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THE FIBONACCI FORECASTER

Edited By Jeff Greenblatt
April 11, 2006
Greetings:
There are times when reputable analysts make calls that are worth remembering. Or reviewing.  As a review I'm going to pass this along and you could do with the information as you like.  I'm going to keep it in the back of my head for the rest of the year to see if it comes to pass......
How many of you are familiar with Arch Crawford?  I believe he has nearly a 30 year track record of accurate calls on the market.  He is very well respected on Wall Street even though his methodology (financial astrology) is not in the main stream.  I know what some of you conservative types are thinking and that's fine.  You can skip this section (or read it for your entertainment).  Remember one thing, it was JP Morgan who stated that astrology is for billionaires, not millionaires.  Any billionaires in this readership?  I know a couple of you might be aspiring billionaires so take it for what its worth....
Friday morning on local (Phoenix) Financial News Radio 1510 KFNN, Crawford called for a STOCK MARKET CRASH THIS YEAR.  His reasoning is every time since 1915 a certain planetary cycle combination has caused a major decline in the Dow.  This is a Mars-Uranus opposition that hits on August 13, 2006.  I looked it up.  I happen to have Merriman's complete library of timing cycles and I have data back to 1966. Merriman happens to agree this signature has the potential to correlate to very large reversals.  In 9 of 23 cases studied, a 50 week or greater cycle unfolded within 15 trading days (39%).  Folks, that has better odds than an expanded flat confirming. The cycle definitions are either Merriman's or from the Foundation of Cycles.   Here are some highlights of past Mars-Uranus oppositions:
Feb 22, 1966  Primary and Double Top to 18 year cycle crest (off by 8 trading days)
July 21, 1973 Major Top to a sharp decline led to 22 month cycle low (off by 4 days)
June 28, 1975 Double Top to a 50 week cycle crest (off by 11 days)
June 1 1981 Primary Top
May 26, 1983 Trading Top to a 50 week cycle crest (off by 15 days)
May 14, 1987 Trading Top (off by 3 days)
Sept 21, 1994 Primary Top which was Double Top to 4 year cycle crest.  Started big decline to 4 year cycle low.
Aug 29, 2000 Primary Top in SP500 And Dow (off 3 and 5 days) led to big decline
Aug 24, 2002  Led to Final decline leg in bear market (off by 3 days)
To be sure there have been a few inversions where this signature created primary bottoms most notably in recent memory was August 18, 2004 which as many of you who were on board at that time was the August low anticipated here weeks in advance.
This signature is in effect from August 13-March 2007.  He claims the highest probability time would be on the seasonal change on September 21-22 (which we already know is a significant time for market reversals).  However, this time there is a SOLAR ECLIPSE right on the equinox on September 22. 
What do I think? Crawford has credibility and a good track record of success.  He is not infallible and we could always have an inversion.  But, this IS a year where we have the potential for a 4 year cycle low. The longer this thing stays up in the stratosphere, on a cycle basis, the greater chance we have for a very serious decline at some point.  Apparently, the planets are suggesting IF it IS to happen, this is WHEN IT WOULD HAPPEN.
We'll see..........
THE STOCK MARKET
As a review let's go back to Thursday night so we can better understand where we are right now.  Recall I was looking for a retest of the high in the NDX and a test of the 61% retracement level in the SOX.  We were so close on both accounts logic prevailed (at least in my mind) we'd at least get those tests.  We started out higher on Friday coming within 5 points in the SOX and 11 points in the NDX.  THEN WE WERE STONED by an invisible ceiling. 
What happened?
On the chart I follow most closely, the NQ, we hit a high wave candle on the 321st-5min bar of this particular leg.  A high wave bar implies (small body and tails on both sides) confusion and uncertainty.  The next bar was the 322nd (Lucas) bar which started the decline we experience to this moment.   Recall on Thursday I stated that we have to be on the alert for pullbacks when legs get into the 300s?  I know that's general because it covers 8 hours.
More importantly, the NASDAQ hit the 262nd hour off the February 13th low.  Catching this exactly on the spot as a major turn was complicated by the fact there are separate bar counts for the NASDAQ and NDX which made a lower low on March 10 which was not confirmed by the NASDAQ.  By Friday afternoon I was able to figure out why we turned.  We were also 21 days up to the current leg.  When we get a turn on the hourly and daily time frame, we need to take it seriously because we only get those several times a year. Maybe once or twice a quarter.
What happened in the SOX was instead of a 61% retracement of the whole move down, we topped on the 61% retracement of the big secondary high.  The NDX topped on the 88.6% retracement of the drop into March.  The 88.6% level happens to be the square root of the .786 common retracement.  After we pass a 61% retracement, there is a 95% chance of testing the high in all time frames.  However in that 5% of situations, we have to deal with that rare 88.6% marker which is always the last guard at the gate to a complete retest.
Lower probabilities, to be sure.  However, since we came so close sentiment here seems to be one of surprising disappointment as those who bought last week are already under water in many cases.  Now it will be much tougher to get back up there in the NDX because as opposed to testing just one point in time (January high) we now have a resistance zone from 1750-61.  Those who have bought in this entire period from February will be looking to break-even or not get killed.   In other words, I think this high has a shot at being a multiweek high. 
