Introductory Special for the Holiday's
Signup today and save 50% on our Membership Packages
which include our Stocks to Watch List and Daily Breakout Reports

Weekend Stock Market Analysis

(12/13/03)

So far all three major averages (Dow, Nasdaq and S&P 500) are still exhibiting a Wave 3 pattern for those of you that follow Elliot Wave Theory.  With out getting to technical a brief example of a what an Elliot 5 Wave Pattern looks like is shown below.  

Notice how Waves 1,3 and 5 are upward moves with Wave 3 lasting the longest while Wave 5 is the shortest.  Meanwhile also notice that Waves 2 and 4 are corrective Waves which only last for a brief period of time before the upward trend continues.   

As far as the major averages the Dow has risen just above its longer term 61.8% Retracement Level near 10000.  If the Dow continues to rally through the end of the year and into the early part of 2004 it appears the next area of upside resistance may reside near 10400 (point A).  Meanwhile as long as the Dow holds support near its rising 20 Weekly EMA (green line) which is now around 9600 its longer term upward trend from the March low will remain intact.

The Nasdaq so far has held support just below its 10 Weekly EMA (blue line) and above its rising 20 Weekly EMA (green line).  If the Nasdaq does resume its up trend into the end of the year and through the early part of next year look for significant upside resistance area around the 2050 level.  The 2050 area is at the Nasdaq's longer term 23.6% Retracement Level and is also near the high made in the early part of 2002 (point B).  Meanwhile as long as the Nasdaq is able to remain at or above its 20 Weekly EMA its longer term upward trend from the March low will remain intact.

The S&P 500 has risen just above its longer term 38.2% Retracement Level near 1065.  If the S&P 500 trends higher through the end of the year and into the early part of 2004 look for possible upside resistance near 1110 (point C) or around 1160 which is the longer term 50% Retracement Level and is near the high made in 2002 (point D).   Meanwhile as long as the S&P 500 can remain at or above its rising 20 weekly EMA (green line) which is currently around the 1125 level its longer term upward trend from the March low will remain intact.

As mentioned last weekend it will be important to watch the Semiconductor sector (SOX) the rest of this year.  The SOX did drop below its 10 Weekly EMA (blue line) this week but found support at its previous longer term 23.6% Retracement Level near 480 and then closed just above its 10 Weekly EMA on Friday.  If the SOX tries to rally through the end of the year into the early part of 2004 it will be interesting to see if it can break through the 540 area (point E) which has been acting as a resistance zone over the past 6 weeks.  If the SOX can break strongly above the 540 area then this would likely lead to a strong move up to the 640-650 area which coincides with the SOX's longer term 50% Retracement Level and high made in 2002 (point F).  Meanwhile as long as the SOX can hold support near its rising 20 Weekly EMA (green line) in the weeks ahead its longer term upward trend from the March low will remain intact.  However if the SOX breaks below its 20 Weekly EMA in the weeks ahead this would likely spell trouble not only for the SOX but for the entire market as well. 

At some point we are probably going to see some type of corrective 4th Wave develop in the major averages.  The question at this point is will the major averages be able to make one more substantial move upward as we move into the the early part of 2004 before a corrective 4th Wave occurs?     

Meanwhile for those of you that have been following the Gold sector the XAU stalled out right at its longer term 61.8% Retracement Level (calculated from the 1996 high to the 2000 low) near 112 and came under some selling pressure this week.  In the bigger picture it still appears to me that the XAU has formed the right side of a 6 year "Cup".   The best case scenario for the XAU would be for it to develop a "Handle" over the next several weeks to complete a Bullish "Cup and Handle" pattern before making another significant move upward to the 150-160 area at some point in 2004.    

How can a Premium Membership to amateur-investor.net benefit you as an investor?  I use principles derived from "CANSLIM" to search for stocks to put in my Top 100 List which are then ranked on several factors including EPS Rank, RS Rank, Group Strength, Accumulation/Distribution, Net Profit Margins and etc.  From my Top 100 List I then narrow the list down further by featuring those stocks which have developed a favorable chart pattern such as a "Cup and Handle", "Double Bottom" or "Flat Base".  These stocks are then included in my "Stocks to Watch List" which gives investors a quick reference to those stocks which may provide the best buying opportunities over in the weeks ahead.  Each stock in my "Stocks to Watch List" includes specific Buy Prices, Stop Loss Prices (very important) and projected Target Prices.  The Performance of our Stocks to Watch List so far in 2003 is shown below as compared to the major averages.

Performance vs Major Averages
(1/3/03-12/12/03)

Signup Today for a "Free" Trial Membership and see our complete list of Stocks
which are currently developing a favorable Chart Pattern such as the
"Cup and Handle" or "Double Bottom"

 
Amateur-Investor.net