The One Minute Millionaire Diamond Mine
 The Wealth Factor
 Stock Market Strategies
 By Dr. Stephen Cooper

Why so Much Confusion?

Even with more Americans working today (numerically) than ever before in US history, the cry of woe and hardship continues. With about 6% unemployment currently, this recession (now mostly past) has been rather mild. The third quarter of 2003 showed the fastest annualized rate of economic growth as has been seen in some years. Corporate earnings have been better than expected, as well. Yet the markets are now indecisive after a perhaps “too strong” rally since March of this year.

Concerns for the future and the present, both domestic and on the world scope, have alternately trickled and then gushed cold water on investors. Add to the mix new terrorist threats and outright attacks, which have been shockingly successful, and we have now seen several weeks of essential stagnation in the Big Three Indices.

I believe that there is considerable pent-up energy that awaits the opportunity to throw itself into equities. What the signal will be for this sidelined money to migrate into stocks is not clear.


What is clear, though, is that the charts are telling us that we are at a balance point in terms of imminent price change. In the above chart of the Dow Jones Industrial Average, you can see that over the past several sessions, price has retreated to a rather specific point, creating identifiable support. The line, at about 9620 points, has been the stopping or starting price on 5 occasions in 5 bars. You might also recognize the “Reverse Lincoln’s Hat” formation from an earlier discussion. This Bullish bar is the very last one on the chart (far right) and indicates that prices will probably rally on the next bar.

“Let’s Step on Back a Ways”

The next chart of the DOW takes in a year of data. It is as if you have taken several steps back in order to see more of the picture.


From this perspective, the same DOW chart has a different feel to it, doesn’t it? The current level of support that we saw in the first chart is part of a larger process. Current prices have pulled back to a line of rising support that encompasses about 7 months rather than 4-5 days. If you’ve listened to the financial news the past week or two, then the gloomy and negative talk has not been lost on you. With even mild price drops, a host of Bearish forecasters can be called upon to plead their case before millions of individual investors and traders such as ourselves. The arguments for why the DOW is “in trouble” can be quite convincing. However, if we step back to consider the market action of today, in context with the past half year, then a far different picture emerges.

In the next edition, we’ll look at the DOW once again in reference to what we talked about today. Why? Because, the ability to draw your own conclusion is far more valuable than the ability to agree with someone else’s.

Until then,

Dr. Stephen Cooper


As a trader, teacher, author and lecturer Dr. Stephen Cooper has guided thousands of students to greater success in trading stocks and options. His site, is an excellent resource for traders of all levels. A free newsletter is available by going to Over the past five years Dr. Cooper has conducted live teleconference courses covering personal financial basics, stock screening, technical analysis and practical trading. He has authored The Online Option Trader, Windows to Wealth, and The Truth About Money. With over 18 years of experience Dr. Cooper is recognized for his successful techniques, his clear and systematic teaching style, and technical expertise.