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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 22nd June 2002
The distinct absence of good news this week again cast a pall of the markets.
In keeping with the trend, more falls again with the DOW and the NASDAQ
scoring new lows and the S&P managing to stay above last weeks low. Action
on Monday and Tuesday this week tried to show some essence of strength,
however it only lasted the 2 days. This 2 day countertrend rally is against
the previous 1 day rallies we have come to expect, and as such may have
sucked in some of the less experienced players. The more experienced would
be waiting for confirmation, taking a more professional approach instead
of taking the purely gambling approach to picking bottoms. Technically,
there is not too much to say except that we have the Solstice this weekend
which marks 270 degrees from Sept 2001 lows.
Swing Charts
DJIA, S&P500, NASDAQ
Just like last week...All swing Patters are Down !
Charts
DOW As we appear to be in an entrenched downward trend, I thought
it may be worthwhile revisiting a chart from last year. Placing the Chart
in weekly data mode and setting the Vertical axis to Logarithmic, we can
see the DOW is approaching the support line that held up the Spike low
of Sept 2001 (Blue). There is also another Line (Red) which is from the
1982 low.These lines are the 'not so obvious' lines of support and as
such can be expected to offer support again. How long they hold is a totally
different matter again.
S&P In following the DOW chart, the S&P this week is also
in Log mode showing the 2 possible lines of support that arise from using
this charting method. The Red Line is the '87 Low to the '90 Low......
and the Blue line is the '87 Low to the '94 Low....... As can be seen,
last weeks low has hit one of the lines and we are not too far away from
the other. It should be noted that these lines are 'not obvious'. It is
the obvious lines of support that the analyst should be wary of. The reason
being for this is simple: If it is obvious, then everyone can see it,
and following a contrarian point of view, if everyone expects it to hold..It
Wont !
NASDAQ This weeks chart is taking a simplistic view, and applying
a channel to the market in an effort to see the likely termination range
for this movement. The NASDAQ is down over 70% from its highs which in
itself is an incredible event, however the market is indicating that there
is room for more on the downside.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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