Daily Market Commentary

Comments: June 30, 2010

Current position Long: 54% Rydex NDX 2x Fund for Thursday. The China slowdown fears seem to be overblown as second half growth should still be possible and close to double digits.  US futures markets were lower in early trading but the Shanghai index was stable. For technical traders the S&P resistance level of 1040 was broken usually indicating more downside to come, but sometimes the market will first make a move back to that level.  From a fundamental point of view, looking at the past PE ratio history and adjusting for the level of the 10 year note, I find the S&P overvalued by about 9%.  A more stable balance would be achieved with the 10 year rate back above 3.2%. If the rate on the 10 year note continues to fall the S&P would most likely follow lower.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 29, 2010

Current position Long: 54% Rydex NDX 2x Fund for Wednesday. China's slowed growth announcement sent the China index down 4.27% overnight which carried over to Europe then to the US.  Although our program can't forecast this type of event, since we trade from both sides of the market, the long term effect on us has been small as we generally capture some of these moves and miss others.  However since November with Dubai and earlier this year with Greece we have caught the bad side on a  number of these random foreign impacts and they have fallen on days when we were more exposed.  Other than for these outside events which happen in a random manner, the program is working fine as most days have some degree of predictability which allow us to stay ahead of the markets.  For Wednesday we reduced our exposure because of market volatility, signal strength remains strong and positive.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 28, 2010

Current position Long: 70% Rydex NDX 2x Fund for Tuesday. With the markets closing slightly lower again on Monday it appears that we either have a stealth decline or the drying up of selling pressure.  I believe the market is ready for a small rally as our signal remains positive and has increased in strength.  I don't see much upside or duration on any rally as I remain bearish for the longer term. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 25, 2010

Current position Long: 70% Rydex NDX 2x Fund for Monday. The lack of teeth in the finance reform bill should boost the banks and the market for a few days.  We are long, and the very near time looks positive, but I expect prior to mid July we will see the continuation of the bear market. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 24, 2010

Current position Short: 17.5% Rydex Inverse NDX 2x Fund, 17.5% Rydex Inverse S&P 2x Fund for Friday. We could be late to the party with the market now down 4 days in a row. Friday could represent an evening-up day for traders who want to take a more neutral position and close out their shorts.  However, this recent slide did not (yet) produce the -2% and -3% down days we have seen this year and our indicators have turned more negative. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 23, 2010

Current position 100% money market for Thursday. A good deal of uncertainty surrounds the market at this time.  The market was able to withstand the terrible housing data, a very good sign, and the market has a positive history the day after the Fed meets, but our signal moved flat and that tells me the market could easily swing either way. Our probabilities are positive but a look at the associated amplitudes shows the negative moves were twice the size of the positives. Looking forward a day we see weakness on Friday so any rally Thursday could have an early termination.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 22, 2010

Current position Short: 40% Rydex Inverse NDX 2x Fund for Wednesday.  Tuesday's early market gains slipped away as has happened very often lately.  Our program is indicating that there is more downside to come on Wednesday. Our two week outlook remains positive and we have reduced our exposure as we explore the downside. The dollar gained on the euro and crude slipped.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 21, 2010

Current position Long: 64% Rydex NDX 2x Fund for Tuesday. China's move to relax the tether on the yuan was met with a strong US market that reversed mid-day and closed lower. This was only the second loss for the NDX in the past 8 days but relieved some of the technical pressure that was building from the run. More market influences are coming together for Tuesday and we increased our long position.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 18, 2010 

Current position Long: 40% Rydex NDX 2x Fund for Monday. Very quiet markets and news. The Vix dropped by one third in the past nine trading days. Indicating expectations for a less volatile and a higher market. Reality and expectations often do not agree. I am waiting for the market influences to converge so that we will have a higher probability of successful trades. Meanwhile I will remain less than fully invested. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 17, 2010

Current position Short: 40% Rydex Inverse NDX 2x Fund for Friday. I am once again looking for a down Friday, last Friday the markets ended higher. The current focus is on oil and BP. The XOI (oil index) has fallen 14.5% since April 23. The Euro climbed again helping to keep the stock market up. There is a good chance that Friday's market direction will carry over into Monday, but past that I expect more upside for about three weeks. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 16, 2010

Current position Long: 25% Rydex NDX 2x Fund for Thursday. Wednesday's action did not lead anywhere but also did not add to the overbought market condition. Our signal has weakened but remains positive and we reduced our exposure. I expect the market will continue to digest Tuesday's big move over the next two days and the real action should happen next week. Talk was that the $20 Billion agreed to by BP was already decided upon prior to Obama's demand, but that is normal politics and good news for the people hurt by the spill.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 15, 2010

Current position Long: 50% Rydex NDX 2x Fund for Wednesday. The market is now even more overbought and the upside seems limited. We find more conflict among the market influences, but it looks like the chance of another plus day remains strong. Once again the Euro rules, as its climb encouraged US stock buyers. I am expecting smaller moves, some backing and filling for the rest of the week with a continuation of the positive trend next week.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 14, 2010

Current position Long: 50% Rydex NDX 2x Fund for Tuesday. We increased our market exposure for Tuesday as more market influences became aligned, but the market is by some measures over-bought. Monday's market ran in sync with the Euro and fell back as the Euro came off its high. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 11, 2010

Current position Long: 30% Rydex NDX 2x Fund for Monday. The markets recovered late Friday and continued their upward move.  We continue to find conflicting influences and could only manage a partial "long" for Monday. Tuesday also has conflicts but there is a good chance that the rally could run though most of the week.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 10, 2010

Current position Short: 34% Rydex Inverse NDX 2x Fund for Friday. Very nice, steady, up day for the markets on Thursday. There were no really compelling news stories or events to justify the move. So I attribute it to the markets recent increase in volatility. Our program has turned negative with some areas of concern and we moved partially short.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 9, 2010

Current position 100% money market for Thursday. We remain in the money market since we only trade when we believe the risk reward ratio is in our favor. Currently market influences are very mixed and the extended outlook for Friday is no better. There is a big difference between verbal events, like today's comments by Ben Bernanke and real events like an oil spill. The market will usually move on either news, but verbal events are generally more short lived and ripe for fading by traders. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 8, 2010

Current position 100% money market for Wednesday. Strange day with gold hitting an all time high in the futures market, the Dow up well over 1.25%, and the Nasdaq negative. We escaped from Tuesday's market with a small gain after a rough ride. Currently there are a number of cross signals that should continue into Thursday making trading more difficult. Our probabilities are looking slightly positive, but the larger negative amplitudes are dangerous.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 7, 2010

Current position Long: 25% Rydex NDX 2x Fund, 25% Rydex S&P 2x Fund for Tuesday. Another day where the falling Euro impacts our market as the multinationals are adjusted for lower forward earnings. Our signal is only moderate, but the probabilities do look good for the upside. I would expect a small pause after two strong down days.  Apple was unable to bring magic to the markets as it's latest  iPhone release could not halt a drop of almost two percent in Apple stock.   Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 4, 2010

