Timing Market Turns – 01/30/2006

Timing Market Turns – 01/30/2006

Market Timing for Swing Trading – We will take profits on Monday on any attempt to exceed SPX 1286 but we expect to be out of our longs before noon N.Y. time. We will then attempt to establish a short position, which should last from 3 to 4 days. The downward move we expect could start and end with a significant push downward.

Market Timing for Investors – We will go to a full cash position at the opening. Our view that SPX 1300 might be exceeded on this upward movement is very unlikely. Even though the recent entry has only been established for a few short days, taking the profit and waiting for completion of the current structure’s downward pattern to complete is the prudent strategy in our view.

We will consider ourselves wrong at a close above SPX 1305, and begin looking for a re-entry opportunity for both traders and investor views.

Since the October 2005 lows, the indexes have traded and moved more like the crude oil market than a stock market. Recognizing and adjusting to this change has given our core position a characteristic more like the swing trade positions than what is normally a more long-term perspective. So be it. It is not an uncommon characteristic of a topping process after more than 3 years of upward movement in stocks and indexes.

I owe a few answers to some interesting questions. I hope you will excuse the postponement till perhaps Tuesday. We have spent a great deal of time examining all the data runs for the indexes. The result is this rather unexpected directional change.

Good Trading and God bless.

W. B. Busin