Analysis - Wednesday, January 8, 2003 8 p.m.
We looked for the Dow to reach a short-term high near January 7,
plus or minus 1 day. We then looked for a fairly brief decline which should
bottom near January 9, plus or minus 1 day. The Dow in fact reached a print
high of 8802 exactly on January 7, right in line with the Cycles
forecast. The Dow has since fallen 222 points to a print low today
of 8580.10.
Adding to the credibility of a high near January 7 was the fact
that the Dow this week rose right up into the top of our 21-Day 3 1/2 %
Exponential Trading Band, which normally suggests that some form of at
least short-term high is likely. The top of that band on January 7 was
8846. The Dow reached an intraday high on January 7 of 8843.
At this point we have seen nothing to alter our basic position for
this time frame. The market has sold off in this time frame, as we
expected, but so far we have seen nothing to cause us to conclude that any
important top has been reached just yet.
From here a rise above 8804 on a print basis in the Dow and 8844
intraday is necessary to prove the market is going higher. For the Nasdaq
to prove it is going higher, it must rise above 1443. The probability of a
rise above those resistance levels during the rest of this week is not
high. Still, to this point the market not done anything really wrong.
We allow for still lower prices tomorrow, but we will continue
holding current positions.
source: Jerry Favors
AI
