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afternoon guys: below is the copy of Tom Hougards Email.


Good morning



I have been thinking long and hard over the state of the market over the last 72 hours. Friday was not a trading day so I sat and looked over the charts to try and get an idea of what Wall Street is thinking. I looked over all the cycles I know of and all the data I have collected over the years.



The conclusion is that I dont know!



I agree I can do better than that, so allow me to run you through my thought process.



The SP500 peaked in March 2000 at 1554. This marked the end of the bull market as we know it and a two year bear market ensued. The bear market ended on a lovely harmonic cycle on the 10th October 2002. On that day the SP500 registered a 50% loss from the all-time high. This of course is a classical bear market characteristic.



Since then the market has rallied relentlessly and over the summer of 2003 had the ability to make my life miserable. I was calling for a top at this stage and lost out on some of the rally from 9200 to 9600. I got the top of the 19th February 2004. I am particular pleased with that call because it cemented in my mind the hidden beauty in the markets. On that day the cycle came in perfectly. On the same day the SP500 had regained 50% of what it had lost in the bear market decline. That is also a classic bear market characteristic.



Since the high on the 19th February we have made a lower high in early April. We made a perfect low at 1075 (it was a perfect low because it saw the market make an equal wave retracement) and have since rallied back up to the 1140 area.



I use several different kinds of forecasting tools. Some are based on natural cycles, some are based on Fibonacci cycles, and some are based on planetary cycles. So far this year they have been accurate in picking highs and lows.



The Fibonacci Spiral that I have shown repeatedly over the last 3 months on this email has been a very good indicator of the market turns. The most remarkable cluster of dates is coming in at the end of the month of June. There will be a very significant turn coming towards the end of the month. I am pretty sure about that.



I have solved most of the month for the Market Map. The turns look like we will see lower prices for the coming week, but then the cycles turn hard up again. As it is incredibly time consuming to solve for more than a few days at a time I will have to make due with two weeks of forecast.



The conclusion from a cycle point of view is that a major turn in the stock market is coming. I favour it to be a low for a reason I may not have mentioned before. We are in an election year in the US. The typical pattern of the election year is lower prices into the June/July period and then higher into November. So far the market is setting up perfectly for this pattern.



Of course it does not stop there. Have you ever heard of the Bradley astrological model? It is usually very accurate and has been over the last 4 years. This model goes straight down for the rest of the year with very few rallies at all.



Unfortunately I could go on and on, presenting diverse signals. It does not serve your purpose and I certainly dont want to waste your time. I will keep you updated on the cycles as they appear. I have 3 4 mentors who together have more than 150 years of trading and forecasting experience. Two of them are saying up and two of them are saying down. How is that for mentoring? J



The conclusion is that I can see the see bullish potential and I can see the bearish potential. It is very easy to see the bearish potential when you pull out your charts for the financial companies. They have had a 15% correction over the last couple of months and are trying to base. Keep an eye on them because they will give you the clue of the direction of the market. I am talking about stocks like Goldman Sachs, Merrill Lynch, Citi Group, and JPM to mention a few. I will short weakness in these stocks but not strength as they could be basing here for another leg up.



This week is the expiration week. The trend set in expiration is statistically significant in the sense that a negative expiration usually means more selling in the week after. I am watching the market right now and will short below 1130 in the SP500 with a stop above 1133. This is not advice in any shape or form. This is what I am doing. You must make your own conclusions. Tuesday should offer another opportunity to short the market as Wednesday should see more weakness.



I think I will leave it for now. My final advice (although I dont give advice per se) is that a move is coming. It will be a significant move and you really should try to make an effort on board. Right now it is looking like a bearish move. For those of you who know about my mirror image chart, you will know the importance of the last rally last week. This was all factored into this chart and from here onwards it is a one way street into the abyss.



Stay on your toes ladies and gentlemen. I can almost guarantee that the rest of the month will be exciting.



Tom

Published: Jun. 15 2004, 07:01 GMT

The Dow may fall further to 10,360, possibly to as low as 10,100 - 10,100


European stocks slid, paced by companies whose sales are most sensitive to economic expansion, amid concern interest rates in the U.S. may rise more than expected this year, braking global growth.







June 14, 2004 - EUROPE



- The Bank of Japan kept monetary policy unchanged at a board meeting in Tokyo as an accelerating recovery in the world's second-biggest economy hasn't ended six years of price declines. Governor Toshihiko Fukui and his eight policy board colleagues maintained the upper limit of the central bank's target for reserves available to lenders at 35 trillion yen ($316 billion) and kept interest rates at almost zero at a two-day meeting ended today, the bank said. The decision was unanimous. The government last week raised its estimate of first- quarter growth to a 6.1 percent annual pace from 5.6 percent. Japan's longest recovery since 1997 has prompted economists to expect the central bank to shift away from its policy of pumping money into the economy as early as next year as deflation may be nearing an end.


- Bank of England Governor Mervyn King said the risk of a decline in house prices is increasing, the central bank's latest attempt to cool the housing market after raising interest rates four times since November. "After the hectic pace of price rises over the past year it is clear that the chances of falls in house prices are greater than they were,'' King said in the text of a speech in Glasgow, Scotland. The proportion of people's income spent on buying homes has risen to ``record levels'' and is now ``well above what most people would regard as sustainable in the longer term.'' This is the strongest warning yet about the risk of house- price declines from a Bank of England policy maker, and the first from the head of the bank. Chief Economist Charles Bean said this month that house prices will either fall or stagnate.



- The Bank of Japan kept monetary policy unchanged at a board meeting in Tokyo as an accelerating recovery in the world's second-biggest economy hasn't ended six years of price declines. Governor Toshihiko Fukui and his eight policy board colleagues maintained the upper limit of the central bank's target for reserves available to lenders at 35 trillion yen ($316 billion) and kept interest rates at almost zero at a two-day meeting ended today, the bank said. The decision was unanimous. The government last week raised its estimate of first- quarter growth to a 6.1 percent annual pace from 5.6 percent. Japan's longest recovery since 1997 has prompted economists to expect the central bank to shift away from its policy of pumping money into the economy as early as next year as deflation may be nearing an end.


