Wall Street fecha semana em alta. S&P 500 e Nasdaq atingem recorde

[Ulisses Pereira]

Rev`s Shark

"Morning Outlook"
10/06/03 08:35 AM ET

"I'm not a worrier. I'm a warrior."

-- Arnold Schwartznegger

"A powerful bounce last week left the bears a bit stunned but the hard-core pessimists are now focusing on the historic dangers of the month of October. Five of the 10 worst days for the market have occurred in October, including the infamous crashes of 1929 and 1987. The overall results for the month aren't all that bad but the potential for drama is high.

So do the bulls have cause for worry? Should they be especially cautious right now? We always have to be vigilant but there is nothing in the technical health of the market that should cause undue alarm. We have good breadth, aggressive buyers and a nice dose of momentum. Two week ago it looked like we were ready to crack but the Nasdaq halted its breakdown right at the 50-day simple moving average and bounced with vigor.

The indices have stiff resistance now at the recent highs. The S&P 500 demonstrated this when it hit almost exactly the highs of two weeks ago before selling off in the final hour of trading on Friday.

After the big bounce last week we have some very clear support and resistance levels. Key support levels are the lows from last week and key resistance levels are the highs from two weeks ago. For the S&P 500, that gives us a trading range of 1000 to 1040; for the Nasdaq the range is 1785 to 1913; and for the DJIA it is 9230 to 9686.

Which way are we most likely to resolve the trading range? The big trend since March is still up so we have to respect that and watch for the potential of an upside resolution. The best thing the market could do for the bulls is base out a bit and digest last week's big bounce before attacking the highs.

Today is likely to be particularly choppy. It is the Yom Kippur holiday, which means the ranks of market participants will be thinned. The ability for program trading and macro moves by big funds to jiggle the market will be higher today as overall volume slows.

We have a little carryover this morning of Friday's surge. Asian stocks were generally high overnight but Europe is mostly flat at the moment. News is generally positive and analysts continue to be upbeat.

The key dynamic to watch for as the market plays out is the aggressiveness of the dip buyers. They have been rewarded consistently for buying weakness and they will be inclined to pounce quickly on pullbacks. As long as they are lurking about, it is going to be very tough for this market to produce any sort of sustained pullback.

It should be a tricky day and I'm going to fortify myself with an extra cup of java. "

(in www.realmoney.com)