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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 20th July 2002
An explosive finish to the week with the Dow plummeting 400 points on
Friday. This move has been expected as the S&P and the NASDAQ have both
fallen to well entrenched new lows and as such the DOW was expected to
follow ( although its not there just yet). With the bearishness that is
pervasive in the markets at the moment, it is interesting to watch how
attention rolls from one area to the other. Similar to when a bull market
is in full swing, participants look for value, that is Stocks that appear
to be undervalued. With a bear market the opposite is true, and Value
for a bear is a stock that appears to be overpriced.
The NASDAQ is now down 75% from the 2000 highs and the chance of finding
bear value is slim, as virtually anything worth shooting is long dead.
For this reason alone, do not expect any spectacular declines in this
index. The S&P is now down 43% and in comparison would be holding some
stocks whose value can be compromised with some spirited short selling.
Last of all we come to the DJIA which is now down 33% which means from
a bears perspective the potential on the Shortside is considerably favorable.
Swing Charts
DJIA, S&P500, NASDAQ
Just like last week and the week before that etc etc...All swing Patters
are Down !
Charts
S&P This weeks chart is a monthly showing the standard retracement
levels from 1974,1982 and 1987. When markets experience the Boom such
as it was during the 1990's they form a parabolic shape displaying the
acceleration on price movement as the punters become increasingly enthusiastic.
Again we come to the question, How far can it go ? The answer to this
is marked by the arrow which shows the pivot point where the market last
jumped out of its normal growth. This is the Jan 1995 low around the 440
level. This level as evidenced on the chart is around the 75% retracement
level. This would imply that the S&P can fall as much as the NASDAQ has.
Note. We are watching the 25th for possible COT.
S&P 500 See
Chart
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