Premarket Futures 23rd Oct

FTSE +2

DAX +2

DOW +19

S&P -0.5

Nasdaq +2

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Thus Group telecoms reported a near doubling in first half underlying earnings, in line with expectations, and said it was on track to hit full-year earnings and sales targets. Earnings rose to 20.6 million pounds from 10.9 million one year before and six months turnover climbed by 10 percent to 157.5 million pounds Unilever said it had agreed to sell its Ambrosia and Brown & Polson units as it continues to cut the number of brands to restore profit margins Ebookers Online travel firm made a Q3 profit of 1.3 million pounds against a 0.8 million pounds loss a year earlier and said it had seen strong trading in October. Turnover rose 98 percent to 18.2 million pounds Canary Wharf is now in final talks with Morgan Stanley for a bid worth 255p

Calendar: United Kingdom	United States (GMT)	Europe & World (GMT
ebookers (Q3), Ryanair (I), Thus Group (I), SurfControl (I) Pz Cussons (AGM) Manufacturing sector PMI (09:30) CBI monthly distributive trades (11:00)	Kellogg Q3 15:00 Construction Spending 15:00 ISM Index 17:00 Auto Sales 17:00 Truck Sales	Dyckerhoff D Q3 HeidelbergCement D

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10/31: There are some changes to the pattern on the daily that allow this count. Basically we are still in wave 5 of an ending diagonal at the larger degree of trend.
Note that it is a 3 wave sequence that sub-divides into 5-3-5 up from 9200, with wave C nearly complete.
The pattern now looks to be forming a triangle, which can only be a 4th wave. This says expect another, quick but short rally that either tests or marginally breaks 9850.
The triangle (if that's what this is) would look best with another up/down sequence before the final wave 5.
On that basis, odds favor some sideways action early on monday, followed by a pop and drop.
A pop and drop at the open which fails to take out 9850, and then declines below 9750 says the pattern is complete.
An ideal case is failure to rally above 9850, as that is a bearish non-confirmation of the advance, and makes a much better case that the larger pattern is concluding here as well.
A breach of 9850 allows for more upside, and it would be possible that this is part of a larger 3rd or C wave up.
Technicals are showing some weakness, but not enough to confirm the pattern has completed just yet.


Updated 10/31 for Monday's market.
Key DOW Levels for 11/3
UP Above 9,850
DN Below 9,775

Still Consolidating
Dow continues sideways beneath resistance. Watch tight range Monday.

From prior commentary, "...the Dow has slowed its uptrend right at the 9,850 resistance level. Unless the index can break through this level, we will likely see the Dow change direction and head lower..."
The Dow held beneath the key 9,850 resistance level today, but continued to hold at the highs as the index traded sideways throughout the session, seen in the 15 and 60 Minute Charts.

The index continues to hold onto the weeks big gains by way of a consolidation at the highs, but the range looks more bearish than bullish at this point. The fact that the index hasn't risen above the key 9,850 resistance level is of concern. Also, the range looks to be taking the shape of a saucer top, which is typically a bearish pattern.

As we mentioned yesterday, if the Dow cannot get an upside break through 9,850, look for the index to reverse trend. A downside break below 9,775 will indicate weakness and a likely downside follow-through.

Short Term Dow

Short term, the Dow held at short term resistance at 9,820 throughout much of the session today. Look for weakness below this level for Monday's Open unless a break through it occurs.

Medium Term Dow

In the medium term, we are still Long the Dow from 9,658 and will pull our stops up to 9,775 for tomorrow's market. We will stay Long above 9,850 and will look to enter Short below 9,775, with 20 point stops.

NASDAQ & S&P

The NASDAQ and S&P each held at their respective highs today, forming clear trading ranges. Watch these ranges closely for Monday's market, as a break from the range will likely dictate direction. *

Summary

The Dow traded sideways the entire session today, and continues to hold beneath the clear and solid 9,850 resistance level. The index must break through this level if further upside is to be seen. Otherwise, a break below 9,775 will signal a change of trend.



MON FTSE PP

R2 4314
R1 4301
PP 4281
S1 4274
S2 4261

close was below Fri pp after loosing 1.3pts in the auction!

WEEKLY FTSE PP

r2 4381
r1 4334
pp 4286
s1 4239
s2 4191

Close was below the weekly PP after challenging the R1!

Morning all
Big Thunder storms & hail all night and still going on at the moment here in Northen France.

That will teach you to go for cheap holidays out of season :-)

Morning all.

Didn't take long for the FTSE to hit R2 and stall.

Back down again now I think.

Melnibone

Managed to get a load of CYH @3.8p now selling at 4.1p less than an hour later. Spread as improved - but should I sell now or hold on?

CYH bid price is yo yoing between 3.95-4.2 but the offer just won't drop below 4.3 (Bid just dropped to 4 & offer went up to 4.4!) Will sit tight and see what develops - Still over 10% up after all charges, in less than 2 hours.

No change on CYH so to compromise, put a limit sell on half of the holding @ 4.3 to see what happens! Made a small purchase in BLLM.

Looks like the FTSE is having keeps trying, but not succeeding!

I'm surprised that the FTSE went so far above R2 whilst
the S@P is so near its highs and not yet open for normal
hours trading.

Still, shows the wisdom in not trying to fight a trend, whatever
you think should be happening.

Melnibone

Too true - I'm supposed to be in mostly cash at the moment, but I have not succeeded in holding back. Perhaps I'm not alone and that's why the FTSE has picked up so much. Although thinking back, prices seem to pick up at the beginning of the month, and then drop back as the month goes on!

Keeping an eye on BP. and SHEL.
Starting to diverge.
Usually price differential of 35/40p.
Currently 44p.

May be worth a pairs trade(Short BP. long SHEL)
if it goes up to 48/50p differential.

Melnibone

Interesting chart - looks like you you're onto something

Thinking of crocs 2 day movement, 2 days up, and then down, 2 days up then down

Just in case it has slipped anyone's memory in this bullish euphoria,
be careful with any position longs at these levels.

As you can see we are now very close to the Sep 2001 low which
was also the resistance on the bear squeeze bounce in Aug 2002.

I would expect heavy resistance at this level. No need to worry about
missing a big surge up. If we break it, retest it and it holds, then
I see nothing to stop it until the old 5000/5200 trading range.
Plenty enough for everyone.

Better to wait and go with it than risk buying at what would now
be the top if this resistance holds. No idea if it will or won't
by the way.

Melnibone.

Taking a look at RBS. It took a hit today with problems over one
of its takeover targets.

It appears to be in a trading range of approx 1530/1650.
It's made a double bottom at 1530 and bounced of the same level
today. If you think that the FTSE is going to try for the 4425
resistance area that I highlighted in my last post(Sep01 low/ Aug 2002 high),
this may offer a better risk/reward ratio.

Take the lowest common denominator in CFD/Spead Betting of 1 a point.
This would be the equivalent of buying 100 shares and looking for 1 a penny.
Just add zeros on the end to get your normal position size.

The FTSE is at 4325 and 100 points away from the 4425.
RBS is at 1546p and 104p(same as points) away from 1650p.

One CFD or spreadbet on the FTSE would give you exposure of 4425 looking
for a 100 gain.

100 shares in RBS would give you exposure of 1546 looking for the same
100 gain.

FTSE is at least a spread of 3 to 4 points.
RBS is often 2p(same as points) spread.

Which is the better risk/reward?

Comments anyone?

Melnibone.