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VIDEOA Pivotal Set-Up Worth Watching
...many elements are dovetailing into place suggesting there is a better than average likelihood that this set-up could in fact play out.
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The 2002 S&P bear market low was 768. Six squares of 360 degrees up in price from 768 on the Square of Nine Calculator is a price of 1576. W.D. Gann often spoke of markets squaring out. I believe this is because the market crystallizes in ninety degree increments in time and price. 540 degrees or six increments of 90 degrees is a completion move. Why? Because a square does not have four sides, a true square is a cube of six sides. I have studied the S&P from its inception in 1941 and I can assure you that 540 degrees in price often times were complete moves both up and down. I walk through this study in my DVD course, Unlocking The Secrets of The New Swing Chart Method.
Consequently, I believe that six squares of 360 degrees potentially represent an even more significant completion move. Interestingly, at the end of June, at the end of the second quarter of this year, the S&P will be up 1570 days from where this all began on March 12th 2003, another potential squaring out of time and price. Oh yeah, and by the way, 768 and 1576 are aligned or resonate off the date of July 4th – obviously an important anniversary date in the U.S. The first week of July is also the anniversary of the crash low after 1929 in the first week of July in 1932.
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Six squares up from 768 is 1576 and July 4th. Note that three squares up from 768 was approximately the high of the first leg up from march 2003 at 1137 S&P.
I have mentioned before that the average time for a blow-off is ninety calendar days. Sometimes they extend to four months. Since the closing low this year occurred on March 5th and the intra-day low occurred on March 14th – that translates to an approximate window between June 5 and July 5 on the one hand and June 15 to July 15 on the other for the possibility of a climactic peak. Of course, it is always possible a peak will occur at any time with an intervening break and then a test of that peak will be traced out.
Additionally, some of you may be familiar with my 1-2-3 Swing-to-a-Test Pattern. It is the same pattern that the S&P traced out on its weekly chart in September of 2000 in testing the March 2000 high of that year. Is it possible that the S&P is carving out a 1-2-3 Monthly Swing-to-a-Test of the March 2000 high at 1553?
A look at the monthly S&P chart shows that the first leg up of 370 points from March 2003 lasted eleven to twelve months. The second leg began in August 2004 and ran into May 2006 or approximately twice the length of the first leg in time. The next leg began in June/July 2006. Eleven to twelve months forward takes us to June/July 2007. Counting three-hundred seventy points from last year’s low of 1219 projects to 1589 S&P or about 2% above the March 2000 peak. Got symmetry? There is an old axiom that many times markets end as they began.
A) March 2003 to February 2004 leg 370 points in 11/12 months
B) August 2004 to May 2006 leg 22 months 267 points
C) June 2006 to ?
A Symmetrical 11 to 12 months leg of 370 points as in the first leg projects to June/July 2007 and 1589 S&P.
W.D. Gann stated that the number of change and reversal and panic was the number seven. The number most mentioned in the bible. Whether or not the S&P is tracing out a test seven years later of the March 2000 peak we will only know in the fullness of time. But, I suspect few investors and traders were prepared for the possibility that the DJIA breakout in 1973 was a test of the 1966 high seven years earlier and the devastating two-year bear market that followed.
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