Current position 100% money market for Monday. Our signal turned slightly positive near the close; too late to trade, and late signals are not that reliable. With the large drop Friday and continued expectations that the coming week will end lower, the chance that the February lows will be broken has become a lot stronger and I am now leaning in that direction. This past week was bad for the markets, but good for us as we erased our loss and moved positive for the year-to-date. As an aside, I sold off the Dell stock at a small profit.  Dell lacks the showmanship that Apple does so well, no pictures of buyers standing in line (etc) for their Streak.  They also seem to be missing the target, which are adult businessmen who really want an all-in-one device that is larger than a tiny phone. Looking ahead some more downside is expected next week and we see a good chance for "down Fridays" for the next three weeks.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 3, 2010

Current position Short: 25% Rydex Inverse NDX 2x Fund, 25% Rydex Inverse S&P 2x Fund for Friday. Seems like we are very close to the top of a trading range. I expect some lower days starting on Friday and running though most of next week but I do not see the lows of February broken at this time. The DELL stock I mentioned on Tuesday moved up about 5% on Thursday in anticipation of Friday's launch in the UK of their new 5" cellphone/minipad called the Streak.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 2, 2010

Current position Long: 25% Rydex NDX 2x Fund for Thursday. The markets continue to swing, evidenced by today's up opening, slide and then strong rebound. A look at our probability chart shows a more limited expected range for Thursday.  Our signal was long all day, but fluttered near the close and I reduced our exposure. Looks like the focus has shifted some from Europe, making the market easier to read. I mis-posted yesterday's information and did not remedy that till this morning. Sorry for the inconvenience. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: June 1, 2010

Current position Long: 50% Rydex NDX 2x Fund for Wednesday. The RUT has now touched the 640 level three times in the past 8 days, the S&P landed at the 1070 level just barely above its recent low.  News of Apple's selling of two million I-Pads in 2 months kept the NDX from doing the same.  Could be a scary night or morning as some carry-over from Tuesday could be expected. I am somewhat optimistic that we will see a new rally start from this level.  Dell will launch it's large cellphone/minipad in England on Friday. Free with a 25 month contract at about $52 per month for voice and unlimited data.  I am expecting a good response and bought some Dell for my personal account. It is very rare that I buy individual stocks, but I have gotten excited about the new larger phone size and think it will be a big winner among businesses. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 31, 2010

Current position Short: 50% Rydex Inverse NDX 2x Fund for Tuesday.  We are watching the magnitude of the daily changes and changes in the VIX as we transition to more normal trading. Friday Spain had their bond ratings cut, but the market reaction was measured. I don't believe the downside is over, but the panic may be subsiding. I expect  more downside early this coming week as the market searches for a bottom.   Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 27, 2010

Current position 100% money market for Friday. Thursday was a good example of the risk reward balance in the market. Our program was correct (see prior comment), but avoiding the current market risk caused us to miss out on the gain. Again it seemed to be overnight, overseas, information having an impact on the markets. China's support of the Euro should move the markets back to more normal conditions. China has become a stabilizing force. Both for the Euro and more importantly with regards to North Korea. China and South Korea have become good trading partners while North Korea chose to remain very third world.  North Korea has become a liability and embarrassment to China and China will exert every influence to prevent a disruption. We do have a weak short "signal" from our normal trading signal, but that may be run over by end of month market exuberance. We should be moving back to more normal trading next week. Looking at next week's expected trading pattern we see a Down Tuesday followed by an UP Wednesday. Longer term the negative conditions have not gone away but the volatility subside.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 26, 2010

Current position 100% money market for Thursday. The market could not hold on to its early gains and ended lower. We continue to operate under our protection mode which takes less risk.  Our normal signal would continue to be long, but the volatility and Europe/Asia influence is making this market very dangerous short term as we saw today. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 25, 2010

Current position Long: 26% Rydex NDX 2x Fund.  Another wild day on wall street saw the S&P drop 3% only to recover and close slightly positive. Good chance for more downside later in the week. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 24, 2010

Current position 100% money market for Tuesday. Our signal remained flat for Tuesday. Most of the day the NDX was up and the S&P and Dow was down. At the close the NDX also ran lower. Our probabilities are slightly higher, but our confirming components are leaning lower. We are seeing some positive influences for Wednesday.  Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 22, 2010

Current position 100% money market for Monday. Our signal stayed flat for Monday but components of our program are starting to lean lower for Tuesday. We are seeing a heavy influence from overseas, this should resolve itself in a week or two. Under this expectation we are trading only our strongest signals for the very short term. Then the focus should move back to the US economy and more normal conditions. With the US economy bad, the dollar showing strength and corporations already eating into their productivity gains there is little to look forward to for the buy-and-hold investor. Currently our longer term indicators remain positive but could go negative in a matter of days if these conditions continue. I expect to see some recovery of the Euro in June and with that some stock market improvement, but longer term does not look as rosy. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 20, 2010

Current position 100% money market for Friday. Our signal moved flat but a look at the "average amount down" for the S&P on our forecast page tells the whole story. Although the probability of an "up" day was 50% the average percent change for a down day (seen under similar conditions) was -5.11% whereas the average of the recorded upside was only +1.59%. This does not look good for the market going forward and we have moved into a "protection mode" that I expect should take us at least through the end of the month.  Under these conditions we will only trade when our signals have the highest level of agreement and that occurs about 21% of the time, leverage will not be used. Maximum exposure under these conditions will be based on the largest recent daily change and the Vix, keeping us less exposed then the market on those days that we enter trades. From there we will most likely move to an "Alert" level that trades about 60% of the time with a broader set of trading components in agreement. I will need to see calmer conditions before I am willing to move back to a normal trading mode.  Our longer term forecast posted on May 5th has turned out to be very accurate. Long term forecast was posted May 5th. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 19, 2010

Current position 72% Long: 55% Rydex NDX 2x Fund, 17% Rydex S&P 500 2x Fund for Thursday. More market turbulence on Wednesday with the markets closing fractionally lower. We have increased our exposure for Thursday aligned with our signal strength. The commodity markets were today's focus as platinum dropped 5%, silver lost 4% and copper was hit for 2.4%. Oil, after hitting a new 7 month low closed higher. NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 18, 2010

Current position 34% Long: 17% Rydex NDX 2x Fund, 17% Rydex S&P 500 2x Fund for Wednesday. After an early gain the markets fell. We reduced our exposure for Wednesday. The current "hot" news focus is on deflation.  Our T-Index told us we were in a deflationary condition over a year ago and that never changed. Very low 90 day bills relative to the 10 year notes is the giveaway. A lot of short term borrowing would push up the rates, but the borrowing isn't there because economic conditions are so poor. What we had was internal deflation with falling wages and rents and external inflation, with rising commodity prices. Now, with the dollar rising we are starting to see both internal and external deflation. The problems in Europe will tend to slow growth world wide. NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 17, 2010

Current position Long: 47% Rydex NDX 2x Fund, 53% Money Market for Tuesday. Monday's market rolled up, then down, then closed higher continuing to show the fear that remains with the market. Our extended forecast shows more fear coming into the market by Wednesday. Tuesday should be a continuation of today's small rally as money flows from bonds back into stocks and interest rates climb a bit while gold slips. NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 14, 2010

