Summary for Week Ending 3rd October 2003

Just when things looked particularly out of sorts, the market decides to show off just how crazily it can behave. Two week sago we saw the market decide that a screaming decline was the thing to do. This week we saw the market essentially recover all those losses. There was no stopping to think about it, or to rest a little or consolidate the decline. It simply just lifted off.

Last week I said I was going to wait for this move to sort itself out and see where that took us. I most certainly was not expecting what we saw this week. Looking at the S&P we had a little swing movement on Monday and Tuesday saw new lows made, but the next three days we saw a recovery of all the movement of the previous seven days. The strength and swiftness of the initial decline did set up the possibility of a re-test but not to the extent of this weeks movement. This movement raises the question of the possibility of the 7 wave advance which was discounted in last weeks report. When things are like this, I prefer not to use more subjective methods of analysis and and far more I'm inclined to look at the swing charts and use these as a guide.

From this perspective, both the DJIA and the S&P are in watch mode since swing lows have been broken. There is of course the possibility of a double top, but I would be happier if this did not happen. Of all the scenarios, I would be inclined to look at the 'false break' possibility as we see so many of these these days ( far more that we used to!).

Looking at time, The 10th OCT is the anniversary of cycle low, so this will be worth looking out for.

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Charts

No Charts this week. ... Nothing worth highlighting.