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<font size=3>Realtraders,<br>
<br>
I apologize if you receive this post again but I have sent it
twice on Sunday and have yet to see it posted on the Forum. Thus I
am sending it again, but this time without the chart. I will send
that under separate cover. Hopefully it makes it.<br>
<br>
Thanks,<br>
John<br>
++++++++++++++++++++++++++<br>
<br>
Realtraders,<br>
<br>
On Friday I wrote the following:<br>
In light of the bearish analyses that has been posted to the Forum
regarding possible CIT dates, I thought I would share my perception of
the magnitude of such a decline for the Nasdaq 100 (NDX) using Symmetry
Wave.<br>
<br>
Essentially, our last two pullbacks of any significance (1/3/00-1/7/00
and 1/24/00-1/31/00) measured 13.6% and 14.2% respectively (a symmetrical
match). Following SymWave theory, a match of this magnitude (13.6%)
should also ensue with a leeway buffer of +/-2.7%. If failure of the
maximum leeway occurs, our next symmetrical support will be at 28.4%
+/-5.7%.<br>
<br>
Just for your knowledge, there has been some very good wave structures in
this market since 1990. I will discuss them in greater detail in my
follow-up report which I plan on writing over the weekend.<br>
<br>
Well, the weekend is here and so is my analysis.<br>
<br>
To begin, my data for the Nasdaq 100 (NDX) begins with a start date of
11/7/1990...I believe this was when the index was first created. If
anyone has additional data for this index, I will be glad to recalculate
any greater wave structures.<br>
<br>
Anyhow, from that 11/7/90 origin, the NDX made an intraday high on
1/16/1992 at 357 (Wave I) and an intraday low on 8/25/92 at 287 (Wave
II). This Wave I - II retracement measured 19.6%. Using
symmetry wave theory, future retracements of this magnitude should also
measure 19.6%, with a 20% leeway buffer. Therefore, 19.6 x 20% =
3.92% or a retracement zone of 15.68% - 23.52% based on THIS wave
structure..<br>
<br>
Moving forward in time, on 1/26/93 the index reached a high of 384, and
on 4/26/93 pulled back to 326. This decline measured 15.1% and fell
OUTSIDE the leeway zone of the original Wave I -II structure. Thus
forming a new INTERNAL (subset) wave structure which will be referred to
as Wave 1-2. Since this is a new structure, we will now prepare
ourselves for future retracements based on this 15.1% decline. When
we calculate the leeway buffer of 20%, we get a leeway zone of 12.08% -
18.12% for those future retracements based on this Wave 1-2
structure.<br>
<br>
From that Wave 2 bottom, the NDX rallied to a new high on 3/18/94 at
418, rolled over and declined with a low on 6/27/94 at 350. This
retracement measured 16.3% and symmetrically MATCHES our original
internal Wave 1-2. Using symmetry wave theory, a buy signal is now
issued to go long this index. This new decline is called Wave
3-4. At this point, the index again rallies to a new high and tops
on 11/6/95 at 623 (Wave 5). Since we have already had one
symmetrical match, it is likely that the index will again correct a
similar magnitude. Following the 623 high, the index declined to a
low on 1/16/96 at 526 (Wave 6). This retracement measured 15.6% and
again symmetrically MATCHES the original Wave 1-2 wave structure and
reissues a more conservative buy signal. This decline will be
called Wave 5-6 and a protective stop will be placed just below the
leeway zone of 18.12% from the Wave 5 high. If a bottom is
confirmed (as it was in this case), your protective stop will be moved to
a trailing stop as the market continues to rally.<br>
<br>
As the market continues to advance, it again forms a new high on 6/6/96
at 704 (Wave 7), rolls over and begins to decline. During this
decline the index begins to exceed the ideal symmetrical match of 15.1%
and continues to retrace with a climatic low formed on 7/16/96 at
572. When calculating this decline, the high to low measured 18.75%
which exceeded the original internal wave structure by several hundred
basis points and in effect ends this wave structure. However, when
we look a the larger picture of the market, this 18.75% decline
ironically or coincidentally symmetrically MATCHES the original wave
structure labeled Wave I-II above. Remember, that wave measured
19.6% +/-3.92. Therefore, instead of labeling the 6/6/96 high of
704 as Wave 7 it will now be relabeled Wave III and the low of 7/16/96
will be labeled Wave IV. So how did one trade this using this
theory: Simple, as the market began to top after (or possibly even
before the 6/6/96 high, you would have been stopped out of the trade as a
result of your trailing stop, which is place arbitrarily. As the
market entered into the retracement zone of 15.1%, no new buys (or a very
conservative buy) would have been issued due to the fact that the wave
structure had begun to reach the 'mature' stage at a potentially Wave 8
bottom. However, in this case, a NEW major buy signal would have
been issued based on the larger symmetrical wave structure (Wave I-II).