Current position Long: 47% Rydex NDX 2x Fund, 53% Money Market for Monday. Our accounts had a good recovery this week, but it wasn't easy. For the markets; I am looking for some up-side early in the week, then a possible drop to test closing lows. Fear of a slowing European economy and a rising dollar is giving investors reason to pull back, especially after what seems like excessive gains of the past year. For us the concern is keeping the proper balance of risk and reward and that means working hard to maintain the proper market exposure levels.  NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 13, 2010

Current position Short: 46% Rydex Inverse NDX 2x Fund, 54% money market for Friday. Our signal shifted back to negative. The beginnings of Monday's signal is looking positive. The aftermarket is slightly negative.  NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 12, 2010

Current position Long: 23% Rydex NDX 2x Fund, 23% Rydex S&P 2x Fund for Thursday. The market turned around during the night and traveled higher all day. We are now long, but aware that the down side may not be over as some indicators are already negative for Friday. Cisco topped estimates but turned lower in the aftermarket. NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 11, 2010

Current position Short: 48% Rydex Inverse NDX 2x Fund, 52% money market for Wednesday.  The markets continued in their volatile ways but closed only slightly negative. So Tuesday saw a pause and not a retreat. Our signal became more negative and we held our "short" position. When Goldman Sachs announced zero trading losses for each day in the quarter they only opened the door wider for investigation. Front running is the new issue.. Move over Bernie you may have some new roommates.  I would continue to avoid the stock. A peak at our probabilities shows a strong chance for more volatile trading. Similar cases that closed "up" show an average gain of +2.2%, similar cases that closed "down" showed an average loss of -3.2%. Full exposure to 2x and 3x funds and ETFs gets to be very dangerous under these conditions. NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 10, 2010

Current position Short: 48% Rydex Inverse NDX 2x Fund, 52% money market for Tuesday. As the market changes get larger we decrease our exposure. Certainly it is nice to see a +6% gain like we had today but we prefer a steady climb with smaller daily changes. And even though we re-evaluate the markets one day at a time we have a long term goal, and rule number one is to keep losses at a minimum so that we can meet our long term goals.  With the markets up about 4.25% this morning we closed out half our long position. 4.25% was the largest one day gain for the NDX in over a year and considering the recent erratic behavior I felt it was prudent to remove something from the table. I avoid ever taking a long or short position in the AM since we do not have a full data set of every component we use to determine our signal. And we rarely, unlike today, reduce our exposure in the AM. Tuesday could easily see some upward follow through, especially in the morning but more often than not these large up-days are followed by a pause or pullback. This is in addition to our strong "short" signal. Selling pressure should carry over into Wednesday's trading.  I did not hear the "all clear" bell today.  NEW long term forecast was posted last week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 9, 2010

Current position Long: 67% Rydex NDX 2x Fund for Monday. One day in April of 2008 we had an equally bad trading day. This makes two in two years and that is too many so I reset our leverage adjustment to kick in at a lower volatility, thereby keeping our exposure down to a more acceptable level.  Volatility has not be a detriment to program performance so we will continue to trade. The market is oversold, but all that really means is there is a higher probability of it going up than down. But there is never a guarantee so this down draft could continue. I do expect a higher Monday, the Sunday aftermarket is sharply higher. This is not an all clear signal and sharp daily changes tend to set up patterns that should play out in the days ahead. As I mentioned in my long term update posted on Wednesday we are looking at a lower market through May. NEW long term forecast was posted this week. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 6, 2010

Current position Long: 34% Rydex NDX 2x Fund for Friday. Stock market insanity, multiple rumors. One rumor was that European banks had stopped lending. Another was that a false trade by a City Group trader sent the automated algorithms in trading programs to Wackoland. Certainly since banks haven't really started lending any dry-up would be a major problem. And the climbing dollar, a consequence of the Greece problem, will hurt earnings. Our T-Index moved further negative, now at -413, very deflationary.  On the good rumor side, Dell should release a larger cell phone with a 5" screen available this summer. The the iphone has a 3.5" screen. 5" makes for a more useable web device and will still fit in your pocket. Thank you Dell.  NEW long term forecast was posted yesterday! Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 5, 2010

Current position Long: 100% Rydex NDX 2x Fund for Thursday. After the excitement of an early morning plunge the markets recovered then gave back about 1/3 of the range for the day. Our signal continued strong. The effect of Europe's problem on the US, in my opinion, mostly concerns the dollar. It strengthens the dollar, which helps the country at large (US), but hurts the stock market. I for one would like to see the dollar climb, reducing the price of commodities, making home construction cheaper and keeping interest rates down. These things stimulate the local economy. If international sales are lost perhaps the multinationals would pay more attention to US activities. NEW long term forecast was posted today! Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: May 4, 2010

Current position Long: 100% Rydex NDX 2x Fund for Wednesday. Our adjustments to exposure and direction are part of our our long term plan to maintain a more uniform level of daily risk. The current market moves are still within our tolerance, unlike 2008 when we spent most of the year only partially exposed. Our signal for Wednesday is very strong and we adhere to our program's call. Although I expect a mid-week recovery, if it happens I would look for more selling next week as the down side does not appear to be over.   Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: May 3, 2010

Current position Short: 34% Rydex Inverse NDX 2x Fund, 66% money market for Tuesday. Monday was much stronger than expected and it changes our expectations for Tuesday to negative. GS gained 3% while BP, under pressure from the oil spill lost almost 4% but recovered from a much greater drop earlier in the day.  The very jagged trading the last few days calls for caution.  The aftermarket was leaning slightly lower in early trading. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 30, 2010

Current position 100% Rydex Money Market for Monday.  On the positive side Mondays have been the strongest day of the week for about a year and the VIX had a large jump on Friday, often signaling a turn around the following day. But in total we have a "money market" signal for Monday. Tuesday should be a better day to have a long position. The Goldman Sachs criminal charge news was one of the causes of Friday's hit. Goldman dropped over 9%. If criminal charges are filed I doubt they will expand to implicate the prior Secretary of the Treasury, Paulson, using RICO. Although corporations buddy up with governments they are still competitors for the dollar and governments generally have the means to show companies who is in control. Some countries like China are better at it than others. So although highly improbable, if the US government decides that Goldman is getting out of hand and is bad for government the 9% drop we just saw could be only the start of a free fall.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 29, 2010

Current position Long: 68% Rydex NDX 2x Fund for Friday. I expect some follow up on Friday. Our signal has lessened a bit from yesterday and I do not expect a large move, perhaps enough to get back to the highs earlier in the week. Going forward the near term influences have gotten weaker indicating problems Monday or Tuesday or both. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 28, 2010

Current position 100% Long: 100% Rydex NDX 2x Fund for Thursday. We have a strong signal and full alignment of next day and near term influences. In addition the market has a strong probability of going higher the day after Fed decisions, especially if it has gone down the few days prior. Add to that Thursday has accounted for over 42% of the NDX's gain since 1993. Still nothing is certain, but it makes good sense to increase your exposure when conditions are more favorable to your transaction and decrease it when the case history is more random. S&P down graded Spain Wednesday with little market fall out so additional down grades will probably have very little impact with the exception of downgrades that might eventually include the USA or other major players. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 27, 2010

