Chart produced using Advanced GET End-of-Day

OK, just so we have this straight: The seventh largest company in the U.S. just declared bankruptcy, and Argentina is about to default. But Wall Street investors seemingly don't care, having taken equity indices mightily higher Tuesday-Wednesday, only to offer a short pause in that advance Thursday.

Much to our chagrin -- we also now have an overlap of 10,120 on the Dow Jones (marked by the red line above) that we had not expected. If the post September 21st rally was to be labeled as part of a 4th wave move of some sort within an impulsive-looking I-II-1-2 decline that began in late May, 2001, it should not have come back though this level. The price action didn't intersect by much, but the point is, it shouldn't have done so at all.

We thus must throw out that Elliott wave interpretation, and search for another one. As a separate issue, we are also now quickly running out of calendar space to go back down in time for a significant February low.

Does that mean our cycles are inverting, and the September low (originally anticipated to be an October low) will lead to a February high, before a final 8.3-month slosh DOWN into our important November 7, 2002 cycle date? We do not quite have enough evidence yet to make that huge change in interpretation, but we do admit that we are increasingly concerned that we may soon be forced to do so.

The Dow needs to reject the the region above 10,000 rather quickly, and certainly not start trading above 10,205, in order to keep a short term bear case intact.

The market may be exuding quite a bit of hubris, but whether this hubris is misplaced or not, we will not let it catch us in its mesh and drag us under. Instead we will watch the immediate price action in the next few days, and with just a bit more Dow strength, we will head for the "bear locker room" once again.

---

Non-subscribers are invited to sign up for a quarterly subscription below. Sand Spring's latest thoughts will all be accessible via an immediate e-mail. A user-id and password for web access to all past and future articles will then follow by a separate e-mail.

Disclosure Statement

Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.

• The Cycle of War & The Agony of Debt, October, 2001...
  In this article, across 12 chart-filled pages, we explore how relative geo-political calm can suddenly digress to a temper-filled period of war, as well as current fundamental pressures on the U.S. economy from excessive corporate and household debt burdens..
  Available for Purchase at $35. THIS INCLUDES ALL ARTICLES BELOW FOR FREE.

  • Perspectives on Where We Are, and Why ISDA Documentation Will Not Prevent Derivatives Accidents, September 2001...A An update on prior views and prognostications, as well as a discussion of a new market sector now potentially coming to life on the long side. We also examine how easy it might be for a major bank such as JP Morgan to someday suffer a serious derivatives accident
    Available for FREE with purchase above.

  • Long_Term Equity, Gold, and K-Wave Cycle Thoughts, August 2001...A long-term look at our own cycle theories and how they may potentially interact with the famous Kondratieff cycle
    Available for FREE with purchase above.

  • The Importance of June 2nd, May, 2001...
    A cyclical look at the 8.6 month cycle at work in the current equity market, and one financial stock with a nasty looking "pattern match" to a historical chart pattern
    Available for FREE with purchase above.

  • Expert Short Picks, May, 2001...
    A discussion of the fundamental thoughts of short selling hedge fund manager James Chanos within a technical framework
    Available for FREE with purchase above.

  • Four Themes for 2001 & Beyond, April, 2001...
    A variety of issues we see growing in importance over the year 2001, with a particular emphasis on certain issues within the U.S. food chain.
    Available for FREE with purchase above.

  • Measuring Financial Time: The Magic of Pi, February 28, 2001...
    Two centuries of financial history within a cyclical and mathematical framework, including an analog roadmap for the NASDAQ to potentially follow in 2001.
    Available for FREE with purchase above.

  • Portfolio from Hell, January 20, 2001...
    a close critique of a major mutual fund manager and a technical look at the individual equity components of their go-go portfolio.
    Available for FREE with purchase above.

  • Positive for Now, January 4, 2001...
    If the DJIA were to vault to new highs, where would the imbedded Fibonacci rhythm of its price action lead?
    Available for FREE with purchase above.

  • Time to Start Accumulating the Golds? - Dec. 2000...
    We take a close look at four gold-related stocks that we favor.
    Available for FREE with purchase above.

  • Don't Look for a Bottom Until..., Nov. 2000...
    An update of some Fibonacci thoughts on eight selected stocks.
    Available for FREE with purchase above.

  • Diamonds in the Sky, Oct. 2000...
    A close technical look at the Dow Jones Industrial Average and the implications of the formation it has made.
    Available for FREE with purchase above.

  • The Signficance of Oct 27- Nov 1, Oct. 2000...
    This analysis did not pan out quite as we expected, but is a good example of how we examine the world in Fibonacci terms.
    Available for FREE with purchase above.

  • M&A Currency Imbalances, Oct. 2000...
    An interview with a well known fund manager and economic thinker, we explore some of the macro-imabalnces as they exist in the world today.
    Available for FREE with purchase above.

  • Failed Accounting Standards, Mmm Mmm Good, and Where (if at all) to Invest in Bandwidth, July 2000...
    A three-part article outlining some of the balance sheet fun and games of today's financial world, one old-world stock, as well as our vision of the potential fallout and opportunities in the bandwidth market
    Available for FREE with purchase above.

  • Cyclical Commodity Turns, May 2000...
    As we entered the summer-time harvest season, this was a cyclical look at the world of wheat, corn, gold, and the CRB. Much of the analysis proved premature, but it still leaves us with some long-term cyclical dates to now keep in mind.
    Available for FREE with purchase above.

  • E-Commerce: A Paired Approach, April 2000...
    This is a more fundamentally oriented article examing the likely winners and losers as e-commerce increasingly invades the transactional side of Wall Street.
    Available for FREE with purchase above.

  • Nasdaq Crash and Stopping Point?...February, 2000...
    This article examines the Elliott wave pattern of the Nasdaq's Price-Earnings Ratio since 1995, as well as various analog pattern matches involving the Nasdaq. It also looks at mutual fund cash levels, mutual fund positioning, and changes in the monetary base. It sketches out a possible path for the Nasdaq that may prove a valuable "roadmap" for trading over the balance of the year.
    Available for FREE with the purchase of article above.

  Subscribe to Sandspring.com on a quarterly basis and receive all of the the above articles, and all that follow them (a minimum of 3 more per quarter), plus all Chart du Jours (some of which would otherwise be pay-per-view) for just $65. THIS INCLUDES OUR LATEST ARTICLE PUBLISHED November 25th. entitled "Kasriel to Greenspan: Farewell Soon?" In this article, we explore the true monetarist causes behind the 2000-2001 Tech Wreck, and where the U.S. economy and markets may be headed from here. One specific tech-stock yet to fall from grace, and one emerging Canadian gold company that we particularly favor are both featured.