|
Summary for Week Ending 26th September 2003
What a difference a week can make. Over the previous 43
days we have been witnessing a consistent although cautious advance. This
week over 50% of those gains evaporated in 5 days basically on the back
of a sudden announcement by OPEC of a cut in oil production and parallel
concerns over the US economy. If either or both of these are the true
cause we will never know ( we never do ) but whatever started the rot,
it was certainly enthusiastically supported as the week wore on.
Last week I was looking towards the upside and the possible price target
of 1068 in the S&P. This week we again saw just how fickle these things
can be, and its difficult not to laugh when you see some good analysis
simply disappear because the market does something else. Looking at the
chart there is a simple 5 wave advance from the August low. Under Elliott terms,
this should have been enough of a warning, but with all things Elliott, its
depends if you have the wave count correct. I was expecting one more push
forward which would have come out as a 7 wave advance which is also valid.
This is just 'hindsight stuff' but its always good to get a reminder that
no matter how good the analysis looks, its the market that decides what its
going to do. I've been doing this long enough not to care too much about such things, and instead look
at what the market is saying, because it certainly isn't doing what I
was thinking.
Concentrating on the S&P we can see that the market
opened on Monday and simply went south from there. Looking at the chart
it looks like someone pulled the rug, with the decline passing all the
most likely support levels with relative ease. The decline has taken 44 points
so far, which is something we haven't seen since 31st July. Prior to that we a looking at 53
points off the June high. Of most concern is that we have drifted back
into the area on congestion so we may be looking at another period of
continued fuzziness. Looking at the Swing Chart we have broken the 12
Sept swing low so a brief rally followed by another decline is a valid
trade entry, although this congestion will need to be followed.
Not too much more to say this week until this movement sorts itself out.
I'll be watching this from a purely Swing perspective, although a Gann
fan may also be of some use.
|