Current position 100% Rydex Money Market for Wednesday.  As the market moved sharply lower in the afternoon, Wednesday's signal moved from very strong to neutral and we exited our positions.  The near term influences remain positive and I would expect to see some positive movement by Thursday. Continued large change days would not be good for the up-side. China's Shanghai SE Composite index was down 2% before the US market opened and could have been one of the negative influences, as China has become a major force on world markets. Ford's positive earnings did nothing for the stock as it fell over 6%. Portugal and Greece debt was finally downgraded by S&P. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 26, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Tuesday.  Another small change day. Our program is mildly negative and we moved back short. The near term influences have once again moved positive and out of alignment with the next day forecast.  Will Blankfein of Goldman give the Nixon, "I am not a crook" speech?  In any event Blankfein will be overloaded with the government case for many months to come and GS stock should continue to suffer from the unknown. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 25, 2010

Current position 34% Long: 17% Rydex NDX 2x Fund, 17% Rydex S&P 500 2x Fund for Monday. Our signal moved to the up side, but not in an overwhelming way so we are only partially long. Tuesday also looks promising to the upside. The market went back to small change days last week which is beneficial to continuation of the uptrend.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 22, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Friday.  We continue to hold our small short position.  Thursday the markets dropped sharply on the open only to recover. We should be clear of the near term positive influences on Friday and Monday so possibly we could finally see a real pullback.  AMZN and MSFT both fell dramatically after the close. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 21, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Thursday.  Our small short position continues. Thursday will mark the final day of the near term positive influence, which goes flat for Friday. This helps define the amount of exposure we are willing to take. Our daily signal remains short. Ebay's earnings were disappointing and should not only bring down the after-market but carry over on Thursday.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.

Comments: April 20, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Wednesday.  We were holding our small short position well aware that the  Apple earnings could be a blow out. And their earnings were excellent, pushing Apple and the after-markets higher. The positive influences are projected into Wednesday but they are already taken into account when our signal is given. The single day trade gets adjusted for signal strength and market volatility so conflicting signals, when strong enough to register, are small trades. When forces are more aligned we become more exposed.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. ...sorry late post thought this was up already.

Comments: April 19, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Tuesday.  Monday's pause should give way to more selling on Tuesday, but I am not expecting that to last into the week as we have positive influences moving in mid-week. Apple reports on Tuesday and that alone should keep the NDX from slipping very far. Our probability chart is also leaning higher for the NDX on Tuesday but our negative signal overrides the chart. Expect more fraud charges to be brought against other financial institutions in the following weeks.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 16, 2010

Current position 100% Rydex Money Market for Monday. The Goldman fraud accusations are a good thing for US investors.  My guess is Goldman will escape without too much damage. Their VP will catch most of the heat and Goldman will get a fine that I estimate at tens of millions of dollars. Small change for a company that probably made that much Friday using their inside knowledge to short the market that morning. Since I am not a lawyer or privy to the customer contracts I can only guess at the following.  Goldman will try to settle with the SEC without admitting guilt by pleading "no contest" so as not to be found guilty of fraud which would have follow on repercussions.  I think the investors burned in the Goldman CDOs are tied to binding arbitration because of the contracts the investors signed. The investors might get around the arbitration if the government proved fraud. If this is correct Goldman will do everything in its power to not be convicted of fraud.  In open court the investors could sue for damages which most likely would be limited or nonexistent under arbitration. Arbitration results would also remain secret something Goldman certainly wants. Total damages in open court could run into the multiple billions of dollars.  Friday's charges caused the market to drop more than we expected and allowed us to exit the week gaining another percentage point. Looking ahead the market has picked up volatility with the daily changes for the past three days up appreciable from the prior month. Higher volatility eventually leads to a downturn. Our program finds large changes easier to read so we like it. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 15, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Friday.  After the bell GOOG showed strong earnings but disappointed based on the "whisper numbers" and tumbled adding some fuel to our short position. The volcanic eruption in Iceland has caused major airline delays across Europe and is one more expense for the recovery to absorb.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 14, 2010

Current position Long: 100% Rydex NDX 2x Fund for Thursday.  We vary our exposure in accordance with our signal strength. The stronger the signal the more likely it will prevail regardless of news or trend duration. Thursday looks very good for the upside, but I don't see it going very far. Friday should pause. UPS pre-announced strong returns and is up in the aftermarket.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 13, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Wednesday.  After the bell INTC beat estimates and sent the aftermarket higher for the NDX. The initial move seemed to be an overreaction as the S&P did not follow with any real strength. I expect that we shall see an initial gain in the indexes on Wednesday because of the reported earnings. Our position is taken about twelve minutes prior to the close. A look ahead shows Thursday as positive. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 12, 2010

Current position 34% Short: 17% Rydex Inverse NDX 2x Fund, 17% Rydex inverse S&P 500 2x Fund for Tuesday.  After the bell Alcoa launched the earnings season with earnings about 10% below their 4th quarter, but in line with expectations.  Our signal is a mild short and I expect a small pullback and maybe another one later in the week. The market closed slightly above the 11,000 level on the Dow, but could not hold the 2000 level on the NDX.   Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 9, 2010

Current position Long: 68% Rydex NDX 2x Fund for Monday. I have completed and implemented our latest program updates. The updated structure allows for three exposure levels for long trades; low, medium and high, and two levels of exposure for short trades, low and high. In addition we have our money market transaction.  These exposure levels are relative to the expected returns and probabilities.     All eyes are on the 11,000 level of the Dow which does not mean anything but allows the TV anchors to have something to keep the buzz going. On the other hand, because of the focus and the fact that the Dow closed below 11,000 we should see a close above 11,000 sometime next week. I expect that the market will push right through on Monday. The daily changes remain small and the market should continue it's climb. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 8, 2010

Current position Long: 35% Rydex NDX 2x Fund for Friday. Our signal continued as a partial long. The market lost ground early on but recovered with a small gain for the day. The last three daily changes for the NDX have been less than a quarter percent each. Mortgage rates climbed to an eight month high but are moving slowly. I don't see a worry in it. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

omments: April 7, 2010

Current position 100% Money market for Thursday.  Our signal turned to a "partial" long at the close, but too late to take a position. Monsanto has announced a 19% drop in 2nd quarter profit. This is significant this late in the economic "upturn". Most likely market direction is slightly higher for Thursday.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 6, 2010

Current position 33% Short: 16.5% Rydex Inverse NDX 2x Fund, 16.5% Rydex inverse S&P 500 2x Fund for Wednesday. We are holding our small short position into Wednesday. Early market weakness gave way to a small rally midday on Tuesday. Nothing to change our minor downside expectations. Change for the day was almost spot on the average. Since we adjust for volatility we should see the actual changes be closer to the estimates given in our probability chart.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 5, 2010

