Preços dos medicamentos vão "inevitavelmente" subir, avisam as farmacêuticas

[Ulisses Pereira]

"Trade What the Market Gives You"

By Jeff Cooper
Street Insight Contributor
10/13/2006 7:29 AM EDT

On Thursday, the S&P exploded up 12.9 points to close near the high of the session at 1362.85. The reason this may be important is because even if the market is going higher, 1363 represents a full cycle of 360 degrees up in price from this past June's low of 1219/1220 on the Gann Square of Nine Calculator.

I understand that this probably seems like voodoo technical analysis to many, but I assure you that I have been studying the Gann Square of Nine Calculator for 20 years and it is not happenstance. The market builds on incremental 90-degree moves in price. For example, the 1219/1220 low this summer was 270 degrees or three levels of 90 degrees down in price from the May 1327 high.

In fact, I have studied these relationships of highs and lows back to the beginning of the inception of the S&P 500 over 60 years ago. All major moves key off these 90-, 180-, 270- and 360-degree increments. This research is revealed and clearly explained in my course, Unlocking the Profits of the New Swing Chart Method.

But that is not what this is about. What it means is that even if the market is going higher, this level should be observed for signs of a meaningful reaction. The time count suggests that it may be more than just a reaction.

In addition to prior price counts that I have mentioned, there is a measured move on the S&P as well: From the important October 2005 low of 1168.40 to the January 2006 S&P high of 1295 was an advance of 126 points. A symmetrical 126-point move from this past July's low equates to 1350. It is important to note that the January 2006 weekly closing high was 1287.60 rather than 1295, which would account for the 10-point offset inasmuch as we are 10 points above 1350. In fact, the move from 1285 to 1295 in January 2006 was very short-lived.


As I mentioned above, all major highs and lows are interrelated in price and in time. For example, today's high is 180 degrees in price from the high of 1295 from Jan. 11, 2006. Moreover, the mid-July test low was six months or 180 degrees in time from the January high, while this mid-October period, that we are currently in, is not coincidentally 270 degrees or nine months in time from the January high and 90 degrees in time or three months from the recent July low.

Be that as it may, this is all a matter of observation, and as traders we cannot trade off of it until a reversal sell signal is given. That would occur on a complete retracement of Thursday's Expansion Range bar.

I mention this because I get emails asking why I continued to look for a top over the past month as the market has gone up. The answer is twofold. First, in my experience, cycles are a valuable tool in market interpretation. But it is also important to remember that a house cannot be built with a hammer alone. Second, the reason I use cycles -- in time and in price -- is to attempt to ascertain when to change my posture from one of buying pullbacks in strongly trending stocks to passing on the idea of buying the pullback and switching to shorting rallies.


Finally, it is important to understand that there is a difference between an intellectual stance or an opinion on the market, and simply spotting setups and pulling the trigger. (In fact, although I have been bearish and expecting the market to top out for the past month, that opinion has not prevented me from taking on long-side setups, which I've detailed in my Trading Reports newsletter.)

Conclusion: As I mentioned Wednesday, the Thursday the week before options expiration is often a misdirection day. So, it will be interesting to see how the week ends and how next week begins. If Thursday's gain is completely offset, then there could be an agenda to make all the calls being bought worthless, and balloon some of the cheap puts that may have been bought by arbs on Thursday."

(in www.realmoney.com)