Market Analysis for Oct 18th, 2004
After this AM's rally attempt towards 1109, the E-SPZ failed to sustain the strength and has abruptly reversed direction and plunged towards another test of key support at 1102. Although the near term technical condition of the E-SPZ does not look very healthy at all, my micro work argues against an immediate breakdown below 1102... but the breakdown is coming in the upcoming hours. The question is whether or not a downside penetration of 1102 will trigger powerful acceleration below 1100 towards 1195? Or will a break of 1102 trigger a marginal new low, followed by another rally back towards 1115? Right now, I have no high confidence predisposition, one way or other, which is why I covered the short position. Let's watch for a little while now to see if the index pattern provides clues about the timing and power of the impending breakdown.
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