Timing Market Turns

Market Summary -

Updated on Saturday, August 11, 2007


We did expect that Friday's action would be upward reversal and close positively. We believe the Federal Reserve actions actually held the markets in place.

It seemed to us that each time the Fed added reserves by buying mortgage backed securities, the small rallies fizzled. So the indexes slogged into the closing and we are left with structure and technicals that are likely to produce a huge run upwards on Monday, August 13th, 2007.

But our Time Loci are pointing to Tuesday as the end of this track. We then expect the normal shilly-shally into the derivative expiration on Friday.

If not sooner, we expect that Friday will end the "normal" market conditions. We expect to be partially or potentially totally short in the index Swing positions and Investor Core positions by Friday's closing or Monday's closing.

The 1998 track is still on course, but we do know nothing is perfect and the Fed's intervention may have altered the timing. A potential second effect of the Fed's intervention is that it might enhance the downward momentum we expect to begin at latest by August 24th, and, ending at a September 4th low. (There should be a strong move upward from that low, followed by a final downward movement into early October.)

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God bless all of you.

W. B. Busin

http://www.market-timing-wbbusin.com/

1230 EDT, August 11, 2007


P.S. Bull Market is over IF these levels are penetrated and closed below for more than one day:
SPX 1364
Dow 11,939
NDX 1711


RUT was near critical support at 758, and 75.15 for the IWM; penetrating that level will quickly lead to the July lows of 2006 at 670. We don't view that as likely.

RUT's structure is much different from the above indexes. We believe it has tracked in an upward corrective structure (not pulsive), as similarly the SOX has tracked. It is a quite difficult and unpredictable structure even when it is trending with the higher capitalization indexes. But we will attempt to try and keep a hold on it and its timing.

RUT may not advance as well as other indexes early in the next upward move this Fall. But it may soon begin to outperform the 'blue chips'. That is a potential based on the 1998-2000 pattern. IWM traders may want to look to the DIA/SPY/QQQQ for the early months of the next movement.