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<DIV><FONT face=Arial size=2>Surprisingly to most everyone the OEX put in a
third hammer candle on Friday. Seasonally there is a decent rally starting
in the last week of September and running into the first week of October.
If an implied volatility of 23% is assumed for this period and assuming Friday
is a pivot low, and assuming the OEX trends up for the next two weeks, then the
ODDS cones would lay out a path between the thick green cone and the thick red
cone with excursions above and below that path. For Monday it is
reasonable to expect the regression channel to be penetrated to the upside which
means a move above 781.5 for an average day and 786 for a strong day. A
week later the OEX should be between 792 and 802. Then if the election
year October stats hold true 798 to 812 would be the conservative target zone
for the end of the first week in October. If the late buying on Friday in
which there were more orders than brokers could fill is an indication of future
strength in a frenzied buying panic, then the OEX might follow the thin and
thick red line path upwards giving 802 to 813 for the next week and then 812 to
827 for the first week of October. A simple 50% retracement of the
Septermber downswing targets 800, a 2/3rds retracement targets 813. So it
seems this probability exercise fits in with the conventional retracement
technique.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>BobR</FONT></DIV></BODY></HTML>
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