Favors tonight. There is eomthig for everyone:
Our cycles suggest a probable
high near December 22 plus or minus 2 trading days. Now we
have stated before the Dow normally reaches some sort of
short term high or low near each options expiration day, plus
or minus 2 days. The Bradley shows 2 turning points for this
time frame. Those are December 18 plus or minus 2 days and
December 22 plus or minus 2 days.Given Friday's rally we
believe we could see a short term sell-off for a day or so
beginning sometime Monday. Any decline below 8858 on a print
basis in the Dow will give a short term negative signal from
the hourly charts. This would suggest lower prices Monday.
However if so any decline should be a brief one and should be
followed by another rally into December 22 plus or minus 2
trading days. There is a Lindsay Top-to-Top Count from the
August 31 closing low calling for some sort of high between
here and December 23. After the high due near December 22
plus or minus 2 days the cycles turn down into a low due near
the end of December. Actually the low is due near
Monday,January 4 plus or minus 2 trading days. That will be
the next trading day after December 31.
While the Cycles call for a high this coming week and a
decline into the last week of December we should tell you
there is a seasonal pattern called the "Santa Claus Rally"
which argues for a rally in the last week of December.
According to the well known market analyst Yale Hirsch,in
his book Stock Traders Alamanac," Santa Claus comes to Wall
Street nearly every year and brings a short, sweet, respectable
rally. In the past 45 years he failed to appear only in
1955, 1966, 1968, 1977, 1979, 1981, 1984,1990,1992 and 1993. The
rally occurs within the last 5 days of the year and the first
2 of January." Hirsch goes on to state "The Bear Markets of
1957, 1962, 1966, 1969, and 1977 were not preceded by Santa
Claus rallies. Seven other lackluster periods preceded years
when stocks could have been purchased at much lower prices
later in the year." This so called "Santa Claus Rally" has
been so consistent,occurring over 77% of the time over the
last 45 years,that it has lead to the saying," If Santa Claus
should fail to call,Bears may come to Broad and Wall". This
means that if we do not see a "Santa Claus Rally " this year
it could prove bearish for 1999. So we have the Cycles
calling for a high near December 22 plus or minus 2 days and
then a decline into the end of December,while the Santa Claus
rally phenomenon calls for a rally during the last week of
December into the first 1 or 2 days of January. Clearly one
of the two will be wrong. If the cycles prove accurate it
will be a bearish signal for 1999.
For this week any rally above 9012.30 intraday in the Dow
will turn the Gann Weekly Chart up and signal higher prices.
If the Dow exceeds 8928.60 on a print basis we will probably
exceed 9012.30 intraday. If the March S&P futures exceed
1202.30 or if the NYSE cash index exceeds 572.54 the odds
will be high that the Dow will exceed 9012.30 intraday.
Any decline below 8858 on a print basis Monday will
signal lower prices and give a short term sell signal from
the hourly charts. Any decline below 8901 on a print basis in
the first full hour of trading Monday morning could lead to a
test of 8858.
We have had several calls about our Gann Trend Change
Dates, which we did not have time to put in our last
newsletter. For those of you who follow those Trend Change
Dates the next Gann Trend Change Dates are:
December 23 plus or minus 1 day
January 4 plus or minus 1 day
January 13 plus or minus 1 day
January 21 plus or minus 1 day
This report strikes me as worse than useles. He seems to be saying that anything can happen. Am I being unfair?
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