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GEOMETRIC PATTERN ANALYSIS:
FOR: NASDAQ 100 Trust (QQQQ) Bull and Bear views looking out from Oct. 2006 Posted to MarketView on 10/19/06 and will have weekly running updates on the chart until replaced. "UPDATED 12/29/06 and 5/4/2007"
With the passing of the of mid October time targets,
"I think" there is virtually NO DOUBT that the Bull Herd did indeed team
up with Mr. FED and pull off one of greatest Bear Traps in modern history.
AS most every pattern trader on Planet Earth knows, the key 4-Year, "Presidential," CYCLE was "due" to make it's trough, low, sometime between 9/21 and 10/21 of 2006. As I said, "was" is the key word here because it's now very clear that the HERD managed to pull off a major sneak attack, by scooping up the indexes from their May to July decline "early." Then, after the "early scoop," they just plain hammered their way right on through all major overhead resistance, to where they were able to put in a new all time high for the DOW on 10/4/06...and followed that jam job with a relentless "squeeze" higher ever since. IF you recall, the critical point in time came when the U.S. indexes bounce off a 7/18/06 low and then stalled after a short rally to 8/8/06...BUT that was right where the FED came out with their "rate hiking pause" and flipped the markets bullish. While this cycle "blow-out," or very early "sneak attack" is not totally unprecedented, as Reagan's BOYZ were able to pull off the same scam back in 1986, this is only the 4th time in 100 years that a 4-YEAR cycle has been successfully used to TRAP BEARS and force a breakout to new all time highs. While many traders "think" this is a final thrust right into "the top," and others think the low is still ahead of us, I'm not one of them, and this Gann chart of the NDX proxy, QQQQ, shows my "expectations" going foward...as the least bullish chart on the left. However let me remind all Gann traders of two KEY points that currently exist: 1) while the QQQQ, NDX, and CMPX have all managed to reverse course and break above the key 1:1 angle coming down from the 2000 highs, a clear but still "weak bullish" sign, they are still JUST under the 1:2 angle coming up from their major low back in 10/2002...a not so bullish sign! While it's true that the Nasdaq indexes would flip to "moderately bullish," from neutral, IF they can get back above their 1:2 angles coming up, lets not forget what "could happen" if they were to drop back below those 1:1 angles again--from above--and that angles is still not too far below...at 41. SO, what do I "expect"? That chart of QQQQ fairly well covers it for here to 2008 for AS LONG AS DOW now stays above 11,750. BY the way, while I show one of those (3) of ((C)) lines going right on up to QQQQ at 70, I would call that a "very long shot," as I see little chance that the index will get very far above Fibonacci 55, with CMPX at "about" Fibonacci 2,584 to the 38.2% Fibo retrace at "about" 2,645. If this line fails to stop the Herd, then my "extreme upside target" is 50% retracement target at CMPX 3,120. However, there is also NDX at Fibonacci 2,584-2,645, and that worries me some. OH, one more thing-ee here: Eventhough the Herd used their GreenSpam PUT to pull off one of the biggest big Bear Traps since 1986, if you review all our actual trading in the MODELS section you will see that PTR has made 14.7% on our "non-leveraged" capital since the April-May high, long and short...thanks to the good old MSAR daily signal and "our decision" to switch to it for the big cycle "shakeout." HUM! UPDATED 12/29/06: The only thing to add here is that the 4-Year Cycle "WAS" absolutely blow-out, or "sneaked out early," in the late summer and fall. While I suspect this will "eventually" lead to a re-run of the last "4--Year Cycle "blow-out," in 1986-1987-1988, for now the Big Bulls have the ball in open field and we see little to no serious Bear Sign for a major reversal here, eventhough, this current sideways and up struggle--most likey the "fully expected" wave four of something-- could "run-on" for a long time before we get to see Mr. Bull's hole cards...so to speak! JUST keep in mind that the front end of the YIELD CURVE is and has been "INVERTED," since the summer, of 06', so Mr. Bull is playing with fire; eventhough, the "current game plan" is: bad is good and good is bad. That is to say, Mr. FED manipulator now HAS TO to "force" an "economic slow-down" in order to hold inflation to within "spin able" limits so as to keep interest rates at these INSANELY LOW levels that American is now addicted to. OUR "final" targets remain unchanged for 2007-8 as long as DOW > 11,700-750. UPDATED 5/4/07: Added more "blue dots" to the chart in order to show QQQQ's current position @ 46.6. AJQ |
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BY THE WAY, as you may recall, there are three "key" LONG TERM targets for DOW between at 12,700- ! ! ! minimum, and DOW ! ! ! maximum. In addition, "any" drop now of DOW back below 11,750 is VERY BEARISH and a drop below 10,650 signals that the BIG BULL "has" ended...regardless of bounce that may, and most likely would, follow either break. ALL in all, and in general, there is "virtually no doubt" that the U.S. and all World Stock Market are a "dead man walking"; even if, I and nobody else knows "exactly" how far they can run on pure Adeline and hype before caving in completely.
For The Price-Time
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Andrew Quiggly Editor |
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