- Bank of England Governor Mervyn King said the risk of a decline in house prices is increasing, the central bank's latest attempt to cool the housing market after raising interest rates four times since November. "After the hectic pace of price rises over the past year it is clear that the chances of falls in house prices are greater than they were,'' King said in the text of a speech in Glasgow, Scotland. The proportion of people's income spent on buying homes has risen to ``record levels'' and is now ``well above what most people would regard as sustainable in the longer term.'' This is the strongest warning yet about the risk of house- price declines from a Bank of England policy maker, and the first from the head of the bank. Chief Economist Charles Bean said this month that house prices will either fall or stagnate.







Equity Market Summary -



Asian stocks fell on concern a U.S. report today will show accelerating inflation, prompting the Federal Reserve to increase interest rates faster than expected. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, slipped 0.9 percent to 87.37 at 11:41 a.m. in Tokyo. It lost 2.1 percent in the past two sessions. Japan's Nikkei 225 Stock Average sank 1.2 percent, South Korea's Kospi index fell 0.6 percent and Taiwan's Taiex index dropped 0.4 percent. Benchmarks in markets opened for trading declined except for those in China, Hong Kong and the Philippines.

U.S. stocks fell Monday on concern government reports this week may show inflation is accelerating, prompting the Federal Reserve to raise interest rates more quickly than some investors had forecast. The Standard & Poor's 500 Index lost 11.18, or 1 percent, to 1125.29. All 10 industry groups retreated. The Dow Jones Industrial Average fell 75.37, or 0.7 percent, to 10,334.73. Both benchmarks had their biggest decline in almost a month. The Nasdaq Composite Index shed 29.88, or 1.5 percent, to 1969.99.

The U.S. economic data was mixed Monday, with May retail sales growth besting the consensus, but the trade deficit widening by more than expected in April. The details of the retail sales report were encouraging, despite the lion?s share of growth attributable to a surge in auto and gasoline sales. The spending data was well received by financial markets, as it essentially put to rest fears about a significant moderation in consumption in the second quarter. The unexpected jump in the trade deficit to a new monthly record intensified concern regarding required foreign investment needed to offset the growing imbalance.

The inflationary data in Europe and recent Fed comments have increased anticipation amongst market participants that interest rate hikes will come sooner, rather than later. As a result, stock markets have headed south Monday, with the DAX, CAC-40, and FTSE-100 shedding 1.9%, 1.4% and 1.0%, respectively.




Equity Technicals:


- DAX Index - the index fell further and has been to 3940 -- we continue to hold on to the short-term scenario of a pullback to ideally 3825 - 3800 before the bullish medium-term view reasserts. However, the caveat remains -- that is, if the DAX goes through 4050, then it is unlikely that we will see this magnitude of a pullback. Nonetheless, the medium-term outlook remains unchanged -- expect a new upwards cycle which should go on and challenge the 4175 top further out, and perhaps go on and focus at a 4500 upside target later in the year. However, if the rally extends above 4,050, then the +pullback scenario+ is probably wrong.


- FTSE 100 Index - the index went lower further -- it fell to 4430. The view is unchanged -- we still hold out for the scenario of a short-term cascade to the 4395 area. . However, the view of a large pullback may still be nullified if the index rallies above 4515. But despite this, continue to make allowances for a +test of the base+ type of corrective decline, the target of which is the area of 4395 - 4380 late in the week -- unless of course the upside swing level is blown away.. The next upwards phase from there may kick off a new upside sequence which will go on and challenge the 4600 top, and perhaps extend gains further towards 4750 later in the year.


- S&P 500 - the sell-off has been to as low as 1122. It may bounce back somewhat today, back to 1128. But further sell-off during the week may yet bring the index to at least 1115. We may yet a shot at 1100 - 1090 area before the bull is set loose. In any case, recent action is indeed supportive of the view that the new bull market cycle may have began and would accelerate higher at some point. The new upwards phase may go on and challenge the 1165 top, and thereafter extend gains to 1225 - 1230 later in the year.


- Dow Jones Ind Ave. - the index may bounce back to 10,360, but the scenario remains -- we may yet see further declines to at least 10,150 in the next few days. And we still are biased for a bigger decline to 10,1000 -10,000. Nonetheless, a new bull market waits in the wings to be confirmed -- eventually, we expect to see a rally to the 10,800 top, and perhaps further appreciation towards 11,500 later in the year.


- NDX 100 - we may see apullback to 1460, but the index should continue to trade lower in the next few days. The index may do a corrective decline back to at least 1440, possibly even to 1405 - 1395 area -- a +test of the base+ type of correction. A new bull market waits in the wings -- we expect to see a test of the 1560 top thereafter, and perhaps further appreciation towards 1700 later in the year.


- Nikkei - the index weakened further and has gone below 11.400 --we may yet that +test of the base+ decline to 10,900. Allow for a retest of the base, which in this case may be 10,900. A new bull market should emanate from there, which may have 14,000 as the major goal late in the year. The short-term view however fails if the current rally goes above 11,600.


- Hang Seng - the index foiund support at 12,000. but should resume the decline later in the week. Still make allowances for a corrective decline back to 11,600 from here, a +test of the base+ type of retracement. The bull markets should then resume and may target the 16,500 - 17,000 area later in the year.

futures have risen after cpi data and indicate a higher opening.Will it be a pop and drop.Resistance at 10450.Also greenbum talking at 4pm gmt.

trade wisely and safely easier ti short the rallies specially if they are on low volumes.

rgds
zarif

email i recieved from Tom Hougard


Wow, Europe is the most quiet I have experienced in weeks. We got some important time counts coming up. For example we got the Dow hitting a 0.618 time count later in the week. However, there is just so little going on and the market seems very confused. If you look at individual stocks they are trading in a very narrow range. The time cycles are still spinning out good turns in the market. I will cover some of them later on in the day and send them out to you.



I looked at the big picture yesterday and I would like to continue in that vein today. The SP500 is barely up for the year and neither is the Dow. As a matter of fact the indices have gone nowhere for the last 6 months. Is that bullish? Is that bearish? There is no easy answer to that question. However, history has taught me that when you least expect a big move (in this case over the summer period) you should expect one. I said it yesterday and I will say again today: get ready. I expected a down day yesterday and I got 75 Dow points. Is this the beginning of the big move? As long as we are below 1132 I am bearish.



