The overall market staged a very unexpected rally on Thursday due to talk that their may not actually be a war in Iraq. It was expected in the sense that the news caught many traders by surprise, but not surprising that the rally occurred based upon that particular news. I spoke to several traders who shared my opinion that Thursday rally was primarily a "short covering" rally, and there was serious concern over its sustainability.

We are currently in one of those rare periods of time where major news that can affect the entire world can break at any moment in time, and contradictory news may occur within a short period of time. Combine this with the increased market volatility caused by decimalization (that's a discussion for another week), determining the short term trend of the market is very difficult at best.

This is probably a great time to be acquiring stocks if you have a long term investment horizon, but that is not the focus of my newsletter. However, I am currently feeling that capital preservation is my prime concern. As a result I am not advising any changes from the position that were discussed in the March 11th, and March 12th editions of the Sterling Weekly

The Dow Jones Industrial Average closed Friday at 7,859.71, up 37.96 points. The chart on the Dow indicates that Thursday's rally probably isn't sustainable. The news from the Azores over the weekend indicates the US is going into Iraq with or without the United Nations. It is just a matter of time. However I expect the market will experience a very volatile move lower until the shooting starts and Iraq is defeated. Afterwards I expect the start of a new Bull Market.

Today's Opinion: Closed @ 7,859.71 Last Signal: Sell Signal on Feb. 24th, 2003 from the closing level of 7,858.24 Current Expectations: The index should move lower and test 7,286.27. ???? Who knows how the news will effect us today.

The S&P 500 closed Friday at 833.27 up 1.37 points. I think the prelude to war is worse for the market than the actual shooting.

Today's Opinion: Closed @ 833.27 Last Signal: Sell Signal on 2-24 with the close of 832.58 Current Expections: Lower The index should test 776.76 on a closing basis War??

The NASDAQ 100 Index closed Friday @ 1,030.45 up 0.66 points. The market is currently in a very volatile period due to the Iraqi situation and the waffling by some of the nations claiming to be our allies.

Current Opinion: Closed @ 1,030.45 Last Signal: Called lower on 2-24-03 @ 994.69 Current Expectations: The NDX should move Lower and test 951.90 and then 910.13