July 2004 – T Theory® Update

Update July 2 2004

Not much to report on the progress of the current Short Range T in the daily charts. Click on the Daily chart for larger image.

day040701

The S&P has been contained in the 55-Day adaptive channel that has narrowed so the market is stuck in a narrow trading range. The upper red envelope normally acts as resistance so the market may bounce about until the blue volume oscillator completes some sort of decline phase.

The next chart reviews the 39-week Adaptive Channels. Click on this Weekly chart for larger image.

day04070139wk040701

On this intermediate scale we see a trend that is up off the black 39 Week MA which continues to rise. The longer-term trend is deemed to be bullish as long as this MA holds reactions.

Keep all these points in mind as we move along. If the current rate rise scenarios or growth negatives take their toll on the market near term it is possible for the 39- week channels to begin a year 2000 type of adaptation that follows all the rules summarize below but looks odd from the Short Range T point of view. It is best not to become too confused.

Anytime the market becomes cautious within an ongoing uptrend (as is possible here) and the market volatility begins to dry up, the upper red envelope and the black 39-week MA begin to flatten out, as the uptrend begins to turn into a trading range. Just as important, the S&P point spacing between the upper envelope and the MA begins to shrink.

I found this process very confusing during the year 2000 topping process, and if we were to see it repeat, I am sure it would also look erratic. However the 39-week perspective held up fine so I prefer to talk in terms of its more understandable swings.

Just keep in mind that if one is a long-term investor and problems arise, but the 39-week MA holds reactions, then the result will become an erratic trading range with lows at the 39-week MA and important peaks at the upper bound as normal. The trading range very well may become a important top later on, but if may take a year to complete, so swings will have plenty of time to play out. The 39-week channel places no particular time limit on the swings.

Turning to a trader’s perspective under these same conditions, any break below the daily 55-day MA, that is not quickly reversed, implied a trip down to the 39-week MA. If no breakdown occurs a trip to the upper 39-week channel red limit will likely see a peak. If the breakdown occurs, a new Cash Build Up line will likely be needed in the daily blue volume oscillator chart before the upside reversal can get started. There would be plenty of time to find that pattern.

This summary covers all the cases that I faced in the erratic bubble- bursting period. I hope this perspective provides good guidance for the next year or so, if events should begin to deteriorate for any reason. Terry Laundry

Comments July 9 2004

The S&P has broken below its 55 Day MA and the correction scenario outlined in my July 2 Update may be in progress. However I don’t want to get specific right now because the S&P appears trapped in a very narrow sideways adaptive envelopes that has limited both upside and downside for some weeks.

It will be interesting and more useful to see whether the S&P can break down below the lower envelop and then turn the 55 day MA down into a decline mode. There is the possibility that the market is marking time while waiting for the earnings parade to start. In another week or two the direction should be clearer but my prior comments should still provide the T Theory projections.

An equally interesting and perhaps related move has been the rise in Gold above $400/oz. I would expect we are in an advance back to the recent $430 highs. More important however for my Gold Mega-T comments is the need to break above this level to confirm a more bullish long-term trend.

The most significant development that could occur would be a simultaneous confirmation of a new Gold Mega-T as the same time an equity breakdown is registered via the 39-Week Adaptive channels noted last week. We are a long way from confirming either of these conditions but the possibilities are extraordinarily interesting from a T Theory standpoint.

Terry Laundry

July 16 2004 Adaptive Channels

The market current sagging tendency does suggest that we ought to expect the current pullback will retest the 39-week MA (S&P 1088) as shown in the Adaptive Envelope Chart below. Click on image for a larger view.

wk39040715

Last time down, the S&P bounced right off the 39 week MA, which when in a rising trend is a normal ongoing bullish pattern. And if a new bounce follows a new successful retest, then the picture will still be favorable with an upside objective at the upper red dashed envelope in time.

However it is always possible that the sluggishness we are seeing is a sign of weakness and bouncing off the black 39-week MA is only providing temporary support much as you can see in the year 2000 during the early history of this chart. Another weak bounce might suggest the advance from the early 2003 low was not the beginning of a true long-term bull market and was only a rally.

A true bull market will normally hold the 39-week MA on corrections then develop strong upside momentum after the correction is over. Persistent basing without following upside momentum, on the other hand, is more likely to be a warning of a distribution top with downside potential come.

It will take some time to size up the probable outcome but this concept will provide a very simple way to judge the nature of the trend developing over the weeks leading into fall.

