Wait and see January, 2010 – Mixed Signs in the stock markets


Sometimes it's better to keep far away from the market. Just watching and analyzing the game frequently helps us to make the correct decisions later on.


As a matter of fact, all the traffic lights are green. In the issue of 12/20/2009, the GUNNER24 forecast rising prices through the middle of January, 2010. On daily basis, at 1839 (NQ #) once again we went long, and that's where we can enjoy a little profit.


Let's analyze at first the NDX, which from my point of view is the leader in setting the tone.


The NDX is going ahead of the other markets since it was the first index which had its low in November, 2008 already and accordingly it should be the early indicator regarding the further performance. It's the first index to give possible signs of change and with a precise analysis, it  gives us continuing points on the question when and which price and time targets should happen.


Here is the monthly trade chart with the 3 Candle GUNNER24 Up Setup. All the buys and the actual SL are market in the chart.



We can be content with the termination of the year. As announced, we closed in the 3rd double arc and thus, the next buy target (4th double arc) is activated. The market keeps on following the setup-anchored Primary Gann Angle, and per se that is the first yellow traffic light sign. We recognize that the Gann Angle is too steep to correspond with a normal trend in price and time. In reverse, that means whenever the Gann Angle is broken we will have to reckon with a rapid crash and a "big" change in trend. 


The second yellow: I don't like the December candle performance at the main target.



The market closed exactly on or tightly below the upper line of the double arc. In addition, December was the 13th month with rising prices since the November, 2008 low. And for itself, that is seen to be a pretty dangerous sign of a top.


The fact, that the December candle closed exactly on the line makes me think something was maxed out extremely, here. I would have become less nervous if we had closed above or a little beneath it. But my experience tells me we will have to anticipate movements, I mean fast, tough movements whenever the price is at the main target and precisely one of the double arc lines has a finger in the pie.


If we continue considering the following constellation regarding the actual GUNNER24 Up Setup from 2002, the situation is not presenting itself in a very funny way.




Zooming into the actual candle we recognize that we closed exactly on the important time line within the main targets. The next yellows traffic light sign.



Closing within the double arc is to be considered positively because here, too, that means we will break that double arc. The question is when.


Conclusion: We will have to wait and see the performance of the market in January. If we see a new high through the middle of January the rally should continue until March, with more energy than during the last 3 months. Well, on daily basis, we had extremely few volatility. The sphere of influence of the price in the surroundings of the main target inevitably causes much more volatility than so far. Further longs on daily basis should not be contracted before a new daily high.


If there is no new high so far, I reckon with a January consolidation until a maximum of 1820 on basis of the NQ # contracts.




A final January price below 1820 means a test of the Primary Gann Angle (monthly chart) in February endangering the rally extremely.


Next week, in the 4 hour time frame the market should follow the 3rd double arc downwards at first being stopped at the next Gann Angle. The temporal influence of that double arc will end on 01/07.



We are not going to trade up the break of this double arc, but because of the monthly signs, we are rather skeptic on the further long engagements. We will simply have to wait for the beginning of January. 


Finally, we will have a look at the actual Gann Angle Corridor of the S&P 500.


In case of S&P 500 (the Dow Jones as well) the traffic lights are completely green yet.



The price is following both setup-anchored Gann Angles like clockwork to the target (1220) which is marked in the chart. The trend is succeeding out of the ordinary steeply upwards as well as the NASDAQ 100. But since the trend is our friend, here we are still completely tuned in to long term rising prices. But here, too, we would rather advise against engagements on daily basis because the test of the lower limit of the corridor (cir. 1097) obviously is to be expected in January. In order to shake out the market participants, even 1090 might be on the agenda again. A final January price below 1090 would endanger the rally very much!


Be prepared!


Eduard Altmann