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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (76277)	11/19/1999 7:47:00 AM
From: Terry Whitman	Read Replies (2) \| Respond to of 86076

>>(11/16/99 PM) Well it finally happened, the deadlock between the bearish DJIA charts and the bullish SPX has been determined. As far as we're concerned, the charts don't often lie and right now they have turned in favor of the bullish SPX since a move above 1420 has validated the blowoff scenario in the Preferred Count charts. The announcement from the FOMC of a rate increase today, but a neutral bias going forward, has been interpreted by Wall Street to mean there are not likely to be any more rate increases until well into year 2000. In fact most seem to agree, because of the Fed's Y2K fears, there may not be any more rate increases until Q2'2000. In response to this generally-accepted interpretation of the Fed's announcements, the markets proceeded to dive back into their speculative orgy once again. The SPX made a new all-time high today. CyclePro mentioned last week in the SPX charts, that we were expecting a very shallow wave "2" before resuming the blowoff rally. While we were expecting something more along the line of 38% retracement, it is possible that we only got 17.5%. Since this is quite a bit smaller than our modest expectation, we are reluctant to say that the wave "2" has actually completed yet. A 17.5% retracement for a wave 2 is a rare event. But from the recent low of 1233.66 (on 10/18/99), if wave "1" topped out at 1387.49 (on 11/05/99) and wave "2" bottomed at 1360.40 (on 11/10/99) then an impulsive wave "3" rally should reach a minimum of 162% of wave 1 (154 * 162% = 249) or a maximum of 262% (154 * 262% = 403). Thus, 1234 + 249 = 1483 and 1234 + 403 = 1637. What is more likely is the "buy on the rumor, sell on the news" general rule. Thus, the wave "1" has just ended (or no later than tomorrow) and a wave 2 retracement should begin soon. This blowoff is likely to last only another 5-6 weeks. Five weeks if Greenspan announces a change in rates and/or bias during the December 21, 1999 FOMC meeting and 6 weeks if FOMC leaves rates and bias unchanged. If Greenspan makes any moves to scare the markets at the next FOMC meeting, Wall Street may end up giving Greenspan the nick name of "the Grinch Who Stole Christmas". Assuming that waves 1 & 2 have completed, wave 3 should rally into the first week of December with enough time to complete a wave 4 retracement and a final 5th wave near Christmas and New years. If only wave 1 has completed and we still need to complete a wave "2" retracement, then the blowoff is likely to spill over into January, 2000 -- but the upper price projections are also stretched higher as well. Since we are looking for a rally of 5 waves, is it possible that the 5 waves we may already be seeing in the charts from 1234 to 1420 today be the end of the rally? While it would be possible, CyclePro believes this to be a severe low probability. The DJIA chart would be showing a "failed 5th" wave while the SPX just barely cleared a new all-time high. Has CyclePro finally capitulated and turned bullish? No! In fact, if you go back to our original blowoff scenario forecast from May, 1999, we are are still on-track for the final blowoff to take place -- only the timing was mis-forecast as it has taken much longer than our original expectations. This all means that CyclePro continues to anticipate a crash and bear market, but not until the blowoff has completed. Since a blowoff will take the market to much higher levels, the destruction from a subsequent crash and bear market will be all-the-more devastating.<< geocities.com