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>Hello
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>
>my work suggested an oversold condition not seen since sep on the nasdaq
>this is based on an indicator invented by vincent and is proproetery
Here comes a fully disclosed indicator from Ray Merriman at http://www.mmacycles.com/artweek.htm
Please note: This is not the same as our service titled "Weekly MMA Comments and Recommendations on Financial Markets," which is available by subscription only.
MMA WEEKLY UPDATE FOR WEEK BEGINNING
MONDAY, FEBRUARY 26, 2001
In the past week, I have completed a study on Mercury direct periods for the forthcoming book on The Ultimate Book on Stock Market Timing Volume 3: Geocosmic Correlations to Trading Cycles, due for release this summer. In this study, I went back and observed all the Mercury direct periods in effect since 1987 (43 cases prior to this one). I correlated these dates to any markets cycles that formed nearby in the Dow Jones Industrial Averages and S&P nearby futures contract. The results were as follows:
Percent of time primary or greater cycle occurred +/- 10 days: 58%
Percent of time primary or greater cycle occurred +/- 8 days: 51%
Percent of time a trading cycle greater than 4% occurred +/-2 days: 53%
Keep in mind that there are usually 2-3 primary cycle crests and troughs per year. In other words, these represent the 2-3 best buying opportunities (if trough) or selling opportunities (if crest) per year. A trading cycle is much more frequent. Both a crest and trough occur on average once every three weeks. Generally prices will reverse at least 4% in price from a trading cycle top or bottom.
Mercury direct periods are very similar to Mercury retrograde periods in regard to their correlation to cycles in the U.S. stock market. Given an orb of 8 trading days, there were slightly more than 50% frequency of primary or greater cycles that occurred (22 out of 43 instances). Given an orb of 10 trading days, the frequency increased slightly, to 58%. In many cases, a significant trading cycle unfolded within only 2 trading days or less (53.4% frequency). In fact, given an orb of only 2 trading days, there were 23 instances of a trading cycle or greater unfolding. Thus it seems that in more than half the cases, some cycle of importance will unfold very close to the time of the Mercury turning direct.
Traders Advisory: Traders are advised to look for at least a 4% trading cycle to unfold within just two trading days of Mercury turning direct. Given an orb of 8 trading days, one is advised to look for a primary or greater cycle to unfold. Therefore if a primary or greater cycle crest appears to be unfolding within 8 trading days of Mercury turning direct (and better yet if only 6 days or less), traders would be advised to look for opportunities to cover longs or even sell short. If instead the market were declining into this period, for primary or greater cycle trough, traders would instead be advised to look for opportunities to go long.
Mercury will go direct this Sunday, February 25. We are therefore in the time band when there is a 58% probability of a primary cycle forming within 10 trading days, and 51% probability within 8 trading days, and a 56% probability of a half-primary or greater cycle unfolding within 6 trading days. The DJIA is in the time band now for its primary cycle trough. That is, this is the 18th week, and the cycle is normally 13-21 weeks. We are also in a time band for a half-primary cycle trough in S&P. The fact that these cycles are due, and that prices have been falling into them, makes this a high probability period for a half-primary and/or full primary cycle trough to occur. The 10-day time band surrounding Mercury direct is February 9-March 9 (58% historical frequency). The 8-trading day orb extends from February 13-March 7. The 6-day orb from February 15-March 5. 4% or greater reversals are due within just two trading days, or February 22-27 (now).
As stated in earlier reports, our ideal goal for the price objective for a low in the DJIA would be somewhere under 10,300, but not below 9654. On Friday, prices touched 10,294. We are therefore in our ideal time band and price band for a significant low to form, and a healthy rally to commence. This would also be consistent with the astrological nature of Mercury retrograde. That is, at the time of the retrograde, investor sentiment swings from bullish to bearish (or vice-versa), and the investment community becomes very confused about the direction of the market. That certainly happened after Mercury went retrograde on February 3 and the market topped out February 2 and 6. Now it is to turn direction again, and the sentiment has been enormously bearish the past 3 weeks. Let's watch and see if all that doesn't reverse in the next few days.
Traders are advised to be alert for a buying opportunity that is now developing, as signified by the historical instances of Mercury going direct.
To read the previous issue click here.
Disclaimer: Past results are no guarantee of future results. Therefore no guarantees are made by either the author or publisher of this report. You are solely responsible for any action you initiate in the market, and the author and publisher assume none whatsoever. Information is provided with sincere intent, and according to our own proprietary studies and methodologies.
Copyright MMACycles - you may link to this site or page, but you may not distribute these texts in any way ( by email or otherwise)
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