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24th May 2002 - Outlook for S&P 500 (See
Chart Provided)
The following is based upon analysis of the S&P 500 index. Due
to the nature of markets, there are numerous similarities with the
DJIA and as such there is no point in duplicating this information
and I would encourage readers to look at the other markets and derive
their own forecasts on these assumptions.
Long Term Perspective.
When looking at the market from a distance Gann said that we should
look at the 30, 20, 15, 10 7, and 5 year cycles. Also of importance
is the 180 week cycle.
We are approaching the end of the 15 year (180 months) cycle from
the 1987 high which occurred on 25th Aug 1987. The second (lower)
high before the crash occurred on 2nd Oct 1987. Information not
canvassed here is the Nov Low, although it too should be taken into
account.
Looking backwards from August/Oct 2002
The 5 year cycle lining up with Oct Highs in 1997.
The 7 year cycle gives us nothing
The 10 year cycle has a very weak alliance with the Oct 5th 1992
low.
The 15 year cycle lining up with the Aug 1987 high.
The 20 year cycle lines up with the Major low in Aug 1982
and the 30 year cycle has a weak alliance with the insignificant
1972 Aug High and Oct low
Short Term Perspective
Fibonacci Time Zones :
610 days from the Jan 31 2001 High :- 3rd Oct 2002
377 Days from the Sept 21 2001 low : 3rd Oct 2002
233 Days from the 7th Jan 2002 High :- 28th Aug 2002
Time Space Division
24th Mar 2000 - 21st Sept 2001 * 61.8% gives :- 24th Aug 2002
Time Ranges
The most prominent are on the Chart supplied (See
Chart)
Squares
The S&P has been in a 153/4 cycle since Mar 2000 (courtesy
Bill McLaren)
Placing a Gann Square grid of 153.5 on the Chart, terminating Cycles
are visible from the following points:
From 22nd May 2001 forward - 3 Squares terminate 27th Aug 2002
From 31st Jan 2001 forward - 4 Squares terminate 8th Oct 2002
From 21st Dec 2000 forward - 4 Squares terminate 27th Aug 2002
From 1st Sept 2000 forward - 5 Squares terminate 9th Oct 2002
From 17th July 2000 forward - 5 Squares terminate 24th Aug 2002
From 24th Mar 2000 forward - 6 Squares terminate 1st Oct 2002
Other Dates to watch :
21st Sept (360 solar deg from Sept 2001 low)
8th July ( 180 solar degrees from 7th Jan 2002 high )
As can be seen from the above analysis, there is expectation of
possible COT around the last week in August and the first 2 weeks
in October. Historically, these periods have produced some strong
events.
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Summary for Week Ending 7th September 2002
After the Monday holiday the market certainly started the week with a
thump down, confirming the 1 day retracement pattern. The interesting
point to notice was the lack of follow-through, with the market congesting
immediately afterward, and there appeared to be no particular urgency
to get on with it. The low on Thursday was significant for the S&P as
it touched the 50% retracement level and duly bounced forward on Friday.
The DJIA landed in the 50% 'area' and also gave some breath forward.
The question for next week is: Will the one day up pattern be reproduced
? Looking at the congestion that occurred after the Monday decline as
well as the 5 minor swing ( wave) counts, then an assumption can be made
that this decline may be over... for a little while. If we get an Up day
on Monday then we have a confirmed swing on a 2 bar swing chart although
this swing is below the previous. The S&P touch at 50% does give some
heart, but the danger is if it is simple a technical bounce, or the start
of something that may last more than 3 days. Taking all of this into account,we
can perhaps look for a short term CALL in the OEX, but . Any break to
new lows would obviously negate the plan.
Bearing in mind that the Anniversary of Sept 11 upon us so expect a subdued
market.
Swing Charts
DJIA, S&P500, NASDAQ
A Break in the swing patterns this week, with the previous upwards compression
giving over to a couple of downward swings displaying a series of Lower
High/Lower Low couplets.
Charts
DJIA
The Chart this week highlights the the price retracement levels as
well as the time ranges showing the 29 day rally and the 14 day(so far)
decline.
S&P
The chart this week simply highlights the price retracement levels
showing the bounce at the 50% retracement level.
NASDAQ
The chart this week simply shows the retracement levels and the current
bounce point at the 76.4% level. It does give the appearance of simply
'hanging there', so action early next week will be interesting.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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