04/28/01 – Intermediate (2-4 wk) Outlook:
Stock Indices added yet another level of
reinforcement to the idea that an important low was seen in March (fulfilling longer-term geometric/Gann-related cycles explained on 3/24/01) and that a sharp rally, decline and second rally would be seen leading into early-May. The only thing that has been altered in this scenario is that it appears less likely a final high will be seen in early-May.
   Instead, an intermediate peak could stretch into mid-or even late-May/early-June. This does not eliminate the chance for an intervening peak in the coming days. The following 4/14 analysis remains intact and could lead to a peak and brief pullback:
   “By closing above the 4/02 highs, these indices
signaled a continuation of near-term strength into at least April 16th and possibly into the 30th.”
   More importantly, as stated last week:
   “The bottom line is that this intermediate rebound remains intact. The critical determination - of whether or not it can upgrade to a larger-degree rally - will likely be made during the month of May.’
   The weekly and intra-year trends should continue to be monitored for clues…
   The weekly trend is down with an initial neutral
signal against it in the DJIA and down with two neutral signals against it in the SPM & NDM. This still means the earliest that any weekly trend can turn up is May 4th.
The intra-year trend is neutral in the DJIA and down in the S+P 500 & Nasdaq 100 with initial resistance
(needing a weekly close above it to turn each intra-year trend neutral) at 1307.0/SPM (1289.0/SP) &

2200/NDM (2103/ND). [SP & ND are the continuous contract.]
   The intra-week action of the coming week will have a strong influence on the ensuing weeks. If stock indices pull back and create an intra-week V - and then rally into the end of the week - it should lead to an additional 2-4 week advance. An intra-week V would also set up for a potential intra-month X-X higher - or at least an intra-month inverted V - both of which would be bullish into at least May 15th. The strongest confirmation will come if/when the SPM & NDM reverse their weekly trends up with weekly closes above 1270.0 & 1995.5.
    The opposite is also true. If the indices spike above
this past week’s highs (10,810.0/DJIA, 1259.5/SPM & 1946.5/NDM) and reverse lower late in the week, it will be bearish for the ensuing weeks.
               Short-Term (1-5 day) Outlook:
   All three indices created a potential intra-week V
pattern on 4/25 and completed the day with a 2 Close
Reversal higher. The Nasdaq 100 was the only one that could not complete the pattern by taking out its 4/23 high at the end of the week. This pattern (in the other two indices) - combined with intra-quarter strength - should have a bullish influence on the coming week. Ideally, the indices will pull back into May 1/2 and then reverse higher. A new signal is likely by mid-week.
   Trading Strategies: Short & intermediate term
traders should have been long mini-Nasdaq 100 futures at 1591/NQM and exited at 1888 with gains of nearly $6,000/contract. A new buy signal is possible by mid-week and will be conveyed - if aligned - in an Alert.