For Sunday, February 28, 2010                                             Go to Website
	Current Strategy Positions   2008 Full Year Results Fibtimer Timing + 17.3 % S&P 500 Index    - 39.9 % 2009 Full Year Results Fibtimer Timing + 54.8 % S&P 500 Index  + 23.4 % also SPX Aggres Timer   + 84.8% Gold Fund Timer     +102.7%  Smallcap Timer      + 74.0 % FibTimer currently has 12 successful strategies   S&P 500 Position -        BULLISH   Nasdaq 100 Position - BULLISH   Gold Stocks Position -  BEARISH   SmallCaps Position -   BULLISH   U.S. Dollar Position -    BULLISH   Bond Fund 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:

"The stock market is following a path that we wrote was quite possible three weeks ago when we exited to cash positions. Both the S&P 500 Index - SPX and Nasdaq 100 Index - NDX, followed in this strategy, are in the midst of strong rallies. Each has recovered a little over half of their correction losses. Both indexes are now at do-or-die levels."

This week:

Last week we wrote that both the S&P 500 Index - SPX and Nasdaq 100 Index - NDX (discussed below) had recovered about half of their correction losses and were right at strong resistance levels.

After an entire week of trading, with intra-day swings of better than 1% on a daily basis in most of the major indexes, we are still right at those resistance levels.

An important aspect of the trading this week is that there were huge sell offs, on several occasions, but all of them turned around as buyers refused to let the markets go down.

On Thursday, the sell off was quite extreme with near 2% losses midday, yet the markets reversed and climbed back to almost even by the close. Potentially a reversal day and a bullish indicator.

It must have been an upsetting week for those who watch every day and make emotional trading decisions based on that day’s activity. Imagine taking positions and seeing them reversed on the following day, every day.

Importantly, both of the trading positions in this aggressive strategy turned positive. At Friday's close they were "just" positive; meaning it would not take much downside to reverse the positions.

So we find ourselves poised for a potential rally, yet with our finger on the sell button in case the stock market fails to follow through.

The SPX has again closed a fraction below its 50-day moving average on Friday. It is also a fraction below the critical 61.8% retracement resistance level at 1109.98. This is the 61.8% retracement of the entire January 19 to February 5 correction.

Last week we also wrote; "If there is going to be selling, or if this rally is going to stall, it should do so between the 50% and 61.8% retracement levels."

Yet though there were extreme selling events this week, the major indexes refused to stay down and every selloff reversed. By week's end we were close to unchanged. In our opinion this is bullish activity.

Of course we do not take positions based on opinion. The aggressive trend indicators we follow turned bullish and we followed them as always. But as we wrote above, they are only "just" bullish. They could easily reverse next week.

Subscribers who follow this aggressive strategy should be aware that changes could be in store next week if the markets head lower.

Our trend indicators though, are now calling for higher highs. They are right more times than they are wrong so next week will be extremely interesting.

Next week will be critical. A decisive close above SPX 1109.98 would indicate we will soon test the prior rally highs up at SPX 1150.

Although we see this week as a bullish one because all the declines were reversed, it was not a breakout week as critical resistance levels were not surpassed. But those levels could be surpassed next week.

We have labeled the daily chart as a 3 wave pattern with the final Wave c having completed. A 3 wave pattern is typical in normal corrections.

There is support at the November 2, 2009 lows at SPX 1042.88. We may have come close enough to this level three weeks ago to have completed a normal correction.

The SPX has also closed below its rising trend support line that has held all declines since back in August 2009. The SPX has rallied back up to that trend line.

Conclusion:

The early March close below the November 2008 lows, as well as below the 2000-2002 bear market lows, 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 now in the midst 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 currently below its 50-day moving average but still above its 200-day moving average. The 50-day average has turned down. The 200-day moving average is at SPX 1033.04 which, along with the 1042.88 support level (see daily chart below), creates a powerful area of support.

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:

"The Nasdaq 100 Index - NDX is trading in lock-step with the SPX big cap index. Like the SPX it also rallied this week and closed just a fraction below critical resistance at 1826.39. But, unlike the SPX, the NDX did manage to close above its 50-day moving average."

This week:

The Nasdaq 100 Index - NDX had the same volatility as the SPX with strong sell offs that refused to stay down. Buyers bought into all of them and the week closed mostly unchanged.

While we have labeled the SPX correction to date as a completed three wave (abc) decline, the NDX is labeled as just a Wave a (one single wave) decline.

Though Elliott Wave analysis would say there must be a 3 wave decline for a completed correction, it does not have to be that way. We could just continue higher from here and one of the minor rallies in the decline would then be labeled as a wave b, thus making this into a 3 wave (abc) decline. Some subscribers may already have done this on their own charts.

So the wave analysis for the NDX is, we feel, indecisive.

The NDX position turned bullish this week and ended the week on the plus side. Yet the index has closed fractionally below resistance at NDX 1826.39. A solid close above resistance at 1826.39 would likely result in a run for the prior highs up at NDX 1900.

Look for this early next week. A rally at the beginning of the week would solidify the NDX position and point to a run to the NDX 1900 level.

The NDX 1900 level stopped the advance the first time and will likely be a problem again if it is reached. Something to watch if or when we get there.

The coming days, and especially early next week, look to be critical. Aggressive timers should be aware that the bullish positions could be reversed if the current market strength evaporates.

The indicators are calling for higher highs, but if the markets reverse we will be exiting quickly.

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 fractionally below its 50-day moving average. The NDX is above its 200-day moving average.

The 200-day moving average is right at the 50% retracement support level so this should offer very strong support if reached. Hopefully it will not be reached.

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