Nov 15 Weekend Report

I'm writing this blog early because I need to go out this weekend and raise money for the Child Soldiers of Sri Lanka.

The stock market rallied off the 5 week cycle low on day 24 Thursday on the full moon. Last time it topped on a full moon (Oct 14) and bottomed on the new moon (Oct 28). We made new lows on the S&P 500 for the year at 820 and then rallied strongly to 911 in what is known as a key reversal. Early today the market sold off sharply and then recovered up until about an hour before the close and then dramatically sold off into the close. This pattern is known as a bullish irregular flat flag. There is support on the SPX near 860 near the .618 retracement and last impulse wave up forMonday.

Our fund model took a hit for the first time since October being down about 10 to 12% on the 2.5X funds. We continue to hold on the buy side and see higher prices ahead on all models including gold mining.

Today was the 4/8 day cycle top and sure enough we topped late in the day and fell back. The next minor cycle top is due near Thursday next week +/- 1 day. After that a final top should ideally occur around Thanksgiving. I say ideally because lately the market has been skipping on the 12 day cycle and not the 8 or 16 as is normal. The 16 day cycle top can come as early as 12 or as late as 20.

We are fast approaching another bear market top soon that should lead us down into the 23 week cycle low due approximately around Dec 23rd. I have targets of 788 to 793 SPX. The upside could be anywhere between 1024 and 1064/1072. The 50 day average is likely to be tagged/ or taken out on this next move and it is just under 1050 right now and falling.

Once the 23 week cycle low comes in, we should see a nice rally into mid February. Overall its hard to say how far the markets will bounce back, but the cycles are saying a top in around March/April 2010 and then a hard fall down to 443 SPX. We could conceivably see a move back to new highs before that time, but it remains to be seen and this market should be viewed as a trader's market only.

The gold and silver mining shares have the best potential going forward and I believe the lows seen around Oct 24/27 will not be taken out, at least not in my lifetime. They too should be traded for most of next year until Nov 2009 where it should be a buy and hold market until an expected IT top there around late May/early June 2010.

Gold Mining Timer

Our VST/ST fast Gold Mining trading model is +53% since Oct 23, 2008 and the slower ST/IT model is +50% since the same date based on Profunds gold mining bull/bear funds.

Nov 14 Pre-Market Update

Looks like a little selling on the open. The 4 day cycle +/- one day is due to top this morning. The larger 8 day cycle is due to top later today +/- 2 days. The larger 16 day cycle is due to top around Thanksgiving. I was looking for an 800+ point Dow rally yesterday and boy did we get it off the bottom!

Gold looks strong today. We are long in all models including gold mining shares since the the PM NAV Wednesday close. Our Direxion ETF NASDAQ 100 bull/bear 2.5x fund was +76% as of the close Wednesday (since Oct 20, 2008). Yesterday's push higher puts that closer to +121% I believe! It has yet to be verified by Timer Trac as they have not yet updated.

Any selling should be bought, and I see nothing but higher prices ahead for now. The daily MOM indicators did not qualify the run down to SPX 820 suggesting a nice run here is likely into the end of the month.

What would make me change my mind? If we went up too fast here over the next day or 2 and hit the 980+ level too quickly. That might make me rethink the timeframe.