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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 24th August 2002
Another week of new highs in all three markets, but again the performance
is not particularly convincing. With the 30 deg mark coming in on Sat,
there was an expectation for a strong finish to the week, to go someway
towards confirming the possibility of a Change in trend for the 30 day
cycle. The low day on Friday has put paid to this idea at present but
as when a COT date falls on a weekend, then the Monday also comes into
play.
Looking at the scenario of a standard correction then we would be looking
at a 1-3 day reversal similar to the Aug 1-5 with Friday being the first
corrective day. The next likely forecast COT is the 27th-28th Aug which
is early next week so time is compressing the likely possibilities. A
3 day reversal would give us a low on Tuesday, but the current swing pattern
is one of compression not expansion so a launch to substantial highs is
unlikely.
A 1-2 day reversal gives the opportunity for a fast break up and then
begin the correction back to retest the July lows. As can be seen from
the above, there is generally a couple of scenarios when the markets are
at this point. Its best to lay the ground work for the scenarios, and
then watch what the market does.
Swing Charts
DJIA, S&P500, NASDAQ
Similar story to last week....A continuation of the Higher Swing High
/Higher Swing Low pattern, with the compression of the upward swing movements.
Charts
DJIA
A simple chart this week showing the first resistance at the 50% retracement
level. Also highlighted is the point of congestion (blue bars) encountered
on the previous run down, so it can be expected that the market may find
some resistance in this area.
S&P
This weeks chart has the standard price divisions highlighted although
the market has yet to respond to these levels. There is a closer alignment
to to the price range equality. There is also a similar relationship to
the DJIA chart where the S&P is approaching an area of previous congestion.
NASDAQ
This weeks chart again highlights the descending channel that was
shown last week. Also marked up on the chart is the pervious high. Should
the retracement continue, we would be hoping for the level of correction
to stay above this line, thus giving a bullish signal that may see the
NASDAQ break out of its Southerly heading.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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