Coming to yesterday and today, the selloff leg that took out yesterday's low violated no less than 3 decent intraday time relationships from yesterday afternoon.  Something has changed, because the past 2-3 weeks have been characterized by lows being set on the kind of time cluster THAT WAS VIOLATED SO EASILY TODAY.   Everyone has their method of technical analysis and I have mine.  What I've noticed is markets always can elect to do or not do something at the fork in the road.  However, when time clusters are taken out SO EASILY, that means something.  Yesterday the NQ hit a low on a combination of 55-15min, 29-5min as well as 161-5 min bars that ALL BOTTOMED ON THE SAME BAR.   Not to mention an ABC price setup that saw a .61/1.61 relationship.   The SOX also bounced after declining for 13 hours.
Obviously, many of the people who bought recently all fled for the exits at the same time.
A word about the Dow.  I put up a new Dow hourly chart so many of you can get a look and sneak preview of the kind of charts that are in the ebook.  I know many don't totally get this time stuff and I'm not in a position to put too many of them at stockcharts but here is a good example.  Off the high from March 21 (change of season) we declined for 60 hours, reversed on 61 and topped on the 89th hour.  This is how we confirm wave counts because they turn on time clusters.  This 89th hour was not only the 89 (Fibonacci) hourly bar off the  high but it was also a 29 (Lucas) hour cycle.  Look at the chart, you'll see that hourly bar created a beautiful tail making the Nison people happy that we confirmed a failure at resistance.  For added certainty, we did it right on schedule. Now the Dow is down another 21 hours so is primed for some kind of bounce.  Also, it is in danger of breaking through a trend line that has contained three lows since the October rally leg started.
BOTTOM LINE: Turning back to the NDX we are now at a small degree 61% marker with the hourly charts down at 30 RSI.  There is a much larger degree 61% marker at 1678.  I'd look for a bounce tomorrow but the NDX has a better chance of finding a trading low one level lower. Same thing for the NASDAQ which has a 61% marker at 2290. We just were up 21 days so I doubt the selling is done after 3 days. I'd look for a low around the April Fibonacci 13th where there is a full moon.  IF we were to get a better low on Thursday we would be down 5 days which is more reasonable than here.
AUSTRALIA
I've been looking for the elusive high for the past few weeks.  Sorry I couldn't be more precise because this is a three week time window.  Right now we just started week 162 off the 2003 low.  Australia is finally showing signs of cracking.  Today you are already down 40 after dropping 40 on Monday. Thursday to Monday saw a decent looking evening star pattern on a daily chart Yesterday was a recovery but today you given right back ON THE OPEN.
For those of you who ever take one of Nison's advanced trainings which I recommend very highly he talks about a specific candle line that now appears on the daily chart.  I'm referring to THE LAST BULLISH ENGULFING BAR.  If you look at the last 4 four bars you'll see an evening star followed by a white candle.  The last 2 bars are black, then white.  When you see that combination on a low,  if implies a potential reversal.  When you see a bullish engulfing bar AT A HIGH,  many times it is the kiss of death to the trend. Same thing would be a bearish engulfing bar near a low.  If you throw in today's drop, we have the recipe for more selling.
GOLD, SILVER AND THE XAU
We've started a corrective wave in the XAU and what is most interesting here is the time count once again.  From March 10-16th we had a leg up that covered 29 (Lucas) hours followed by a pullback.  The pullback ended on the 64th hour off the bottom and the leg up spanned from hour 65-139 counting shared bars which is roughly 75 or one shy of Lucas 76.  The relationship of 29/76 is 2.62 which is why we are so interested in the Lucas sequence here.  We had an initial leg and then a 2.62 time extension which created a turn. What is interesting about the leg since the high is we SPIKED on hourly bar 17 and dropped on 18 which is a sure sign of change of direction. We have a gap up and 38% price retracement level at 138 which is where I think we are headed.   I tend to think this could be a 4th wave but we need to stay above 132 (first wave high) to confirm that.
We are still in the area around 597 which I discussed last week which is an important marker for traders as it is a 1.61 extension level.   I'd look for a small pullback here but since we topped 600 I'd look for a more lasting high somewhere in a zone of 610-618.   We have a negative divergence on an hourly chart dating back to March 30.  The divergence is more pronounced on a 15 minute basis.  Silver has the same type of divergence but is now up 153 days so we are coming to that 155-162 day period.  Silver looks like we started a small degree abc correction that could find a low near 1220.  IF it drops here we could see a low at 155 days and perhaps another leg up to the 160-162 day cycle.
US DOLLAR
The dollar finally hit a low in the time frame I was anticipating last Thursday. We've started a leg up and now a small correction for the past 10 hours.  IF it is to reverse, it should do so early in tomorrow's session on a time basis and at 88.72 on a price basis. The leg up off the low looks like an impulse wave.  If the larger count (a big triangle) is correct, we've already seen the low.
BONDS
I think we've hit another false bottom. We've hit the low on the 58th day of the leg which means we have a chance to hit a small degree high by day 62 which will happen on Thursday. Here's a chance for an inversion where instead of bottoming on the 62nd bar we invert and continue the downtrend.
CRUDE OIL
We are having our retest of the high right now which just about blows the triangle count out of the water.  The good news is we are 38 days up overall and 16 days up on the latest leg.   We are also at a point on the chart where after the decline into early March we are at a 1.61 extension of the leg from February.  The implication is we could get a pullback here with bearish divergences on the various intraday time frames dating back 2 weeks.
Jeff
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The content in THE FIBONACCI FORECASTER is for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information is the opinion of Jeff Greenblatt and subject to change without notice.   Please be advised to consult your investment advisor, attorney or tax professional before making any investment decisions.  Jeff Greenblatt will not accept any responsibility or be liable for any investment decisions based on the information discussed here.
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