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US Stocks hit a fresh 18-month high with the DOW ever closer to the key psychological level of 10,000, as blue-chip buying lifted the broader market ahead of the year's last Federal Reserve policy-setting meeting. Media companies say they expect global advertising spending to rise next year due to an improved economy and events such as the Olympics, but that Europe's growth will lag. Manchester United Irish racehorse magnates J.P McManus and John Magnier have raised their holding in to just over 24 percent from 23 percent previously, fuelling bid speculationFirst Choice Holidays beat forecasts with a 20 percent rise to 87.1 million pounds in annual profit on and was confident about this year, despite lagging sales for summer 2004 as customers continue to book holidays late. Greene King regional brewer and pubs group reported a 10 percent rise in its half-year profits and added that trading since the start of its second-half had been encouraging. They posted profits of 38.6 million pounds for the 24 weeks to October 19 compared with a consensus forecast of 38 million pounds. Standard Life mutual insurer reported a 22 percent fall in worldwide new business sales for 2003 on Tuesday but said it was optimistic after demand rose at the end of the year. New business sales fell to 1.42 billion pounds in the year to November 15, 2003 from 1.82 billion pounds the previous year.Severn Trent raised its first half dividend by 2.5 percent on Tuesday, signalling confidence in the upcoming regulatory review of its pricing structure as first half profits topped forecasts. Profit grew to 151.1 million pounds from 131.8 million pounds a year ago with analysts forecasts of 134.5 and 140 million pounds, It also raised its shareholder payout to 17.77 pence, at the top of expectations. PHS Group washroom services company reported a 21 percent rise in first-half to 20.8 million pounds but slightly below forecasts and said it expected more growth in the second half. Halma safety products firm said half-year pre-tax profits rose by 15 percent, to 24.4 million pounds above estimates, and said its outlook was in line with its expectations.

Calendar: United Kingdom	United States (GMT)	Europe & World (GMT
First Choice Holidays (F) PBT 83.1m exp. Greene King (I) PBT 38m exp. Victrex (F) PHS Group (I) PBT 21.5m exp, Severn Trent (I), First Technology (I), Grainger Trust (F), Halma (I), ITE (F), Phytopharm (F), HSBC Trading Statement Denistron (DSN) Rights Issue Ex Date. Sub Price is 10p, Terms are 1 for 1 09.30 Oct World trade Balance -2.0bn exp	Alby (Q3), Analogic (Q3), CostCo (Q3) 15.00 Oct Wholesale Inventories 0.2% exp. 19.50 FOMC Rate Announcement	Lufthansa Traffic Figures 10.00 Dec German ZEW Economic Sentiment 70.7 exp.

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12/8: Sloppy sideways pattern was indeed a correction, and looks like a triangle so far with a sharp rally about the width to finish it off.
Note that the 10K fib target is still close by, and we might test that level before this pattern is done.
A retrace of today's rally, and more importantly a decline below wave 4 (the low today) says the near term rally up from 9600 has completed, and a correction of that move up is underway.
Note that triangles always occur prior to the final move, and often times signal the end of the trend at the next larger degree as well.
Nothing to do but wait for a tradable pattern as the risk for whipsaw is very high right now.
Note the major intra-market divergence between the dow and the ndx right now, and the divergence with RSI and price that is still intact here on this chart.


Updated 12/8 for Tuesday's market.
Key DOW Levels for 12/9
UP Current Trend
DN Below 9,850

Rally
Dow rallies off lower boundary of range, passes upper boundary.

From prior commentary, "...Should the index hold above 9,840, we could see another push higher within the expanding range. An upside break through 9,880 will likely spark a push toward 9,950..."
The Dow was able to hold above the 9,840 support level today and pushed higher throughout the session, seen in the 15 Minute Chart. The index quickly broke through 9,880 and proceeded to rally to the 9,950 level by day's end, capping off a 103 point rally for the day.

Looking at the 60 Minute Chart shows that the Dow has now seen an upside break through the top of the large consolidation that had formed at the highs of the recent upmove. The break at 9,925 will likely lead to another push higher in the medium term, especially if the Dow can continue to hold above 9,900 in the next 2 sessions. Conversely, a break back below 9,900 will make for another move lower within the wide trading range.

Short Term Dow

Short term, the Dow has formed a tight consolidation at the highs of the 1 Minute Chart from 9,955 to 9,970. An upside break is implied, but watch both boundaries for direction at the Open.

Medium Term Dow

In the medium term, we entered the market Long today at 9,897 and are still in the market. We will move stops up to 9,930, but will hold off on additional Longs at this time. We will look to enter Shorts below 9,850, with 20 point stops.

