For Sunday, August 24, 2008                                               Go to Website
	Current Strategy Positions FibTimer currently has 11 successful timing strategies   Aggressive S&P Position -         BULLISH   Conserv. S&P Position -             BEARISH   Aggressive Nasdaq Position -  BULLISH   Aggressive GOLD Position -      BEARISH   Aggress. SMALLCAP Position - BULLISH   U.S. Dollar Timer Position -        BULLISH   Aggressive BOND Position -      BULLISH These positions were started over previous weeks. You need a paid subscription for real time signals. Sector Funds, ETF and Stock positions are not included above.

Last week we wrote:

"...Another week in which the S&P 500 Index - SPX struggled, but again achieved higher intra-week highs, higher intra-week lows and a higher weekly close. The chart (below) shows a clear path to the upside with a rising trend support line (green) unbroken."

This week:

Two days of heavy selling early this week upset the steady, though slow, advance of the S&P 500 Index - SPX.

On Tuesday the rising trend support line was broken, suggesting a correction was beginning that could last awhile. It was not enough for a sell signal, but certainly did suggest a change in the course of the advance.

The selling also pushed the SPX back below its 50-day moving average.

But on Wednesday and for the rest of the week, the bears could not push the market any lower, and on Friday, a solid rally took the SPX back up to the rising trend support line as well as back above the 50-day moving average.

The close, back above the 50-day moving average, is particularly bullish in the short term.

Ending the week with a strong rally is likely to spill over into early next week so we are looking for more gains. After the momentum slows it will be back to the struggle, however it is at least possible that we have seen the end of this correction.

The stock market continues to solidify its gains and the July 15th lows are looking more and more like a long term bottom.

The SPX has a long way to go though before we can say it is in a new bull trend. In fact the prior rally highs reached back in May must be surpassed before we can say there is a bullish technical breakout. That is some 10% above current levels.

At this point just a run to the resistance levels would be acceptable, at SPX 1320-1347. If they are surpassed, then we have something to be excited about.

The small caps and Nasdaq indexes are still showing strength and that is a positive. The Nasdaq 100 Index remains above both its 50-day and 200-day moving average. It also made up a good amount of the early week losses and will also likely continue higher early next week.

We continue to look for the market to run into a wall around the SPX 1320-1347 levels that we have labeled as resistance in the below chart.

When the SPX closes in on the 1347 level, it will closely coincide with the 200-day moving average. That may turn this level into do-or-die for the SPX.

We continue to watch these resistance levels with great interest because the specter of inflation and potential rising interest rates in coming months make a long term trend unlikely. This suggests the possibility of a near term top, followed by another leg down in the bear market.

However this does not have to happen. The stock market could just as easily plow right through resistance and continue on to become a new bull market.

As unlikely as this scenario may seem, trend followers, as we are, will be onboard. And if we turn lower, we will be in bearish positions for the ride down.

For subscribers who overly worry about short term swings in the financial markets, remember that you do not have to be an aggressive timer to be a profitable timer. This strategy can and does incur small losses on occasion. Money is made in both aggressive and conservative style trading. Our Conservative S&P Timer strategy trades only the long term trends but that means it profits without the numerous buy and sell signals that active and aggressive traders take. The Conservative S&P Timer has been in cash since January 7th.

The SPX portion of this strategy is in a BULLISH position. Subscribers following this strategy should be in the Rydex Nova Fund - RYNVX  (or other bullish S&P index fund) for both the Bull Only (active) and Bull & Bear (aggressive) strategies

S&P 500 Index (SPX) Daily Chart

Nasdaq 100 Index (NDX) Chart Analysis

Last week we wrote:

"... The Nasdaq 100 Index - NDX continues to outperform the big cap indexes and has now closed above both important resistance levels (see below chart)."

This week:

Right when we began to watch for a run to the prior rally highs in the Nasdaq 100 Index - NDX, the market turned lower.

You can see in the below chart that the NDX had surpassed the important resistance levels, but those levels remain close enough to be considered as contributing to the declines this week.

Still, the NDX displayed strength in the second-half of the week and pulled back to close right at critical resistance (NDX 1941) and also is back above both its 50-day and 200-day moving averages.

This strength will likely carry through with strength early next week.

The NDX now needs to close above its highs of the previous week to again forecast a run to the prior mid-year rally highs at NDX 2055. A strong week might do this so next week is going to be an important one to watch.

Last week we wrote; "We should now see this index make a run for the old rally highs at NDX 2055 in coming weeks, though the path is not likely to be a smooth one considering how fast the gains to date have been achieved."

The "not as smooth" part is where we were this week. Hopefully next week will see the strength back in NDX stocks and some momentum to the upside again created.

The NDX portion of this strategy is BULLISH and in the Rydex NDX 100 Fund - RYOCX (or other bullish NDX 100 index fund) for both the Bull Only (active) and Bull & Bear (aggressive) strategies.

Nasdaq 100 Index (NDX) Daily Chart