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Market Turns Advisory 8/12/4


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#1 TTHQ Staff

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Posted 12 August 2004 - 10:04 AM

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S&P 500 CASH
SPX CASH: Daily Projected Support and Resistance levels: High - 1077 Low - 1064
SEPT SP: Daily Projected Support and Resistance levels: High - 1076; Low - 1063
SPX CASH: 5-Day Projected Support and Resistance levels: High - 1086; Low - 1040
SEPT SP: 5-Day Projected Support and Resistance levels: High - 1085; Low - 1039
SPX CASH: Monthly Projected Support and Resistance levels: High - 1120; Low - 1058
SPX CASH: Yearly Projected Support and Resistance levels: High - 1274; Low - 950
Current SPX Index Postures:
Mid-term (6-8 weeks) = BULLISH from 1130.53 (25% position)
Short-term (1 day-3 weeks) = NEUTRAL

Current Outlook: The SPX gapped lower with the futures this morning, taking out first support at the 1072 region and picking up the futures gap that was left over from Monday’s close. As per the notes last night, the higher volume figures that were seen with Tuesday’s tag of 1079.04 SPX CASH indicated a re-test or higher high would be likely after any correction lower; that proved to
be the case, as - after the selling dried up - prices did retest the 1079 area in a late day rally, tagging 1077.34 at the late day rally.

Short term, today’s late day tag of 1077.34 SPX CASH will confirm 70% odds of a turn up in the 18 hour minor cycle if taken out to the upside in Thursday‘s session. If that occurs, then the best spot for it to do so would be at some point very early Thursday, as the cycle just above it - the 36 hour cycle - is now in the topping process. Recent tops for the larger 36 hour cycle have held at the 24 trading hour range, and, at today’s close, we are already 21 hours along. In other words, if today’s 1077.34 late-day top is going to be taken out, then odds will favor it will be early in tomorrow’s session - short and sweet in terms of time, probably lasting no more than into the afternoon session. In terms of price, taking out 1077.34 higher will make the 9 period moving average on the daily chart (which should be at the 1083 region in Thursday’s session) as the upside price attractor; Larry also is noting the 1090 level, so this could provide a magnet as well. This is valid and preferred as long as prices hold above the 1065.92 intraday low seen in today’s session; if that were to be instead taken out lower first, then assume that the 36 hour cycle has topped and new lows for the daily chart just around the corner.

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Stepping it up a bit, the 10 day cycle is now seen as 3 days along, and we know from the statistical notes that this cycle has been topping in the 2-5 trading day range. With this said it is lso possible that the next 36 hour cycle top could also be the peak for the 10 day component as well. However, with the diverging 20 day oscillator on our daily chart, the 10 and 20 day moving averages (or 9 and 18 period averages - a point or so either way makes no difference) will act as upside magnets for price in the coming session or two, so we would have to look for a little more upside here at east. We also still have the possibility that the larger 45 day cycle is extending it’s bottom and is bottoming right NOW, or had bottomed at the 1062 swing low from Friday’s session. I made a possible case for this a few days back with the analysis of the diverging McClellan oscillator and the SPX/VIX relationship. If this cycle is in fact bottomed or bottoming and turns up, the natural magnet would be the 45-50 day moving average on the daily chart, which near the 1112 region. As farfetched as it may seem right now it is still a possibility. Even said, the 90 day moving average is pointing lower for now and as long as it remains down then any rally with the 45 day cycle would be expected to fail and drop to or below the recent swing lows in the coming weeks as the 90 day cycle itself tries to bottom out in September.



NASDAQ 100 CASH
Daily Projected Support and Resistance levels: High, 1336 - Low, 1317
5-Day Projected Support and Resistance levels: High, 1361 - Low, 1268
Monthly Projected Support and Resistance levels: High, 1457 - Low, 1302
Current NDX Index Postures:
Mid-Term (6-8 weeks) = 100% BULLISH from 1365
Short-term (1 day - 3 weeks) = NEUTRAL

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From last night: “the NDX also consolidated to the upside for most of the session, dropping slightly after the fed news and then firming back up into the closing bell. Volume here came in at 1.4 billion shares, which is about 10% higher than Monday’s numbers - but is still fairly light overall. Seeing that the index made a higher swing high for the day, the 10% greater volume gives above-average odds that we will see a higher high made in the next session or two.”

Current analysis: Unlike the SPX, the NDX did not test the 1346 swing high that was seen in Tuesday’s session, as the news from CSCO saw this index harder-hit intraday. At the session lows the NDX actually recorded new swing lows for this move, tagging 1309.50 before reversing higher later in the session - though still ending up weak for the day.

I noted last night that the firm volume numbers seen in Tuesday’s session should lead to a re-test or a higher high in the coming days, something I think is still in the ards, even despite today’s action. As a second note, volume was once again heavier with today’s new swing low, with about 1.8 billion shares traded on this index - about a 20% increase from Tuesday‘s volume figures. This also gives above average odds for another retest or a lower low (below 1309) in the coming days. To me the above inference is that both 1346 and 1309 are going to be seen again at some point in the coming days; if true then what we may see for the next week or two going into options expiration is an index that consolidates near the above areas - but not with a ton of conviction in either direction. See-Saw.


Jim Curry
email me: jcurry@cycle-wave.com
website link: www.cyclewave.homestead.com


Disclaimer:
The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable. The methods Used to form opinions are highly probable and as you follow them for some time you can gain confidence in them. The Market can and will do the unexpected, use the sell stops provided to assist in risk avoidance. Not responsible for errors or omissions.

About Market Turns and Market Charts:
Jim Curry is a trading systems designer and day trader and edits Market Turns cyclic advisory. Market Turns advisory service specializes in cyclical analysis
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Each week he discusses when each cycle is likely to peak or trough, how far we are in the trading cycle, also what price projections are likely to be hit while the cycle progresses. Knowing these periods of projected strength or weakness - days, weeks, and even months in advance is the most valuable information you can have as a short-term trader.

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