Analysis - Friday, January 10, 2002 8 p.m.
For the most part today was mostly a sideways day, with the Dow making little real progress in either direction. The Dow did manage to close up 8.77 with the Nasdaq up 9.29.
Perhaps the best thing we could say about today's action is that so far, the market has done nothing really wrong.
The Gann 3-Day Chart had a chance of turning down today, but it did not. The 3-Day Chart could not turn down from here before January 15 at the earliest. The Gann Weekly Chart is also still pointing up at this time. Any decline below 8580 on a print basis and 8540 intraday in the Dow next week will turn the Gann Weekly Chart downward. That would signal that a still stronger decline is coming next week which could test the very important support at 8214 intraday and 8242 on a print basis in the Dow. If those support levels are broken at any time next week, it will signal that an even stronger decline is coming, at least short term. In terms of the Nasdaq, any decline below 1390 next week will turn the Gann Weekly Chart down there, and signal a test of the important support now at 1327. A decline below 1327 in the Nasdaq any day next week will signal that an even stronger decline is coming there next week.
The Cycles still call for a short-term high near January 13, plus or minus 1 day.
For now we would continue to look for fairly strong resistance to any further rally attempt up near or just above the top of the Dow's 21-Day 3 1/2% Exponential Trading Band. The top of that band on Monday should be in the 8920 area or so, depending on where we close on Monday.
At this point we will continue holding current positions.
Jerry Favors
AI