I got today as a wish-wash between bullish and bearish but I will short any rally today even if it does temporarily gets above 1132 because I am expecting Wednesday and Friday to be down hard. This is based on the Map I do. This is my strategy. A close above 1132 will make me nervous and I will close out my shorts if the market settles above 1132. The big turn of the day does not come until 19:00 19:40 which is about 90 minutes before the close in the US.



Good luck today



Tom

http://uk.finance.yahoo.com/q?s=^NDX&d=c&k=c3&a=ss,w14,m26-12-9,r14&p=m10,m20,m50,m100&t=5d&l=on&z=m&q=c

Looking to open a short on the NDX. We've closed the gap open
from yesterday, but we've still got a gap from last Wednesday
circa 1495.

Greenspan waffling again today, somewhere around 1600Hrs I think,
so that'll decide whether we go down today or fill that last gap.
Will bide my time. We've got several gaps to fill on the downside
including todays.

Melnibone.

http://uk.finance.yahoo.com/q?s=^NDX&d=c&k=c3&a=ss,w14,m26-12-9,r14&p=m10,m20,m50,m100&t=5d&l=on&z=m&q=c

Sorry, I pasted the link above instead of inserting it.
This should give you something to click rather than copy
and paste into your address bar.

Melnibone.

DAX falls today; it may decline further to 3825 - 3800, followed by new bull market to 4500



June 16, 2004 - EUROPE



- Canadian factory shipments rose 0.5 percent to C$48.5 billion ($35.2 billion) in April, the fifth straight gain, led by record demand for lumber. Unfilled orders and new orders both increased, as did inventories, Statistics Canada said in Ottawa. Manufacturers are benefiting from stronger U.S. and overseas demand this year, and from a drop in the Canadian dollar. Half of the country's factory output is exported. Canada's dollar has declined 5.2 percent this year, easing pressure on exporters after last year's record 21 percent rise.


- Gold futures in New York had their biggest gain in two weeks as an increase in some U.S. consumer prices matched economists' forecasts, easing concern the Federal Reserve may quicken its pace of interest-rate increases. Higher rates erode gold's appeal as a hedge against inflation. The metal also rose after Fed Chairman Alan Greenspan said inflation is ``not likely to be a serious concern'' and rate changes probably will be measured. Gold had fallen 2.6 percent since June 7 after Greenspan said the Fed ``is prepared to do what is required'' to head off rising consumer prices. Gold for August delivery rose $4.50, or 1.2 percent, to $388.70 an ounce, the biggest gain for a most-active contract since May 27. The metal yesterday fell to a three-week low of $384.20.


- U.K. government figures are understating growth in Europe's second-biggest economy and will be revised up over the summer, a forecasting group said. Gross domestic product rose at a quarterly rate of 0.6 percent in the first quarter, compared with 0.9 percent growth in the fourth quarter of last year. First-quarter growth may be raised on June 30, the ITEM Club said. ``The official data have been lagging the upturn and will surely be revised up over the summer,'' said Peter Spencer, chief economic adviser to the group.


- Crude oil futures in New York on Tuesday rose as much as 0.9 percent as attacks on two Iraqi oil pipelines heightened concern about the security of supplies after the U.S. hands over control of the country on June 30. The bombing of a pipeline in the south halted exports through Iraq's two Persian Gulf terminals yesterday. Hours later, a pipeline from the country's northern oil fields at Kirkuk to a refinery was blown up, Agence France-Presse reported, citing Adel Kazzaz, a director general of the Northern Oil Co. Crude oil for August delivery, the most active contract, rose as much as 35 cents, or 0.9 percent, to $37.77 a barrel in after-hours trading on the New York Mercantile Exchange. It traded at $37.45 at 9:07 a.m. Singapore time. The July contract rose as much as 1 percent to $37.57 a barrel.






Equity Market Summary -



Asian stocks rose today after U.S. Federal Reserve Chairman Alan Greenspan said interest rate increases may be ``measured'' because inflation isn't a serious threat. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks, jumped 1.8 percent to 89.94 as of 10:27 a.m. in Tokyo. Japan's Nikkei 225 Stock Average advanced 2.4 percent, while the broader Topix index gained 1.5 percent. South Korea's Kospi index climbed 1.8 percent. All benchmarks in markets in Asia opened for trading advanced.

U.S. stocks rallied yesterday on a tame inflation report. Stocks pared their gains but finished well in positive territory, reversing most of Mondays losses. The core CPI figure posted its smallest increase in three months in May, dispelling inflation fears, at least for now. Dovish comments made by Chairman Greenspan during the Q&A session of the confirmation hearings also contributed to investors optimism.

European stocks rose Tuesday after a U.S. inflation report eased concern that the Federal Reserve will raise interest rates more than investors had expected. The Dow Jones Stoxx 50 Index rose 0.8 percent to 2710.53. The Stoxx 600 advanced 0.7 percent. The Euro Stoxx 50, a measure for the 12 countries sharing the euro, added 1 percent. Benchmark indexes rose in all 17 Western European markets. France's CAC 40 Index and Germany's DAX Index gained 1 percent, while the U.K.'s FTSE 100 Index increased 0.6 percent. June futures on the Euro Stoxx 50 added 1.6 percent.




Equity Technicals:





- DAX Index - the index rose back to just below 4000, but may fall today. We continue to hold on to the short-term scenario of a pullback to ideally 3825 - 3800 before the bullish medium-term view reasserts. However, the caveat remains -- that is, if the DAX goes through 4050, then it is unlikely that we will see this magnitude of a pullback. Nonetheless, the medium-term outlook remains unchanged -- expect a new upwards cycle which should go on and challenge the 4175 top further out, and perhaps go on and focus at a 4500 upside target later in the year. However, if the rally extends above 4,050, then the +pullback scenario+ is probably wrong.


- FTSE 100 Index - the index rose further and has been to 4463, but may sell-off today. The view is unchanged -- we still hold out for the scenario of a short-term cascade to the 4395 area. . However, the view of a large pullback may still be nullified if the index rallies above 4515. But despite this, continue to make allowances for a +test of the base+ type of corrective decline, the target of which is the area of 4395 - 4380 late in the week -- unless of course the upside swing level is blown away.. The next upwards phase from there may kick off a new upside sequence which will go on and challenge the 4600 top, and perhaps extend gains further towards 4750 later in the year.