(I hope this isn't too confusing.)<br>
<br>
Ok, so were do we stand: 1. The smaller internal Wave 1-6 structure has
now ended and will never come back into play. 2. The ONLY
wave structure on this index is the current Wave I-IV which places us at
the 7/16/96 low of 572 (Wave IV). 3. If the index should continue to
decline greater than the 23.52% leeway buffer, then we will be stopped
out of the trade. If the market rallies, then move the protective
stop into a trailing stop. Note, remember to keep a proper
perspective on the time frame that you working with. In this case,
the time frame and magnitude of the wave structure are rather larger
therefore, your trailing stop should be considered proportionally.<br>
<br>
Now form this Wave IV low, the market rallies considerably to a new high
on 1/23/97 at 938 and proceeds to correct with a low set on 4/3/97 at
779. Guess what, this decline measured 17.0% and again
symmetrically MATCHES the original Wave I-II decline. This wave
will be labeled Wave V-VI and a conservative buy signal is again
issued.<br>
<br>
From the Wave VI low, the market rallies to another new high and tops on
10/9/97 at 1153 (Wave VII) rolls over and declines to a low 3 weeks later
at 926 on 10/28/97 (Wave VIII). This decline measured 19.7% and
MATCHED the original WAVE I-II. Since this is now entering a
'mature' wave structure any additional buys based on this structural
decline should be considered speculative and corresponding stop
placements should be followed more closely.<br>
<br>
Moving forward, the index again rallies to another new high which is
formed on 7/21/98 at 1485 (Wave IX). Since this is an
extended or mature wave structure, your trailing stop should be placed
even closer to current market action. From this Wave IX high, the
market begins to correct and by 9/1/98, the index retraces greater than
the maximum leeway of 23.52%. As a result, you are <u>totally
out</u> of the NDX (hopefully your trailing stop preserved most of your
gains prior to this low). At this point, the market finds support
and proceed to bounce over the next month. However, it falls short
of a new high, rolls over and continues its decline which culminates with
a capitulating low on 10/8/98 at 1063. The overall retracement for
this high to low pullback measured 28.4% and far exceeds our previous
largest wave structure. Thus forming a NEW larger wave labeled Wave
A-B. Since this is an original wave, NO buy signal is given at this
time...we must wait for a confirming Wave D bottom before a buy can be
issued BASED ON THIS SIZE STRUCTURE. Also note, the leeway buffer
will now be +/-5.68% of the 28.4% decline of this wave.<br>
<br>
We are getting there!!!<br>
<br>
Ok, so we are out of the market. Moving forward again, from the
10/8/98 low (Wave B), the market takes off with very few pullbacks.
Unfortunately using symmetry wave, we have to wait for a symmetrical buy
and that buy takes place on a very small pullback of approximately 6% on
12/1/98 which matched a 6.8% original decline of 10/14/98. Using
this 12/1/98 low, you can now enter the market at approximately 1600 on
the NDX. I realize that some of you will probable notice that from
the 10/8 low of 1063, you would have missed approximately a 55% rally
before you got the buy signal, but I guess that could be considered a
drawback of this system...you have to wait for a symmetrical match.
