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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 31st August 2002
A very uninspiring week, with nothing special happening in any of the
three markets. Most notable was the performance on Wednesday following
the Tuesday rally. All three declined for the following two days only
to recover with marginal gains on Friday. The most interest here is if
we are about repeat the performance of the recent declines and quickly
demolish every attempt at a rally. Looking at the Chart for the S&P we
can see that the market is approaching the lower end of a weak rising
parallel channel. The Nasdaq has declined into the range of the Highs
set on July 30 which is also a weak indicator and the DJIA similarly cannot
seem to get out of its own way, also producing continuing compression
patterns.
Should the pattern of 1-2 up and 2-3 down continue this week then ii can
be assumed that this is the movement that we have been expecting to retest
the July 24 lows. With the current weakness also evident in leading stocks
which are also displaying weak compression indicators, primary interst
for myself is in the shortside of the market.
A number of external factors are looming on the horizon, with the Anniversary
of Sept 11 not too far away as well as the Anniversary ( 360 deg) of the
Sept 2001 low which is also 60 deg from the recent July 24 low.
Swing Charts
DJIA, S&P500, NASDAQ
A Break in the swing patterns this week, with the previous upwards compression
giving over to a couple of downward swings displaying a series of Lower
High/Lower Low couplets.
Charts
DJIA
The Chart this week highlights the creeping parallel channel, If the
market is heading for a retest of the July lows then the lower end of
the channel can be expected to provide a short term bounce point at best,
perhaps generating a 1-3 day rally before resuming the downward trend.
Time is highlighted with the solar degrees, and the standard retracement
levels are also marked.
S&P
Same as the DJIA
NASDAQ
Same as the DJIA
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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