Summary for Week Ending 1st March 2003

Another 'nothing happened' week as the market had a quick slump early and then spent the remainder trying to go back up. Iraq related news items appear to still maintain the center of focus, whereby any news byte that hints towards war sees depression, and news bytes that lean towards more inspections appear to give the market some heart. Working from this perspective, the markets are congesting again, showing that what they dislike the most is uncertainty.

The expected carry over from the previous Friday did not eventuate, with a convincing drop on Monday. Should the drop be truly in earnest then this should have been expanded upon on Tuesday, whereby there was a solid decline, but this was quickly captured during the day with the close in excess of the opening tick. If there was going to be a strong downward shift, I would not have expected this to happened, and the action for the rest of the week bore this out. Wednesday showed a failed attempt at heading north, with a marginal rise above the previous days high, thus giving us a green bar (up day) to concentrate on even though the close was weak. Thursday gave us an outside day, although of little technical importance and the week closed up on Friday, although again, this could best be described as weak.

The Action on Wed through to Friday gives us a 3 day counter trend rally and in normal circumstances could be expected to be a termination for the rally, but since the decline itself was essentially weak, there appears little for the market to react against at this point. In summary, when we look at they chart, we can see a 2/3 day rally from the 13th - 18th Feb.. Since then the market has attempted to go down yet up till Feb. 25th, the market still has not consumed what only to a couple of days to create. This in itself is a signal that things are not as obvious as they appear, and that there a strong bullish undercurrent in what should be a bear market. Until this bullish intent is expended, then we can possibly expect more of the same, that is, a congestive pattern, unsuitable for taking a position in either direction.

This situation has me looking at the looming possibilities for a COT. The most widely publicized date is March 3rd as it represents the date of the New Moon and this fact aligned with the so called 'geopolitical sitiation' represents terrific bombing weather which in turn has a high probability of creating a change in trend.
Looking from a purely technical perspective, and assuming that you are living in a media vacuum, and you think Saddam is the guy who cleans the pool, the Mar 3rd date can be derived by a couple of simple technical approaches : 144 days from the 10th Oct Low, and 91 (90) days from the 2nd Dec high. Of more interest to me personally is the March 8th date, and I invite reader to look at the 8th March in the DJIA for the past 3 years. There a a couple of other technical approaches that also point to the March 8th event, so both Monday and Friday will be days to watch. Also of interest in the coming month is the mid March area around the 15th as well as the 21st which is the date of the Equinox which relates back as far as the Sept 2001 low.

Looking ahead at the coming week, as I have outlined above, both Monday and Friday are significant, although the fundamental support for Monday ( ie War starting) does not look promising. This leaves Friday, and the common signal for a COT is the market rushing into the date. If the market remains as is, that is , dull, then we are back to assessment purely on Price/technical terms. My expectations are still with the downside, however the congestion that is appearing, makes a good entry all that more difficult.


A quick note to D Bartz. Your return email address is incorrectly configured. I received your mail but was unable to respond. The above constitutes most of my intended reply.

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