Turning Point Forecast

For the

 DJIA

S&P 500

NASDAQ

NDX

RUSSELL

Indexes

Third Quarter, 2001

 

 

Forecast prepared by

 

Jim White

 

 

 

Pivot Research & Trading Co.

3203 Provence Place

Thousand Oaks, Ca. 91362

805-493-4349

PivotTrader.com

 

 

 

Turning Point Forecast for the Third Quarter, 2001

 

Introduction

 

This forecast was made using  our Near Impulse Theory and methodology documented in Research Report No. 101 entitled Using Gann Based Expanding Cycles to Forecast Turning Points in the DJIA. Additional correlations were made with forecasting techniques based on the methodologies of Donald Bradley and Welles Wilder’s Delta Theory.

 

The content of this report does not constitute investment advice and is to be used with discretionary judgement by the trader. Guidelines for use of this information are given below.

 

Guidelines

 

The dates listed as potential turning point dates in this report are expected to forecast a short-term change in the structure of the market. Three different outcomes may occur on these dates.

(1)       The market may reverse direction. Thus if the market is in a noticeable up move, a high pivot and reversal to down movement can be anticipated. Traders making investment decisions based on this information are urged to apply some mechanism to confirm the reversal before entering or exiting a trade. A confirmation that has proved effective is a close beyond the opposite extreme of the pivot bar. Therefore, if we are in the time vicinity of a forecast point and the market is going up, look for a close below the low of the high pivot bar as a confirmation of the pivot.

 

(2)            The market may move sideways or congest. Congestion regions in a market may be caused by a self-canceling interaction of upward and downward influences. Generally these moves are characterized by a series if time bars with a range near that of the last bar of the previous move. This may be a series of inside or outside bars but with narrow range of closes. These moves are difficult to trade and should be avoided. They can de expected only about 5 to 10 % of the time.

 

(3)            The market may accelerate in the direction it is already moving. These acceleration type moves are rare and are characteristic of marking the end of a larger trend move. They also may exhibit a false breakout as if a reversal before continuing in the dominate direction. These false breakouts generally occur on low volume days and are an opportunity for market specialist to pick up inventory prior to the continuation of the move. Whipsaws are common and the trader should have a close stop policy to deal with these occurrences.

 

 

 

 

Forecast Dates

 

The forecast dates for the Third quarter are listed in Table I below.  Dates marked in the table are potential reversals of the dominant trend of the period.

 

DJIA	S&P 500	NASDAQ	NDX	RUSSELL
	7/3 Likely high	7/3	7/3	7/3
7/10	7/11	7/12	7/11	7/12
7/17				7/17
	7/20	7/20	7/20
7/27	7/25	7/25	7/25	7/24
7/31	7/31 Likely low	7/31		7/31
8/8 Likely high			8/6	8/9
8/15 Likely low		8/13	8/15
	8/20		8/20	8/20
8/27 Likely high		8/27	5/30	5/29
	9/4			9/5
	9/10 Likely high
9/18	9/17 9/26 Likely low	9/18 9/26	9/28	9/17