Chart constructed using Advanced GET End-of-Day

Well on Friday, the S&P slipped and closed below 814 where we had hoped it would hold: scary, yes - but a definitive collapse in the offing Monday? Anything is possible of course, but we continue to think not. Basis the December S&P futures we basically stopped Friday just at the 91% retracement level of the July-August advance. If July-August was only an A wave within a larger A-B-C corrective chop, then today's close is just about as far as a B wave can fall to still be a B-wave. But a B-wave it still can be, with a surprise C-wave still lurking into our November 7th cycle window.

This is a tight call, and obviously not worth betting the ranch on. Our game plan is to throw in the towel on this view on one more hard day down beyond current price levels. Thereafter 7130-40 on the Dow would be a next stopping point we'd be looking for, and we'd likely have to shift our view toward a November 7th low instead of a November 7th reaction high. But for now we must stick to our A-B-C game plan as previously laid out.

What is particularly difficult about the current situation is envisioning the fundamental event or future headline that could occur to suddenly shift sentiment to the topside. About the only fundamental event that we could see arriving at this point to temporarily save the day would be a surpise European rate cut. And with interest rates in Europe still at the levels of 1999 boom times, why is the ECB dallying so? Do they really want to turn the financial system of Europe into the next Japan? Shouldn't the ECB at least be trying something -- even if the real problems in Europe are structurally high labor costs and excessive business taxation.

We discuss the macro picture in Europe a bit more within our latest subscriber-only Sandspring.com monthly article being released today, and we also compare Europe to the improving economic picture in Asia. Within this article we also spend a great deal of time moving beyond our immediate November 7th cycle date and looking for "pi rhythm" dates of potential importance in 2003 and 2004. For those curious about pi in general, we also offer much historical context that in our mind holds much fascination.

Given wide this range of topics, this article carries a somewhat long-winded title, 72, 22, 7 -- The Ancient Language of Mathematics, Upcoming Pi-related Cycle Rhythms & The Macro Picture in Europe and Asia in Relation to the U.S. Subscribers are invited to access it by clicking on this hyperlink and entering their user-id/password combination. Non-subscribers are invited to sign up below for a quarterly subscription to Sandspring.com below and gain immediate access to this work.