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1) The Gann angles are based on our determination for the current  "key" frame of reference when applied in the     correct Gann scale of one point per calendar day, week, or month.
2) The square of the range "price" (historic decline or rally) to future "time."
3) The square of the "price" high,  or low , to future "time."
4) The placement of three "key" time targets based on the square of time (of the range) to future time, which are also the same targets identified by the Fibonacci ratios and extensions of the time range.
5) The 1/8th divisions of the square of the range and the high, or low, to future time.
6) The 360 degree and 180 degree Square of Nine support or resistance "lines" in price (index value) only.
7) Not Gann, but also shown on these charts is the Fibonacci retrace targets based on logarithmic (percentage) scale. Note that the Fibonacci retracements in absolute values (linear scale) are "very nearly the same as Gann's 1/8th divisions of the square. For example, 61.8% is very close to Gann's 5/8's division of the square at 62.5%.
8) PTR's bull and bear targets based on this analysis, and our overall  price and time targets based on all current analysis.  

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POSTED FOR 5/24/2004: 

   The chart and graphic below shows the "summation" of our "Gann methods analysis," for the SOX index, using data obtained after the close on 5/24/2004. The upper part of the graphic shows the application of the Gann angles coming down from the historic all time high (ATH) in March, 2000, and up from the recent historic low in price, or index value, in October 2002. Neither of these are necessarily the "wave" pattern high or low as determined by Elliott Wave Theory, since Mr. Gann used absolute extremes and never made any reference to "waves."

   From the preliminary analysis, we have determined that the SOX index is "very likely" to be following angles based on W.D. Gann's chart scale of one point per calendar day. The squares and angles shown on both of these graphics are base solely on this scale of "one point per calendar day," and any reference to other angles or squares in the scales of one point per week or one point per month is noted on the chart by text surround  by a "blue" oval or pointed to by a blue arrow. While PTR firmly believes this is "the current key frame of reference" (correct time period or "scale"), we fully acknowledge that we can be incorrect in this analysis or the  correct "key frame" can change over time. Therefore, the reader is urged to determine for themselves the "probability" that we are correct and take action based on their opinion of our analysis when analyzed in conjunction with their own research.

   For the SOX index  the key scale is "very likely" the one point per calendar scale , since the stock is now well above the 1:1 angle in weekly scale, and does not appear "maximum bullish," or at least not as bullish as a weekly scale would imply. Also, we know from experience that the vast majority of "indexes" have a strong tendency to follow the Gann angles in "calendar day"  scale, if they follow any of his angles.

  Based on "calendar day " scale, we believe that W.D. Gann would have classified the SOX index as currently "bearish" but possibly making  the transition to "very bearish," since it has recently fallen below Mr. Gann's minimum up angle of 1:2 (23 degrees in the correct scale) coming up from the October, 2002, low, in calendar day scale. If the index fails to hold at or above this angle (1:2), then per Mr. Gann's rules, the price is very likely to drop down to a full retest of the prior major low or make new lows. If 1:2 angle is broken, the price is still "somewhat  likely" to rally right back up to a double top, near 557 to 560, but it would also be a huge piece of circumstantial evidence to support the assumption that the bear market of 2000 has resumed it's decline into the 2006 low.

    Based on "calendar day" scale, we believe the SOX index  will reverse course and make our target at 601-641 by "about" July 17, 2004.  However, the key line of support is the Gann 1:2 angle, in calendar day scale, that has been violated to the downside. Should  the SOX index stay below this angle for much longer then in all likelihood our "expectations" are wrong. Also, be aware that even if this analysis is correct, the SOX index could "extend" the last wave up, or so we say, past 641 and become very bullish. While we believe that is very unlikely, we need to keep this in mind that if we do rally back above the January high on this rally. On the flip side, a break below 450 would be telling me that the wave pattern up was indeed an ABC corrective wave up from the October , 2002, low that terminated at the January 12, 2004 high. If this happens, then I would expect to see a decline below 450 to "catch" itself just below "about" 390, most likley at the 2:1 angle in weekly scale, and then rally right back up to a "double top" near the 1/12/2004 high, and/or that 1:2 angle down from the all time high (ATH), near 560, before starting the last phase of it's cyclical bear market down into a 2006 retest of the 2002 low.

   Also, do not forget to watch IBM and Microsoft very closely, since these two stocks are key stocks inside the DOW index, and while MSFT is winding down into the bottom of triangle, IBM could be in the processes of breaking a huge bearish triangle to the downside. As of this writing, 5/24/04, IBM is just "hanging on" at $87, so this stock could still become big time trouble over the next few weeks.
For the PriceTime Review
Andrew J. Quiggly
Editor                                                                   <Prior Post SOX 4/27/04>

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