March 2008 – T Theory® Update

During March I will continue to focus weekly on the daily chart as the new Bear Market is moving faster now and there are some important T Theory concepts I want to discuss as practical applications to real situations. Updates will usually be made before the market open the first day of the week as usual. Terry Laundry

T Theory Observations Update for March 31 2008. Last week we saw the S&P peak near the 55 Day MA as noted in the new PDF daily chart. Download the PDF file to see the updated daily chart.


If this initial decline continues, a new Short Range T center post low should develop around the old lows and we will have plenty of time to study this picture.

Until then, I will point out some of the alternatives that really depend on pending earnings news as we move into April and technical factors such as the normal peaking of rallies going into the end of a month.
An only significant alternative is Wall Street’s current technical infatuation with the implied bullish prospects of the bottom pattern noted in the chart and the recent rate cuts. This will be pitted against the fundamental negatives that could be forthcoming in the new April earnings reports.

If the market turns up from here it is possible to force a premature T formation that will push the market into an overbought condition quite quickly. However in such cases were real bullish potential has existed historically, the blue Volume Oscillator never dropped below the neutral zero line. Since the level was penetrated on Friday’s decline, don’t believe this is the most likely outcome, but possible.

T Theory Observations Update for March 23 2008.

Last week we saw the S&P break below the January lows as noted in the new PDF daily chart, then reverse to the upside, leaving a standard accumulation low as noted in the chart by ACC. This unique pattern is identifiable by the red rising bottoms in the oscillator at the same time the S&P was making the lower low. Download the PDF file to see the updated daily chart.


This is sufficiently positive to allow a new Short Range T to develop and push the S&P up to overhead resistance. However the current rally is unlikely to be the beginning of the new T. It is more likely that the 55 day MA (now at 1360) will mark upside resistance one more time causing another short downward correction. That new correction is likely to end at the center post low for the new T, after which, the S&P should break above the 55 day MA.

Within a long term decline a good rule of thumb is that rallies rarely ever last for more than 7 trading days, primarily because the buying is motivated by traders rather than investors. Also the overhead resistance tends to limit the advance as selling can be expected once it is reached or penetrated.

T Theory Observations Update for March 17 2008.

Last week we saw a very volatile market but the S&P was not able to break below the January lows as noted in the new PDF daily chart file below. However the market will open down this week so we will have a chance to see what the expected selloff will produce in the daily chart. Download the PDF file to see the updated daily chart.


This selling wave is the just a piece of the gloomy long term outlook forecast by my discovery of a 40 year cycle that calls for a compressed correction for the whole 1974 to 2007 bull market over the next few years. How to analyze the long term downtrend using T Theory will require another week or two of data to size up the eventual formation of a new T using the developing cash build up sketched in this week’s chart.

T Theory Observations Update for March 10 2008

As projected last week the S&P 500 has dropped to the lower green envelope.


Moving on, the updated PDF file above shows the S&P is also approaching the key “Last Low” noted in black on the chart. According to my 40 year cycle work the S&P will break below this potential support level as part of a very long term correction to the 1974 to 2007 bull market period.

During this 33 year up trend, many financial excesses have developed and this long cycle that I have tracked over the last 200 years will require an exceptionally steep correction over the next few years in order to round out the 5th 40 year cycle in the last 200 years of U.S. financial history.

This basically means there should be no trouble in making a 3rd sharp Down Wave that carries the S&P to lower lows. Once this occurs we can start looking to the center post low for the next Short Range T which will begin some sort of recovery, but only after the green Cash Build Up line has matured further.

T Theory Observations Update for March 3 2008.

For this week I am continuing the theme of my pure price “Envelope Theory” vs pure time “T Theory” concept introduced in last week’s update. Last week’s projection of a rally failure near the 55 day MA has come to pass and the S&P has begun a new decline.


In the updated PDF file above which you may download we see that small blue T sketched in the volume oscillator has expired its alloted price time from the mid January center post low because the S&P rally was limited to the same time period as the prior green cash build up time. Looking ahead I have sketched a new green Cash Build Up phase using the current declining tops pattern in the volume oscillator, which in time will define the left side of a new T. We will just wait on this pattern to evolve.

In the meantime the failure of the S&P rally at the 55 day MA implies a quick decline to the lower dashed green envelope of my adaptive channel in the upper portion of the chart. The data at the top of the chart lists the target value for the lower envelope as S&P 1297. Once we see this level being approached we will have to watch the rally attempts more closely.


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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.


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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