Timing Market Turns – 03/24/2006

Market Timing - posted at 0400 EST

Swing trade - still 100% short, as of the open on Monday, March 20th.

Investor core - The core position is now 100% short. Stop at SPX 1310, MIT.

Today, Friday the 24th is a time locus for the 30 year U.S. Bond. Interest rates for the bond are known as the TYX symbol. They move inversely to bonds. The currencies have already signaled a change is possible, and they are linked in various ways to domestic and international interest rates.

A downward move in rates would result in an upward move in bonds. Recently, rates can be seen moving in similar direction as the stock indexes. This is not always true. Whether rumor or not, some people are speculating that the Federal Open Market Committee will not raise the Fed Funds rate on Tuesday next week. Others are speculating that Fed Funds will rise 25 basis points, BUT that this would be the last one for some unknown time. That could be perceived as not really raising at all. Market traded financial instruments (bonds, notes) would likely have a strong and immediate upward move.

Follow me on this - market traded rates go downward, then, possibly the market indexes follow on their downward track that we want in this trade - all caveats apply.

All the above is a reason why I suggest watching the bond and note futures prices this morning to look for an effect in the morning session of the indexes.

To sum, bonds have a time locus and a technical buy signal in the oven, and, interest rates and some cross currency rates show definite signs of lows against the US$. Result - this short trade has a good environment for beginning to move to more profitable levels - downward in the indexes, that is.

Good Trading and God bless

W. B. Busin