Timing Market Turns - 03/10/2006

Market Timing - posted 1246 EST

Swing Trade position - 100% cash

Investment core position - 100% cash


We continue to look for a turn for the time locus point on Monday, March 13, 2006. We will not trade until we see some resolve in the structure. If it shows itself as a a high, we will decide whether and how to trade the expected downward move based on the volume pattern and structural character of it's form prior to or during Monday's session. Clearly, a high on Monday will indicate continuation of the current downward corrective movement that began on the February 27th high for the S&P 500 index (SPX).

Adding to the decision process is that Monday will be the first day of option expiration week. Many times the indexes rise into that week and then turn down or vice versa. If we see an opportunity to go short - in only the Swing position - the three indexes near today's close or early during Monday's session, we will update here.


We stated on March 8th:

as we expect SPX 1284 to be seen. It is possible for SPX 1288 to be strong resistance. We think SPX 1294 will prove impossible to penetrate on this small upward correction.

We expect the next significant move in the SPX to be downward with SPX 1250 as a target for support.

The SPX is currently pushing against the 1284 resistance level. We maintain the above resistance levels will stop this small upward move today or Monday.

It does not seem likely that we will see an indication of an upward turn in the indexes until the SPX reaches near the 1245-50 level. This is an important barrier to structural integrity. The penetration of SPX 1220-30 level would signal that a top is set in the SPX. In fact, breaching SPX 1240 on a closing basis, at this time, would raise to prominence several factors that would signal that the indexes had moved fully into a downward corrective role.

This would possibly negate an upward move toward new recent highs in some of the indexes, resulting in only a modest counter-to-the-downward-trend up move. But, we are getting too far ahead of the moment. We will discuss attempts at new highs when we see signals for an upward move.

An unlikely scenario, but remotely possible - a steep decline beginning today and completing during Monday's session in the SPX 1245-50 level. We could easily find ourselves wanting to take a small long position. I would assign a 10% chance to this scenario developing at this time.


Blog housekeeping -

We have been bitten by Murphy's Law in the past weeks as we try to build a website. We might tell this story sometime soon. For example, I am posting from a computer that is not my own. Fortunately, the indexes have behaved according to our general scenario.

As one supportive friend stated early in the web site development process, "You are trying to build a NASA space shuttle that looks and operates like microwave oven." I am beginning to think that was an understatement. It will be worth the extra effort and time if it is easy for you and for me to use. Thank you for your patience.

We hope to be able to give you a link this weekend for an email alert service. It will broadcast to those on the list that we have updated the blog, and in the future, updated the website if that is necessary.

We will update here at around 1530 to 1545 EST today.


Good Trading and God bless

W. B. Busin