Market Analysis for Oct 6th, 2004

Around the time of my last update, the December E-mini S&P was attempting to hurdle important micro resistance at 1138.50, which turned out to thwart the intraday upmove from 1133.50. Now the index is back in the middle of today's relatively narrow range, which itself is in the middle of a 3-day congestion area. In that all of the action off of Mon.'s high at 1141.25 is messy and nondescript, I have little doubt that it is part of a sideways digestion pattern that should resolve itself in another thrust to the upside WHEN IT IS FINISHED. The problem is that I don't think it is finished yet- and may have to press the E-SPZ into the 1130-11128 area before renewed buying interest emerges...... With that in mind, we will continue to watch from the sidelines.

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