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S&P; 500 Commentary for Friday, February 23, 2001 S&P; 500  Mar  SPH1 Pattern Signals - an automated pattern identification process which identifies today's most likely market scenario based on recent price behavior. 2 Day ROC Buy Wide Range Reversal: The current bar has the lowest low and widest range of the last 5 bars and the close is within the top 25% of the range. Look for long entries. Pivot System Support & Resistance Levels - used by floor professionals to determine value based on prior day price activity. Shifts in market psychology often occur near these levels. R3·1299   R2·1285   R1·1271   DP·1251   S1·1237   S2·1216   S3·1202 Range Projections - This market will have a tendency to trade within the Normal High/Low Range today as noted below. If those levels are exceeded, use the Extended Range. Normal Extended High 1275 1288 Low 1240 1227 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S S&P; 500 COMMENTARY We have two Pattern Signals fired for today's trading in the S&P;, the first of which is the 2 Day ROC Buy. This signal is the Raschke and Connors way of quantifying the swing trading methods as taught by the Taylor Trading Technique. This technique teaches that there is a natural pattern to the sequence of buy and sell days. The 2 Day ROC Buy signal is telling us to expect today to be the "buy day" part of that pattern. The second Pattern Signal fired for today's trading is the Wide Range Upside Reversal. This signal is activated when three conditions have been satisfied: 1) the low of the day is the lowest low of the last five, 2) the trading range of the day is the widest range of the last five, and 3) the close is within the top 25% of the day's range. This signal typically marks significant market turning points. On the S&P; Half Day Chart, all three of our Cycle Indicators turned higher from oversold levels with yesterday's activity. Of greatest significance is the upturn in the 7 period %K. Once this indicator turns from within an overbought or oversold zone, it is a fairly good indication that a new trend has begun and at least several more bars of the new short term direction should follow. ADX levels on 30, 60, and 120 minute charts are all above 30, indicating that the trend to lower prices is still intact in these timeframes (see charts below). If we were triggered into a short position by a price reversal pattern and/or Oscillator Divergence near the 20EMA in any of these timeframes, we would have the makings of a Holy Grail setup. A trade based in part on a Holy Grail pattern can take as its minimum profit target a return to the most recent swing pivot extreme, which would be yesterday's 1230.00 low. If the move to that level occurs on Momentum Confirmation, there should be even more downside in the making. Both the Wide Range Upside Reversal and the 2 Day ROC Buy signals are telling us to look for longs in today's early trading, but high ADX readings in several critical timeframes tells us that the downtrend continues in full force. It would be best to enter today's trading without any directional bias. Instead pay close attention to market action relative to important support and resistance levels. In today's early going, pay particular notice to price behavior in relation to the 1250.70 Daily Pivot. Significant activity above this level will imply further upside. Activity below will hint at further downside. Approach today's trading with an open mind and a willingness to let immediate price behavior, coupled with oscillator divergence, tell us which way and how far the market wants to go. 20 PERIOD EXPONENTIAL MOVING AVERAGE AND 14 PERIOD ADX ADX<18 indicates ambivalence: use chart pattern breakouts to help determine directional bias. ADX>30 defines trend moves in that timeframe: watch for retracements to the 20EMA. The colored bar under ADX represents trend direction.