NASDAQ & S&P

The NASDAQ lagged for much of the session, while the S&P followed the Dow's lead. Each index has now gotten key upside breaks of upper trend lines, which point to further strength tomorrow. *

Summary

The Dow pushed solidly higher off the lower boundary of the wide trading range today, which forced an upside break from the consolidation, seen in the 60 Minute Chart. The upside break from the range implies continued strength in the medium term, but a pullback below 9,900 would indicate new weakness and potential "bull trap".

TUE FTSE PP

R2 4396
R1 4378
PP 4358
S1 4340
S2 4320

Ftse closed below Mon pp after gaining 3.2pts in the auction! DJ not giving away anything into our close! 2 day ftse chart rangebound, brk of 5 day downtrend through 4360 or continued weakness back to S1!

edit-gap up through downtrend this morn now pos to r2

21stcentury
Every tenet of contrary investing continues to point to a market badly in need of a correction in bullish sentiment. Yet it's not happening -- at least not yet. And it just hasn't been the best idea to short a market that keeps pushing up to make new highs, except if you're going for the intraday "scalp".

So while it's against my basic principals of contrary position trading to go long with sentiment at such bullish extremes, I also have little appetite to go short while the market stays above 1060. As I've written, the last stage of a bubble or mania -- and I certainly think this qualifies -- can often be the most dramatic in terms of price movement. There's still a decent shot that this market can soar up to the 50% retracement level of the bear market at SPX 1150, and you don't want to cling to bearish positions during such a blow-out.

But personally I'm content to watch this weird show from the sidelines for now, sort of like the "wise old men" did during that bubble blowing back at the tail end of 1999 and the first few months of 2000. And I know what you're thinking, but I just don't think it's possible for people to do what everybody fantasizes can be done; that is, ride up a bubble for all it's worth, and then deftly switch to the short side at precisely the right moment. That's pure fantasy. The human psyche doesn't allow those who buy into a bubble to make such an instantaneous shift. A bubble, by definition, inspires a feeling that it will go on forever, and that's precisely the feeling that's being inspired now.

Morning all

Good Morning all. Thanks Croc & TP. Leading shares up this morning but ETL showing a big fall.

mornin all

Morning all,

That post of the view from 21stCentury was good, TP.

Just about sums this situation up. I can relate to the
thoughts and emotions that it refers to.
I'm getting very wary of actually doing anything at the
moment.
Sometimes, the safest course of action is to do nothing.

Melnibone.

The best 2 comments the mullet has said all year imho:

Bias for today is bullish but after the announcements we could see some volatility. Lately, volatility has been very light and ranges continue to be very tight with the 10 day average range under 9 points. The lowest seen in over a decade.

Again, we are seeing these typical December/ Holiday period directional force conflicts and we can just do our best under the circumstances to try and squeeze some points out of this December trading month which is also very light on trading days.

Melnibone-preservation of capital, had i traded so far this morn i would be on a loss after comms, if you were,nt long last night its hard to chase!

Anyone know what's happening with SHEL and BP.

The oil price is near the top of OPEC's range.

They earn and report in Dollars and the Dollar is falling.
Yet the share prices keep rising.

What am I missing here?

Melnibone.

Morning all

Melbibone like a lot of UK companies that use a lot of dollars they should fix their dollar price and buy options from the banks to obtain all their dollars at that price for a least a year, so they aren't effected by the flucuations.

FTSE bounced of R2.

Looks like traders don't fancy a pre-emptive strike
at 4400 without following the DOW to 10,000.

Melnibone.

Ref SHEL and BP.

Bloomberg are reporting that the rise is due to the
first snow storms in the US which has caused a spike
higher in crude.

Seems a bit of a short term view to me, but what do
I know.

Melnibone.

Melnibone
I'm an novice at this compared to you but luckily I bought BP in this account at &4.05 I see its now breaking R2. Does that now signal theres more to come on the upside, or is it time to trade out?
Rgds
Optomistic

Hi optomistic,

It's very kind of you to attribute experience to me, but as I've
said before, I'm not a Guru. Your view is just as good as mine and
seeing as it's your money we're talking about I'd say that your view
is more important than mine.

The big picture of BP. doesn't look inspiring as you can see in
the above chart and the 60 Day MA looks like it's about to cross
down across the 200 Day MA.

It all depends if you think the current 8 month trend will continue
in BP. and the FTSE.

If it doesn't, BP. should find support around 400/405p so you'll
have plenty of time to get out with a profit..

If the trend continues then you are looking at 440p.

Depends on your own view and your own timescale.

Melnibone.

Thanks Melnibone
All info helps. I have just checked out the stock on MACD chart and it looks reasonably promising the MACD 12/26 breaking through its EMA(9) and nudging zero, will have to watch closely. What do you think about technical evaluation? I use it as fundamental info always seems to be available to others before it comes down to the outside world.

Optomistic

kept out of the market for the last week.first trade placed today.if done
order placed to sell dow if it hits 9995.

Your name may sound a bit offensive to some folks...each to their own I guess...

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