Then again, following that 10/8 low, WHO would have ever expected the
market to rally northward virtually every day, offering no
pullbacks. Anyhow, even though you had to wait until 12/1/98 or
approximately 1600, the market continued to rally to 2000 before the next
selloff which measured just 8.5% and then onto 2150 by 2/1/99. From
that high (and 100% rally), the market retraces to an 1864 low on
2/18/99. This decline measured 13.3% and has subsequently taken you
out of the market based on that smaller 6.8% wave structure. This
2/1/99 high to 2/18/99 low will be labeled Wave a-b and is an ORIGINAL
wave therefore, a 20% leeway buffer will be calculated based on this
13.3% drop. In this case our leeway will be +/-2.66% or 10.64 -
15.96%.<br>
<br>
On 4/7/99 the market again tops at a new high (higher than the 2/1 high)
at 2250 and declines to a low on 4/20/99 at 1952. This decline
measures 13.2% and symmetrically MATCHES. Thus forming Wave c-d and
a NEW buy signal is issued!<br>
<br>
I am getting tired and you are probably getting tired of reading
this.<br>
<br>
Let's move on. On 4/27/99 a high was made at 2283 and a low on 5/26/99 at
1960. This decline measured 14.1% and MATCHES Wave a-b.
Another buy signal (conservative) is issued. This will be called
Wave e-f.<br>
<br>
From the Wave f low, the market rallies to 2468 on 7/19/99 and declines
to 2120 on 8/10/99. Again measuring 14.1% and MATCHES the original
Wave. Thus a third speculative buy signal is issued and formed Wave
g-h.<br>
<br>
On 10/12/99 the NDX rallies to 2586 and on 10/18/99 declined to a low of
2300. This pullback measured 11.1% and still falls within the
leeway zone. This wave will be called Wave i-j and is considered
mature. I would NOT recommending any NEW purchases at this point
but your existing positions should still be alive.<br>
<br>
Amazingly, from the 10/18/99 low at 2300 (Wave j Bottom), the NDX rallies
exponentially, AGAIN. Rallying all the way to the January 3, 2000
high at 3837 or another 67%. From that high, the market bottoms
four days later on 1/7/00 at 3315. Guess what, it measures 13.6%
and forms Wave k-l. Obviously, new buy signals would not
technically be issued but at least it shows how often markets AND the
emotional behavior of investors seem to repeat themselves.<br>
<br>
Ok so let's move forward. On 1/24/00 another new high was reached
at 3905 and seven days later, a low was set on 1/31/00 at 3349.
This decline measured 14.2% and let's all say, " it symmetrically
MATCHES the original Wave a-b". Further, this wave structure
now runs from Wave a-n...I have never see such a symmetrical wave
structure repeat itself so many times. <br>
<br>
Where does this leave us. Well, we are again at new highs. As
of 3/10/00 the NDX stands at an intraday and all-time high of 4660.
Some 1300 points higher than it was just a month and a half ago.
<br>
<br>
If you ask, can this go on for another year, or for another 2, 4, or 6
more waves? My answer is, "I don't know but at some point this 13.3%
wave structure will FAIL!". And when it does, the only thing I
can do is to look at the next larger wave structure, and determine where
one should expect to find symmetrical support. And as I stated
above, that larger wave structure was identified as Wave A-B and measures
28.4% +/-5.68%.<br>
<br>
Personally, if you asked me if I expect this to happen I say,
"absolutely". The question is, will the market and the
irrational behavior of investors find support at that 28% mark?
Further, I can't identify when this will occur. My best guess will
be for some time this summer and culminate with a climatic low early this
fall. <br>
<br>
Further, when you come to think of it, a 28% decline really isn't that
big, especially if you consider the magnitude of the preceding
rally. Finally, if and when we do get a larger correction (28%
+/-), symmetrically speaking, it will be a MAJOR buy signal to go long
this market.<br>
<br>
Hope you enjoyed this small book....congratulations if you made it this
far.<br>
Questions, comments and concerns are always welcome. For those of
you who did not receive a printing of the Q&A of Symmetry Wave, let
me know and I will send it to you.<br>
<br>
Hope this helps,<br>
John Boggio<br>
<br>
<br>
</font><br>
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<font size=3>Realtraders,<br>
<br>
Attached is a weekly chart of the NDX.<br>
<br>
John Boggio</font></html>
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