Is This A Tell From Washington?

  • October 7, 2004
  • Mark Melin

Wednesday, October 6

Wednesday Recap:  Wednesday
started out with sloppy, back-and-forth trading as I anticipated. 
Then late in the day the indices took off to the upside. 
The afternoon rally had a weird feel to it — almost as if someone
received inside information.  You’ll
recall that in Monday’s report I mentioned that I was hearing rumors that
Friday’s unemployment number might be strong. 
Was Wednesday’s price action a tell from Washington? There’s no way
to know for sure, but it wouldn’t surprise me. 



What made the move unusual
yesterday afternoon was that with oil trading into the stratosphere and stocks
had no real reason to break significant resistance before a major report,
that’s exactly what happened — stocks broke significant resistance. 
For it’s part the NASDAQ broke above the 200-day moving average…



…and the S+P closed above
the 1140 level. 



Prediction for
Thursday:  If we hold above
1140 on the S+P and the 200-day MA on the NASDAQ, then we’re likely to head
higher Thursday and potentially take off on Friday. 
If we do take off, watch for a test of the 10300-30 level on the Dow
before October options expire — assuming we don’t get a terrorist event.Â