4-29-05 Dear Readers: Another whipsaw, a buy signal after yesterday's notional sell signal. We ignore again the buy signal as a Whipsaw and the Whipsaw State stays Dirty. The S&P closed up 14 to 1157. I think the path of least resistance for the near future is down. 

The on-balance volume (OBV)(note 2) today was +891  (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -392 to -91. We dropped a -614 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Monday due to dropping a positive number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the upper threshold of -28, gives a Short-term BUY signal, but it is ignored since yesterday was a SELL (albeit notional) signal, and therefore today's signal is classified as a Whipsaw. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week/End of Month update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. But the S&P is now below the 40WMA, which does not affect the conclusion that this is a continuing BULL market, and in fact is a buying opportunity. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is BELOW that average. Table 2 of the Long-Term System page was updated for the month of April, and that table shows an increase in the nine month moving average, indicating a BULL Market, but that the S&P is below that average line. We are below the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is -0.8% using S&P only as the basis, or -3.3% using 50% of S&P change and 50% of NASDAQ Composite change for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The S&P500 needs to stay above about 1102 (bear bogey) for another week to avoid a BEAR market signal, after which we see declining bear bogies for a few weeks, which means it will be easier for the market to stay bullish.

Short Sellers paragraph. We going to test the new rule again. We have a second occurrence of the whipsaw buy when we are short stock. On 4/27 and 4/28/05 we discussed whether we should buy in our short sales even though we do not act to buy long on the buy signal since it is a whipsaw. The conclusion we came to is that we should not buy them in. So today we are sitting tight and not buying in the shorts. We'll know soon enough if this was a profitable decision. When the market opened higher today, we bought in some of the short positions and when the market turned lower, we put them on again. See Glossary for any unfamiliar terms.

4-28-05 Dear Readers: The longs got whacked again (Long-term Investors sit tight). The S&P closed down 13 to 1143. I think the path of least resistance for the near future is down. If we weren't protected by the Whipsaw rule, today we would have sold, after yesterday's buy signal, after the day before's sell signal. See why we have the Whipsaw rule; it did its job for us again, we did not act on these latter two signals; which would have been a money-losing trip.

The on-balance volume (OBV)(note 2) today was -1349 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +127 to -392. We dropped a +1246 from the average from six days ago, giving a large negative bias to the 5DMA today. We will have a positive bias to the 5DMA Friday due to dropping a negative number from the 5DMA from six days prior. The simultaneous downturn in S&P and 5DMA, while the 5DMA was below the upper threshold of +19, gives a SELL signal, but it is sterile since yesterday was a Whipsaw BUY signal, which we did not act on. The notional BUY (on paper only) of yesterday was matched with the notional sell today. If tomorrow is NOT a buy signal, then the Whipsaw State will change back to Clean, and we can buy the next buy signal. Please see Glossary  for any unfamiliar terms.

Short Sellers paragraph. When the market opened lower today, we attempted to open again the short sales we did on 4/26. We got some and didnt get others. As the market closed much lower, it looks like the answer to yesterday's question is that we should not buy back the shorts on a Whipsaw BUY signal, in other words, treat closing shorts the same way we treat opening new long positions: dont. While this is only one data point on which to base a rule, it is a very rare phenomenon we are dealing with, so absent other info, we have a rule based on one incident. If we get other cases like yesterday, we can re-visit the rule. See Glossary for any unfamiliar terms.

4-27-05 Dear Readers: In a bit of a rebound from yesterday's 10 point drop, the S&P closed up 5 to 1156. I think the path of least resistance for the near future is down. While today was a BUY signal, we dont act on it (see next paragraph).

The on-balance volume (OBV)(note 2) today was +90 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -140 to +127. We dropped a -1244 from the average from six days ago, giving a huge positive bias to the 5DMA today. We will have a negative bias to the 5DMA Thursday due to dropping a positive number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of -28, gives a BUY signal, but since yesterday was a sell signal, today's buy is a Whipsaw, and is not acted upon. The Whipsaw State changes to Dirty. The Market State page has been updated for the Whip. But we must do a notional BUY (on paper only) to determine when to change the Whipsaw State back to Clean. If the next SELL signal is not followed by a BUY the next day, we then change the Whipsaw State back to Clean, and we can then buy the next buy signal. And as if that weren't enough churning for the week, we are now above the +19 threshold for a sell signal which could come as soon as tomorrow. Now perhaps you can see why we dont act on whipsawed signals. Please see Glossary  for any unfamiliar terms.

Short Sellers paragraph. We have a chance here to see science being done in real time. Yes, we have never had (that I recall) a buy signal that was a whipsaw when we were short. We dont buy on a whipsaw buy signal, but should we buy to cover the short positions? In a few days we will know the answer to that and we will have a new rule from that. Meanwhile we need to know what to do today. In cases like this, I cover half of my positions. We were close to break even on the ones we closed, but we dont now report any short transactions in the results tables. If the S&P had rallied today above the previous minor high (of 1162 on 4/25) we would have had to buy back ALL the short positions based on the busted bogey rule; but that didnt happen. Why would we consider covering the shorts when we dont act on the BUY signal? Because being short is more risky than being long (owning stocks). See Glossary for any unfamiliar terms.

