Price Time Volume Investing

Discussion of why I believe the October low will be “the” low before a new five wave bull market. While the SP500 Index (SPX) e-wave charts do little to support this guess, the total market is in much better shape.

The SP500 Index made five waves from the October high to the March low. My guess has been that we have been in an a-b-c correction the will eventually move down into October. The question now is how high do we go before starting back down again?

The Powershares DB Multi-Sector Commodity Trust Agriculture Fund (DBA) is nearing the 1:2 ascending Gann angle at the 50% price retrace. The Ag stocks have been under pressure for several weeks and are setup to bounce from here.

The Nasdaq Composite climbed on higher volume today while the SP500 Index (SPX) rose on lower volume - which maybe be due to more big cap energy issues in the SP500 than on the Nasdaq.

Price finally busted above the rally day six high with a strong outside day that finished at the high on Friday. Volume was off a little from Thursday but the weekly volume was well above average. Volume on the Nasdaq Composite (COMPQ) was about equal to Wednesday and Thursday’s volume. This is day 18 of the rally and the COMPQ looks very strong.

I have been following and commenting on the chart of Apple Computer (AAPL) for some time now. Back in May I thought it would end up at the near 125 this fall. Even though price bounced nicely off the 3/8 line on the big reversal day three weeks ago, volume analysis shows that there are few buyers on this current bounce.

Looking at the Cisco Systems (CSCO) 2002-2007 range square, a definite time cycle pops out. The first peak in 2004 hit at the 25% of the time cycle. The 50% and 75% points of the time cycle also provided a low for at least a short time.

The indices took off on cue after the three day a-b-c short term pullback. Tomorrow is day 11 of the rally and I want to see price over the high from last week at the end of this week.

Lower volume pullback for three days should lead the major indices to move higher tomorrow.

Wave cycles discussed for the SPX.

This is the first in a series of posts meant to provide a guide to those who have been emailing about my “method”. What I do is very simple. All that is needed is a price data and a tool to plot it.

Unless this market is much stronger than I think, the QQQQ looks like it needs to move to the $46-47 area before another leg up. That could happen in one day. And could happen interday and end the day with a new high.

My latest guess has the SP500 Index (SPX) in the “B” move of the three wave counter-trend move off the March low. There were 5 waves down from October to March. I have been trying to figure out how June 16th (90 days from the low) fits in with the July dates I have.

I updated that Gann Emblems link found under the Charts heading on the right side of the page. The July and January high/low are available for the Valueline Arithmetic Index (VLE).

The Powershares QQQ Trust (QQQQ) squared out in the short term yesterday and looks strong in the long term. Price continues above the 4:1 Gann Angle of the Mar05-Oct07 range. Price recently bounced off the 1:1 descending angle (as expected) and could move all the way to the 1:1 ascending line without losing it’s bullish attitude.

The SP500 Index (SPX) bounced off the 1440 level which is 360+90 degrees from the March low and at the 1:1 descending Gann Angle as discussed in this weekend’s Outlook.

The oil market, US Oil Fund (USO) has made five waves up from the 1998. I am not calling a top. I made these charts over the weekend just as a gauge to assess where price is in the cycle. Assuming the oil market does top in a few weeks, these charts will still be valid.