Current position 33% Short: 16.5% Rydex Inverse NDX 2x Fund, 16.5% Rydex inverse S&P 500 2x Fund for Tuesday. The market continues to make gains and I do not see any warning signs of a large decline in the near future. Smaller declines can cut through accumulated gains so the investor must be diligent.  The recent changes that I made over the weekend will more sharply define the high probability trades from the lower probability trades. I have found that most of the draw downs occur from an accumulation of lower probability trades gone wrong. It is this set of transactions that are more easily upset by adverse news events and lesser influences. However the lower probability trades are an important asset and, long term, do add to the bottom line. Our trade for Tuesday is a lower probability trade and we have reduced our exposure to 33% (Equal to approximately 66% of the movement of the NDX and S&P). Our higher probability trades will be leveraged to a level dependant upon the recent volatility of price movement and under current conditions would be close to 100%. I have also updated the probability program on our Forecast page and as of today it reflects the new adjustments.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: April 1, 2010

Current position Long: 50% Rydex NDX 2x Fund for Monday. Markets are closed on Friday. Monday should be a strong day with our signals in agreement and the recent jobs report going along. I have made some up-grades to the program and will have them in effect starting with Monday's trade.  As always I look to reduce risk while improving performance. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 31, 2010

Current position 100% Money market for Thursday.  More conflicting signals, still slightly negative, but not quite as negative as yesterday.  More jobs were cut in March where a gain was expected. These numbers did not include the temporary census hires so expect to see more numbers coming out.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 30, 2010

Current position 100% Money market for Wednesday.  Our conflicting signals continued for Wednesday and still leaning lower, but this time compounded by the end of month / end of quarter activity. We withdrew into the money market. Median home prices gained month to month, but as I have said before, that reflects the drying up of the low-end foreclosures raising the median, but not really raising the prices of the individual homes on the market. Home prices can decline as the median gains if mainly the lower priced homes are sold. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 29, 2010

Current position 25% Short: 50% Rydex Inverse NDX 2x Fund for Tuesday.  We have conflicting signals for Tuesday but leaning lower so we took a small short position. Monday was another small-change day in the topping action which finds the indexes just below recent highs. The market behavior remains positive as small changes are good.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 28, 2010

Current position Long: 50% Rydex NDX 2x Fund for Monday. Our signal stuttered some, along with the markets fluttering about the zero line during the last half hour of trading on Friday. The market appears to be in a topping pattern, the NYA is lower for the past 7 days with the SPX even over that time and the NDX higher. I am looking for some upside early in the week then some softening.   Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 25, 2010

Current position 65% Short: 50% Rydex Inverse NDX 2x Fund, 15% Rydex inverse S&P 500 2x Fund for Friday. A strong early gain evaporated. In the news the Social Security system will pay out more this year then it will take in. This will happen six years earlier than expected.  The simple solution is to raise the lid on the payroll tax, not a popular option but expect it to happen.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software. 

Comments: March 24, 2010

Current position Long: 50% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Thursday. The small pullback may have provided another opportunity to get onboard as our signal returned to the positive side. The two hot spots in tech are 3D for video and the blending of cell phones and computers. Still the cell phone players are missing an opportunity for growth as they all fight for position with a one size fits all cell phone. The player who adds a man-sized, or business size phone will take a big piece of the market, watch for it.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 23, 2010

Current position 100% Money market for Wednesday.  Another day where we saw weakness earlier in the day that shifted to a reasonably good up-move. The most interesting news is the ongoing relationship between the giant corporation Google and the super giant country China. Corporations vie with governments for a piece of the earnings of the citizens that fall under their domain. We are used to thinking about corporations as completely different from governments but they really don't differ by that much. Government borders are land bound physically drawn lines. Corporations are borderless and use their wealth to influence governments to let them operate within the government's physical boundaries. A person might be defined as a citizen of a country or an employee of a specific corporation. Governments provide land use and services and are funded through taxes, corporations provide products and services and charge for them. Both compete for the earnings of the citizens. Single corporations could be powerful on their own, but corporations join together forming lobbies to influence governments. The Google/China affair is very interesting and will have many ripples. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 22, 2010

Current position Short: 50% Rydex Inverse NDX 2x Fund. The markets returned to their positive path on Monday, but made our signal more negative so we increased our exposure. The passage of the health care bill did not seem to have any market impact, but the dollar pull back (after an early rise) did, and seemed be the reason that kicked the markets higher. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 19, 2010

Current position Short: 37.5% Rydex Inverse NDX 2x Fund.  It could be the health care bill or just the overbought condition, but the markets took a break on Friday. I expect some carry over into Monday but not very much and reduced our exposure.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 18, 2010

Current position 65% Short: 50% Rydex Inverse NDX 2x Fund, 15% Rydex inverse S&P 500 2x Fund for Friday. Certainly a very strong, low volatility market trend is in place. Although this type of trend is the most stubborn the market does like to chatter more than move in one direction. The news continues to be void of excitement allowing this droning to continue. The current standard deviation of daily changes is exceptionally low so I do not expect a large down day.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 17, 2010

Current position 100% Money market for Thursday.  Our probabilities may be overstating the case for the down side for Thursday. Our signal is very flat and the first 100% money market signal in almost a month. It is hard to say whether our deflation situation will be good or bad for stocks going forward. More important will be the direction of the dollar. A strong dollar will help our internal economy by reducing costs and moving the focus from overseas back to the USA, this will hurt the market short term but bring long term benefits for the market.  A falling dollar will boost the earnings of multinational corporations, (the bulk of the stock market) and help stock prices, but cause internal problems with high oil prices and a continuation of the recession.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 16, 2010

Current position Long: 50% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Wednesday.   "Don't worry be happy." The Fed announced that rates will be kept low for an extended period.  That is the correct call as "deflation" as measured by our T-Index is still the problem. The T-Index which measures the relationship between 90 day bills and 10 year notes remains at very negative levels (-393) on the close.  We are extremely far away from an inflationary environment, as we would have to go through the normal positive range first. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 15, 2010

Current position Long: 50% Rydex NDX 2x Fund for Tuesday. The Dow and S&P managed to recover earlier losses on Monday but recovery for the NDX was only partial, stopping its consecutive winning days at 13.  The only time the NDX exceeded 13 gains was In 1990 when it managed 19 consecutive wins, but five months later it had fallen 16%. When we are dealing with just a few cases we can not draw any conclusions regarding future market behavior. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 13, 2010

Current position Long: 35% Rydex NDX 2x Fund for Monday. Friday the NDX nudged above the zero line at the close up 0.03%, but that counts as the 13th up day in a row for that index. We will step cautiously until the tension breaks. Most indications are for another gain on Monday.  A correction should come this week and last a few days. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 11, 2010

Current position Short: 35% Rydex Inverse NDX 2x Fund for Friday.  Today the market recovered from an early small loss.  Once again our signal has shifted to the short side. With 12 consecutive NDX "up" days it would seem that a down day is over due, but the S&P and NDX are still taking tiny steps under the broad trader radar. However I believe some traders would look to pull money off the table prior to the weekend. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 10, 2010

