For Monday, November 15, 2009                                       Go to Website
	Current Strategy Positions   2008 Full Year Results Fibtimer Timing  + 17.3 % S&P 500 Index      - 39.9 % 2009 to Nov 13 Fibtimer Timing + 57.0 % S&P 500 Index  + 21.1 % also Gold Fund Timer   + 96.5 % Smallcap Timer     + 55.3 % Bond Fund Timer  + 15.8 % FibTimer currently has 12 successful strategies   S&P 500 Position -        BULLISH   Nasdaq 100 Position - BULLISH   Gold Stocks Position -  BULLISH   SmallCaps Position -   BEARISH   U.S. Dollar Position -    BEARISH   Bond Position -              BEARISH 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:

"For subscribers who crave action, this week must have been fun. After holding a bullish position in the S&P 500 Index - SPX for months, the index declined with enough speed to trigger a midweek sell signal that was effective at the close on Thursday, November 5th. Fibtimer is already in a bearish position for the NDX, and considering the current volatility we opted to exit to a cash (money market funds) position, instead of a bear fund position, for the SPX. This would have placed the strategy 100% in bear funds in an, as yet, unproven decline."

This week:

The S&P 500 Index - SPX rallied this week making this the second consecutive week of gains.

The strength in stocks is difficult to understand. It appears that we have an anemic recovery underway. Unemployment could still rise in coming months and even if it does begin to decline; most economists are looking for several years of high unemployment numbers.

Jobs are the foundation of a recovery. So if there are fewer jobs, where will the capital come from to spur a continued recovery?

We do not have the answer. Apparently though, enough investors are looking for the recovery to continue and they are betting with their wallets. Thus the reversal from what certainly looked to be the beginning of at least a normal correction (10%).

Typically we view new closing highs as the confirmation of the end of a correction. Also, corrections typically consist of three waves. This correction appears to have a single down wave and then a second wave up and to new highs. Definitely not typical.

But we trade what actually happens, not what we think will happen. That is the critical difference between successful timing and unsuccessful timing.

Monday's rally was a huge surprise. Not just that we had a rally, but that we had another breadth explosion with up volume on the NYSE swamping down volume by 16 to 1.

Long term subscribers know that such days with greater than 9 to 1 up volume vs. down volume are rare events and typically they occur at the "beginning" of rallies. We had several of them back in March and early April when the current 2009 advance was just starting.

There is one requirement left. We need two of them within a fairly short time frame to have a new bullish signal (based on this indicator). If we get the second one we will discuss it here of course.

Last week we wrote that the SPX would likely see a continued advance to at least the 61.8% retracement level at SPX 1073. Should the SPX "close" above 1073, we may very well see a new test of the rally highs.

This week we quickly surpassed that resistance level and then rallied to a new closing high on Wednesday. That high confirmed the end of the correction. The market pulled back on Thursday, but regained most of those losses on Friday.

In the below chart we have drawn a long trend support line (green) starting at the March lows. After this week's gains the SPX is back above this trend line.

We are back on the "right" side of the 50-day moving average. This level had not been broken since early July. In that previous correction the 50-day moving average was again surpassed after just over a week when the SPX again rallied to new highs.

Last week we wrote: "The S&P Volatility Index - VIX, had jumped to its highest level since July, closing at 30.69. It also had broken above its upper Bollinger Band, a tool we watch closely here. Typically, when VIX closes above upper band it means we have a bounce coming for stocks."

Vix has now declined to the 23.36 level and there is further downside potential before the lower Bollinger Band is reached. So according to this indicator, there is potential for a continuation of the rally.

Conclusion:

The early March close below the November lows, as well as below the 2000-2002 bear market lows, has completed a bearish Elliott Wave (5 Wave) pattern.

We have an Elliott Wave confirmation of a new bull market for the SPX. This occurred when the SPX closed above its prior bear market Wave 4 rally high at 934.70 on Monday, June 1st. Accordingly, we are at the beginning of a new advance that will last months and possibly years. How far it will go is unknown, but it should be very profitable and consist of several waves higher, with corresponding corrective waves along the way.

The SPX is now above its 50-day moving average and also above its 200-day moving average. Both averages are moving higher.

Looking back to the beginning of this advance, there have been a total of nine breadth surges of better than 9 to 1 up volume vs. down volume which have occurred during the early weeks or at the start of each new rally. These predictive days have already been proven correct. They have no upside limit though so higher highs can still be ahead.

This week we had another breadth surge. This time it was a 16 to 1 up vs. down volume rally on the NYSE. We are watching for a second such day to confirm a bullish signal based on this indicator.

The target for this rally is still SPX 1119, only 2.4% higher. A close above SPX 1119 would point to a run to the next resistance level, at SPX 1226.

Big picture analysis: The stock market is looking at an advance, with corrections, that could last years. We have considerably higher highs ahead. There will be corrections along the way and no one will know when they are about to occur. But after the corrections, the stock market will make ever higher highs.

The SPX portion of this strategy is in a BULLISH position and in the Rydex Nova S&P 500 Fund - RYNVX (or other bullish S&P index fund).

S&P 500 Index (SPX) Daily Chart

S&P 500 Index (SPX), Weekly Chart

Nasdaq 100 Index (NDX) Chart Analysis

Last week we wrote:

"Unlike the stronger performance for the SPX, the Nasdaq 100 Index - NDX has not generated much momentum. Partly this is because the NDX had steeper losses initially and those losses require a longer period of recovery."

This week:

The Nasdaq 100 Index - NDX reversed from its declines with a surprisingly powerful rally that has pushed this position back to new highs.

The NDX is typically the most volatile index. However this rally was still unusual in the speed of the reversal after what appeared to be the start of a normal correction. All the NDX had was a severe decline and then a huge rally back to new 2009 highs.

Speaking of those highs, the posting of new highs confirms the end of the correction for the NDX. It also surpassed the 1772 level that has held prices in check since September.

The close above NDX 1772 forecasts higher highs in coming weeks. Last week we were looking for a failed double top and now we have new rally highs instead.

The NDX has again closed above its 50-day moving average line. The close below this average was the first such crossover since July. In that previous decline, the average held and after a week the NDX rallied back above the 50-day average and eventually to new highs. You can see this in the daily chart below.

The NDX is again above its long term rising trend support line (green line) just as is the case for the SPX. This trend support line has defined the direction of the major trend since March.

Conclusion:

The NDX has a Wave 5 Elliott Wave low in place at its November 2008 lows. The NDX has closed above NDX 1378.40, the Wave 4 high, which confirms this as a bear market bottom based on Elliott Wave theory. The SPX has also confirmed this as a bear market bottom.

The NDX is now back above its 50-day moving average. The NDX is far above its 200-day moving average. Both of these averages are rising.

The NDX is back above its rising trend support line.

The NDX has closed above the critical 61.8% retracement resistance level at 1772. This forecasts continued higher highs in coming weeks.

The NDX portion of this strategy is in a BULLISH position and in the Rydex NDX 100 Fund - RYOCX (or other bullish NDX 100 index fund).