Go to Jeff Salisbury LWGate Home Page.From: "Hill, Ernie" <Ernie.Hill@ElPaso.com>
Subject: [CANSLIM] S&P index "M"
Date: Sun, 9 Jun 2002 16:05:31 -0500
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On Tuesday the S&P index hit a low of 1030.49 right in the middle of the
highest probability target range and on the highest probability target day.
The next day it closed above the high of the previous day, signaling that a
turn had been made. Then the very next day Thursday the market dropped again
hitting an intra-day low of 1026.91 right at the bottom of my projected
target range. All was still well and within parameters. I fully expected
Friday to close above the high for Thursday and again signal that a turn had
been made. But alas, all was not well Friday!
First the optimistic view. Sometimes these target levels can hold true based
on closing prices. This usually occurs when a market aberration causes the
target to be overrun, yet prices will still close at or near the target
levels. This could have happened Friday with the market closing at 1027.53.
If Friday was an aberration then the intra-day low of 1012.45 will hold
through the next low turn.
Now for the much grimmer forecast. If Friday was not an aberration then it
is very possible that the next turn low could break the 1012.45 level and
possibly challenge last September's lows.
At this point the picture is very muddy we will just have to sit back and
let the market tell us where it is going to go.
Assuming that Friday was indeed the low point of the current down move
(hopefully Monday will give us a confirmation signal), then we can
anticipate the next turn high to occur within four trading days of 6-14. The
most likely targets for this turn would be a .382 retracement of the last
move down which began on 5-17 at 1106.59 and ended on 6-7 at 1012.45 or a
.618 retracement of the same move. This would give us a target prices of
1048.41 for the .382 retracement and 1070.62. for the .618 retracement. Both
of these targets carry approximately the same probability rating.
In either case the next turn high will likely occur very soon and without
much strength to the upside. Sorry Duke, it's not what I was hoping for
either. For those of you who are strong optimists there is a low probability
target of 1104.60 which if it occurs it would be late in the turn window.
Of course if the market breaks the 1012.45 level on Monday then this
forecast would no longer be valid.
E
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<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>On Tuesday the S&P index hit a low of 1030.49 <span class=3DGra=
mE>right</span>
in the middle of the highest probability target range and on the highest
probability target day. The next day it closed above the high of the previo=
us
day, signaling that a turn had been made. Then the very next day Thursday t=
he
market dropped again hitting an intra-day low of 1026.91 <span class=3DGram=
E>right</span>
at the bottom of my projected target range. All was still well and within
parameters. I fully expected Friday to close above the high for Thursday and
again signal that a turn had been made. But alas, all was not well Friday!<=
o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>First the optimistic view. Sometimes these target levels can hold t=
rue
based on closing prices. This usually occurs when a market aberration causes
the target to be overrun, yet prices will still close at or near the target
levels. This could have happened Friday with the market closing at 1027.53.=
If
Friday was an aberration then the intra-day low of 1012.45 will hold through
the next low turn.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>Now for the much grimmer forecast. If Friday was not an aberration =
then
it is very possible that the next turn low could break the 1012.45 level an=
d possibly
challenge last September's lows.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>At this point the picture is very muddy we will just have to sit ba=
ck
and let the market tell us where it is going to go.<o:p></o:p></span></font=
></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>Assuming that Friday was indeed the low point of the current down m=
ove
(hopefully Monday will give us a confirmation signal), then we can anticipa=
te
the next turn high to occur within four trading days of 6-14. The most like=
ly
targets for this turn would be a .382 retracement of the last move down whi=
ch
began on 5-17 at 1106.59 and ended on 6-7 at 1012.45 or a .618 retracement =
of
the same move. This would give us a target prices of 1048.41 for the .382
retracement and 1070.62. <span class=3DGramE>for</span> the .618 retracemen=
t.
Both of these targets carry approximately the same probability rating.<o:p>=
</o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>In either case the next turn high will likely occur very soon and
without much strength to the upside. Sorry Duke, it's not what I was
hoping for either. For those of you who are strong optimists there is a low
probability target of 1104.60 which if it occurs it would be late in the tu=
rn
window.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>Of course if the market breaks the 1012.45 level on Monday then this
forecast would no longer be valid.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D3 face=3D"Times New Roman"><span style=3D=
'font-size:
12.0pt'>E<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 face=3DArial><span style=3D'font-size:1=
0.0pt;
font-family:Arial'><o:p> </o:p></span></font></p>
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