- S&P 500 - the index did bounce back to 1137 yesterday, but lost ground at the close. Further sell-off later in the the week may yet bring the index to at least 1115. We may yet a shot at 1100 - 1090 area before the bull is set loose. In any case, recent action is indeed supportive of the view that the new bull market cycle may have began and would accelerate higher at some point. The new upwards phase may go on and challenge the 1165 top, and thereafter extend gains to 1225 - 1230 later in the year.


- Dow Jones Ind Ave. - the index did bounce back to 10,425 yesterday, higher than expected. Nonetheless, the scenario remains -- we may yet see further declines to at least 10,150 in the next few days. And we still are biased for a bigger decline to 10,1000 -10,000. Nonetheless, a new bull market waits in the wings to be confirmed -- eventually, we expect to see a rally to the 10,800 top, and perhaps further appreciation towards 11,500 later in the year.


- NDX 100 - we did see an awesome pullback to 1487, but the index should continue to trade lower in the next few days. The index may do a corrective decline back to at least 1440, possibly even to 1405 - 1395 area -- a +test of the base+ type of correction. A new bull market waits in the wings -- we expect to see a test of the 1560 top thereafter, and perhaps further appreciation towards 1700 later in the year.


- Nikkei - the index rose somewhat on good fundamental news . . . But nonetheless, we may yet that +test of the base+ decline to 11,000. Allow even for a retest of the base, which in this case may be 10,900. A new bull market should emanate from there, which may have 14,000 as the major goal late in the year. The short-term view however fails if the current rally goes above 11,600.


- Hang Seng - the index was initially higher today but faded at the close, and should resume the decline later in the week. Still make allowances for a corrective decline back to 11,700 from here, a +test of the base+ type of retracement. The bull markets should then resume and may target the 16,500 - 17,000 area later in the year.

copy of Tom Hougards email
Good morning,



I am somewhat surprised by the strength in the European markets this morning, but then again although Dow sold off the NASDAQ did not.



Given that we are trading well above 1132 in the Globex market I will treat the market with a bullish bias. Only a move below 1128 will get me bearish again. I got today as a down day, grinding lower, but I am somewhat sceptical of this right now given the strength in the European indices. As long as we are holding above 1132 the market has a chance of getting above 1142.



The only problem is volume. On this leg higher the volume has been declining. However, there are a large number of contracts outstanding for the expiration and I wonder if we will see a short squeeze develop. My Map sometimes shows a grinding day lower when we gap higher and just trade near the highs for the day. This is a possibility today.



Essentially the market is probing the ranges between 1120 and 1140. The market is bullish right now and a move above 1142 will target 1150. I am more inclined to think that we will see a range day if we dont break down.



I shorted the market yesterday as I said I would. I got the lower prices towards the end of the day. Unfortunately I have doubts whether my bearish call for Wedneday will hold true so I have stopped myself out at 1134 and remain flat right now, waiting for the cash market to open.



Tom

dow -zzzzzzzz at the moment please wake me up when it decides what to do!!!!!

copy of Tom Hougards email:
Good morning,



It really does smell of manipulation. When is the last time you saw the Dow have a range of 38 points? The average range over the last 4 years has been near 120 points.



It stinks of manipulation.



The market is going nowhere but we are still above the crucial 1132. As long as this holds the bulls are in control and the bias is for higher prices. There is no real discernable trend and no real patterns to go by. At the moment it is much easier to day trade. I had, as you know, yesterday as a strong DOWN day. Instead I got a flattish day with a tiny range. A break of yesterdays lows should see more downside but I really have not got that in the chart until Friday. As a matter of fact I am beginning to think that as long as the SP500 September contract is holding above 1132 we could see another attempt to push up towards 1143. I got Friday as a very weak day with lower prices.



For now I would be cautious trading this market. I am not bullish here but I would prefer to short the SP500 on weakness below 1132 and preferably below 1128.



The NASDAQ looks like the weakest link and I do subscribe to a system which I have no idea how it works (actually it was my boss who wanted it J ). Anyway this system went short the QQQ, which is the tracker stock for the NASDAQ 100, yesterday. I have not really followed because I dont like to follow systems that I have no idea how works. For all I know they could be flipping a coin.



The DAX cash chart looks like it is ready for a correction. There may be another push higher today towards the 4040 area. A move below 3990 should initiate more downside. A break of 3933 is confirmation of the downside.



I am attending a seminar tomorrow so there will be no analysis.



Have a nice weekend and be careful in this market. The market can explode higher on this manipulation.



Tom

saxo bank analysis by R.Balan


FTSE 100 may give back more gains -- expect further decline to 4410, maybe even 4390


U.S. industrial production increased 1.1 percent in May, most in almost six years, as utilities generated more power, companies made more business equipment, and builders began work on more homes.







June 16, 2004 - NEW YORK



- Bank of Canada Governor David Dodge raised his economic growth projection for the first half to a pace faster than 3 percent, citing rising domestic demand and exports. In April he predicted the economy would grow at a 2.75 percent first-half pace, and figures since then showed Canada had its second-biggest monthly trade surplus ever and new home prices rose at the fastest pace since 1990. The speech is another step preparing investors for a rate increase later this year. Last week the central bank dropped from its public statements a phrase saying the risks to the economy are ``balanced,'' and today is the third time in three weeks the central bank has said inflation is rising faster than it expected.


- Inflation remains ``under good control'' and central bankers are not too late in starting to raise interest rates to head off price increases, Federal Reserve Bank of Richmond President J. Alfred Broaddus Jr. said. ``I do not believe we are behind at this point,'' Broaddus, who retires from the Fed on Aug. 1, said in an interview. ``I believe inflation is under good control.'' The Federal Open Market Committee's statement last month said that ``well-contained'' inflation would allow it to start raising interest rates at a ``measured'' pace. ``We're clear that we need for rates to move up,'' Broaddus said in the interview. A neutral fed target rate ``is something in the vicinity of 2.5 to 3.5 percent,'' he later told an audience of money managers in Washington. ``But many things can affect what `neutral' is -- it is always difficult to answer with precision.''


