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Summary for Week Ending 19th September 2003
We had a good week this week, with the markets in a generally
good mood and quite happy to add to the previous few weeks successes.
Nothing out of the box as far as action goes, but certainly a steady performance,
and one that has notably got a lot of journalists suddenly bullish again.
Usually that's a worry.
Last week I said that we could expect the forward momentum to continue,
and we were not disappointed. We are now close to an interesting juncture.
Looking at this weeks S&P chart we can see that we are approaching
an area that should offer considerable price resistance. Firstly we can
see the38.2% retracement level from the all time high. The market has
reacted to the 23.6% level in Dec 2002 so we know in advance that the
fibonacci model has provided a reaction in the past. The 38.2% level comes
in at 1068. Next we can flip over to a bit of Elliott
and we can consider that this movement upwards from the Aug 2003 low is
a final wave 5 following the Flat corrective wave 4. If this count is
correct, then we can look at the possibility of wave 5 equaling wave 1
or 107 points. When we add this to the Aug low of 961 we get a price target
of 1067 points. Next we can revert back to Gann and look
at the range square from the first impulse wave. A 161.8% extension from
this range gives a price target of 1069 points. A range
square from the 2002 low gives 1069 at 61.8%. From the
above simple and basic analysis we can obviously see a clustering around
the 1068 level.
Now lets look at time. A 2 year anniversary of the Sept 2001 low comes
in at 20th Sept. 45 days /degrees from the Aug low comes out at 20th Sept
(Saturday) so we could look at Monday the 22nd. Applying speed lines to
the chart the lines cross the projected 1068 level around the 24th/25th.
Looking forward 49 days ( 7 weeks or Ganns favorite limit) we get a target
of 24th Sept. In summary, looking at the above analysis we certainly have
something to concentrate on this week.
Looking quickly at the DJIA, there are 2 range squares in
play. Again considering a 5 wave Elliott style advance, the wave 5 should
be an equal relation or a fibonacci relation to a previous wave. Taking
wave 3 at 1459 point we can apply 61.8% to it and derive 901 points. Adding
this to the July low of 8844 we get a price target of 9745. As we can
see on the chart, there is a price target at 9748, so this will also be
worth watching this week.
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