Market Analysis for Sep 9th, 2003

This is shaping up to be a really interesting day. It's already been an interesting half day. The one market that was an eye popper was gold, which was up as much as $8 ,. It's still up $7 , as we speak. Silver is up a lot, and the bonds early on were up, so you walked in and saw an upmove in all these markets that usually do not move in lockstep with equities on the upside and equities were down just a touch.

The downside sure enough did accelerate during the first hour of trading in the stock indexes. Using the September E-Minis -- which, by the way, will transcend into the December front month on Thursday -- the E-Mini S&P went from almost 1035 at its new highs early in pre-market to 1021. We recovered to 1028, and now we're at 1026 and change. Basically we've recovered just about half the day's down move during the first hour of trading.

A similar situation is occurring in the E-Mini Nasdaq, but that market is a little bit more buoyant in general because it was the leader on the way up. The question is: When it rolls over will it lead on the way down? Lots of good news is coming out almost everyday on tech stocks, whether it's microprocessing or cell phones, and it would seem like this market has discounted an awful lot of good news. As we come into earnings warning season there may be some surprises that people will not like, and if they're overly concentrated in tech, they could feel the heat certainly in that area.

But as far as today's action is concerned, in summary you had a down first hour and spent the last 2 ,-3 hours recovering half the day's range. The day has a bearish profile, which to me means the markets should roll over and gravitate towards the lows of the session established during the first hour of trading. If that happens, I think we have the beginning of a minor top on the August part of the rally that's been in progress for the last six months.