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Wednesday, October 20, 2004

Analysis and Predictions: Tuesday 10/19/04

Favors: We could have had a short lived rally on Tuesday/Wednesday, but weakness was expected in to Thursday/Friday. Favors still expects an important short term low by the end of the week. Excurpt:

At this point if the Dow falls below 9861 and a sharpercorrection follows, there should still be very strong support near9750, plus or minus 20 points on the Dow. We do not consider a declineinto that area as mandatory from here, but it is still possible.Nevertheless, we believe that still-higher prices will follow anyfurther correction in this time frame.

For now we want you to be prepared for some further correctionover the next day or two, but it remains our position that we are near the next important low in stock prices.

We would expect some further correction at some point tomorrow,however we believe that significantly higher prices will follow any further correction in this time frame.

WS: Ryan is still predicting continued weakness, although a side note in his analysis extends the possibility that the markets might be in a larger ABC correction. Excurpt:

Today’s reversal down is yet another indication that the downtrend remains intact on the Blue Chips. The main question is whether the next leg down has begun or if we’ll have to wait for a larger ABC to trace out before it does.

Market Action: 10/20/04
Decline until 11am then strength.
3 Wave advance.
DJIA: -0.10%
NASDAQ: +0.50%

Conclusion:
Ryan still predicts significant weakness, but covered his ass today and realizes an expanded correction (more time consuming) may be in store. I have always believed he jumps the gun and expects movements to take less time then they should or do. On the other hand, Favors is unclear about how long a rally will last. Two days, two weeks, etc... Both analysts may be converging on the same conclusion that a short term upward correction is in the works. I'll wait and see. But if I had to put my money somewhere, I'd say Thursday goes down and then Friday is the reversal. I'll give this one to Favors.

Trade:
Remaining flat until Friday.

Tuesday, October 19, 2004

Monday
10/18/04

Favors: 1 or 2 day pullback then a rally beginning Thursday or Friday to significantly higher highs for the year.

WS: Heading lower immediately. No real forecast looking forward. Elliott Charts are messy.
*Note, Ryan was dead wrong with his forecast from Friday.

10/19/04
Market Action
Swift initial strength for about 1 hour.
Then a sharp reversal and a weakness drift for the rest of the day.
NSADAQ and DJIA both down about 0.60%

Conclusion:
I'd have to say Favors wins this round if only because Ryan is not clear on his predictions.
I imagine the first few days of me doing this will not yield much clarity until I have a rolling/moving predictions "average."

Trade:
Remain flat until Friday when Favors' analysis should yeild some results.

I'm starting a new "feature"... haha
I'm going to start comparing the Jerry Favors report with Wavespeak (Ryan Henry) to try and determine wh is a better market forecaster. Basically, how well can each analyst predict market paths.

As often as I can I will post a summary of Jerry and Ryan's market analysis and predictions. Predictions will be posted on a one day lag along with what actually happened in the market. I will also attempt to point out when certain predictions are imminent, and of course when they do and do not come to pass. For instance if on Monday Jerry says the market will nosedive on Friday, on Thursday or Friday I will try to remember to point out that analyst's prediction.

Hopefully through posting these predictions online I (and you) can see when these two are getting things right and when they are horribly wrong. And since I am trying to come out in the black instead of the red in this game, I feel these blogs will be a nice resource.

Happy Trading!

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