Not for the first time, many of our forecasts called for a zig higher on a day whenan uncooperative stock market zagged determinedly lower. We’d like to be able to say it was just ambivalence taking its daily course, all within an increasingly tiresome range. But that is probably too bullish a point of view, considering the nervousness that attends our apparently imminent decision to invade Iraq. According to some sources the war has already begun, to the extent U.S. warplanes have been hammering away at Iraq’s missile batteries, and special-ops forces have been securing the country’s southern oil fields. The recent U.S. request that Iraq destroy all missiles capable of flying more than a curiously allowed 90 miles raises an interesting Catch-22. The Iraqis have a point when they ask, How can we destroy our missiles when the U.S. is about to attack!? Perhaps we could give them a fighting chance by letting them keep the missiles -- provided they leave them near the northern border, just outside of Turkey. “When we count to three, Saddam, you draw!” Hard to imagine we once predicted in this space that the war would be called off. The protests have swelled since, but Mr. Bush has not wavered. We thought it was just brinksmanship, but it turned out to be unflinching determination.Or foolhardiness, depending on whom you ask. We’re in it for keeps now, though, and we’ll probably know within a few years whether Germany and France gained anything by acting as Saddam’s shield. Scary to think they might, but scarier still to think not.
[The + symbol means we have an open position, while $ means there is actionable advice.]
Gold
APR GOLD (356.40):Yesterday’s strong rally brought the futures to within spitting distance of the 360.80 pivot above which they’d be a good bet to run to 379.20.
+GG (11.20): We hold 200 shares for an average 4.65.There are three hidden-pivot targets just below -- at 11.00, 10.87 and 10.45. If one is breached, assume the next is likely to be reached.
+DROOY (3.68):We own 600 shares for an average 4.38. The closest support worth noting is a hidden pivot at 3.61 that has already been tested once. If it is touched again and fails, Durban would likely fall to around 3.40 before bottoming.
RGLD (20.10): Royal fell to within a few cents of a 21.12 target we’d flagged, but any lower today and the stock is apt to wind up loitering near 18 for a while, where it consolidated for months last autumn before running up to 29 in early February. We’ll wait for a more precise target to materialize before we consider buying some calls.
DJIA (7858.24):We’re not bullish by any means, but we’ll nonetheless furnish some modest upside targets, since they are more interesting and potentially useful than the somewhat vague targets which lie immediately below (near 7630, for one, where the Dow made a low of middling importance on February 13). To telegraph strength today, the Dow would need to have traded no lower than 7851 before touching 7939. If it makes it to 8026 thereafter, we’d infer the rally has sufficient wattage to continue for another two days, to a cycle maximum of 8201.68. Not likely, in our opinion, but it’s okay to dream.
E-Mini S&Ps (832.25):We’ll sit out a day, since there are too many speculative inputs needed to come up with a plausible target for a rally of just a few points this morning.
MAR BONDS (113.19):Our short-term rally target is still 115.07. It will remain viable so long as the futures do not fall below 111.27.
OEX (421.47):If the index has not first dipped below 421.03, a 426.13 print would trigger a minor buy signal. Immediate potential thereafter would be to 431.24, a hidden pivot -- and we’ll stop right there, lest this forecast start sounding a bit dreamy.
QQQ(24.74): So long as the cubes don’t fall below 24.51, the target given here yesterday – 26.20, a hidden pivot – remains viable over the near term.
MAR NASDAQ 100 (993.00):A rally to 1062.00 is possible over the short term, but the futures will first need to get by a hidden pivot at 1028.00. Worst-case for a do-nothing day: 968.93, a Fibonacci-based level.
MarketWise Black Box is published on weekdays 240 times per year. Copyright 2003 by MarketWise. For further information please go to www.marketwise.com. All information was gathered from sources believed to be reliable The risk of loss in futures, stocks or options can be substantial; therefore only genuine risk s should be used for such trading. Futures, stocks and options may not be a suitable investment for all individuals, and individuals should therefore carefully consider their financial condition in deciding whether to trade. Commodity option traders should be aware that the assignment of a short position will result in a futures position. Past profits are not indicative of future profits.
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