For Sunday, August 1, 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 + 59.5 % S&P 500 Index  + 24.7 % 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 -    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:

"We have found much to be bearish about over the past several weeks, including a week ending one-day 3% selloff last Friday, but this week several of the bearish indicators we have been closely following have reversed."

This week:

This week the gains were tempered by profit taking, but the indicators still point higher.

The daily chart for the S&P 500 Index - SPX, below, shows that the advance stopped right at the 200-day moving average. The day the SPX touched that line, the index pulled back. The 200-day average is a big deal to many investors, especially longer term ones, and many see it is the dividing line between a bull and bear market. It should be expected to act as strong resistance.

After two days of declines, none of which were extreme, the stock market tanked on Friday morning after the GDP number came in at 2.4% for the second quarter of 2010 when the estimates were 2.5%.

But after the market opened with those steep losses, buyers came in and by the close on Friday the SPX actually finished with a small gain. This was a bullish reversal day. When the stock market is able to discount bad news, you have to consider this as bullish.

We have drawn a rising trend support line in the below chart. It is steep and will not stay this steep for long, but Friday's lows touched that support line and then immediately reversed. That is the level at which buyers saw value and they stepped in.

The SPX remains above the declining trend resistance line we have in the below chart. Though we had a few losing days this week, the trend remains up. It is jagged and volatile and a bit scary, but it is pointing higher.

Should we see selling next week, this position will be quickly exited, but for now the potential for a continued advance remains.

If we continue higher next week, the target is SPX 1131.23. This is the prior rally high and it marks resistance. We could again see selling at this level, but a close above 1131.23 would constitute a breakout for the SPX.

Subscribers should watch this level as it is very important, as are the lows reached intra-day on Friday at SPX 1088.01.

Conclusion:

The SPX is now decisively above its 50-day moving average for the first time since early May. The SPX remains below its 200-day moving average after reaching it mid-week and reversing. The 50-day average is still below the 200-day average.

We have had "seven" unusual and bullish breadth explosion days. Typically two such days within two months marks the beginning of a bullish advance. The stock market appears to have ignored most of these bullish days but they may be a sign that a big move is imminent.

The SPX has crossed above its long term declining trend resistance line and remains above. The SPX reversed from its rising trend support line in a bullish reversal on Friday.

The SPX portion of this strategy is in a BULLISH position 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 has issued a buy signal, bringing this strategy to a 50% invested position as of the close on Monday, July 26th. As discussed last week, the NDX 1850 level caused the NDX to reverse two weeks ago and we have been watching it as a potential rally top."

This week:

The Nasdaq 100 Index - NDX sold off this midweek but on Friday, reversed its declines and rallied to close with a gain. Not much of a gain, but considering the lows reached early in the day it was a reversal.

The early selloff in the NDX on Friday reached a number of critical support levels. The 50-day moving average, the 200-day moving average, the declining trend resistance line (red line) and the rising trend support line (green line).

All of these are grouped together at around NDX 1835-1845. When this level was reached intra-day on Friday, the NDX reversed and closed the day with a gain. This was a bullish reversal day for the NDX.

For the week, the NDX closed above all of these support levels and ended the week with a gain that should point to higher highs on Monday.

However this is a fragile stock market. The volatility has been extreme and anything can happen. The selling this week puts this strategy near a sell signal. Early next week will be critical for this portion of the Bull & Bear strategy.

Conclusion:

The NDX is now back above its 50-day moving average. The NDX is now back above its 200-day moving average.

The NDX has broken out above the prior July rally highs.

The NDX has broken above its declining trend resistance line.

Declines this week tested all the above support levels and the NDX reversed from them and again moved higher.

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