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MARKET COMMENTARY
Weekly Market Summary

Market Summary

(For Week Ending Oct. 17, 2003)

By Al Martin

Last week saw the Dow establish a weekly tradng range 145 points (9702-9847), settling out the week at 9721.79, up 46.86 points, week over week as the Dow was turned back from the important 9850 level mid-week, engendering selling from overhead supply, when the 9800 level was not held.

In last week’s OTC market action, the NASDAQ established a weeklys trading range of 57 points, (1910-1967), settling out the week at 1912.36, down 2.95 points, week over week, as the NASDAQ was turned back from the 1969 overhead resistance level in mid-week trade, engendering fresh technical selling all the way down to the 1911 support level.

The SPX established a 17 point (1036.50 - 1053.50) weekly trading range, settling out the week at 1039.32, up 1.26 points, week over week as the SPX was midweek, turned back form the important 1053/55 resistance level, engendering good volume technical and professional trade selling, which backed the index off all the way down to test the 1035 support level in Fridays trade.

The Dow/SPX spread closed out the week with a reading of –4.13, thus giving our readers, who had taken Tradex’s suggestion, as mentioned in last week's summary, to put on the Dow/SPX bear spread, a very tidy profit on the week.

For the coming week's trade, Tradex majority floor consensus looks for a near term test of floor support at the SPX 1020 level, followed by a bounce.

In last week's trade, technical negatives continued to build for the 19th week out of the last 23 with last week's establishment of a fresh weekly low in the Dow 52 week weekly volume chart as well as the posting of a now, double yellow caution flag in the VIX Index, which established a five consecutive trading day average under 18, with the establishment of such a trading pattern under 16, were it to now occur, would cause a red warning flag to be posted.

For the coming week’s next upside resistance level in the Dow it is seen in the 9850-70 area just above last weeks inter-day highs, with NASDAQ resistance seen at 1969 and a gain at 1984, and next upside resistance in the SPX seen at the 1053-55 heavy, 1063.50/ 1066 light and the 1072 moderate resistance levels, on to the extremely heavy shelf of resistance at the 1080 level, as can be seen on the 89 month trading chart.

CF trader-readers who acted upon Tradex CF trade link recommendations, as reported in last week's summary to scalp the GCZ contract form the long side on tests of the $370. level and to short the CLX contract on a rally above $32., showed an approximately $1200. gross profit on the week based upon our recommended one contract continuous 5 to 1 risk-reward ratio trade model for the small “armchair trader.”

For the coming week, TTL sees opportunity shorting the DLX contract on rallies to 93.50 and continues to like scalping the GCZ contract from the long side on inter-day tests of the $370. level, but cautions that a close under $ 369.80 would engender a fresh round of technical selling.

In a final note, we would add that copper remains overbought, the never ending drum banging of the copper bulls not withstanding.

The equation is relatively simple; a near 23 year high in existing and deliverable stocks, increasing production combined with demand, having peaked last month and now entering a traditionally weak seasonal period, means lower copper prices.

Oh, how the bulls hate the supply/demand equation.

In other trade features: Dec. platinum, trading in the $721.50 /23.50 resistance level continues to be technically overbought until and unless the $732.60 level can be overcome on a closing basis.

The March sugar (SBH) contract continues to trade in the 5.92 /97 support area and if 5.89 can continue to be held, on a closing basis look for a provable technical bounce up to the 6.34 resistance level, which if breached, would call for a push up the 6.46 secondary resistance level.

Also, look for heavier than usual seasonal bear spreading in lumber which has been exerting downward pressure on the LBX contracted pressure which is expected to continue into expiry.

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