- Bank of England Governor Mervyn King reiterated that world interest rates are set to rise as the global economy picks up, and signaled further rate increases in the U.K. ``A synchronized recovery in the industrialized world is now under way,'' King said in the text of a speech in London. ``Over the past three months expectations of interest rates among all the major industrial countries have risen as the recovery has become more firmly established.'' The Bank of England has raised borrowing costs four times since November and most economists expect another increase in August. The U.S. Federal Reserve is expected to at least double its main lending rate, currently 1 percent, by the end of the year. The European Central Bank will keep its main rate at 2 percent until at least the fourth quarter. King also repeated that U.K. growth is likely to be ``robust'' over the next year and then ease back toward its long- term average. He said there isn't much spare capacity in the economy, with the labor market tightening further. Cost pressures are rising and pay growth has picked up, he said.


- U.S. industrial production increased 1.1 percent in May, the most in almost six years, as utilities generated more power and companies made more business equipment. Builders began work on more homes than forecast and construction permits reached the highest annual rate in three decades. The rise in production at the nation's factories, mines and utilities followed April's 0.8 percent increase, the Federal Reserve said in Washington. In a separate report, the Commerce Department said housing starts fell 0.7 percent to an annual rate of 1.967 million, topping the median forecast of 1.95 million in a survey of economists. Manufacturers are ``doing a little more of the heavy lifting in the economy,'' . Businesses are investing more and hiring more, which is a good sign for the sustainability of the expansion.


- Crude oil futures in New York rose for a second day yesterday on concern violence in Iraq and Saudi Arabia is increasing the risk of disruption to Middle East supplies. Gunmen yesterday killed the chief of security for the North Oil Co., which operates Iraq's northern oil field, while a bomb Tuesday halted exports from the country's Persian Gulf terminals. Oil prices closed at a record $42.33 a barrel on June 1 after an attack on an oil-workers housing compound in Saudi Arabia, which this week said it will step up its fight against insurgents. Crude oil for July delivery rose as much as 22 cents, or 0.6 percent, to $37.54 a barrel in electronic after-hours trading on the New York Mercantile Exchange. It was at $37.49 a barrel at 10:32 a.m. Singapore time. The August contract, the most active, gained as much as 0.5 percent to $37.85 a barrel.





Equity Market Summary -


Japanese stocks fell, after the Nihon Keizai newspaper said regulators will tighten supervision over the bank on suspicion that it hid credit information from inspectors. Stocks also declined after the government said in its monthly economic assessment that a rise in the price of oil, which has risen 27 percent this year, is an immediate threat to economic expansion. Japan's Nikkei 225 Stock Average slipped 0.4 percent to 11,597.80 at 11 a.m. break in Tokyo. The Nikkei yesterday closed at its highest in seven weeks. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks in the region, lost 0.3 percent. It is heading for its first decline in three days. Australia's S&P/ASX 200 Index advanced 0.4 percent and is poised for a record close.

U.S. stocks finished mixed yesterday of heavy economic data. Equity markets saw low volatility and finished little changed on the session. The Nasdaq and S&P ended with small gains, while the Dow finished with a marginal loss. Dow +0.85 at 10379.58, Nasdaq +2.63 at 1998.23, S&P 500 +1.59 at 1133.60

The U.S. May industrial production report provided little direction for markets. Growth advanced 1.1% during the month, the largest increase since August 1998. Such strong growth received the typical good/bad news response, in which strong data is good for growth, but bad for interest rates. That said, the manufacturing production data are now essentially aligned with the ISM survey evidence. Residential construction activity slowed for the third consecutive month in May, but the level of housing starts remains high.

European stocks advanced, after Federal Reserve Chairman Alan Greenspan said inflation is ``not likely to be a serious concern.'' The Dow Jones Stoxx 50 Index added 1.1 percent to 2740.36, increasing for a second day. The Stoxx 600 rose 1 percent. The Euro Stoxx 50, a measure for the 12 countries sharing the euro, climbed 0.8 percent. All reached their highest since May 5. National benchmarks gained in all 17 Western European markets except Finland, where the Hex 25 Index slipped 0.3 percent. Germany's DAX Index added 0.4 percent. France's CAC 40 Index rose 0.8 percent. The U.K.'s FTSE 100 Index increased 0.7 percent. June futures on the Euro Stoxx 50 rose 0.1 percent.




Equity Technicals:


- DAX Index - no change in the view -- the index was marginally higher yesterday but it may fall later today. We continue to hold on to the short-term scenario of a pullback to ideally 3825 - 3800 before the bullish medium-term view reasserts. However, the caveat remains -- that is, if the DAX goes through 4050, then it is unlikely that we will see this magnitude of a pullback. Nonetheless, the medium-term outlook remains unchanged -- expect a new upwards cycle which should go on and challenge the 4175 top further out, and perhaps go on and focus at a 4500 upside target later in the year. However, if the rally extends above 4,050, then the +pullback scenario+ is probably wrong.


- FTSE 100 Index - the index rose further -- it has been to 4510 -- but no change in view. Nonetheless, it may give back some gains later in the day. The view is unchanged -- we still hold out for the scenario of a short-term cascade to the 4410 area. . However, the view of a large pullback may still be nullified if the index rallies above 4525. But despite this, continue to make allowances for a +test of the base+ type of corrective decline, the target of which is the ideal area of 4395 - 4380 late in the week -- unless of course the upside swing level is blown away.. The next upwards phase from there may kick off a new upside sequence which will go on and challenge the 4600 top, and perhaps extend gains further towards 4750 later in the year.


- S&P 500 - the index tried to rally but failed. We should see more declines today, which may eventually bring the index to at least 1115. We may yet a shot at 1100 - 1090 area before the bull is set loose. In any case, recent action is indeed supportive of the view that the new bull market cycle may have began and would accelerate higher at some point. The new upwards phase may go on and challenge the 1165 top, and thereafter extend gains to 1225 - 1230 later in the year.


- Dow Jones Ind Ave. - the index failed a rally attempt -- the Dow should fall further later today. The main scenario remains -- we may yet see further declines to at least 10,150 in the next few days. And we still are biased for a bigger decline to 10,1000 -10,000. Nonetheless, a new bull market waits in the wings to be confirmed -- eventually, we expect to see a rally to the 10,800 top, and perhaps further appreciation towards 11,500 later in the year.


- NDX 100 - the index should continue to trade lower in the next few days -- a rally attempt failed yesterday. The index may do a corrective decline back to at least 1440, possibly even to 1405 - 1395 area -- a +test of the base+ type of correction. A new bull market waits in the wings -- we expect to see a test of the 1560 top thereafter, and perhaps further appreciation towards 1700 later in the year.


