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SUGAR:

The sugar market last year was predicted extremely well by these Fibonacci cycles. It has several unusual features worth noting, however. The 233 long term cycle actually bottomed the market out after the first leg up (I) had been accomplished. So I had to watch leg (I) move up and come back again before I felt I could safely buy the market. The price exploded out of my 233-week cycle lows very nicely reaping some huge profits on its way up to leg II (which surpassed my 1.618 ratio objectives by 150 points). The next major buy point should be the 55-week cycle lows to be made the first week of February. If the pattern and ratios look proper at that point, we should then be ready for the beginning of wave III with maximum objectives up near the $ .20 level. Always, of course, be alert when a major cycle low is violated to the downside -- unless your ratio or pattern provides the explanation for such an occurrence, you are better off on the sidelines.

SWISS FRANC:

A question that frequently arises is, how safe is it to make a trade when you have only one, or two out of my three categories satisfied? The answer is, you have decreased your degree of certainty by precisely the category that has not been satisfied.

An extremely good example is the Swiss Franc. At this time, we have the apparency of a perfect long term and a near term pattern completion, as well as a good ratio completion. The 1981 lows were major wave I, the 1982 lows were major wave II, and we have just taken out the major wave II lows when the March Swiss Franc went to 44.70.

В Thus we finally have ourselves a major III. Moreover, we have three minor waves downwards (waves 1 through 5 being the correct subdivisions of Major III), so there is a strong probability that Major III has run its course. In addition, we have satisfied one of the minor ratio objectives (1.618 of leg 1 giving us the aformentioned 44.70 objectives). So at least two of the necessary categories seem to have been satisfied. But there is no clearly discernible time cycle that is bottoming out.

Thus we are missing one of the major prerequisites for a high profit - low risk trade. With such a

fine-looking pattern and ratio presented to me, I would be buying the market for a move up, but I would be using very close stops under recent lows, in case wave III should give us anВ  extension' into lower territory.