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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 10th August 2002
At last we saw some strength in the markets this week, with the DOW and
S&P recording higher Swing Highs on Friday. The IMF loans news certainly
helped things along but the continued efforts of investigators locating
cadavers in the WorldCom accounts certainly does not help at all. It should
be noted that the performances in these two markets as they approached
the previous high of 30/31 July was not all that impressive. The NASDAQ
in comparison has not managed this Higher Swing high just yet, and appears
to be running its own race at present. All three markets however have
performed a 4 day rally coming off Mondays Low. Expectations this week
would be a follow on from that, generating a 2-3 day decline, then a rally
back.
Looking at the charts, both the S&P and the DOW are at a precarious technical
position. Any continued weakness would leave us with a 'Double Top' which
at this stage of the market could prove to be a savagely weak signal.
Should this be the case, the the likelihood of the market retesting the
old lows quickly is very high, and the possibility of it breaking the
old lows is also very high. A more convincing breakthrough the OLD highs
would be appreciated. Following from this is the possibility of an classic
Elliott 3 wave advance. Once completed this would also leave us with a
bearish formation, although is would be considered a much stronger when
it comes to retesting the July 24 low.
Swing Charts
DJIA, S&P500, NASDAQ
At last the pattern has changed with High Swing Highs and Higher swing
lows breaking the downwards pattern in the S&P and the DJIA. The NASDAQ
however is now in Mixed/Neutral swing pattern.
Charts
DJIA
The chart this week has the Range square applied highlighting the
extension levels from the initial push up from the July 24 low, which
should provide a price vibration for the overall movement. As I mentioned
earlier, the market is delicately poised at present, so the activity this
week should be a good indicator of things to come.
S&P
Similar to the DOW the chart this week has the Range Square applied
highlighting the possibility of extension levels off the initial 136 point
movement forward, As with the DOW, the 2 possibilities of Double Top or
Elliott 3 overhang the market upon Fridays close, so this weeks performance
will be a good indicator of the real direction.
NASDAQ
Not much to say about this weeks chart, except that the Higher Low
is evident and it appears that a Lower high will come into play on Monday,
leaving us with a mixed position. When the Market is like this, the trend
can go either way.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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