Price Time Volume Investing

The SP500 index (SPX) roadmap I have been tracking for several years shows the actual weakness of the market.  While it is true the SPX has bounced over 60% from the March low, price is only back to 2004 levels.  There will be no Christmas in Whoville this year.  The 218 day cycle which worked since 2002 did not greatly affect the market in May and October so this energy may have been overcome by a stronger cycle wave.  December 24th is the next cycle turn and I don’t play to be long much going into this date.

The 2002-2007 Gann fan range of the SPX show price butting it’s head against the 1×1 angle.  As a general rule, this angle should provide significant resistance to a tired market.  The bounce itself remains at the four times slope line which is strong if taken stand alone.  But the fact that the market tanked below the 2002 low before the bounce puts the “strong” move into context.  Price has not even retraced to one-half of the 2002-2007 range yet.

A larger context picture of the Nasdaq 100 (NDX) shows price at only 25% retrace level of the 2000-2002 bear market.  Again, a 70% plus move from the March low was a nice trade.  But there is no strength in the long term shown on this chart.

The SPX is moving to 270 days up from the March low.  The only real correction lasted about 30 days.  Price recently moved through 135 days from the July low.  Extended blowoff moves often end 135 days from the intermediate low (90 + 45 days).

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Tags:   Gann Emblem · Market Outlook4 Comments