Hi Jaime,
Nice post. seems like the market is getting ready to roll over.... BWDIK. Maybe it will prove itself again, maybe not. I have studied gann, but don't really trade off of it. Nonetheless, I came across this post about 2 weeks ago on two separate listservs that i belong to... it then summarily popped up on a few places on SI. Maybe you've seen it already. Since you dig gann, i thought you might get a kick out of it. <g> I am passing this along FWIW, this is not my work, and I cannot say for sure whether I agree or disagree.... but I do agree that in general, the stock market is overvalued right now. FWIW, talk to you later, take care
Regards,
Frank
My name is Jean Comeau from Quebec, Canada and I am a commodity trading advisor (CTA) registered in Chicago. I have studied the stock market in a technical way for over 25 years and with a detailed technical analysis which follows, I have come to the conclusion that a stock market crash this year (l999) is inevitable.
The Dow Jones Industrial average should hit 11550 to 11600 points on an intraday basis and a crash will then be triggerred. Since we are almost there, I took the liberty to write the following as to perhaps help others to make a decision in regards to whether stay in or bail out of the market before the iceberg is finally hit...
In order to understand more clearly the main core of the following
analysis, I shall begin by refering to pionners in terms of researches
in the technical analysis field.
ELLIOT (Wave Theory): a market trend usually moves in 5 waves UP and
then 3 waves DOWN and so on...
FIBONNACCI (Perfect Numbers): .382 and .6l8
1-2-3-5-8-13-21-34-55-89-144 etc...
These numbers play a major role in technical analyses of any sort when
it comes to mathematical calculations.
W.D. GANN (Square Rule): Time and price (space) meet at a turning point or as in this case the square root of 34 as it will be demonstrated.
Now, let us go back in l929 to possibly obtain a better comprehension
of the last major WAVES DOWN of the crash that occurred then and realise why the enormous potential for it to repeat is just around the corner.
CRASH OF 1929 - 3 waves down
October 1929 = High or end of previous major 5 waves up = Dow touches
382 points or Fibonnacci .382
Then,
CRASH - Wave 1 = Within 2 months from the high (382), the Dow touches
200 for a total move down of 182 points.
CRASH - Wave 2 = Within the following 6 months, the market recovered to 290 or 90 points gain. Here, notice that half of the retracement is made back up from the original 182 points down(wave 1).
CRASH - Wave 3 = Finally in June 1932 (after 34 months from the high),
the market touches the 43 points level and establish the end of the
major bear market.
NOTE: For any wave to be confirmed as fitting the picture, the market
will usually and normally retrace half of the last move either up or
down from the previous major low or high which it actually did in Crash - Wave 2.
NOW, ON THE WAY UP...
WAVE 1 = 1972 (last quarter) D.J. hits 1051
WAVE 2 = 1974 (last quarter) D.J. hits 577
In this case, the total move down is 474 points or half retracement
from 43 (l932 low) to (l972 high) 105l.
WAVE 3 = 1987 (August) D.J. hits 2746 (intraday basis)
WAVE 4 = 1987 (October) D.J. hits 1616 (intraday basis)
In this case, the total move down is 1130 points or half retracement
from 1974 low or 577 to high of 2746.
WAVE 5 = WHEN DOW JONES HITS 11550 TO 11600 POINTS. END OF MAJOR BULL MARKET, PERIOD.
We achieve our goal by using Fibonnacci numbers as follows:
Wave 1 or l972 = Fibonnacci number 3 times 339 which is the total down
move of the last crash (1929) totals up to 1017 plus 43 (crash low)
equals 1060 and the actual high in 1972 was 1051.
Wave 3 or 1987 = Fibonnacci number 8 times 339 equals 2712 plus 43
(crash low) equals 2745 and the actual high in 1987 was 2746.
Wave 5 or l999 = Fibonnacci number 34 times 339 equals 11526 plus 43
(crash low) equals 11569.
Also note: W.D. Gann Square rule is now in full strength 34 times 340
(square root of 34) = 11560. Note that the number 339 was rounded up to 340. When that number is hit, the 3 waves down will be in an effective mode. We are to expect then that THE MARKET WILL DROP FROM 5500 to 6000 POINTS within the following 2 months (half of retracement of full move from 43 to 11569) which will signal the very next GREAT GREAT DEPRESSION and a rendez-vous with destiny and Y2K...
There are many more technical analyses that add up to similar results
which also reveal the exact same story. At this point, this present
exercise seemed to me more realistic for an immediate comprehension of the matter.
Ex: Twice 34 (Fibo) years from l932 to 2000
13 (Fibo) years from l974 leads us to l987 (Note: a cycle bottom
to top or top to bottom usually repeats twice only when properly measured.
13 (Fibo) years from 1987 leads us to 2000...
I sincerely hope that this will help,
best regards to all, |
