Market Analysis for Oct 11th, 2005

Yes, the Q's did decline to new reaction lows, breaking last Thurs. low at 37.92 on the way to the intraday low at 37.82... HOWEVER, there has been no downside follow-through, which is a warning signal to the shorts that perhaps the Q's are sold out for the time being, and are in the very early stages of a recovery rally up to the 38.50 area. Let's keep in mind, though, that although the Q's have warned us about a potential recovery rally, the price ACTION has failed to confirm that such a rally is in progress... which will occur if the Q's can hurdle 38.15 for starters, and then the prior rally peak at 38.27. Barring a rally at least above 38.15, the Q's remain within the dominant micro downtrend that has developed off of Friday's recovery rally peak at 38.51. MJP 10/11/05 1:50 PM ET 37.98

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