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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 17th August 2002
The markets displayed some resilience this week as the upwards movement
continued, albeit in a compressed format. As mentioned last week, we had
a slight peeling back from the previous Fridays high for 2-3 days and
then a resumption to newer highs. The action on Friday was again weak,
although this could be blamed upon a reluctance to be long over the weekend,
after all the devastation of the previous months. There was a continuation
of newspaper pundits reporting earlier in the week of this being a 'Technical'
rally, and all should be wary.
This may be a factor in how the current market will play out. Neither
of the 3 markets have reached what I would consider a strong technical
point of resistance but we aren't too far away. This coming Friday(Sat)
is 30 deg (days) from the July 24 spike low, which is also very close
to lining up with the above listed COT dates. Following from this a possible
scenario is a continuation of the previous two weeks activity, whereby
the markets display some passive action early on in the week and display
more strength towards the end of the week. Should this occur, a keen eye
should be kept on all the basic technical positions such as range equality,
retracement levels and approaches to old highs
Swing Charts
DJIA, S&P500, NASDAQ
A continuation of the Higher Swing High /Higher Swing Low pattern, with
the NASDAQ finally joining the party. Of note however is the compression
of the upward swing movements. In an expanding market, it would be expected
that the swings would increases in size. A compression in the swing range
is a bearish signal usually indicating the the movement is running out
of puff.
Charts
DJIA
This weeks chart has the Price retracements, Solar Degree dates highlighted
as well as the Price Markers displaying the the compression in the swing
movements. Worth noting is the 61.8% retracement level hovering around
the congestion of early July.
S&P
As with the DJIA, this weeks chart has the Solar Deg highlighted as
well as the Price retracements. I have also marked up the horizontal line
from the 945 low from Sept 2001. In keeping with the Gann analogy that
old levels of support become resistance. It isn't rock solid but it is
worth keeping an eye on it.
NASDAQ
This weeks chart simply has the parallel channel highlighted. Whilst
this market participated in the recent declines it did not do so with
the same vigor. In that it did not form the requisite 'Spike' on the low,
but simply continued on its way down. This market is very difficult to
follow at the present, as it is not playing the same game as the other
two. We did get our 2nd consecutive higher swing high but the depth of
the movements are not convincing. No yet, but a close watch should be
placed upon this.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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