STOCK MARKET DIRECTION by STEVE ZITO

Steve Zito (MS Finance) is a technical analyst who also uses economic and technical analysis to forecast direction of the stock market. The views stated herein are his opinions only, and should not be relied upon as advice for investment decision-making. If you have a specific question use the Feedback form.
NASDAQ April 20 Page -INDEX -Model Portfolio -Market Data

DOW JONES INDICATORS
SUPPORT/RESISTANCE

Six of seven indicators are POSITIVE
Fri. April 21, 2000

5-minute chart
Positive trend
Support at 10,819
MACD, RSI, stochastics positive

15-minute chart
Positive trend
Support at 10,801
MACD, RSI, stochastics positive

30-minute chart
Positive trend
Support at 10,761
MACD, RSI, stochastics positive

60-minute chart
Positive trend
Support at 10,745
MACD, RSI, stochastics positive

Daily chart
Negative trend
Resistance 10,857
MACD, RSI, stochastics negative

Weekly chart
Positive trend
Support at 10,757
MACD, RSI, stochastics neutral

Monthly chart
Positive trend
Support at 10,194
MACD, RSI, stochastics negative!

More Market Data

******************Commentary*******************
April 21. The Dow soared 6.3%, or 643 points off last Monday's low. The Dow managed to fool everyone Monday by turning near the 20-month moving average of 10,194, and running up 347 points in the last hour of trading to close at 10,582. Attribute to Internet day traders rushing in when long-term support held. This week, the Dow crossed every chart resistance level (which became support) except Daily Dow chart resistance at 10,857. If the Dow closes above 10,857 next Monday, I will exit Dow DJX May puts in the Model Portfolio, which are still profitable. The 5-minute and 15-minute chart players ruled the stock market Monday, and ignited the comeback. The market is now far less likely to fall to fair value of 8,800 in May, still the Dow has only retraced 50% of its decline since April 12 (11,475 to 10,201), and a good day of selling could start momentum players driving prices down. The 5-minute Dow chart support jumped up to 10,819, just below the Dow close of 10,844. The 15-minute Dow chart support is close to Dow 10,801, with MACD, RSI and stochastics positive. The 15-minute stochastics are at 81.92/74.89%, below excessively overbought levels last Tuesday. The 30-minute Dow chart support is at 10,761. The 60-minute Dow chart support is now 10,745. Daily chart support was broken April 13, became Dow resistance and remains the last resistance at 10,857. The Weekly Dow chart support is at 10,757. The Monthly Dow chart support of 10,194 showed itself to be a key level on Monday. The media reports the public did not sell in the recent plunge, based on "man in the street" interviews. A scientific study conducted by the same pundits who told us that inflation was dead. Have you purchased a tankful of gas lately? Have you seen airfares flying this year as airlines pass along higher fuel costs? Even haircuts are 25% higher this year (except the free haircut Nasdaq stocks will get soon). The government has reported inflation which was based on "core rates" excluding food and energy, but included tobacco. How many do not buy food or gas, but buy cigarettes? Inflation is actually very robust, yet gold stocks are selling at historic lows. I will add May call options on select gold stocks to the Model Portfolio beginning on Monday.
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