Steve Zito (MS Finance) is a member of the HTML Writers Guild
using economic and technical analysis to forecast direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice for investment decisions.
NASDAQ April 26 Page --INDEX --Market Data --INTEL Review

DOW JONES INDUSTRIAL
AVERAGE close 10,734
20-per. exponential mov. ave.

5-minute chart
Negative trend
Resistance 10,752
MACD, RSI, stochastics neutral

15-minute chart
Negative trend
Resistance 10,774
MACD, RSI, stochastics neutral

30-minute chart
Negative trend
Resistance 10,806
MACD, RSI, stochastics neutral

60-minute chart
Negative trend
Resistance 10,841
MACD, RSI, stochastics negative

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

Weekly chart
Positive trend
Support at 10,722
MACD, RSI, stochastics positive

Monthly chart
Positive trend
Support at 10,195
MACD, RSI, stochastics negative

********************Commentary*****************
April 28. The Dow is lower than Monday, when it gave a BUY SIGNAL. On Monday's close, all Dow indicators went positive, which I expected in the April 21 Page. The Dow rose another 350 points on Tuesday and Wednesday, then sank 500 to the current level, and appears stuck in a TRADING RANGE, retracing 42% of the April decline (11,475 to 10,201). The media reports on bad news to keep the market from advancing (higher interest rates to combat inflation), and good news to keep the market from sinking (strong corporate profits). I exited Dow (DJX) May puts in the Model Portfolio with profits last Monday. Put positions will be added again if the Dow moves above 11,400, call positions will be added if the Dow trades below 10,300, betting a trading range will hold. The Dow's five-minute chart resistance is 10,752. The
15-minute Dow chart resistance is 10,774 with MACD, RSI, and stochastics turning neutral. The 30-minute Dow chart resistance is 10,806. The 60-minute resistance is 10,841. The Daily Dow chart shows the resistance at 10,857. The Weekly Dow chart support is barely holding at 10,722. The Monthly Dow chart support of 10,195 looks like very strong support. In the April 25 Page, I mentioned an economic shock which could derail the Dow would be a surprise inflation number. That is just what the market received Thursday. A bad employment cost index number dropped the Dow 500 points. More "bad news" on inflation IS ON THE WAY THIS WEEK. The media has reported zero inflation for four years citing monthly price index statistics and low gold prices as evidence. This flies in the face of hard facts. Have you purchased a tank full of gas lately? It costs twice as much as one year ago. The U.S. government reports inflation based on the CORE RATES which exclude food and energy prices, but include tobacco. Realistic? No. How many people only buy cigarettes? Inflation is very robust, yet gold stocks are selling at five-year lows, so low I added May 7 1/2 calls on Placer Dome (PDG). This week I will add June 85 call options on EXXON-MOBIL (XOM) if XOM falls below 75 (in the Model Portfolio).
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