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Realtraders,
FWIW, attached is a long term 60 minute chart of the S&P 500
Cash dating back to 1996. Two observations that I thought I would
share:
1. This index has just retraced 62% of the October '98 low and the
all-time March '00 high. If one were to find Fibonacci support,
this would be the area.
2. If you measure the 1998 decline (July-October) in percentage terms,
you will see that it declined approximately 22% from high to low.
Now, if you measure the March '00 all-time high to today's low, the
decline measures 24%.
This suggests that the current decline symmetrically matches its
1998 brethren and would indicate that psychological support has been
matched. As such, one should expect this support to hold, at least
temporarily, and then allow the market to rally. Failure of this
bullish analysis will occur when the S&P Cash declines past the 1123
level.
Finally, based on my current analysis, I would expect a rally that
measures 133 points +/- 26 points in this index. Obviously, this is
a tradable analysis from the bullish side in a down trending market and
caution should be taken, therefore, remember to set your stop loss at
1123 or below.
John Boggio
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