reversal. Keeping an eye on the above dates, any serious stab to new lows should be watched carefully in conjunction with the volume numbers.

Swing Charts
DJIA, S&P500, NASDAQ
Yet again...Not much new here, the weeks declines confirmed the patterns.
Charts

DJIA
The chart this week is a bit complex but is goes towards indicating how close the market is to considerable support. The Price Square off the 11909 high shows the 38.2% level lines up with the 1998 lows. The Gann Square of 11909 grid off the same point shows the market is currently right of the 37.5% level.

S&P
The chart this week the price ranges that close in on the April 97 minor technical support level. There is also the range Square from the All time high to the Sept 2001 low also indicating support at the low 700's. There are a large number of studies that can lead to this area and I leave it to the reader to decide for themselves. As an art, bottom picking is deeply flawed, but it does give a target to aim at.

NASDAQ
The chart this week shows the price ranges on the first 3 downswings in the current movement and how they line up against the August high. Curiously, the largest swing of 530 points terminates against the lower trend channel around the 20th of October.

DJIA See Chart

S&P 500 See Chart

NASDAQ See Chart