Go to Jeff Salisbury LWGate Home Page.From: DanC <danc@compuall.net>
Subject: Re: [CANSLIM] M where now? Correction Delete previous
Date: Mon, 29 Apr 2002 23:39:59 -0700
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Arrogant? An idiot? Not hardly. Your willingness to put
your work out there and let the Market do its humbling bump and
<br>grind on you is admirable. I hope you keep posting. Predictions
of price and time are fraught with peril. I am more
<br>comfortable in trying to figure price levels without the frame of precise
time.
<p>Fibonacci ratios are interesting. The 1177 resistance level that
coincides with the 38.2 retracement from the 3-19 high to
<br>the 9-21 low has been intact since 12-02, and seems to be rather
substantial. I don't put much importance (hope) in the
<br>9-21 to 1-4, 61.8%, 1033.45 price as it is in the middle of the
price rise off the 9-21, and there is not much there to act as
<br>support. On the other hand, the 1060.86, 50% retracement, coincides
with support built for a few days beginning 10-30.
<br>If the 1061 does not act as support, I think there is a good opportunity
for the index to revisit the 9-21 low. It is close to
<br>support, now, at 1074, (not a Fib number) that may be of importance.
And if it does hold, there is the possibility we will
<br>stay within this wide trading range bordered by 1177 and 1074 for some
time to come.
<p>Dan
<p>"Hill, Ernie" wrote:
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<div class=Section1>
<div class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>Hi
Group,</font></font><o:p></o:p></span></div>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>When
I made my first market forecast to the group back in March part of the
reason I chose to make a forecast then was because I had a very reliable
forecast to make. Because of the high probability that I saw occurring
in the market I chose to make a very precise forecast for maximum effect.
At that time I said the market would bottom in the 1070 to 1075 range on
the S&P on </span><st1:date
Month="4" Day="17" Year="2002"></font></font>4-17-02</st1:date>.
I had a high degree of confidence that the market would turn within two
days of that date and very close to my projected price range.<o:p></o:p>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>First
the market gave me a head fake with a false turn confirmation, now it has
blown up my forecast with today's price action. First the S&P has set
a new low for the move, which will now put the eventual turning point outside
the maximum range predicted by my model. In addition to that it has surpassed
the lowest price level that I had projected for the move.</font></font><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>So
what does it all mean? For some of you it proves that I am an idiot that
got his just due for being arrogant enough to think that he could predict
the market. I can accept that criticism; however, from my point of view
my missed forecast gives hints to the longer term picture for the rest
of the year. For those of you who are still reading here is what I see
as the most likely scenario going forward and the implications of the market
dropping through and past my projected turning point.</font></font><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>First
of all the S&P will likely drop to an even lower support level before
the turn is eventually made. This support level will continue to drop slightly
with each passing day. For tomorrow that level will be 1035.5, if the S&P
drops to that level by tomorrow then the market will likely turn from there.
Going back to the market low on </span><st1:date Month="9"
Day="21" Year="2001"></font></font>9-21-01</st1:date>
the S&P put in a low of 944.75 it then rose to a high of 1176.97 on <st1:date Month="1" Day="7" Year="2002">1-7-02</st1:date>.
61.8% of that move would be 143.51 points. 61.8% is a key Fibonacci ratio
where corrections often find support. Subtracting 143.51 points from the
market high of 1176.97 yields a price level of 1033.46. On <st1:date Month="5" Day="2"
Year="2002">May
2, 2002</st1:date> my projected support level for the S&P is 1033.5.
Will <st1:date Month="5" Day="2" Year="2002">5-2-02</st1:date> be
the day this market actually changes trend at least briefly? We'll see.<o:p></o:p>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>The
longer term implications are that the ensuing rally will likely be briefer
than previously expected and certainly have a lower price target, maybe
even below 1176.97 the current high for the year. If the rally that follows
this current decline fails to exceed the current high for the year then
we may be looking at a retest of the September lows later in the year.</font></font><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:
12.0pt'><font face="Times New Roman"><font size=+0>E</font></font><o:p></o:p></span>
<p class="MsoNormal"><span style='font-size:10.0pt;
font-family:Arial'><o:p></o:p></span></div>
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