Current position Long: 15% Rydex S&P 2x Fund for Thursday.  Our signal weakened and we eliminated our exposure to the NDX.  The daily changes continue small and another "up" day would still be reasonable even though the NDX has had 11 consecutive positives. News is running at a low level and has had little market impact. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 9, 2010

Current position Long: 35% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Wednesday.   The markets made new 2010 highs on Tuesday and could target those highs on Wednesday, but beyond that I don't see much upside after such a sustained climb. On the flip side the daily gains have been small and have not triggered any urgency to exit. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 8, 2010

Current position Short: 50% Rydex Inverse NDX 2x Fund for Tuesday.  After a string of 6 Long signals we finally got a short. The NDX has just completed a string of nine up days. In July there was a string of 12, but going back 17 years the max had been 9. So we are close to, or at a top or pause which would most likely be followed by a congestion period rather than a sharp decline. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 6, 2010

Current position Long: 25% Rydex NDX 2x Fund, 25% Rydex S&P 2x Fund for Monday.   We balanced our positions between the NDX and the S&P. I expect to see some down days this coming week as Friday added a little heat to the up move. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 4, 2010

Current position Long: 35% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Friday.  Although the NDX has gone up 7 days in a row the gains were small enough to keep traders from triggering sell orders that fade sharp up moves. For the past two days, the low of the day has dropped on the NDX, even though the market has closed higher, this is a positive sign. We remain long but cautious, and reduced our position.   Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 3, 2010

Current position Long: 50% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Thursday. The market closed mostly unchanged. Probably the biggest news is the new 7 week high in crude oil.  The XOI oil and gas index has not followed and could mean a pull back in oil. Although the NDX has risen for six days the small gains have not produced an over bought condition and it could easily continue higher. Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 2, 2010

Current position Long: 50% Rydex NDX 2x Fund, 15% Rydex S&P 2x Fund for Wednesday. Our signal improved to include the S&P for Wednesday. We noticed that there is more take over activity recently, something that was missing during the dark hours of 2008-2009. Other than this there is little business new to influence the markets and the markets closed only slightly higher.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: March 1, 2010

Current position Long: 49% Rydex NDX 2x Fund, 51% Money Market for Tuesday.  We held our "long" position over into Tuesday. Our signal has weakened but remains positive.  Not very much on the news front.   Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.     

Comments: February 28, 2010

Current position Long: 48% Rydex NDX 2x Fund, 52% Money Market for Monday. I am doing some interesting work in determining trends. The normal methods (ie following a moving average) are not satisfactory. I have come up with a "trend" indicator that measures how well one up day leads to another up day. So it is more of a persistence indicator. Used in conjunction with a counter trend indicator it has done quite well over many years without optimization. Generally the simpler the indicator the better and this combination is simple. When I get a little more time under it I may post it daily as it does give a good overview on direction.  Last long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.    

Comments: February 25, 2010

Current position 63% Short: 48% Rydex Inverse NDX 2x Fund, 15% Rydex inverse S&P 500 2x Fund for Friday. The markets recovered Thursday from an early substantial drop. Friday looks lower and so does Monday. The overall economic news is bad, with unemployment numbers higher and long-lasting goods orders falling. Worries over Greece over the weekend could put some pressure on Friday's market. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.    

Comments: February 24, 2010

Current position Long: 48% Rydex NDX 2x Fund, 52% Money Market for Thursday. Our signal became less positive going into the close. New home sales were the lowest on record in January. They started keeping records in 1963. This indicates that many of the overall housing sales numbers are for foreclosures. Typically these are lower priced homes and skew the median home sales price lower, once the foreclosures become less available they will skew the median home sales price higher. So first things look worse than they really are, then they look better than they are. Freddy Mac says a record number of their mortgages are in arrears and is bracing for more foreclosures. So much for the domestic scene.  The dollar fell today helping the multinational corporations.  New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 23, 2010

Current position hedged leaning lower : 28% Rydex Inverse NDX 2x Fund, 14% Rydex  S&P 500 2x Fund for Wednesday. Pressure from last week's run up is weighing on the market, but there are some other positive forces giving us a mixed signal resulting is a partially hedged position. Consumer confidence reached a 10 month low in the latest report, but I remind you that "corporate America", which are mostly multinational corporations, have become less tied to the fortunes of the American people at large. What's good for General Motors is no longer good for America. So until something causes a change in direction the corporations will continue to make gains as America loses jobs and struggles under added debt. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 22, 2010

Current position 100% Money market for Tuesday. Another flat signal, and again leaning lower, as the recent market climb has caused the market to become overheated. This sluggishness may take a few more days to wear off. The good things for our multinational stock market are bad things for our domestic economy. The outsourcing of jobs, weak dollar and productivity increases of the internet will continue burden us on the domestic side with ongoing unemployment. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 19, 2010

Current position 100% Money market for Monday. The Fed move got a mixed reaction from the traders who spent the day waiting for the market to do something. Instead the market flat-lined with most indexes closing about unchanged. The RUT has accumulated 8 consecutive up-days and is slightly positive for 2010. Our T-Index was not affected very much by the Fed move and remains in the -420 area, screaming deflation. Monday looks like it is leaning lower. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 18, 2010

Current position Long: 48% Rydex NDX 2x Fund, 52% Money Market. We reduced our exposure and exited the S&P going into Friday.  The manufacturing index climbed but unemployment degraded and Wal-Mart reported a drop in quarterly sales in their US stores.  What doesn't get reported, since they do not qualify for unemployment insurance payments, are the many thousands of self employed that are barely hanging or now unemployed. Their offices and stores will add to the vacancy  lists as the year continues. After the market closed the Fed announced it was raising the discount rate by 1/4%. The immediate effect was to hurt the aftermarket indexes by about 3/4%. I don't see any positives here, we are not a booming economy like China. And the problem is deflation not inflation. Removing fuel from a stalled train will not get it moving any faster. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 17, 2010

Current position 92% Long: 64% Rydex NDX 2x Fund, 28% Rydex S&P 500 2x Fund for Thursday. Good earnings day, with little bad news to detract from it, blew the markets moderately higher. Our signal has become more positive and we increased our exposure accordingly. Looking for a positive Thursday. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 16, 2010

Current position 55% Long: 42% Rydex NDX 2x Fund, 13% Rydex S&P 500 2x Fund for Wednesday. Strong day, especially for the S&P. The dollar fell boosting gold, oil and the markets.  Whole foods showed good sales gains a positive in a bad economy. Our hedged position worked out due to the strong S&P, I expect the NDX to play catch up. Guggenheim acquired Rydex. No changes in operations are expected. New long term forecast was posted 2/11. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 15, 2010

Current position hedged : 42% Rydex Inverse NDX 2x Fund, 42% Rydex  S&P 500 2x Fund for Tuesday. China has raised reserve requirements for banks to slow expansion. China has a problem we wish we had. They are growing too fast but their government is containing it in what looks like a proper, intelligent manner. I spent many hours refining the blend of S&P to NDX for our positions. The addition of the S&P, though it mostly trades in line with the NDX, should add a bit of diversification and smooth out the equity curve. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 11, 2010

