Summary for Week Ending 26th April 2003

Yet again we have seen the week where the market has struggled;ed to out of its own way. In the S&P we saw a continuation of the upside movement which began on 10th April, but again, as has been the hallmark of this move, the action has been choppy and very difficult to predict with any confidence.

Looking at the action this week, it has now made the movement forward more obvious than appeared to be last week, and we all know that hindsight is 20/20 vision..(if only we could trade with hindsight !). Looking closer at the S&P 500 it is now apparent that we have had 3 primary waves forward up from the 12th March low. We can look at this as a likely point for the run to halt or we can expect that the movement may make one more push before succumbing to the need for a consolidation and a resumption of the sideways trend. Last week I made considerable mention of the markets intention to keep shifting aimlessly until there is something to 'shock' it out of its malaise. After reading some articles on the CNN money site during the week, it appears that there are also a considerable number of pundits who are also making prophesies that the sideways movements are here to stay. From a contrarian perspective, it makes me look for reasons for the market to stop running sideways. I do not like it when the mob agrees with my point of view. At present have nothing to offer regarding a major shift in the market pattern,however I will be watching the coming week very closely for a fissure that may lead to an acceptable entry point.

What should also be watched carefully is the SARS problem and its likely effects to international business and trade. I have found that the news reports are full of crap and exaggeration and the best place to find balanced information is the CDC web site (www.cdc.gov).

Looking from a technical perspective, both the DJIA and the S&P are showing signed of compression, with upward swings being shorter in distance but expanding in time. This struggle is a bearish signal and is most evident in the S&P. Looking at the DJIA the picture is similar but more confused with the swings far more compressed. The DJIA pattern actually looks more bullish than bearish and this is the problem I am having with the markets at the moment ...mixed signals. Until things clear up ..I can only wait.