Wednesday, December 04, 2002

DOW 9000 - IF YOU BLINKED YOU MISSED IT

Heh-heh. It happened first thing Monday morning - during that sweet spot in the news cycle when the "Black Friday" (the big shopping day after Thanksgiving when the retail stores finally go into the black for the year) news boosting the Dow up over a hundred points within a half hour to 9043 (yay!) and then the disappointing ISM manufacturers report came in at 10 am and everything sunk from there. It reminded me of those heady moments when the networks had called Florida for Gore and it looked like Gore would be our next President LOL - just an illusion. The reversal continued well into today, but volume is orderly and declining and the daily price range is staying withing current bullish upward trending price channels. A few days in the 8700-9000 range may be a nice rest area and allow a recovery from overbought levels to begin new assaults. On a technical and longer term basis, the Dow has been staying above an upward sloping 20 day Moving Average line for a few weeks now, and even more importantly, the 50 day moving average line has finally started to curve upward. There are various minor economic reports coming out this week such as ISM services,. Productivity revisions, car sales, etc., but the key, I think, for the week and for the streak, will be Friday's Unemployment Report - how that affects the market Friday will be whether or not we roar back at 9000, or have to wait further into the future for another shot. We are rapidly approaching a huge long-term weekly index resistance which started in March 2000 and has beaten back every feeble attempt to breach it since. Right now it's also in the low 9000s magic area where the August top lies and the 200 day moving average awaits and Bear Market weekly resistance wall is waiting to be pierced. So it doesn't bother me too much right now that we hit 9000 and pulled back right away. The significance of what happens once the Dow hits all that trouble on the other side is no less than the fate of the W bottom put in place in the pain of July and October, and basically starting all over again with a whole new setup to finally kill the long bear market soemwhere down the road. So it really may all come down to one report this coming Friday. It's gonna be HUGE.