Current position 84% Short: 42% Rydex Inverse NDX 2x Fund, 42% Rydex inverse S&P 500 2x Fund for Friday. New long term forecast posted today!  Looks like traders assumed that all was clear on Greece and moved the markets from a somewhat oversold condition to one that is probably overbought. We received negative signals on both the S&P and NDX and moved short at 84% exposure. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 10, 2010

Current position Long: 20% Rydex S&P 500 2x Fund for Thursday. Our NDX signal is for the money market I expect the market will lean higher on Thursday. For Friday we have negative sentiment. Greece is probably behind the market and with the exception of perhaps a test of the recent intraday lows I expect to see the market reach new 2010 highs over the next few months.   Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 9, 2010

Current position Long: 20% Rydex S&P 500 2x Fund for Wednesday. Our NDX signal fluctuated between long and short near the close and we moved that portion into the money market. It closed leaning lower. Sometimes reporters attribute news as the cause of the market's direction, today it really was news of the Greece bail out as the markets spiked mid morning on the news release.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 8, 2010

Current position 20% Short: 40% Rydex Inverse NDX 2x Fund, 20% Rydex S&P 500 2x Fund for Tuesday. What started out as a positive day turned bad in the afternoon. I have added a second signal to our trading. Splitting our total trade between the S&P and the NDX. This newer component has two independent parts and each of those parts is applied separately to the S&P. The NDX has become 50% of our total trade when fully exposed.  This change should result in a more steady positive return with less overall risk to capital. It may sometimes, as you see today, result in a split ticket where the S&P and NDX are traded in different directions and perhaps in different amounts. For today's trade for example Our NDX signal was short while one S&P signal was Long and the other S&P signal was in the money market. The change provides some additional diversification within each trade while we continue to benefit from time-based diversification since we are rarely glued to one direction for very long. Today's Exposure rating is 80%. The probability chart shown on the Forecast page continues to be based on the main (NDX) program. Although our trading is only for a single day our plan and view is very long term as we look to provide the best long term total gain with the lowest risk to capital. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 5, 2010

Current position 70% Long: 35% Rydex NDX 2x Fund, 35% Rydex S&P 500 2x Fund for Monday. Will foreign countries be able to pay their debts and remain solvent?  Will this problem affect the US?  Valid questions that investors ask one day and ignore the next. Friday morning they were asking but when the market stopped falling they jumped back in like nothing mattered. We added to our S&P position at the close and we showed about a 1/2% gain for the week. The market most likely will test Friday's low and if Monday goes higher Tuesday could possibly start another down leg. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 4, 2010

Current position 50% Long: 35% Rydex NDX 2x Fund, 15% Rydex S&P 500 2x Fund for Friday. More of last weeks negativity carried over on Thursday, this time Sovereign debt was given the blame, and wiped out the earlier gains of this week.  We sold off half our position at the morning fix since the sharp drop looked like it had some more to go. Our signal continues to be long but the exposure rating has fallen and we reduced to 50%. We also moved back into the NDX and out of the Russell.  Although our gut may tell us different, over the past 17 years the market has rebounded 70% of the time after a down day within the -2.5% to -3.5% range in the S&P.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 3, 2010

Current position 62% Long: 31% Rydex Russell 2000 2x Fund, 31% Rydex S&P 500 2x Fund for Thursday.  Earnings and more importantly (for the economy and big picture) sales rose for both Cisco and Visa. This should lead to a higher market opening on Thursday. Our signal turned long and we added some leverage. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 2, 2010

Current position 100% Money market for Wednesday. Although we have many positive components for Wednesday, the price action over the past few days should apply negative pressure canceling the plusses.  This week UPS reported very good earnings, but UPS is no longer a bellwether for the whole economy as consumer purchases continue to move to Internet sales and away from physical stores. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: February 1, 2010

Current position 50% Long: 19% Rydex Russell 2000 2x Fund, 31% Rydex S&P 500 2x Fund for Tuesday. Monday's up move could bring in some selling, but our signal remains positive and I expect the markets to add a little for Tuesday. We reduced our exposure are now 1 to 1. looking ahead two days index I expect more upside on Wednesday. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 31, 2010

Current position 81% Long: 50% Rydex Russell 2000 2x Fund, 31% Rydex S&P 500 2x Fund for Monday. On Friday the market continued to make up for 2009's over enthusiasm. Most of the current news if better than what we heard in 2009 but this time it is interpreted as a negative.  We were in the money market Friday but have taken some lumps along with the buy and hold folks. Any reasonable rally on Monday will most likely be sold into on Tuesday. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 28, 2010

Current position 100% Money market for Friday. Touchy market, that is looking like a bear market based on it's response to the news.  Especially the Tech sector which got hit for over 2.5% while Goldman Sachs was up over 1%. Although the probabilities look very "short", we have some mixed signals and have gone into the money market.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 27, 2010

Current position 86% Long: 53% Rydex Russell 2000 2x Fund, 33% Rydex S&P 500 2x Fund for Thursday.  We increased our position. More signal components are in agreement and the probabilities have improved with greatly reduced negative amplitude. Overall it appears that the market is on a much firmer footing for continuation of Wednesdays advance. Apple introduced its I-pad, but my guess is that it may have missed the boat, though Apple does very little wrong. Its works great for viewing videos, surfing the Web or reading, so it can replace home computers for many who never use "computing" power, but it lacks the ability of net-books for computing, making Skype calls and portability. The initial reaction of some high school students (that I overheard) was very negative. This leaves a gap for an 8.5" x 5.5" paperback size device that can multifunction. Maybe next iteration. The Fed left rates unchanged as expected. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 26, 2010

Current position 60% Long: 35% Rydex Russell 2000 2x Fund, 25% Rydex S&P 500 2x Fund for Wednesday.  We are holding our position. The signal has increased in strength over the past few days and I expect at some point we will see a recovery. There is still risk of another sharp down day. I am not a big fan of this market since I do not believe that the price levels are justified but since we reevaluate the market each day our long term views do not have very much of an impact on our positions. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 25, 2010

Current position 60% Long: 35% Rydex Russell 2000 2x Fund, 25% Rydex S&P 500 2x Fund for Tuesday.  Monday's market gave up a sizeable portion of it's gain, but that left room for more on Tuesday. Our signal is a bit weaker than it was for Monday but our odds show that the rally will continue for at least one more day so we left our position intact. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 22, 2010

Current position 60% Long: 35% Rydex Russell 2000 2x Fund, 25% Rydex S&P 500 2x Fund for Monday.  Normally a down Friday leads to a down Monday, but since Wednesday and Thursday were also lower it changes the dynamics. Most unsettling news item was the Supreme Court decision to allow unlimited corporate and union spending on elections. It should reduce bribery by renaming it and making it legal. This decision dilutes the checks and balance system of three separate government divisions; executive, judicial and legislative. Now all three can be purchased above rather than under the table. Our founding fathers never envisioned an America with huge rich entities, unions, corporations and hedge funds capable of impacting the law making process. So far earning have been improving but still gross sales lag. There may be a few more down days next week, I lean towards an up Monday and down Tuesday. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 21, 2010

