Outlook for Selected Markets. DJIA - S&P 500 July 30/05

by Bill Voeten
July 30/05

Summary for Week Ending 30th July 2005

In comparison to previous weeks, we have had a quiet week on the news front and this is also reflected in the performance of the market this week. The highlight this week was the S&P approaching the 61.8% retracement level of the range. Although we didn't quite get there we got very close.

This week we saw the market continue with its sluggish behavior that was in evidence late in the previous week. Monday through to Wednesday saw the market trade the same price that was traded in the Wednesday to Friday period of the previous week. On Thursday we did see the market take a shot forwards out of the congestion with the close very near the high for the day but this was not followed through on Friday were we saw the market decline for the entire day and finish near its lows back into the area of congestion. The '90 day' time zone mentioned last week threw up nothing and as it stands at the moment we have to see if we get any follow through on the steep decline we saw on Friday.

Looking at this week chart I have highlighted the fact that we are well and truly into 7 waves of advance for this cycle. If we ignore pure Elliott for a moment, then we should see the market advance in 5,7 or 9 waves forwards. Under Elliott there are only 5 waves forwards but the rules are too complex to enter into here. Its far easier to just count the waves and accept the fact that in a majority of cases there will be 5, 7 or 9 waves. I'm not using this method to pick the top, but simply as a marker as to where we are in the overall picture of things. So far in this run we can see that the longest that the market has spent in reverse is 17 days and its the high that caused this decline that should provide the next area of support should the market peel off further.

Looking at the All ords... it was a very quiet week with the market really doing nothing at all. We saw a jump out of the blocks on Monday to new highs, but the rest of the week was spent trading in and around that range.

Charts

S&P 500 See Chart

All Ords

Bill Voeten

The forecast was done with Gann analysis software which is available at:
gannalyst.com