- Nikkei - the index is in a holding pattern . .The scenario of a +test of the base+ decline to 11,000 is looking less and less likely. Nonetheless, for now keep the view intact A new bull market should emanate from there, which may have 14,000 as the major goal late in the year. The short-term view however fails if the current rally goes above 11,600.


- Hang Seng - the index faded at the close, and should resume the decline later in the week. Still make allowances for a corrective decline back to 11,700 from here, a +test of the base+ type of retracement. The bull markets should then resume and may target the 16,500 - 17,000 area later in the year.

DAX falls further -- objective of 3625 - 3810 may be reached next week; a new bull market to 4500 follows


Producer prices in Germany rose for a fourth month in May as costs for energy and raw materials increased. Prices for goods ranging from toys to machine tools rose 0.5 percent from April.







June 18, 2004 - EUROPE



- Producer prices in Germany, Europe's largest economy, rose for a fourth month in May as costs for energy and raw materials increased. Prices for goods ranging from toys to machine tools rose 0.5 percent from April, when they increased 0.4 percent, the Federal Statistics Office in Wiesbaden said. Economists expected an increase of 0.4 percent, the median of 24 forecasts. From a year ago, prices increased 1.6 percent.


- Norwegian oil workers went on strike, cutting output from the world's third-largest oil exporter, after two unions failed to reach a pension accord with employers. About 200 workers at North Sea fields operated by Statoil ASA, ConocoPhillips and Exxon Mobil Corp. have ceased work, said Bjoern Tjessem, deputy leader of the OFS labor union. The action affects fields with total output of 455,000 barrels a day. Closure of all the fields would cost producers 115 million kroner ($16.6 million) daily, the Norwegian Oil Industry Association said. Lower output from Norway, which pumps about 3 million barrels of oil a day, may boost oil prices that have risen 18 percent this year as violence in Iraq curbs global supplies


- Crude oil futures rose to their highest in eight days after U.S. officials discounted an early resumption of exports from Iraq's terminals on the Persian Gulf. Iraq's southern pipeline network was sabotaged on Monday and Tuesday, stopping oil flows from the country's biggest terminals for the second time in less than six weeks. Clare Baxter, a spokeswoman for the U.S.-led occupation authority said yesterday that exports from Iraq, which pumped about 2.6 percent of world supply in May, won't resume until Tuesday at the earliest. Prices surged 3.1 percent yesterday after car bombs exploded near an army recruitment center in Baghdad and outside a government office in Yethrib, killing at least 41 people. Crude oil for July delivery rose as much as 37 cents, or 1 percent, to $38.83 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $38.67 at 1:06 p.m. Singapore time. The more actively traded August contract rose 14 cents to $38.95.




Equity Market Summary -



Asian stocks dropped, after economic reports in China and the U.S. fueled concern their central banks will slow growth with higher interest rates. Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 stocks in the region, shed 0.7 percent to 88.81, its first drop in four days, at 11:31 a.m. in Tokyo. Stocks also declined after oil prices in New York yesterday had the biggest advance in more than two weeks. Japan's Nikkei 225 Stock Average shed 1 percent to 11,497.11, set for its second weekly drop in three. South Korea's Kospi index tumbled 1.8 percent to 746.34. Hong Kong's Hang Seng Index dropped 1.7 percent to 11,880.65.

U.S. stocks finished lower in directionless trading on Thursday. A stronger than expected increase in producer prices applied the selling pressure early on, although a pair of reports released later in the day provided some upside lift. Both May leading indicator and June Philly Fed figures bested the consensus, with the latter report offering some bullish news in terms of pricing pressures. The three key price-related components of the survey – prices paid, prices received and delivery times – edged lower during the month.

The Dow and S&P finished slightly in the red, while the Nasdaq ended the session with a more sizable loss. Dow -2.06 at 10377.52, Nasdaq -14.56 at 1983.67, S&P 500 -1.53 at 1132.03






Equity Technicals:


- DAX Index - the index did fall later in the day, and bingo. A small uptick early on should be followed by further declines. We continue to hold on to the short-term scenario of a pullback to ideally 3825 - 3810 before the bullish medium-term view reasserts. However, the caveat remains -- that is, if the DAX goes through 4050, then it is unlikely that we will see this magnitude of a pullback. Nonetheless, the medium-term outlook remains unchanged -- expect a new upwards cycle which should go on and challenge the 4175 top further out, and perhaps go on and focus at a 4500 upside target later in the year. However, if the rally extends above 4,050, then the +pullback scenario+ is probably wrong.


- FTSE 100 Index - the index was neutral -- no change in the short-term bearish view -- we still hold out for the scenario of a short-term cascade to the 4410 area. . However, the view of a large pullback may still be nullified if the index rallies above 4525. But despite this, continue to make allowances for a +test of the base+ type of corrective decline, the target of which is the ideal area of 4395 - 4380 late in the week -- unless of course the upside swing level is blown away.. The next upwards phase from there may kick off a new upside sequence which will go on and challenge the 4600 top, and perhaps extend gains further towards 4750 later in the year.


- S&P 500 - the index fell then tried to recover -- but it closed on a weak note. We should see more declines today, which may eventually bring the index to at least 1115. We may yet a shot at 1100 - 1090 area before the bull is set loose. In any case, recent action is indeed supportive of the view that the new bull market cycle may have began and would accelerate higher at some point. The new upwards phase may go on and challenge the 1165 top, and thereafter extend gains to 1225 - 1230 later in the year.


- Dow Jones Ind Ave. - the index failed again to break through -- a negative sign -- so the Dow should fall further again today. The main scenario remains -- we may yet see further declines to at least 10,150 in the next few days. And we still are biased for a bigger decline to 10,1000 -10,000. Nonetheless, a new bull market waits in the wings to be confirmed -- eventually, we expect to see a rally to the 10,800 top, and perhaps further appreciation towards 11,500 later in the year.


- NDX 100 - the index was hammered early on, the late session yielded a weak consolidative phase, so it very likely that the weakness will extend further today. No change to our main scenario: the index may do a corrective decline back to at least 1440, possibly even to 1405 - 1395 area -- a +test of the base+ type of correction. However, a new bull market waits in the wings -- we expect to see a test of the 1560 top thereafter, and perhaps further appreciation towards 1700 later in the year.


