Gann Angles - Short Term

Current Analysis

November 29, 1999 - Bullish

New Angles - We have added a couple of new angles that help define the ranges near term.  The first is an 8:1 angle off the July 1999 high.  This sets up the first support level at 1390.  The other is a 1:1 down angle from the next overhead square defining the next resistance point at 1485.

The S&P remains extremely bullish. The move up through three resistance levels to a higher support angle reverses the short term down trend from July 1999..Two squarings and a cycle line fall tomorrow Tuesday November 30 indicating a reversal point short term.

November 15, 1999 - Bullish

End of a phase - As mentioned last time the current squaring is running out.  A new box needs to be established from the October lows.  We would like to see new highs before making this transition.   But the breaking of all of the primary down angles gives a bullish bias to the S&P and suggests new highs. There is a minor squaring on November 22nd.  From this point on the over head resistance point is the old highs at 1420 and support levels 1374 and 1363.

November 1, 1999 - Neutral

45 Degree Down Angle - The S&P has bounced strongly off the 45 degree down angle and taken out tree high down angles.   This has to be considered a reversal of trend.  However, until the S&P picks an up trend line we would consider the market still in neutral territory,

We are fast running out of angles and should the bottom in October hold up for a while longer we would consider it an important angle and start to redraw the current geometry.

Squares - There are two squarings near term that are important. A minor on Tuesday that should result in a completion rally off the recent strength.  The second and more important square is November 10th.   This should be a bottom.

Resistance - 1380.  Support - 1325, 1311 and our old friend 1296.

October 26, 1999 - Neutral

45 Degree Down Angle - The S&P bounced off the 45 degree down angle and is now forming an up trend in a channel.   The blue project line indicated the path we expect the market to take over the next six weeks and into the new year. The turn points are more accurate than the price levels, but the over all gives the idea of a sideways market.

October 19, 1999 - Lower

45 Degree Down Angle - The S&P 500 bounced off the 2:1 down angle and continues lower on the 45 degree angle.  This keeps the trend bearish and negates the reversal that was set up from the bounce.   The recent strength comes exactly on a squaring off the 45 degree down angle (red line).  The recent strength also lands on another squaring (blue line) suggesting only a short bounce up before lower prices..

Current over head resistance 1304 - downside support 1172.   The next squaring is October 22.

This leaves a lot of open air under the S&P 500 in a very short space of time..

October 12, 1999 - Neutral

45 Degree Down Angle - The S&P bounced off the 45 degree line (Red Line) almost on a squaring and took out one down angle and bounced off the next.  This is a bullish indication.  The breaking of the up trend line from here would be considered a bullish break out and reversal of trend.  A squaring on October 19th is the next critical point.  From there the S&P should start to follow the next up trend line (Blue Line) higher.   Support exists at 1297 and 1260.

How the S&P reacts around the current angles will determine the next trend direction.

October 5, 1999 - Neutral

45 Degree Down Angle - The recent rally has moved above the 45 degree down trend angle and is currently testing the next higher angle.  The S&P has held below this angle for over a month since September.   Breaking of the upper angle with a re-test of the 1290 area would push the short term Gann analysis from Neutral to Bullish.  At present it remains neutral and we would look for resistance at 1231.  The 1230 area holding and the S&P moving back towards the 45 degree down angle (Red Line) would keep the S&P in the current down trend.

September 23, 1999 - Bearish

45 Degree Down Angle - The S&P has closed below the 45 degree line (Red Line) shifting the bias from neutral to bearish and suggesting an acceleration in the down trend.  The next support angle is at 1242.

September 21, 1999 - Neutral

45 Degree Down Angle - The S&P is once again approaching the 45 Degree Down Angle (Red Line)  Unlike the last test this one occurs at a squaring of the up and down trend lines and at a cycle point.  Given that cycle lines are the least reliable, we would not expect a intermediate or even short term reversal   We would, however, expect a bounce.  

Dow Industrials - While not shown here, the Gann Angles on the Dow Industrials are worth noting.  Where the Dow led the S&P when making new highs, it has also broken below support.  This would suggest that we are now seeing again a de-coupling of the Dow Industrials from the S&P.   If this is the case the S&P should hold support while the Dow Industrials continues lower to the 10,200 area.

On the negative side should the S&P break the 45 Degree Down Angle the down trend can be expected to pick up speed.

The Gann pattern remains neutral to bearish, but bears close watching..

September 16, 1999 - Neutral

45 Degree Down Angle - The S&P bounced off the 45 Degree Down Angle (Red Line) The down trend is carrying between the 45 degree line and the one higher angle.  As long as the S&P remains in this channel the index should continue to work lower.  Should the 45 degree line be decisively broken then expect the down trend to accelerate.  Look for the upper angle (3:1 Line) to be touched before lower prices.   Failure to touch the upper angle (3:1 Line) before heading lower is also a bearish indication.

Alternatively should the upper angle be broken then we would look for the down trend to be complete and at minimum for a sideways trend to develop. 

The current Gann pattern is neutral to bearish.

September 6, 1999 - Neutral

Trend Lines - The S&P touched briefly below the 45 degree primary down angle and bounced above.  It is currently resting on the next higher angle.  Moving above any of these angles would terminate the trend following the 45 degree angle down and suggest new highs.  At the moment based on Gann analysis the trend is in an indeterminate state. 

August 29, 1999 - Neutral

Trend Lines - The July peak establishes the current box and thus the 45 degree (1:1 angle - Heavy Red Line) down angle.   Bouncing off the first quad line the S&P 500 has now moved above the 45 degree down angle shifting the short term bias from bearish to neutral.  The August rally reached almost exactly the 2:1 down angle.

The next target would be a bounce off the upper part of the 45 degree down angle.  A bounce off the 45 Degree Down Angle followed by a move above the next higher down angle (dashed red line) would indicate higher prices and a new high for the S&P 500. 

On the bearish side holding below the upper down trend line creates a downward channel for the S&P 500 to follow down. Breaking the lower green up trend line would confirm this bearish scenario.

Timing - The crossing of trend lines creates critical timing points  The point where the up angle crosses (dashed green line) crosses the upper down trend line was hit on August 24th creating a short term reversal. There are many timing points created in this fashion, but many are unimportant. The next timing point is September 8th where the 45 Degree Down Angle crosses the second secondary up trend line.