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On Time Update 10/21/5


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#1 TTHQ Staff

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Posted 21 October 2005 - 02:04 PM

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ON - OFF - ON

The decline is on, the decline is off, the decline is back on again. Wednesday’s rally was technically healthy, but proved to be a one-day wonder. Yesterday’s decline reinforces the orginal analysis that strong downward pressures are occurring now, and will last through October 28. Wednesday’s rally seemed to be a product of too many in-the-money October puts that had to be squeezed into today’s expiration. Expiration forces may generate one more rally, and any strength into the close would be a shorting opportunity. More likely, the positive glow of Google’s earnings will wear off sooner than that and prices will then attack the support between 1172-1176 on the December future. The current volatility makes holding any position extremely difficult. Yet that is typical market behavior.

Bonds are basing. Yesterday was a range-bust reversal bar and any close around this morning’s levels will turn the daily trends positive. Likewise, the dollar is topping, though that process make take longer before a new trend clearly emerges.
Gold is poised for a rebound to the 468 – 470 which will provide a new level of resistance.

Crude may find support near 58.60, the bottom of the daily channel, on the December contract.

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