Summary for Week Ending 29th March 2003

This week we saw the sobering light following from the binge buying of the previous week, which was generated by the initiation of hostilities in Iraq. The markets this week were, for the most part, no so much bearish as 'disinterested'. There was no real desire nor design to go in either direction, and whilst the war in Iraq moves further away from the much publicized, pre launch 'Short War' scenario, I think the more investors and pundits alike will have to take stock of their positions.

This analysis will have to be taken with a cold approach to what may evolve with a drawn out affair in Iraq. It should also be noted that the Markets are currently responding to every piece of news attached to events in the middle east.Whilst this remains as the primary driver for market activity, then it makes it very difficult to take a position either way, as we are at the mercy of events that are well and truly out of our control, and as I mentioned last week... it is has to be a terrific opportunity to get me to place a trade in these conditions.

Looking over the week that was, there is nothing that stands out. I mentioned last week that there was a COT on the 21st March and this week appears to have confirmed this date, but also as I said last week, there was a trade opportunity however the risk profile was well outside my personal boundaries. The market did start in a weak position and certainly finished that way, although the downside may be close to running its race.

Looking at the coming week there are a number of dates that are leading towards possible COT dates. The markets ran up from 12th to the 21st or 9 Cal days. Projecting 9 cal days forward is Sun 30th Mar or at best Mon 31st Mar. Looking at the DJIA chart we can see that we are near the 50% retracement level, so a push down on Monday close to this area would have the markets at a 50% retracement in 100% of the time, and as such a valid point from which to trade from. the caveat on this of course is the overhang of war, so I would be looking for the market to be almost exact before I'll open the wallet. the next in line is the April 6th area and then the April 11th/12th, but more about these next week.

As it is shaping up, a possible scenario is a COT on Monday leading to a anemic rally for the week and a COT on Fri 4th Apr or Mon 7th April giving us the lower high that I am expecting. Remember that neither the Jan or Dec high has been taken out an so we are still faced with a series of consecutive lower highs. It is simply this pattern that has me primarily bearish. A break in the pattern will have me spinning on a 1 cent piece, but until then... its downside opportunities only.