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Norman, I think you have it pretty well covered. Only addition I would make
is that the daily wave structure from the April low suggests the possibility
that the rally into the May high was a w.1 and this decline is a w.2,
setting up the bullish case for a strong rally i.e. w.3. I am rather dubious
regarding this scenario and will believe it if and when we take out the May
high. Still I do think we could get a pop here ... AGet is showing strong
time clustering for a possible high in late July so I doubt that any rally
is sustainable ... more likely an ABC correction and resumption of trend
down.
Overall, things are a bit murky regarding the price structure in the
equities market but on the whole the economic picture looks negative when
one attempts to peer beyond the latest economic release:
Positive
Low short term interest rates
Expansion of money supply
Ingenuity and creativity
Negative
Corporate earnings fattened by pension and option gimmicks
Dividends remain very low
High levels of corporate debt
High levels of consumer debt
Extreme high valuations of US stock indexes relative to earnings
Extreme high valuation of US$
Extreme reliance on service sector
Extreme reliance on imports for manufactured goods
Under the circumstances, investors will likely find reward by remaining
defensive with a good measure of bonds. Unfortunately, the wave structure in
bonds, looks rather weak suggesting the bull market in bonds is over and
higher rates lie ahead ... major economic recovery or strong inflation.
Since I don't see a major economic recovery in the immediate future and
don't see further significant rise in inflation, I am assuming that this is
one of those times when the wave structure is providing bad information.
Earl
----- Original Message -----
From: "Norman Winski" <nwinski@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>; <gannsghost@xxxxxxxxxxxxxxx>;
<get_traders@xxxxxxxxxxxxxxx>; <astrofinance@xxxxxxxxxxxxxxx>
Sent: Friday, July 06, 2001 10:34 PM
Subject: [RT] S&P Moment of Truth
I see some important indicators converging next week for a possible change
in trend for the
US Stock Market via the S&P 500.
1.Jupiter will change signs which it only does every 11 months when it
enters Cancer on 7/12.
2. S&P cash 1169 is a .618 retracement of the March to May rally. 1169 = 29
Gemini which is where Jupiter will be until it reaches zero Cancer (90
degrees = 1170) on 7/12.
3. Jupiter in Cancer should be friendly to the US, born on the 4th of July
and with several Crab planets.
4. My sentiment indicator, as of Friday's close, entered bullish territory
for the first time in several weeks, indicating the probability for a low in
1-2 trading days.
5. Even given the bearish case, if we stop at 1169 area, I can see five
waves down and should at least get a very good bounce. Please see chart
below.
6. If SPX goes much more than $5 under 1169, time to throw in the bull
horns, and go back to the barn. On the other hand, I have cycles indicating
that the Greenpan bail out should soon start having a positive effect on the
US economy and markets until late summer.
7. Bottomline, I see the next few trading days as a "do or die" situation
for the S&P 500 and probabaly the US stock market.
Cheers,
Norman Winski
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