Nasdaq 100 Commentary for Friday, February 23, 2001 Nasdaq 100  Mar  NDH1 Pattern Signals - an automated pattern identification process which identifies today's most likely market scenario based on recent price behavior. There are no Pattern Signals fired for today's trading. Pivot System Support & Resistance Levels - used by floor professionals to determine value based on prior day price activity. Shifts in market psychology often occur near these levels. R3·2228   R2·2169   R1·2110   DP·2039   S1·1980   S2·1909   S3·1850 Range Projections - This market will have a tendency to trade within the Normal High/Low Range today as noted below. If those levels are exceeded, use the Extended Range. Normal Extended High 2117 2166 Low 1987 1937 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S NASDAQ 100 COMMENTARY There are no Pattern Signals fired for today's trading in the Nasdaq 100. On the Half Day Chart, all three of our Cycle Indicators turned higher from oversold levels with yesterday's activity. Of greatest significance is the upturn in the 7 period %K. Once this indicator turns from within an overbought or oversold zone, it is a fairly good indication that a new trend has begun and at least several more bars of the new short term direction should follow. ADX levels on 30, 60, and 120 minute charts are all above 30, indicating that the trend to lower prices is still intact in these timeframes (see charts below). If we were triggered into a short position by a price reversal pattern and/or Oscillator Divergence near the 20EMA in any of these timeframes, we would have the makings of a Holy Grail setup. A trade based in part on a Holy Grail pattern can take as its minimum profit target a return to the most recent swing pivot extreme, which would be yesterday's 1968.00 low. If the move to that level occurs on Momentum Confirmation, there should be even more downside in the making. It would be best to enter today's trading without any directional bias. Instead pay close attention to market action relative to important support and resistance levels, especially the 20EMAs as mentioned above. In today's early going, pay particular notice to price behavior in relation to the 2039.00 Daily Pivot. Significant activity above this level will imply further upside. Activity below will hint at further downside. Approach today's trading with an open mind and a willingness to let immediate price behavior, coupled with oscillator divergence, tell us which way and how far the market wants to go. 20 PERIOD EXPONENTIAL MOVING AVERAGE AND 14 PERIOD ADX ADX<18 indicates ambivalence: use chart pattern breakouts to help determine directional bias. ADX>30 defines trend moves in that timeframe: watch for retracements to the 20EMA. The colored bar under ADX represents trend direction.

US T-Bond Commentary for Friday, February 23, 2001 US T-Bond  Mar  USH1 Pattern Signals - an automated pattern identification process which identifies today's most likely market scenario based on recent price behavior. There are no Pattern Signals fired for today's trading. Pivot System Support & Resistance Levels - used by floor professionals to determine value based on prior day price activity. Shifts in market psychology often occur near these levels. R3·104´22   R2·104´06   R1·103´23   DP·103´10   S1·102´27   S2·102´14   S3·101´31 Range Projections - This market will have a tendency to trade within the Normal High/Low Range today as noted below. If those levels are exceeded, use the Extended Range. Normal Extended High 103´21 104´00 Low 102´25 102´14 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S T-BOND COMMENTARY There are no Pattern Signals fired for today's trading in T-Bonds. On the Half Day Chart, our Cycle Indicators continue to display mixed and erratic behavior, offering little information in regards to cyclical positioning. It would be best to wait until they've have had a chance to normalize and return to more normal short term cyclical behavior before using them to help determine any sort of directional bias. The last few days of trading have demonstrated how important it is to pay attention to price behavior near the 20EMA in ALL timeframes. Recent market moves towards higher prices have found resistance right along the daily 20 period EMA. Furthermore, a quick glance at the last few months of activity illustrates how often this level has played an important role We don't have any Pattern Signals fired to help guide us in a trading strategy for today. It would be best to enter the day without a directional preference, but with strict attention to market action relative to important support and resistance levels. In today's early going, pay particular attention to price behavior in relation to the 103-10 Daily Pivot. Significant activity above this level will imply further upside. Activity below will hint at further downside. Approach today's trading with an open mind and a willingness to let immediate price behavior, coupled with oscillator divergence, tell us which way and how far the market wants to go. 20 PERIOD EXPONENTIAL MOVING AVERAGE AND 14 PERIOD ADX ADX<18 indicates ambivalence: use chart pattern breakouts to help determine directional bias. ADX>30 defines trend moves in that timeframe: watch for retracements to the 20EMA. The colored bar under ADX represents trend direction. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ YESTERDAY'S T-BOND TRADING

Statement of disclaimer: This information was compiled from sources believed to be reliable, but its accuracy cannot be guaranteed. There is substantial risk of loss in stock and futures trading. There is no warranty, express or implied, in regards to the fitness of this information for any particular purpose. Past performance is not a guarantee of future results.