POLAR PACIFIC / Financial Markets Analysis by David Bensimon [2001]

This section presents Highlights of actual forecasts from the first year (MAR01-MAR02) of the Dynamic Balance Weekly Reports. Examples are provided for the three equity indices covered in every issue as well as for the additional markets covered on a rotating basis amongst commodities, exchange rates, and interest rates.
The purpose of these Highlights is to illustrate a high degree of accuracy on short- and medium-term projections of price, direction, and timing. They are not meant to be an exhaustive listing of every forecast, expectation, or contingent scenario presented in the Reports, and for the sake of brevity only 24 examples from throughout the year are presented. Of those forecasts not included here many were also successful in terms of achieving their price, direction, or timing objectives.
Indeed, the selections for the three equity indices are not the absolute 12 best of all the forecasts but serve to demonstrate consistency across the 12-month period. For the six other markets each pair of examples was selected to include one with a larger-scale orientation and one with a smaller-scale focus.
Of course, no one is perfect and the Weekly series included some forecasts that did not meet their anticipated targets. [One notable dud called for a crash into 21DEC01 that did not eventuate.]

E Q U I T I E S
SPX
#1 24MAR01	*Forecast*	"The recent trough at 1081 represents both an exact 75% retracement since the Low in OCT98 and an exact 50% retracement since the Low in JUL96. It is also 3/8 of the distance from the Primary 4 trough in OCT90 [to the MAR00 peak at 1552]. ... 1081 also happens to lie right where the lower band of the channel guiding the decline since MAR00 [on a monthly logscale basis] intersects with the rising support connecting the troughs from OCT97 and OCT98. ... The weekly bar chart (arithmetic scale) further illustrates the potential significance of the intraday trough at 1081, [with] strong support generated by the convergence of seven angles from previous Lows since late 1994."
	*Outcome*	The 1081 level stressed in that report just two days after the trough indeed marked a key reversal -- one which produced a +22% rally over the next two months to a peak at 1316, the largest gain since the exhaustion surge in OCT99-MAR00.

#14 23JUN01	*Forecast*	"... an immediate breach of 1220* will result in a capitulative downswing targeting 1176 with interim supports at 1203 and 1190."*
	*Outcome*	A drop through the triggerpoint cited at 1220 continued as expected to a trough at 1204 -- virtually at the 1203 first cited support. A bounce from there went straight back to a High at 1221 -- exactly tagging the 1220 inflection point from underneath. The final target cited at 1176 was achieved two weeks later.

#24 01SEP01	*Forecast*	"Look for a sharp increase in volatility during September." Report #25 on 08SEP01 added that "SPX is balanced precariously at a very critical juncture [at 1081]." After the WTC attack, Report #26 on 15SEP01 went on to "expect very high intraday volatility in both directions as the market struggles to accommodate a natural tendency for a 5-15% decline in value against concerted efforts by monetary officials and regulators to stabilise trading and soften the downside extent. ... Failure to quickly recapture 1081 would signal further weakness for the next few weeks to critical longterm support at 923".
	*Outcome*	The initial volatility was delivered immediately with a 50-point roundtrip intraday on 02SEP. The events of 11SEP of course plunged the market over the critical juncture cited just a couple days earlier, and the *13.5% sell-off reached a Low* on 21SEP at 945 -- just 2% from the cited target at 923.**

#37 03DEC01	*Forecast*	"[An] early dip should reach 1135, and an opening gap which rolls down would continue directly to 1125. Failure to move below these levels, though, would allow for a final small corrective upleg to 1150 prior to a sharp reversal taking control. ... An upside break of 1155 is not anticipated but would trigger a spike directly to 1175."
	*Outcome*	The initial dip reached a trough at 1126 -- exactly at the 1125 cited target. Tagging this support without breaking it produced the expected bounce to 1150. Continuation through the upside triggerpoint at 1155 then resulted in a peak at 1173 by the end of the day -- virtually at the 1175 objective for this contingency.

NDX
#3 07APR01	*Forecast*	"The next 7 sessions should produce a net advance [from 1448] ... to a target on 16APR* at 1840."*
	*Outcome*	The market rallied strongly and reached the 1840 cited target on 18APR -- a net gain of +27% for this forecast from 1448. It then stretched further to a peak on 20APR at 1981 -- a total +37% from 1448 (and +47% from the Low on 04APR at 1348).

