Market Analysis for Oct 20th, 2003

Today has turned out to be a two-edged sword. In the first hour you had a continuation of Friday's selling pressure, and the indices made very marginal new lows. In the E-Mini S&P it made a low from 1035 down to about 1034. In the E-Mini Nasdaq, it made a marginal new low from Friday's low of 1390 , to today's low of 1389 even.

So you can see it was just a point or so on each of the indices during the first hour of trading, and then the indices pivoted to the upside. They've been grinding higher for the last 1 , hours or so, and each of the indices is now approaching very important resistance that represented the breakdown levels from last Friday.

Using the E-Mini Nadsaq, last Friday's breakdown where acceleration took place was about 1406. That's exactly where the rally has taken the E-Mini Nasdaq at this point, from 1389 to 1405-6. If it gets through 1406, then we can expect additional upside. The question is how much more. Above 1413, my work will become neutral. But unless 1413 is taken out on a surge to the upside, my work is still negative.

As far as the E-Mini S&P is concerned, the rally has taken it from 1034 to about 1039, and until it gets above 1043