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The Open E Cry Market Outlook – 5/3/4


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#1 TTHQ Staff

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Posted 03 May 2004 - 09:44 AM

The Open E Cry Market Outlook – May 03, 2004
by: Rick Tomsic

Correction or Consolidation?

Since the breakout at 1065 in December 2003 and quick rally to 1160 in January 2004 we expected a consolidation range. The initial consolidation traded back and forth between 1115 and 1160 for several months. Once this mini range was broken with the spike low to 1087 the S&Ps went back into a choppy range again failing at 1150. The point of this history is the consolidation that has occurred since the beginning of December is near its end. Finally, the market is setup to move and create real volatility. The end parameters in the current market are 1087 and 1065 on the downside and 1150 and 1163 on the upside. With the idea of higher interest rates creeping into the market the environment for trading is also likely to change.

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Market Outlook


Where does the market go from here? The S&P 500 has been in a wide trading range since early December. This environment is about to change and the volatility increase as the market moves into a trend environment. The end parameters on the current range are 1087 and 1163. A close outside this range would set the wheels in motion. We have grown accustomed to shut a narrow range a trend move would catch many traders off guard creating a real profit opportunity.

Have a great week trading.