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Jerry,
Interesting to note your measuring method.
I use the identical one as my primary price indicator.
However, I come up with a very different result.
Looking at the S+P, which is the only index I trade, I have the following
numbers:
June low (weekly chart): 1280.50
July high (weekly chart): 1431.20
As the last low was below 1280.50, namely at 1272.00, I calculate the next
major target as follows:
1280.50 - (1431.20 - 1280.50) = 1129.80
Furthermore, I also calculate a Fibonacci expansion target, as follows:
Wave A: 1431.20 to 1272.00 = 159.20 points
Wave B: 1272.00 to 1387.40 = 115.40 points
Wave C (projected): 1387.40 - (1.618 x 159.20) = 1129.80
I find it extremely fascinating that both calculations result in precisely
the same result.
Now, while this indication is by no means certain, my experience and
research show an accuracy of approximately 93%, hence my bearishness.
As a result, I went short SPU at 1382.60 (based on a similar calculation
using the high at 1327.30, and the low at 1272.00). Protective buy stop in
place at 1387.50, so even if I'm wrong, my risk is minimal.
I'm looking for the 1129.80 level in October, so I assume I'll have to roll
out to SPZ.
Good luck,
Warren
-----Original Message-----
From: GREHERT@xxxxxxx <GREHERT@xxxxxxx>
To: realtraders@xxxxxxxxxxxx <realtraders@xxxxxxxxxxxx>
Date: Friday, August 27, 1999 9:54 AM
Subject: I can't understand why everybody is so bearish.
>
>I can't understand why everybody is so bearish. Bond yields keep dropping
>(bonds keep rising), yields now down 38 basis points, and the stock market
>keeps moving in lock step with the bonds.
>
>When we reverse a correction like this, I like to measure the distance from
>top to bottom of the correction, and then I add that distance to the
>break-out point to project the top of the break-out move. It's based on
>something I learned in physics 101: "For every axction there's an equal and
>opposite reaction." This gives me the following tops (I try not to get
>greedy but lighten up as I approach the top.):
>
>NASDAQ COMP: 2981
>NASDAQ 100: 2574
>S&P 500: 1456
>DOW: 11521
>
>See chart of NASDAQ COMP - attached.
>
>Not a recommendation. Just sharing my thoughts.
>
>Best wishes,
>
>Jerry Rehert
>
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