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To: Les H who wrote (3117)	10/6/2002 12:11:29 PM
From: Les H	Read Replies (1) \| Respond to of 29597

9/28 outlook insiidetrack.com -- 09/28/02 – Intermediate (2-4 wk) Outlook: Stock indices are poised for a second spike low and reversal higher in the next couple days. This is consistent with expectations for negative pressure to remain through month-end AND would perfectly fulfill analysis for successive lows on September 24/25th and Sept. 30th. As explained for the past month, the most likely scenario was to see the NQZ spike below 861.5 before the DJIA could begin a new wave higher. This has now been fulfilled. However, the DJIA reversed its weekly trend back to down in the process so the potential for a multi-month rebound is diminished and must be re-established - one week at a time - before it takes center stage. There are some long-term wave comparisons and Cycle Progressions that should be examined when discussing the potential for a low in the coming week. Based on these timing/turning point indicators AND the fact that 2 of the 3 indices are likely to set new lows in the current 2-week time frame - this could turn out to be an even longer-standing low than I have discussed to this point. However, before getting ahead of ourselves, let’s examine this web of indicators: The week of September 30-October 4th is: · The completion of a 54-week high-low/low-low Cycle Progression in the DJIA that connects the September 2000 high and September 2001 low. · From a monthly perspective, a low on 9/30 would also represent the monthly anniversary of the 9/2000 high and 9/2001 low AND the 9/1998 low (see next point). · Consistent with the uncanny 71-72 week cycle in the DJIA - that was used to project both the January 2000 major high and the May 2001 secondary high in the DJIA - the coming week completes a 71-week low high/ high-high/high-low Cycle Progression, dating all the way back to the September 1998 low. This cycle has been discussed in several issues of INSIIDE Track since late-1999. It has also been discussed in the Weekly Re-Lay each time it has approached. It has been the single biggest governing force in the DJIA for the past 4 years and should not be minimized. · In synch with the 54-week Cycle Progression, the coming week is the third of three possible weeks that complete the latest phase of a 26 28 week sequence of high-low (8/1999-3/2000),low-high (3/2000 9/2000), high-low (9/2000-3/2001), low-low (3/2001-9/2001), low-high (9/2001-3/2002) and high-low (3/2002-the week of 9/30--10/04/02). · A low in the coming week would complete a 2/1 decline/rally sequence in which the DJIA rallied for 71 weeks following its Sept. 1998 low at 7400 and then sold off for 142 weeks to almost the exact same price level. This is a perfect example of a couple of Gann’s time/price principles. · October 2002 is 180 months from October 1987 one of the most important lows of the past two decades. · From a much shorter-term perspective, Sept. 30th is the completion of the two daily Cycle Progressions cited on 9/21/02. So, particularly in the DJIA, there are a host of timing indicators/wave comparisons/Cycle Progressions and sequences that portend a very important low. We’ll soon see if the market agrees. 1-3 month traders & investors should have been buying the late-July drop to new lows in equities (this does not apply to system futures trading, which is discussed separately under ‘Trading Strategies’) but should now just hold these longs until a weekly close below 7532/DJIA. More aggressive traders & investors should have lightened up on these long positions at the August 19-22nd cycle peak and re entered them from 8660 down to 8030/DJIA. Hold for now (risking a weekly close below 7532/DJIA). “The test of so many resistance points - grouped at 912-917.0/SPZ - and the subsequent reversal lower signaled that a continued decline should ‘transpire into month-end’. At least one of the indices and possibly more could set a low in the next 1-3 days. However, intra-month indicators will/should exert continued bearish pressure into September 30th. There is another reason that September 30th should receive some focus. While intra-month anniversary (geometric) cycles point to September 23-25th as a potential low, two developing Cycle Progressions have greater focus on September 30th. A 68-day high-low low CP (5/17-7/24-9/30) and a 13 trading-day high-high-low CP (8/22 9/11-9/30) bring together the short-term and intermediate-term moves of the past 4 months and converge on 9/30. Since this fits with the intra-month downtrend and the emphasis on Sept. 27th (regarding the weekly downtrend in the DJIA), it demands careful scrutiny as the markets progress through the coming week. There are two possible patterns that have the greatest likelihood of signaling that 9/30 will be the final low of this decline. They are similar in several respects. The first is if the indices immediately rebound (eliminating any chance of Sept. 23-25th being a low since new lows will not be set during this time) and the SPZ tests 871.7-876.0 by mid-week and then reverses lower. The second is if the indices do spike to a new low on Monday and then follow the same path into mid-week. This will create more uncertainty since it will fulfill the potential for a 9/23-9/25 low (the daily trend will be used to filter this). In both cases, these markets should sell off on Thursday/Friday and then spike lower on Monday, 9/30.” Though I try not to repeat substantial portions of previous analysis, last week’s (9/21/02) comments deserve reiteration since they lay the groundwork for the coming day and week. The final sentence sums up this analysis. Two intra-week patterns were possible this past week with the only difference being whether or not a spike low was seen on 9/23-24 (before a 1-2 day rally was seen). In both cases, a late-week sell-off was projected and in both cases a spike lower on 9/30 was forecast. So far, so good. Now comes the decision point. Intra-week action showed - on 9/25 - that the lows for the past week were intact (which simply meant new correction lows would wait for 9/30 rather than being initially seen on 9/27). This is good since it sets up a couple potential intra-week reversal patterns AND provides the potential for inter-market divergence between the indices. It would not surprise me to see the DJIA see a final blow-off to re-test 7532 before a low is intact. Once that occurs, I will address points and price levels to watch as early signs of a reversal higher. Though the SPZ could briefly spike below its 2DGR support at 814.9, it is NOT expected to see a drop below its July low of 774.0. So, a perfect form of inter-market divergence is possible with the NQZ already setting new multi-month/multi-year lows, the DJIA poised to set a double bottom at 7532 and the SPZ set to trigger a higher low. September 30th IS Cycle Low in DJIA, SPZ & NQZ!!! forums.delphiforums.com