1030 S&P Resistance

Discussion in 'Trading' started by waggie945, Sep 5, 2003.

  1. Breaking down below today's PIVOT at 1026.30 should see a test of:

    S1 = 1023.20

    S2 = 1018.10

    S3 = 1014.90

  2. just21


    to see the charts mentioned in this report go to www.dynamictraders.com and click on free stuff. Sign up, and then click on traders education tutorial.

    Stock Market At A Critical Juncture.

    High For The Year Probable In Sept.

    Robert Miner, Dynamic Traders Group, Inc.

    In early Oct. 2002, I sent an email to everyone on our email list that the low for the year was likely to be made on Oct. 10. That exact date turned out to be the low for the year and the stock market has continued to advance since then.

    The S&P and other major stock indexes are now at a similar critical juncture as they were at the Oct. 2002 low. Except this time, it appears a high instead of a low will be made.

    This report presents the technical position of the stock market from the Dynamic Trading perspective that we teach in the trading course that is included with the Dynamic Trader Software and in the Dynamic Trading book.

    While no approach to technical or fundamental analysis is fool proof, the overwhelming weight of the evidence suggests Sept. and Oct. will be months to remember for traders and investors. The focus of the Dynamic Trading approach to technical analysis is to identify conditions for trend reversals and the signals that confirm trend continuation. Once a trend reversal is confirmed, the Dynamic Trading approach will project the high-probability time and price targets to complete the trend or counter trend.

    No matter how accurate any approach to technical analysis or forecasting may be, consistent profits will only be made with appropriate low-risk trade strategies and trade management. As we have shown time and again in our trading courses and reports, even when you are dead wrong on the market position, low-risk trend reversal and trend continuation trade strategies can still result in profits.

    We "trade the market, not the forecast."

    The charts and commentary below show the S&P in a critical position to complete a major high that should last weeks, possibly months. I want readers to be prepared for this eventuality. I present the facts and obvious conclusions. It is up to you to make the decision if it all makes sense and what action to take.

    Our DT Reports update the position of the major stock indexes daily as well as individual stock, ETFs and the major futures markets. Given the next few weeks may be the most important period of the year for traders and investors, if you find this report useful you might consider a three month subscription to a DT Stock or Futures Report.

    S&P At Major Resistance

    The labels on the chart in this report relate to Elliott wave analysis. If you are not familiar with Elliott wave analysis, the Dynamic Trading book provides a practical explanation of the most common wave patterns.

    The first chart is the S&P weekly data. Our assumption is the Oct. 2002 low is a Wave-(A). Our Dynamic Time Projection targets (not shown below) point to Wave-(B) correction that should not be complete prior to the first quarter of next year. If March is a Wave-B (of (B)) low as shown on the chart, it appears waves 1-4 of C are complete. The S&P has reached the maximum Wave-C price resistance zone at 1019-1089 which includes three key retracements and a key APP (alternate price projection) for the end of Wave-C. This is a fairly broad zone but a MAJOR RESISTANCE area. The daily chart will show a much more narrow zone for a top.

    The weekly long term Dtosc is in the OB zone and has made a bearish reversal. While the long term Dtosc often precedes or lags a weekly price reversal by a week or two, the clear message is the upside should be very limited if the S&P continues to advance. The weekly Dtosc bearish reversal also suggests a decline lasting at least several weeks should soon begin.

    Sept. Time Target

    The next chart is the daily data for the S&P from the March 12, Wave-B of (B) low. The break above the June-July highs has resolved the Elliott wave count and clearly indicates a five wave trend that should complete W.C. If Aug. 6 is a Wave-4 of C low as shown on the chart, the ideal Wave-5 price target is 1030-1068. Thursday’s high is just one point short of this target.

    More importantly, the Dynamic Trader’s Dynamic Time Projection routine points to the most probable time for a Wave-5 top Sept. 4-9 (Thursday – Monday) and ideally Sept. 5.

    The daily Dtosc is making a price/Dtosc divergence showing the lack of momentum at the new price high and signaling a top should be near.

    Now let’s move down to the 60m data where it gets really interesting.

    When The Short Term Projections Coincide With the Long Term Projections – Watch Out!

    The 60m chart shows the results of DTs Dynamic Time Projection for the next high. I did projections from two different sets of swings, one set of swings is shown on the chart below and the results for both are in the two windows below the chart.

    Very interestingly, both degrees of swing project the same period for a top comparable to those shown on the 60m chart. The next 60m top should coincide with a daily chart top and the W.5:C (of (B)) top. For the first three weeks of Sept., the period with the highest probability for a top is from mid-day on Thursday, Sept. 4 through mid-day on Monday, Sept. 8 with the highest score on Friday afternoon, Sept. 5 the very same date projected from the larger degree Aug. 5, Wave-4 low for the Wave-5 high!

    The last time we had such a perfect alignment of short to intermediate term time projections for a reversal was for early Oct. last year which turned out to be the low of the year.

    Time, Price, Pattern and Trend/Momentum

    Dynamic time projections are most accurate when there is a clearly defined wave pattern. What makes these time projections particularly important is the S&P has finally resolved the wave position to a clearly defined five waves up from the March low and has reached the EOW-5 price projections and other price resistance as shown on the weekly chart.

    The second most probable time target on the 60m data for the high is Friday, Sept. 12. However, with the EOW-5 time target as shown on the daily chart centered around Sept. 5, Sept. 4-8 is the most probable period to complete the high. Should the S&P continue to advance beyond Monday, Sept. 8, the top is likely to be complete no later than Monday, Sept. 15.

    High For The Year But Not The Final Wave-(B) Top

    If a top is complete near the current time and price projections for a high, a decline should continue well into Oct. However, our longer term projections have not changed that the corrective rally off the Oct. low (W.(B)) should not be complete with this high. A decline should follow that will not take out the March low and the S&P is should eventually have another advance from above the March low that should take out a Sept. high and not complete the final W.(B) top until the first quarter of next year.

    If a top is made soon as anticipated, it should be the high for the year. Sept. and Oct. have a very negative bias, particular if the S&P is trending up into the Aug. – Sept. period. The stock market position is suggesting we may have some surprises in store on the global or economic scene in the next few weeks.

    Investors should be aware that the projected ultimate Wave-(B) high in the first quarter next year should not be far above a Sept. high and now would be a good time to be prepared to liquidate any long positions. There is always the potential that a Sept. high will complete the Wave-(B) correction and the bear market will resume to well below the Oct. low. Our long term stock market analysis projects the bear market that began in 2000 will not be complete before 2006 and will eventually decline 30%-50% or more from the current market position.

    All Things Are Possible But May Not Be Probable

    Any approach to technical analysis will only reveal the most probable position of a market and the most likely consequences. Only amateur traders and investors do not prepare for all possibilities. The probability based on the time, price, pattern and momentum position of the S&P all point to an impending high, probably the high for the year that will be followed by a significant decline. While I would give it a 90% probability that the high for the year should be complete by Sept. 15 and most probably by Sept. 8, the market may continue higher. Probability analysis is why we teach trade strategies are the most important factor in long term success.

    In our DT Reports, we will monitor the market closely the next few day’s for a reversal signal and the signal that will confirm a top is complete. We will also monitor and identify the market action that voids the negative outlook and instead signals a continuation of the bull trend. When you are prepared for all possibilities with the appropriate trading strategies to take advantage of any condition, your success is ensured.


    Robert Miner

    © 2003 Dynamic Traders Group ALL RIGHTS RESERVED