Market Analysis for Oct 4th, 2004

With about 2 hours remaining in today's session, the December E-mini S&P continues to stair-step to the downside in its minor correction off of this morning's high at 1141.25. Thus far, the grudging, sparse pullback has pressed the index to 1136.25. My work and my suspicion about the developing intraday pattern are that there is more downside ahead -- even if the E-SPZ attempts to rally to 1140-41 again first. In other words, upside is limited here for a while longer until the near-term corrective process runs its course -- down to the 1135-32 target zone. Once complete, my work points to another potent rally that propels the E-SPZ to new highs for this move -- in the 1150 target zone.

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