Turning Point Forecast
For the
Pivot Research & Trading Co.
3203 Provence Place
Thousand Oaks, Ca. 91362
805-493-4349
This forecast was made using our Near Impulse Theoryä and
methodology documented in Research Report No. 101 entitled Using Gann Based Expanding Cycles to Forecast Turning Points in the
DJIA.
During 2000 and 2001, I posted quarterly forecasts of
turning points for the major stock indexes, demonstrating over 80% accuracy in
the results. With this report, I will be presenting a quarterly forecast of an
individual stock or commodity to demonstrate the applicability of the
methodology to any freely traded market.
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.
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 For Adobe Systems (ADBE)
The forecast dates for the
Third Quarter, 2002 are listed in Table I below. Dates marked in the table are potential reversals of the dominant
trend of the period.
|
Forecast
Date |
High/Low Expectation |
Actual pivot |
Result |
Successful |
|
7/1 |
High |
6/28 high |
2 day down |
YES |
|
7/5 |
|
7/2 low |
3 day up |
YES |
|
7/9 |
|
7/8 high |
3 day down |
YES |
|
7/12 |
|
7/11 low |
3 day up |
YES |
|
7/24 |
|
7/24 high |
Failure Not tradeable |
NO |
|
7/31 |
|
7/29 high |
Large gap down on 7/31 unexpected |
YES |
|
8/5 |
|
8/5 low |
Up 6 days |
YES |
|
8/9 |
|
No pivot |
|
NO |
|
8/19 |
|
8/20 high |
Failure One day high |
NO |
|
8/30 |
|
No Pivot |
|
NO |
|
9/11 |
|
9/11 high |
Failure One day high |
NO |
|
9/23 |
|
9/24 low |
3 days up |
YES |