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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 8th June 2002
Another week of consistent falls across all three markets with most interesting
being the lack of a decent rally against the trend. Since this decline
started on the 17th May, the best that the markets could manage is a couple
on 1 day countertrend rallies. This is a very week signal in itself, however
the action on Friday ( open low and rally) is the initial part of a setup
for a reversal pattern. A close above the previous days close would have
been a nice touch but we cant have everything our own way. In the short
term it is foolish to buck the trend, so the possible COT dates that are
clustered around last Friday and Saturday will work themselves out in
the coming week. Obviously any decline below this weeks low is a cancellation
of the COT and we again look at downside targets. Volume has been rising
with a peak occurring on Thursday. Also of interest is the termination
points for the NASDAQ and the S&P 500 both of which have technical
reasons for support at current levels. The Dow has obvious support, and
this is of concern, as obvious support is just that...too obvious, but
it cannot be ignored.
Swing Charts
DJIA, S&P500, NASDAQ
No much can be added to last weeks comments, as both the weekly and the
Daily swing charts for all three markets are in confirmed downwards patterns.
Of interest is the weekly ranges for the Dow and the S&P which have
been the highest since the wild action of Late Sept 2001.
Charts
DOW This weeks chart has the 90 Solar degree line highlighted as
well as the approximate range equality which highlights the termination
point on Friday. In keeping with what was mentioned earlier, should last
Friday validate as a COT date, then we would be looking for a Higher High,
Higher Low Higher High sequence to validate the change of trend. We had
a mini volume spike on Thursday and although this was nothing extraordinary,
it has signaled short term changes of trend in the past.
S&P The chart this week is a bit messy, with the SO9 and a
Range square indicating the termination point on Friday as well as a series
of Angles which all are crossing around the Friday low. As with the DOW,
a COT validation pattern would be required,, and failing that the all
eyes should be looking South for the next termination targets.
NASDAQ Similar to the S&P, we have a series of angles lining
up against Fridays plunge low as well as a Range Square leveling off at
the termination point.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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