Analysis - Friday, June 20, 2003 8 p.m.
Today's action was no real surprise to us one way or the other. We
stated that we expected the Dow to encounter strong resistance to any rally
this week near or just above 9400. The Dow reached a print high this week
of 9354 and an intraday high of 9405. We closed the week at 9200.75.
We looked for resistance near 9400 this week because that was where
the top of our 10-Week 7% Exponential Trading Band was this week. The band
is still rising weekly, and next week the top of the band should be in the
9500 area, depending on where the market closes next Friday. We would
expect resistance to any further rally next week in that area.
In January we stated that the Bradley Indicator called for a low in
March and an important top near June 25, plus or minus 2 days. Next
Wednesday is June 25, so if we have not seen a top already, the Bradley
suggests we should see that top at some point next week. We believe the
odds are extremely high that we are near some sort of top. The only
question is how severe will the coming decline be? In any case, if you have
not begun to raise cash this week, we suggest you do so next week.
Our Gann 3-Day Chart did not turn up today. It is still pointing
down, and that is a negative. The more important Gann Weekly Chart will
turn down next week on any decline below 9117 on a print basis on the Dow,
1629 on the Nasdaq, 30.00 on the QQQ's and 99.24 on the Spyders (SPY). The
Dow will be the most important of that group. If the preceeding levels are
broken, it could mean the top due in this time frame has been seen. If the
Weekly Chart on the Dow does turn down next week, only a rise above June's
intraday high, which so far has been 9405, could turn the Weekly Chart back
up next week, and prove we are going higher. However our 10-Week 7%
Exponential Trading Band still suggests there would be strong resistance to
any rally next week near or just above 9500.
We will continue to hold current positions.
www.jerryfavors.com
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