Summary for Week Ending 3rd August 2002
Something different this week as the markets did NOT post new lows. The Low of 24th July has so far held and as mentioned last week, the pattern was expected to change. I though that there was enough time to post a higher swing low this week, but apparently I was wrong about that. I also underestimated the strength of the upwards push which persisted through to Wed for the S&P and Tuesday for the NASDAQ and DJIA. I expected the Highs to come in on Monday after the huge movement forward, but apparently there was still some left over. Following the markets making their top for the week I expected a 2 to 3 day retracement and then a slower more deliberate movement forward. This timing was out and we may have to wait till next week to see a higher low posted in any of the three markets.

Again the question is 'Will it hold up ?'. When the markets are in this mood, one can only make an assumption based on sound technical observations and then look for a scenario to follow. If we accept the 24th July as bringing in the low for the movement, then we can start looking forward to see what lies ahead: Using Solar degree intervals we can see that 30 Deg gives us 24th Aug, 60 Deg gives us 24 Sept and 90 Deg gives us 25th Oct. Using Calendar Day Intervals : 30 days gives us 23 Aug, 60 Days gives us 22 Sept and 90 Days gives us 22 Oct. Looking at these dates we can see that the Aug dates are very close to the Aug dates mentioned in the Long-term COT dates above. The Sept dates are close to the Sept Equinox and also close to the anniversary (360 deg) of the Sept 2001 low. You do not need to be an Einstein to know the relevance of the Late Oct dates.

The Next issue is 'Shape'. If we use the assumption that the July 24 point will hold then what shape can we expect the market to take. One thiing for certain, it will not imitate the reaction off the Sept 2001 Low. This event was caused by external factors and as such the rebound was in response to this. The falls this time can be attributed directly to the market and its behavior as a whole, so the enthusiasm will no be there with the same level. I have included this week the Chart of the Australian All Ords after the 1987 crash. Whilst I do not expect a mirror image of this behavior, it should be useful to see how a market performs after it has had the stuffing knocked out of it. Note the 90 deg time frame between the Initial low and the re-test. Of course all of the above is moot if the S&P declines below 776.

Swing Charts

DJIA, S&P500, NASDAQ
Just like last week and the week before that etc etc...

I know I said last week that a change was due, but it looks like it will be This Week..!

Charts

DJIA S&P NASDAQ
Just highlighting the Solar degree intervals and the Standard retracement levels with all three charts this week.

DJIA See Chart

S&P 500 See Chart

NASDAQ See Chart