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----- Original Message -----
Sent: Saturday, October 23, 2004 11:07 AM
Subject: 10/23 Report
Technical market report for October 23,
2004
The good news
is:
- Next week we enter what is seasonally the
strongest period of the year.
The first three charts plot the composite change
of the Russell 2000 (R2K), S&P 500 (SPX) and the Dow Jones Industrial
Average (DJIA) over fourth year of the past four election cycles. Typically the October low has been well
above the yearly low, and the end of year high is the high for the year. Relatively the blue chips have done
better than the secondaries during the last two months of the
year.
The market related headlines Monday will point
out the DJIA is at a new low for the year which will serve to scare people away
as the market enters its strongest period.
The NASDAQ new high indicator, a 10% trend (19
day EMA) of NASDAQ new highs, continued moving upward Friday. Although this indicator had little
discernable direction over the past week, the downward direction of the prior
week was arrested.
The chart below shows the NASDAQ composite in
red and the NASDAQ new low indicator in blue. The NASDAQ new low indicator is a 10%
trend of NASDAQ new lows plotted on an inverted Y axis (increasing new lows move
the indicator downward).
The indicator remained flat in spite of the 2% sell off on
Friday.
There were
fewer new lows on Friday at the weekly price low than there were any other day
of the week except Thursday which was a strong up day.
Price declines accompanied
by diminishing new lows is a positive.
The last chart plots momentum of NASDAQ new lows
subtracted from momentum of new highs.
This indicator removes the subtlety of the previous two charts, it is
heading sharply upward.
The tables below show seasonally next week
begins weak and ends strong.
Last
5 trading days of October
The number following the daily return
represents the day of the week;
1 = Monday, 2 = Tuesday etc.
The number following the year represents its position in the
presidential
cycle.
R2K
Day5
Day4
Day3
Day2
Day1
Totals
1988-4 -0.14% 2 -0.21% 3 -0.99% 4 0.34% 5 0.05% 1 -0.95%
1989-1 0.28%
3 -0.83% 4 -1.08% 5 -0.39% 1 0.69% 2 -1.35%
1990-2 0.11%
4 -1.24% 5 -0.98% 1 -0.73% 2 0.00% 3 -2.83%
1991-3
-0.51% 5 0.44% 1 0.64% 2 0.80% 3 0.88% 4 2.25%
1992-4 0.39%
1 -0.06% 2 0.64% 3 0.23% 4 0.32% 5 1.53%
1993-1
-0.11% 1 -0.27% 2 0.45% 3 0.36% 4 0.90% 5 1.32%
1994-2
-0.41% 2 0.10% 3 0.57% 4 1.09% 5 0.01% 1 1.36%
1995-3
-1.00% 3 -1.08% 4 -0.03% 5 0.57% 1 0.00% 2 -1.53%
1996-4
-0.03% 5 -0.84% 1 -0.60% 2 0.04% 3 0.71% 4 -0.73%
1997-1
-6.15% 1 2.32% 2 1.16% 3 -1.43% 4 1.07% 5 -3.02%
1998-2 1.37%
1 -0.15% 2 -0.01% 3 0.81% 4 0.98% 5 3.00%
1999-3 -0.22% 1 -0.47% 2 0.24% 3 1.45% 4 1.38% 5 2.37%
2000-4
-2.59% 3 0.95% 4 0.02% 5 0.60% 1 3.10% 2 2.08%
2001-1 1.94%
4 0.62% 5 -2.11% 1 -1.53% 2 1.26% 3 0.18%
2002-2 1.81%
5 -0.97% 1 -0.10% 2 1.50% 3 -0.18% 4 2.06%
2003-3 1.76%
1 2.04% 2 1.13% 3 -0.27% 4 -0.41% 5 4.26%
Averages
-0.22%
0.02%
-0.07%
0.22%
0.72%
0.63%
Winners 44% 38% 50% 69% 87%
63%
SPX
Day5 Day4 Day3 Day2 Day1 Totals
1988-4 0.04%
2 -0.35% 3 -1.46% 4 0.45% 5 0.16% 1 -1.17%
1989-1
-0.35% 3 -1.33% 4 -0.85% 5 0.00% 1 1.58% 2 -0.95%
1990-2
-0.78% 4 -1.76% 5 -0.93% 1 0.72% 2 -0.02% 3 -2.76%
1991-3
-0.23% 5 1.38% 1 0.50% 2 0.38% 3 -0.13% 4 1.91%
1992-4 0.98%
1 0.08% 2 0.39% 3 0.17% 4 -0.52% 5 1.11%
1993-1 0.20%
1 0.02% 2 0.07% 3 0.67% 4 0.02% 5 0.98%
1994-2 0.15%
2 0.24% 3 0.70% 4 1.70% 5 -0.30% 1 2.49%
1995-3
-0.70% 3 -0.99% 4 0.52% 5 0.61% 1 -0.30% 2 -0.86%
1996-4
-0.20% 5 -0.52% 1 0.61% 2 -0.09% 3 0.62% 4 0.43%
1997-1
-6.87% 1 5.12% 2 -0.29% 3 -1.68% 4 1.21% 5 -2.52%
1998-2 0.15% 1 -0.65% 2 0.26% 3 1.67% 4 1.17% 5 2.60%
1999-3
-0.62% 1 -0.91% 2 1.15% 3 3.53% 4 1.53% 5 4.69%
2000-4
-2.38% 3 -0.03% 4 1.11% 5 1.38% 1 2.20% 2 2.28%
2001-1 1.37%
4 0.41% 5 -2.38% 1 -1.72% 2 0.00% 3 -2.32%
2002-2 1.72%
5 -0.83% 1 -0.91% 2 0.97% 3 -0.56% 4 0.40%
2003-3 0.22%
1 1.52% 2 0.13% 3 -0.11% 4 0.36% 5 2.11%
Averages
-0.45%
0.09%
-0.09%
0.54%
0.44%
0.53%
Winners 50% 44% 63% 75% 56%
63%
The weakness of the past week did very little
damage to the indicators providing a nice setup for a long trade as we enter a
seasonally strong period.
I expect the major indices to be higher on
Friday October 29 than they were on Friday October
22.
Most of the major indices were down last week,
but the NASDAQ composite was up slightly so I am declaring last weeks negative
forecast a tie.
This report is free to anyone who wants it, so
please tell your friends.
They can sign up
at:
http://www.guaranteed-profits.com
If it is not for you, reply with
REMOVE in the subject line.
Thank you,
Mike Burk
W19/L17/T6
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