- Nikkei - the index is finally accelerating lower and the scenario of a +test of the base+ decline to 11,000 is now looking much better. A new bull market should emanate from there however, which may have 14,000 as the major goal late in the year. The short-term view however fails if the current rally goes above 11,600.


- Hang Seng - the index fell sharply, and should fall further next week. Still make allowances for a corrective decline back to 11,600 - 11,500 from here, a +test of the base+ type of retracement. The bull markets should then resume and may target the 16,500 - 17,000 area later in the year.

Ym pushing up atm -low volumes and Quadruple witching today so better do some quick scalps and start the weekend early.

rgds
zarif

managed a quick long just before and am just watching the dow standing up like a cobra -it can either lash up or down so best to wait and make sure before it takes a chunk out of you.

rgds
zarif

Copy of Tom Hougards Email I recieved last night.
rgds
zarif

Good morning,



It is nice to finally be out of the expiration week. We settled right in the middle of the range for the day and also in the middle of the range for the week. From history we know that as we go before the expiration we will go after the expiration. As we went nowhere last week this could easily happen again. I am somewhat bearish the market even though we are consolidating below the recent highs so let me be more specific.



I will be bearish below 1132 in the SP500 September contract. I will also consider short positions if the Dow hits 10480 with a stop above 10520. I am already short the NASDAQ 100 September contract. I am looking for a trip down to 1420 on this contract. I would prefer to see lower prices early on in the week. I got Monday as a fairly neutral range day with a negative bias (despite the big mark up in the market this morning). I got Tuesday as a definite down day in my analysis and confirmation of weakness comes from trading below 1132. Above 1142 will most likely cause short covering and a lot of breakout traders entering the market. I will short weakness and not strength, and any move above 1142, in particular after expiration, can cause the kind of vertical moves that I have seen countless times after expiration. Dont get in the way of those moves.



NASDAQ is definitely not a happy index and I am already short here. I think we will see weakness here first and I will add to positions less than 1470.



The European markets are a mixed bag this morning with the FTSE down for the day and the DAX up for the day. I am fully aware of the bullish potential, in particular in the SP500. The all-time high in March 2000 was 1553. The 24th June is 1553 days from the all-time high and I am waiting for this time and price square out to occur



We are entering a time period in the market with huge cyclical turns. One is the square out but I also got cycles from the All-time high, the 9/11 low, the bear market low and the highs in February. Additionally I got the big master cycles pointing to a momentum move within the next 10 trading days. It is without doubt going to be a mover and I would advice you to stay on your toes.



What are the obstacles? We got the Iraq handover at the end of the month. If this can take place without any disturbances the market will be pleased and will begin to look forward to the election. Seasonally and statistically this would mean rising equity prices into September or longer. Until the 30th deadline the market could be nervous. However, the flipside is the month-end and quarter-end mark up. Funds will look to mark up stock holdings going into the last day of the month. This will add to volatility.



I am long gold and I think this commodity is on the verge of breaking higher. Unfortunately I dont know what the earthly implications are for rising prices or to be precise what gold is pricing in? Is it the Iraq handover? Is it the Money Supply situation in the US? Who knows? Any suggestions are welcome. Either way the metal is moving higher and I want to be onboard. I bet small in this as it can be quite volatile. That is one advantage of a spread betting account. You can trade a commodity in a size that suits you.



By the way I do from time to time post on www.TacticalTrader.com . It is a very good site with good posters and a nice atmosphere. It is free as well.



I promised myself last week not to disclose my positions again. I mentioned what I was trading and what my positions were. Unfortunately I received a flood of questions whether I was still in or I had taken profits. If you decide to take out positions in the market, then decide upon your stop before hand. If you dont know how to derive buy or sell signals using for example mathematical trend lines or geometry then dont follow my calls ( which is you own responsibility either way). If you want to learn these methods then feel free to drop me an email. I will then contact you later in the year when I am running seminars.



Today is solstice. It is the day when the sun stands at its highest point on heaven. It is a seasonal turn date. Does solstice ever mark a turning point in the markets?

Answer: I can only answer for the equity market and only for the Dow and only for the last 25 years (because I have to do it manually and it is time consuming). Hopefully a sample space of 25 years against a history of 125 years will suffice.

The conclusion is in my opinion ( visually and not a mathematical opinion - i.e. I have not performed rigorous checks ) that SOLSTICE - the point in the year - a seasonal date according to Gann and others - where the sun is highest on the heaven - DOES NOT MARK A SIGNIFICANT TURN IN TREND enough times to make it statistically significant.

Of the 25 years I went through the Dow had 5 significant turns on this day or the day before or after.

14 years saw no significant change in trend.

10 years saw a slight change in trend - for as little as two days and as much as 5 days but within a confined range.
Of the 10 years there were 5 years where the 21st market a low or high for the next month or more.





I wish you a happy trading week.



Tom

Tom Hougards email for today analysis

Good morning,



I got the downside I was looking for in the NASDAQ. Stops are in. I still got today as a down day as well, but I am wary that there was a spill-over from the cycle and I got most of the downside yesterday. I still would like to see 1420 in the NASDAQ and will run the position. The problem (there are always problems in the market and things to watch out for J ) I have is the month-end pattern. We have 7 days left of the month and the quarter. In this time period we tend to see the market make an effort to push higher to mark up Wall Streets portfolios. It is common practise and something you should be aware of.



Technically I would say to you that as long as the market is below 1142 but above 1132 in the SP500 the market is neutral and is just market time. A move above is bullish and a move below is bearish. Yesterday we tried for the 1128 but held. You may recall that the 1128 was the support area from the decline earlier in the month, funnily enough also on a Monday!!



1132 will now be new resistance I would expect traders come in and defend the 1128 today. I doubt very much anyone is interested in lower prices but if it does trade lower short positions are required and the first target is 1122 and then 1108.



The key will be the financials like banks and brokers. Many of them are reporting shortly, and most of them have had sizeable declines since the February highs. I would watch this group closely. You should also pay attention to the old generals like GE and MSFT. When the Dow drops 80 points intra-day and those two still hold up for the day, it is a sign of strength.