Current position 100% Money market for Friday. The big banks have spoken. They don't want anyone to end their game of taking all the chips all the time. Most likely they will win in the end as they have enough friends, ex-partners and expected partners in government that nothing worthwhile will pass. Mixed signal for Friday and we moved to the sidelines.   Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 20, 2010

Current position 75% Long: 25% Rydex NDX 2x Fund,12.5% Rydex S&P 500 2x Fund, 37.5% Rydex Russell 2000 2x Fund for Wednesday. The large drop was most likely due to the 2.9% decline in China overnight. But we saw a good partial recovery off of the low and our signal got stronger.   Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 19, 2010

Current position 75% Long: 37.5% Rydex S&P 500 2x Fund, 37.5% Rydex Russell 2000 2x Fund for Wednesday. Our signal strengthened and we increased our exposure.  Strong rally on Tuesday, but the after-market has started out down about 1/4%. The sharp rise was partially due to hope that the Massachusetts election will hamper the health care bill. After the bell IBM reported good earnings and increased their outlook. I am still expecting a rising market through most of the week followed by a down turn Friday.   Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 15, 2010

Current position 50% Long: 25% Rydex S&P 500 2x Fund, 25% Rydex Russell 2000 2x Fund for Tuesday.  A mild signal for Tuesday leaves us running along side the markets. From an intermediate term perspective we are looking at the market holding on Monday rallying on Tuesday through Thursday then a sharp decline into next week. This will be refined each day going forward.  I liked Friday's market drop in the face of a good Intel earnings report. This type of response would not have occurred over the past 10 months when the market only went up. Things are getting more normal. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 14, 2010

Current position 100% Money market for Friday. The proposed bank tax is much better than the alternative transaction tax which would hurt a great many people not in the least responsible for the economic collapse. Intel's positive sales pushed the aftermarket much higher in early trading after the close and some should carry into Friday's market.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 13, 2010

Current position 100% Long: 50% Rydex S&P 500 2x Fund, 50% Rydex Russell 2000 2x Fund for Thursday. Wednesday's market firmed up after some early wobbles as Congress grilled the bankers over derivatives. Especially interesting was Goldman Sachs shorting the sub prime mortgages that they had created and sold to clients.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 12, 2010

Current position 50% Short, (and not leveraged): 25%  Rydex Inverse 1x SPX fund, 25% Rydex Inverse Russell 2000 1X fund for Wednesday. Our signal gained strength but remained negative and we reduced our exposure by half. I do not expect the market to fall apart in here as there have not been any shocks (large one day moves) for a while and that usually precedes a down turn. The aftermarket spiked higher a few minutes after the markets closed leaving the futures well above par. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 11, 2010

Current position 100% Short, (but not leveraged): 50%  Rydex Inverse 1x SPX fund, 50% Rydex Inverse Russell 2000 1X fund for Tuesday.  The early rally slipped and ended with the Dow and S&P ahead and the NDX and Russell behind. The S&P has put 6 consecutive up days together. China became the world's largest Auto market last year, out-buying the US. The beginning aftermarket is lower. I adjusted the "average amount up" and "average amount down" in the probabilities to better reflect current market volatility. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 10, 2010

Current position 100% Long: 50% Rydex S&P 500 2x Fund, 50% Rydex Russel 2000 2x Fund for Monday. Here is a graph engineers will love. It compares the 1929 to 1942 time frame with the current 2000 - 2010 time frame. The 1929 time frame is extended a few years to see what happened. I aligned the 1929 DOW with the 2000 NDX. (The NDX did not exist in 1929).

Both dates start at the height of the prior bull  market and I normalized the DOW to the NDX starting level. Amazingly similar. What is also similar is the government response cutting interest rates below 1/4%.  For those of you waiting for rates to skyrocket you might have a long wait when you consider that interest rates remained below 1/2% from 1934 till 1947.  A period of 13 years. More on this in our next long term update. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 7, 2010

Current position 37.5% Short: 25%  Rydex Inverse 2x SP fund, 12.5% Rydex Inverse Russell 2000  for Friday.  More small movement, not giving us much to work with. NDX down, most other indices up. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.  

Comments: January 6, 2010

Current position 25% Short:  Rydex Inverse 2x SP fund for Thursday. Another day of flip flop trading, now leaving us leaning to the short side. T-Bills below 1/4% appears to be a good indicator that the rally has strong government support and that may be the target figure to watch.  It can turn quickly as it jumped from below .1 to over .3 in seven days last February. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.   

Comments: January 5, 2010

Current position 25% Long:  Rydex SPX 2x fund for Wednesday. No dramatic news and small market movements left us with a weak "long" signal after some back and forth shifting. Probabilities do not agree with our signal, but that often happens when the signal is weak.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.   

Comments: January 4, 2010

Current position 75% Short:  50% Rydex Inverse 2x SP fund, 25% Rydex Inverse 2x Russell 2000, 25% Money Market for Tuesday. Looked like a rush to get back in the markets on Monday as the markets opened much higher, climbed then reached a plateau. The dollar fell about 1/2% against the Euro and Yen helping oil and gold as well as stocks climb. The dollar had been improving and unless we see more improvement we will start to see inflation in everything we buy, which will stall an economic recovery. Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.   

Comments: January 1, 2010

Current position 100% Money market for Monday. December was a positive month for us but could not make up for the Dubai hit over Thanksgiving.  For 2010 we will be in the money market less as I found a way to trade most of those "out" days. The exposure will be less on those days since it makes the most sense to only use leverage on strong signals. The signal for Mondays trading was leaning short going into the last half hour but swung over to money market and we followed. For January we will be mostly trading the S&P. I expect that the markets will continue to trade more normally as we saw in the last quarter. The Vix is a very reasonable 21.7. Our cyclical study is positive and the daily market changes are small, both suggesting that there is more upside ahead early into the year. The after-hours trading is very positive so I expect a strong opening. I am still behind with long term comments.  Please pick up your free password so you can read about our longer-term forecast, and download the free "T" index software.   

For earlier comments made in 1st half of 2010 

For earlier comments made in 2nd half of 2009 

For earlier comments made in 1st half of 2009 

For earlier comments made in 2nd half of 2008 

For earlier comments made in 1st half of 2008 

For earlier comments made in 2nd half of 2007 

For earlier comments made in 1st half of 2007 

For earlier comments made in 2nd half of 2006 

For earlier comments made in 1st half of 2006 

For earlier comments made in 2nd half of 2005 

For earlier comments made in 1st half of 2005 

For earlier comments made in 2nd half of 2004 

For earlier comments made in 1st half of 2004

For earlier comments made in 2nd half of 2003

For earlier comments made in 1st half of 2003

For earlier comments made in 2nd half of 2002

For earlier comments made in 1st half of 2002

For earlier comments made in 2nd half of 2001

For earlier comments made early in year 2001

For earlier comments made in year 2000

Don't confuse brains with a bull market.

-----Humphrey Neil