Go to Jeff Salisbury LWGate Home Page.From: "Hill, Ernie" <Ernie.Hill@ElPaso.com>
Subject: RE: [CANSLIM] S&P index "M"
Date: Tue, 11 Jun 2002 22:10:09 -0500
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Today's market action all but confirms that Friday was no aberration, but
was indeed a warning signal. I believe the high turn that I forecast for the
time window of 6-10 to 6-20 was made today and well short of the low target
of 1048.41. Even if the market should manage to make it up to 1048 over the
course of the next few days the risk is far greater than the potential
reward.
The primary reason that I think this short term high turn has been made is
because the S&P has closed significantly below the target range of 1034-1027
that I had forecast for the low turn that I had anticipated in my post from
5-21. Also in that post I had mentioned that there were two time windows
that the low turn I was looking for could be made. What has happened almost
always occurs when the market is in the midst of a strong trend. In this
case a down trend. The first and most likely time window for the turn
occurs, but the next high turn is made early in the window is often only one
or two days up and is very weak with the market turning below target levels.
When this happens the second time window for the target should be expected
and the move is exaggerated. This means that the low turn I had originally
forecast to occur within four trading days of 6-14 has blown past its target
and should now occur within four trading days of 6-26. I haven't had time
yet to calculate the likely targets for this turn, but I suspect that this
down swing could challenge last Septembers lows before a meaningful move up
can be made.
I wanted to get this post out tonight to warn those of you who give weight
to my analysis. If any of you are holding on to positions expecting the S&P
to reach 1048 per my analysis, the market has spoken, it ain't likely to
happen.
E
- -----Original Message-----
From: Hill, Ernie
Sent: Sunday, June 09, 2002 4:06 PM
To: 'canslim@lists.xmission.com'
Subject: [CANSLIM] S&P index "M"
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=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Today's market action all but
confirms that Friday was no aberration, but was indeed a warning signal. I
believe the high turn that I forecast for the time window of 6-10 to 6-20 w=
as
made today and well short of the low target of 1048.41. Even if the market
should manage to make it up to 1048 over the course of the next few days the
risk is far greater than the potential reward.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'>The primary reason that I think this s=
hort
term high turn has been made is because the S&P has closed significantly
below the target range of 1034-1027 that I had forecast for the low turn th=
at I
had anticipated in my post from 5-21. Also in that post I had mentioned that
there were two time windows that the low turn I was looking for could be ma=
de.
What has happened almost always occurs when the market is in the midst of a
strong trend. In this case a down trend. The first and most likely time win=
dow
for the turn occurs, but the next high turn is made early in the window is
often only one or two days up and is very weak with the market turning below
target levels. When this happens the second time window for the target shou=
ld
be expected and the move is exaggerated. This means that the low turn I had
originally forecast to occur within four trading days of 6-14 has blown pas=
t its
target and should now occur within four trading days of 6-26. I haven't
had time yet to calculate the likely targets for this turn, but I suspect t=
hat
this down swing could challenge last Septembers lows before a meaningful mo=
ve
up can be made.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'>I wanted to get this post out tonight =
to
warn those of you who give weight to my analysis. If any of you are holding=
on
to positions expecting the S&P to reach 1048 per my analysis, the market
has spoken, it ain't likely to happen.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'>E<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span style=
=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 face=3DTahom=
a><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b> Hill, Ernie <br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Sunday, June 09, 2002 =
4:06
PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> 'canslim@lists.xmission.=
com'<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> [CANSLIM] S&P i=
ndex
"M"</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>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 high=
est
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 right at the botto=
m 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></f=
ont></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>First the optimistic view. Sometimes these target
levels can hold true based on closing prices. This usually occurs when a ma=
rket
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 clo=
sing
at 1027.53. If Friday was an aberration then the intra-day low of 1012.45 w=
ill
hold through the next low turn.<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s 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 t=
he
1012.45 level and possibly challenge last September's lows.<o:p></o:p></spa=
n></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>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.<o:p></=
o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>Assuming that Friday was indeed the low point of=
the
current down move (hopefully Monday will give us a confirmation signal), th=
en
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 la=
st
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.<o:p></o:p></span><=
/font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>In either case the next turn high will likely oc=
cur
very soon and without much strength to the upside. Sorry Duke, it's not wha=
t 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 style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s 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 style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Time=
s New Roman"><span
style=3D'font-size:12.0pt'>E<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 face=3DArial=
><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></font=
></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 face=3D"Cour=
ier New"><span
style=3D'font-size:12.0pt;font-family:"Courier New"'><br>
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the ElPaso </span></font></code><br>
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mso-bidi-font-size:12.0pt'>Corporation are confidential and intended solely=
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