So the conclusion is unfortunately a mixed bag. I am short NASDAQ. I suspect that the SP500 will not attract any major selling until we are below 1128. There is very little to add.



IBM is a very interesting stock to follow. It tracks the big indices very well and has beautiful patterns and cycles. IBM is in a make-or-break situation. The blue line shows that IBM traded above this price level of $90 for 3 years. In April 2002 IBM broke $90 in a gap down which took 94 weeks to fill. The challenge is always to trade what you see and not what you think. It is even better to trade with the idea that you have to second-guess what they are thinking. In this case they are the big funds. IBM is a real bell weather and tracks the economic cycle well. I have included the volume figures for the chart as well. We are right at the critical $89/90 price level. The chart pattern is bullish but the volume is telling a different story. It points out that the last years rally has been on declining volume. That is not a bullish sign but you got to give the pattern the benefit of the doubt. If the latter part of the year is bullish I think IBM will perform well and regain $100. Use the $89 as a pivot. Have you ever heard the saying: Dont short a dull market? That is my concern here. We are simply doing nothing because no one really wants to sell and everyone is holding out for the summer rally.



Well, you are prepared price wise. Just follow the levels given in the SP500 and use prudent stops.



Tom

Tom Hougards analysis for today

rgds
zarif
Good morning,



The Dow rallied after a weak open yesterday and it looks like typical portfolio mark up without any real conviction on the tape. Once the indices make it into positive territory the buying stops and the volume dries up. This is a typical pattern going into quarter end. Institutions are clearly nervous about being in the market but have to be fully invested at all times. Stocks like EBay are seeing huge intra-day reversals in pure manipulation of the tape. It is most likely that these NASDAQ ( EBay, Cisco, Klac etc) will lead to higher prices between now and the 30th June.



All in all we got a range bound market which is trying to think of an excuse to move higher, but there are too many uncertainties for Wall Street to deal with. The Fed meeting is on the back of peoples minds as is the Iraq handover.



I will have to be biased long above 1132 in the SP500 and short below 1128. This is the same strategy as yesterday. We are so close to the big turn that you have to be double alert for fake moves. It would be ideal to have a big spike into the 1144 area again before moving lower, if at all. As you know I got major cycles hitting between now and the 4th of July. If I see a strong rally develop today I will not short it as it could lead to a 2-3 day rally. Only a move back below 1128 will get me short again. I am still short NASDAQ and remain so. The weak Globex market is probably institutions hedging against any potential downside for the next week.



So the conclusion for me is that I will stay short NASDAQ unless the Comp gets back above 2000 (although I am trading the NASDAQ 100 contract). I will favour the long side in the SP500 above 1132 and favour shorts below 1128. From this point forward a move below 1128 should be terminal. The current pattern for the quarter-end is typical so dont stand in the way if they begin to mark up the go-go names mentioned above.



Today I got two potential highs, one coming in at 17:10 and another high near 18:50.



Vodafone is breaking down and possible target prices are as low as 107.50 pence. The geometry was hit perfectly yesterday and the low of 121.75 is a perfect equal wave relationship. If the 121.75 is taken out Vodafone should be on its way to 107.50 as the first target. The low of yesterday coincided with the geometry and also with a 38% retracement. This could have been it for Vodafone and higher prices are to follow. However a move below 121 should set about more weakness.



Good luck



Tom

Tom hougards email analysis and thoughts for today.
rgds
zarif

Good morning,




What an amazing trading day. The market held the 1132 area and turned on a dime. The target of 1144 area was calculated using a very simple 1 to 1 wave advancement technique and it was hit spot on at 1145.25.



It is always difficult for me to write the analysis after a big rally on Wall Street. Few would like to buy it here as they feel they have missed the boat. Given the fact that we have hit a major target in the market we should be short against 1145. This is a strategy that you can employ but it is probably not very wise. I am fairly certain that the market will have a stab at the 1148 area and depending on momentum we could see higher prices going into month end and the Fed meeting in a couple of days. In other words I dont think the market will stop here. It seemed strong to me yesterday and there was a real concerted effort to mark up the names I mentioned yesterday. Ebay, IBM, GE and INTC were all trading higher on the day. These stocks are always worth watching for a bit of tape manipulation before the important quarter-end mark to market for institutions.



One counter argument that could be made is the spike I was talking about yesterday. Last night could have been it. I was looking for a spike into the major square out of the all time high in calendar days. This came in last night or early today. Momentum will be the key but a move below 1138 will send a cold shiver down the bulls spine and will most likely cause more selling. That would be a major disappointment to the bulls.



So to conclude: we hit a major target last night on the dot. When targets are met the market sometimes lingers around before turning, while at other times they turn promptly. In this case I will favour no turn at all. I think after basing for as long as we have the market could move higher over the coming day or two before turning. You may want to consider a few shorts with tight stops but I would not fight the tape if we are making new highs on the day after 19:00 UK time. I got a nice turn today around 18:00 UK time and I will in case we are moving higher consider a short day trade position around this time frame.



I shall however not be trading the market this morning. I am going to my first Wimbledon experience and luckily it is not raining today in London J

Tom

Just watching the dow atm. no positions open.
Closed the cable long in good profit. so that will hopefully make for a good weekend and any quick scalps if possible on the dow will be bonus for the slush fund.

rgds
zarif

Tom Hougards thoughts for todays market.
rgds
zarif
Good morning,



Thursday was a bit of a disappointment for the bulls but there was no real damage done to the chart. I hope some of you caught the 18:00 turn which came in bang on time. We are still bullish above 1132 and this can now be extended to 1138. I think we are in the quarter-end mark up period but I dont think institutions intend to take stocks too much further. There are 4 days left of the quarter. Today can go either way and I will favour the long side above 1138. There are clearly some items on the exogenous agenda that can and potentially will shake the market a little. The FED meeting is next week, and the Iraq handover is taking place. You also got the Russell 2000 re-weighting in this major index which will require some adjusting of the big portfolios.



I will keep todays analysis short. I dont see any real reason to be bearish right now. It was mixed bag yesterday but stocks like Goldman Sachs, Bank of America, Citi Group and Lehman all had good reversals and the strength in the financials is usually a good sign for the general market.



For today I got another 18:00 UK time turn. I wont be trading of course as I will be warming up shouting and cheering for Denmark. J



Have a nice weekend.



Tom