#16 07JUL01	*Forecast*	"Look for a bounce back to resistance at 1700/1718/1751 followed by a capitulative downleg to complete the overall consolidation at 1618 on Wednesday (with extension target slightly lower at 1590)."
	*Outcome*	The market delivered the expected bounce, rising 50 points to a High at 1719 -- precisely at the 1718 central cited resistance -- and then promptly collapsed 118 points to a Low on Wednesday (right on schedule) at 1600 -- exactly midway between the main target cited at 1618 and the extension level at 1590. As expected, the market then reversed sharply, rising 183 points all the way to *1783 before pulling back to finish the week at 1751 -- precisely* tagging the third cited inflection point. The main swings totalling 351 points represented 21% of the index value at the start of the week.**

#27 24SEP01	*Forecast*	"Expect another 10% sell-off to complete a 5-wave sequence at precisely 1000. ... In the event of early strength past 1160, next resistance is at 1230/1310/1400."
	*Outcome*	An opening gap at 1166 -- just above the triggerpoint cited at 1160 -- invoked the case for further immediate gains and rolled up to a High at 1220, very nearly reaching the next resistance cited at 1230. From this higher level, the market then collapsed to 1101 -- perfectly fulfilling the -10% magnitude originally expected from 1120 to 1000 -- before recovering to finish the week at 1168, once again at the week's opening level.

#43 14JAN02	*Forecast*	"An immediate decline through 1618* is not favoured but would likely continue directly to 1540."*
	*Outcome*	An immediate drop through the cited 1618 level triggered the alternative case described for further weakness, and the next few days saw a choppy decline all the way to a Low at 1538 -- precisely achieving the cited downside objective at 1540.

DOW
#8 12MAY01	*Forecast*	"Holding above 10800* will enable a strong advance throughout the week to achieve a new High on Friday 18MAY at 11800."*
	*Outcome*	The market dipped to a Low at 10800 -- precisely tagging the cited support -- and rallied 550 points to a significant peak at 11350 on Tuesday 22MAY -- just 2 sessions after the cited turn date, though still somewhat shy of the 11800 price target.

#23 25AUG01	*Forecast*	"[An initial rally from 10423] targeting 10620 with additional resistance at 10720 should be followed by a sharp sell-off later in the week all the way down to 10000/9960. ... 9920/9860 should also be kept in mind."
	*Outcome*	The market skipped the small initial rally and proceeded directly into the sharp sell-off, collapsing to a trough at 9869 -- virtually fulfilling the final support cited at 9860.

#33 05NOV01	*Forecast*	"Early strength should reach 9380, with an upside break opening the way to a significant peak at 9725."
	*Outcome*	A rally directly past the initial target reached a High several days later at 9722 -- 400 points up for the week and precisely achieving the 9725 objective cited for a top. As expected, a sharp reversal quickly gave back half the gains.

#44 21JAN02	*Forecast*	"The Dow is very close to significant support at 9700 +/- 10 points. Well-proportioned price relationships, oversold technical conditions, and favourable interpretation of earnings reports over the next couple of weeks are expected to enable a strong rally from 9700 to 10360. ... A surprise downside breach of 9680 would be required to trigger continuation to lower supports."
	*Outcome*	The market dropped 150 points to a Low that day at 9697 -- precisely achieving the 9700 cited target -- with a brief extention the next morning (23JAN) to 9681 that held precisely inside the 9680 cited triggerpoint for further weakness. As expected, a powerful rally ensued, with the market eventually gaining 1000 points over the next two months to 19MAR (after one last dip to an intraday divergent low on 30JAN).

E X C H A N G E R A T E S
EURUSD
#11 02JUN01	*Forecast*	"EURUSD is consolidating at a large scale, reflecting a difficult evaluation of the longterm forces and relative strengths of alternative global currencies for the next decade. ... Expect buying interest at the lower end of this range (ie. .8200) rather than a downside collapse."
	*Outcome*	The market oscillated over the next few weeks between .8400 and .8700 before dropping to a trough at .8350 -- not far from the cited target at .8200. This concluded the corrective decline since the peak at .9600 in January, and the market then rallied almost 12% over the next few months.

#44 21JAN02	*Forecast*	"Spot is trapped in a contracting triangle bounded now by .8800 and .9000. ... A downside breach would open the way to a deeper pullback to .8500 without negating the larger bullish picture for later this year targeting 1.0000."
	*Outcome*	A small initial rally from .8825 to .8875 held inside the lower half of the .8800-.9000 cited range and then collapsed through .8800 to a Low at .8550 the following week -- very nearly reaching the full extent to the cited support at .8500. The market then recovered right back to .8800.

USDJPY
#5 21APR01	*Forecast*	"Look to sell on a quick bounce to 124* or on a downside breach of 120."*
	*Outcome*	*The market bounced directly up to 124.30 -- precisely* providing the short-entry recommended at 124 -- and promptly fell nearly four figures to 120.60.**

#20 04AUG01	*Forecast*	"... a downside breach of 123 [would] lead directly to 121* and then lower to strong support at 116."*
	*Outcome*	The market dropped through the triggerpoint at 123 and continued as expected directly to the 121 cited support. A bounce then tagged 123 from underneath before the decline resumed to 119. Another bounce again tagged the familiar 121 inflection point before the final sell-off worked its way down to a trough in mid-September at 115.90 -- precisely achieving the 116 cited objective.

