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<x-rich>Realtraders,
Last week (9/12/97), I wrote a post titled, "GEN: Tech Stocks - Expect Beating for 9/12/97" and in that post, I wrote:
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So, as I said earlier, tomorrow can be a very important day. If we convincingly exceed the recent lows, then I suspect the market is in the process of forming a major top in which a decline of 20% should be expected. If we do not break down tomorrow or Monday, and rally, then based on my style of analysis, we will have averted any further declines for some time. Hence, we will rally and exceed the Aug.7th high, as we continue this phenomenal bull market rally.
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Well, we DID NOT break below the recent lows and subsequently rallied. Thus, IMO we have averted the decline for the time being.
The purpose of this post is to give you a idea of where you might be able to enter this market on a pullback, or the stock market in general, since we have had such an explosive rally over the last few days.
Using symmetry wave analysis, we have only 1 wave structure that we can follow over the last few days. Enclosed is a 15 minute chart of the SP Z7 since Sept. 10th. I have drawn green symmetrical lines which indicate the relationships of the past pullbacks since Sept 11th. As you can see, the original Wave 1-2 began on 9/12 and measured 1175 Basis points and creates a leeway of +/-235 pts (20% rule) or a target zone of 940 - 1410 points.
Wave 3-4 took place on 9/15 and measured 1070 points. This matches the original symmetrical decline by within 105 Bpoints. (For those who do their own symmetrical analysis, this would have been your BUY signal). Sorry I did not post this signal to the forum, but I was too busy trading. Anyhow, I hope this next signal to go long will help you.
With respect to this next buy signal, if we know that the market has already had 2 symmetrical pullbacks, then why not expect a third. Therefore, at the present time (10:15am et 9/17/97) the SPZ7 has a high of 96100. Thus, we are looking for a symmetrical decline of the original Wave 1-2. In this case, 1175 points +/- 235. Therefore, based on the current high of 96100 just subtract 1175 point and you get an exact level of 94925, +/-235 pts. This level is subject to NO HIGHER HIGHS above 96100. If we do make a marginally higher high, then just subtract the 1175 from that NEW high.
Finally, I have also include two of my favorite indicators: Stochastics and Fibonacci. As you can see the stochastic oscillator is extremely overbought on this short term chart and suggests a pullback is likely...soon. Second, if you calculate a Fibonacci retracement from the Sept 11th low to our current high, you get a 23% retracement to the 94910 level. Obviously, this adds confluence to our symmetrical target.
Hope this helps,
John Boggio
PS. Please remember this is a short term analysis and as such, plan your decisions accordingly. However, I suspect that any pullbacks should be viewed as excellent buying opportunities for gains over the next few weeks.
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<x-rich>
For recent commentary and more informations regarding SymWave, please go
to:
<center>Commentary: http://www.realtraders.com/boggio/disc7_toc.htm
Info regarding SymWave: http://www.realtraders.com/boggio/boggiobio.htm
</center>Thank you.</x-rich>
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