Terry Laundry

July 23 2004 Comments

The S&P 500 has fallen to the 39-week MA (S&P 1088) as noted in last week’s update and we can now watch to see if this key support level can hold. Personally I am skeptical but we need only wait to see how the trend develops. Note this support is roughly 10,000 on the Dow Industrials so chart watchers will probably try to hold the more significant 39-week MA for a bit anyway. Terry Laundry

Adaptive Channel Update July 30 2004

The S&P 500 is holding so far at the 39-week MA (still at S&P 1088) as noted in last week’s update and we can now watch to see if this key support level can hold. Click on the image for a larger view.

39week040729

39week040729
It is probably too early to say if the current low is adding to the base potential at the 39-week MA that could, over time, set the stage for a resumption of the uptrend or whether it might break down on some future, deeper correction.

However it is bullish as long as corrections hold at the MA; bearish if the trend gets much under the MA. Terry Laundry

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All Rights Reserved By The T Theory® Foundation ©

Order the T Theory® Encyclopedia

For a complete understanding of the T Theory® and how to successfully use Terry’s unique methods, order the Encyclopedia from Paula at the above link.  There is additional material in the encyclopedia not covered here.  Paula will be more than happy to answer your questions too.

Many thanks to Paula Burke for her permission to re-post Terry’s old T Theory® explanations.  The period re-blogged on these pages are some of Terry Laundry’s best work and was published here from public domain.

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I claim no credit for the material found under T Theory® on this blog.  All of this material is the creation of Terry Laundry and was downloaded from Terry’s free blog site (TypePad).  I have created a mirror of Terry’s original material and now there is a second site containing Terry’s T Theory®.  One or both of these websites hopefully will survive through time as Terry’s material is too important to be lost to the ravages of time.  This site is simply a memorial to his lifetime work.

The page content re-blogged here is exactly as Terry created on his original webpages (saved on my computer with ScrapBook)).  Nothing has been left out from the period Dec 2003 to June 2011.  From Terry’s site, I made a lot of formatting changes, creating a more easily readable webpage appearance.  The PDF chart duplicates of the JPEGs have been omitted for ease and speed of recreating Terry’s pages.  References to PDF charts should be ignored (but no chart was left out).

After June 2011, Terry created a paid subscription website. None of that material is found here.

There were many many, many hours spent on this project; downloading Terry’s individual charts & audio files, followed by the uploading of Terry’s charts and audio to my WordPress blog library, after which I had to insert the uploaded material into my new T Theory® webpages (hopefully in the correct places).  This was a dull and arduous project and I hope you enjoy it.  I don’t believe there remains any more of Terry’s material in free domain, so my T Theory® project is probably finished.  If I’ve missed something, you can leave me a comment.

If you find an uploaded reference error (chart or audio in the wrong place), please note the month and year of the webpage, plus the exact name of the referenced error file.  Include any other info that will help me locate the problem file and where it occurs on the webpage.  Leave a comment for me with the info and I’ll fix it.

Terry’s material is very long and will take many weeks for you to finish.  Don’t hurry, it’s not a marathon and you will absorb more if you go through it at a reasonable rate.  This is especially true for those who don’t invest in the T Theory® reference encyclopedia.  The encyclopedia is a written reference for T Theory® and includes everything of importance for Terry’s T Theory®.  Without the reference encyclopedia you must depend on your memory and Terry’s method carries some rules that you could easily violate.  The encyclopedia also includes new information never seen on his website.

You are welcome to save any or all of my blog material to your computer.  You also have my permission to re-blog my information, but you must (1) credit me and my blog in an obvious manner and (2) don’t change my material.

FYI – I find the best way to save a webpage is using “ScrapBook” (it’s an add-on for the FireFox browser).  ScrapBook saves a webpage to your computer EXACTLY as it appears on the day you saved it.  You can’t tell the difference between the internet webpage and your ScrapBook saved webpage.  The saved pages are not pictures.  Instead the pages consist of HTML and page functionality remains identical on your computer.   There is also a second method for using ScrapBook, where you can save all of the webpages down to a defined link depth.  This optional method means all links will function on your computer to the link depth specified (meaning you can click on links on your saved webpages and tunnel down into pages within pages).  Saving the normal way will only save the top webpage but the links that exist could continue to  function by taking you to the website on the internet instead of on your computer.  But sometimes the linked website doesn’t exist anymore.  I’ve had this happen on some very good webpages with unique information (they just disappear into the internet void).  That’s a bummer when you lost some really good info and thus rose my need for ScrapBook.  You can also filter the pages saved using the optional ScrapBook method, which can exclude all pages not coming directly from the specified website (filtering is recommended using this method otherwise you wind up with a LOT of useless stuff).

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