C O M M O D I T I E S
GOLD
#3 07APR01	*Forecast*	"07APR01 -- now -- is the precise date providing symmetry to conclude the right side of a large inverted H&S since 1998. ... First upside target is at 289 (+34 from 255), followed by a halfway pullback to 272, and then a powerful surge to a double top at 340 (+68)."
	*Outcome*	The trough in the first week of April was the lowest point on Spot Gold since SEP99 and the market turned directly up in a choppy advance that has since covered 50 points to 304 -- a 25% increase in value thus far (to MAR02) and 5/8 of the distance to the final target cited at 340.

#42 07JAN02	*Forecast*	"Gold is building towards an upside explosion during January, with a break of 281* [basis GCG2] opening the way to next resistance levels at 290 and 305."*
	*Outcome*	The February futures contract immediately surged higher and reached a peak the following week at 290 -- precisely at the first cited resistance. From there it fell back all the way to a Low at 278 before powering up again to a peak 8 sessions later at 307 -- exactly fulfilling the second target cited at 305.

SILVER
#12 09JUN01	*Forecast*	"Look for nearterm strength to reach as far as key resistance at 4.50* [basis Spot] before turning back down to 4.30."*
	*Outcome*	The market rallied directly from 4.33 to 4.53 -- precisely achieving the 4.50 cited target -- and then promptly collapsed back to a Low at 4.29 -- right at the 4.30 cited downside objective.

#33 05NOV01	*Forecast*	"Silver is approaching fulfilment of an important unrequited downside objective for the DEC futures at 4.00. An early dip this week through support at 4.10 would quickly produce a first touch at 4.00 followed by a good bounce to 4.20 and then further consolidation over the next few weeks before finishing the month again at 4.00. ... The larger picture strongly favours an eventual massive rally to reach at least 5.50 within the next 8 months."
	*Outcome*	The SIZ1 contract dipped slightly under the 4.10 cited support and then shot up to a High at 4.21 -- exactly achieving the 4.20 cited upside target. As expected, it turned back sharply from this resistance and fell all the way to a Low at 4.01 -- precisely fulfilling the cited final objective at 4.00. Report #39 on *17DEC confirmed that "Silver has turned the corner" ... and by mid January the front contract had already advanced 20% to a High* at 4.78.**

I N T E R E S T R A T E S
DEPOSITS [3-mo ED futures]
#19 28JUL01	*Forecast*	"Look for a major peak on EDU1 at 96.60 in the next week or two, but an early dip through 96.36 carries the potential for premature launch of the new downtrend. ... While not considered probable at this time, an upside breach of 96.60 would involve rolling up to a new envelope and represent a significant change in outlook."
	*Outcome*	The market held at 96.40 -- avoiding any breach of the triggerpoint cited at 96.36 -- and continued climbing for several weeks to achieve the 96.60 cited objective in late August. It then promptly fell back to 96.47.

#28 01OCT01	*Forecast*	"The shock events of 11SEP produced a powerful upward thrust on Eurodollar futures as capital flooded into the safety of short-term deposits and cash yields were driven lower by additional massive injections of liquidity by the Fed. EDH2 gapped over key resistance, [opening the way for] ... another rally during October to a terminal peak at 97.72. In the event of pushing past 97.72 ... additional longterm rising resistance would be encountered at 97.86 / 98.00."
	*Outcome*	The market continued its big advance all the way to a peak at 98.15, fulfilling the 98.00 cited objective.

BONDS [30-yr US futures]
#25 08SEP01	*Forecast*	"Look for a final small upleg this week to reach resistance at 106-00 [basis USZ1]. From there expect a sharp retreat over the next month to go 4 full points before rebounding all the way to a double top. ... A surprise upside break of 106-08 would be required to redefine the outlook."
	*Outcome*	The pre-attack High at 106-01 precisely achieved the cited target at 106-00 and produced a quick drop to 104-21. Post-attack volatility saw a brief spike to 106-07 that did not violate the 106-08 cited inflection point and the market duly collapsed to 102-17 -- nearly completing the entire 4-point cited move. The ensuing sharp rebound then continued according to plan, with a High by the end of the week right back to the anticipated double top at 106-03.

#37 03DEC01	*Forecast*	"For the nearterm, holding above 104-00 [basis USH2] will enable an upward acceleration targeting 108-16. ... If 104-00 is unable to hold, look for a rising bottom at 103-00, but a downside breach of 102-23 would have to be respected as signalling a much larger decline [targeting] 98-00."
	*Outcome*	From a local High at 105-06 the market fell through the 104-00 cited triggerpoint. This invoked the downside scenario and the market collapsed directly down to a trough the following week at 98-01 -- precisely achieving the 98-00 cited objective. A big recovery over the next 2 months then reached a High right back at 104-00 [continuation basis].

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