FWIW, Hahn's time target. Dated April 29,2002
Summary: Today was a continuation of the slide. More technical damage was inflicted. The market trades in a very heavy manner. This kind of liquidating market ends badly. With or without an external shock, the stock market slide will culminate in a capitulation low. An external shock in conjunction with a capitulation may produce much lower lows than anyone expects. Because the market has been artificially supported for so long, the level of fundamental support (fair value) is down at an unthinkable level. Be sure to wait for one of our time targets before trying the long side of this market.
Be aware of the comparisons between September 10 and today. It's too close for comfort.
The next major economic data point is on Friday, May 3 when the employment situation report is released.
The fact that we don't have significant time until May 8 suggests a very tough time period for the stock market over the next few days. We do have a minor time waves arriving on May 1 and May 3, so these may be an important days, especially if we've seen some kind of true capitulation. If not, the bigger time is on May 8.
The next important time wave projections hit on May 7-8. Last week's technical breakdown was significant and we must consider this to be a target for a low. If we get another unthinkable catastrophic event, like 9/11, the markets may be closed for several days again. That would move our target further out. From right now, we expect a trend change in seven trading days. If the market is closed for some reason, the count remains the same, but the calendar date shifts.
The FOMC meeting is May 8. Greenspan has already indicated “no action”, so the bullish aspects are already known. That leaves only bearish surprises. Changes in currency relationships and energy prices between now and then could cause the FOMC to quickly withdraw the condition of “negative real rates of interest”.
May 24 and June 25 are appearing as important time wave projections, with June 25 being the most important. I'm beginning to look to June 25 as some kind of capitulation low in the stock market. (Or, it might be the date of a retest of the May low.) June options (triple witch) expiration is on June 21. Assuming the final plunge in market prices is delayed past the triple witching day, the final leg down could come on Tuesday, June 25. After that date, I'll become selectively more bullish. Hopefully we'll be able to buy ORCL and CSCO in single digits, or QQQ at $25, GE at $25 and IBM at $65. These are examples of the probable dimension of the upcoming decline. (It could be worse, so avoid buying until the “time” has arrived.) |
