Market Analysis 10/29/2004

The chart does not change this past week. The dow has been forming bull flag since the beginning of the year after a big run-up in 2003. The same can be said for Nasdaq Composite index. Decline has been orderly and we are in range bound mode. The same can be said for S&P500 index. As I said last week, the Nasdaq is in better shape than the rest of the market.

 Both the Nasdaq and S&P 500 manages to stay on top of the downtrend channel. I believe these two index will lead the way to the upside within the next two weeks. (Providing there is no terrorist act or oil shock or some sort of unexpected events)

What does it mean here? The fact that the market can rise from the low of March 2003 and not fall back to that same level ( DJIA: 7500, NASDAQ: 1300) is bullish. If the DOW (or NASDAQ or S&P500) can break the top of the line drawn above, it is bullish sign for the stock market. Until then, expect sideways movement for the foreseeable future.

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