4-26-05 Dear Readers:  Short-term SELL signal today (see next paragraph). The S&P closed down 10 to 1152. I think the path of least resistance for the near future is down. 

The on-balance volume (OBV)(note 2) today was -1111 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +199 to -140. We dropped a +806 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Wednesday due to dropping a negative number from the 5DMA from six days prior. The simultaneous downturn in S&P and 5DMA, while the 5DMA was above the upper threshold of +19, gives a Short-term SELL signal. We sold the positions we bought on 4/18/05 and 4/21. The round trip profit in the account on these was 0.07%, giving account for the percentage of capital invested in each buy, bringing the change for the year to -2.1%, compared to the S&P change of -5.0%. The Market State page has been updated for the SELL. Please see Glossary  for any unfamiliar terms.

Short Sellers paragraph. Since the drop in S&P was more than 4 points, and since the Market State is OSCILLatory, and since the Short-Sell State is Clean, we are able to sell short this sell signal. We put only 50% of available capital at risk, not because of any rule, but just out of caution. We sold short equal amounts of SPY, IWM and QQQQ. Please see ETF page for meaning of these symbols and see Glossary for any unfamiliar terms.

4-25-05 Dear Readers:  The S&P made a nice up move today, the S&P closed up 10 to 1162.  But I think the path of least resistance for the near future is down. 

The on-balance volume (OBV)(note 2) today was +997 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from +109 to +199. We dropped a +352 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday due to dropping a positive number from the 5DMA from six days prior. We could get a Short-term sell signal any day since we are now above the upper threshold of +19 in 5DMA for a sell. Please see Glossary  for any unfamiliar terms.

4-22-05 Dear Readers:  The S&P was down 16 the last hour, then recovered by the close. The S&P closed down 8 to 1152.  I think the path of least resistance for the near future is down. 

The on-balance volume (OBV)(note 2) today was -778 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV actually rose from -66 to +109. We dropped a -1491 from the average from six days ago, giving a large positive bias to the 5DMA today. We will have a negative bias to the 5DMA Monday-Tuesday due to dropping a positive number from the 5DMA from six days prior. This was not a sell signal since the 5DMA rose. We could get a Short-term sell signal in a few days since we are now above the upper threshold of +19 in 5DMA for a sell. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. But the S&P is now below the 40WMA, which does not affect the conclusion that this is a continuing BULL market, and in fact is a buying opportunity. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is BELOW that average. Table 2 of the Long-Term System page was updated for the month of March, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is -1.2% using S&P only as the basis, or -3.2% using 50% of S&P change and 50% of NASDAQ Composite change for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The S&P500 needs to stay above about 1102 (bear bogey) for another 2 weeks to avoid a BEAR market signal.

4-21-05 Dear Readers: Wham, bang, hitting the stops in both directions, yesterday way down, today way up. The S&P closed up 22 to 1160. BUY signal today (see next paragraph). There is a large "overhang" in the market, meaning that much trading was done at higher prices, and so people who bought at higher prices will "just want to get even". The gives a resistance to further advance, so we expect this rally will not last long. Please see Glossary  for any unfamiliar terms.  

The on-balance volume (OBV)(note 2) today was +1522 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -604 to -66. We dropped a -1444 from the average from six days ago, giving a large positive bias to the 5DMA today. We will have a positive bias to the 5DMA Friday due to dropping a negative number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of -28, gives a BUY signal, the second one in a row, with no intervening sell signal. We buy with 25% of available funds for equities equal amounts of SPY, IWM, and QQQQ. Please see ETF page for meaning of these symbols. This brings our total exposure to 75% of available funds for equities. Since we are in Intermediate Down Trend, the Long-Purchase State is Dirty, so we scale-in purchases by buying with 50% on first buy signal, 25% on 2nd, 12% on 3rd, etc, so we never run out of investable money. The repeat BUY is shown on the Market State page.  Please see Glossary  for any unfamiliar terms.

4-20-05 Dear Readers: We got whacked again. The S&P closed down 15 to 1138, to a new low for the past 5.5 months. This is not a happy day. We busted the bogey for the BUY of 4/18/05, whose previous minor low of 1142.8 was set on 4/15/05. Today's close is at least one point lower than the bogey of 1142.8. This drops the Market State from RUN-5 to OSCILLatory. That changes the threshold values of 5DMA at which signals are given. We do not sell our long positions when a bust occurs. This is the reason the Short-term System has us scaling-in purchases, so that we always have buying power left for repeat buy signals, which are almost inevitable now. Please see Glossary  for any unfamiliar terms.  

The on-balance volume (OBV)(note 2) today was -1518 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from -558 to -604. We dropped a -1012 from the average from six days ago, giving a large positive bias to the 5DMA today. We will have a positive bias to the 5DMA Thursday-Friday due to dropping a negative number from the 5DMA from six days prior. This was not a SELL signal because the 5DMA was not above its upper threshold of +19 when the downturn in S&P and 5DMA occurred. No signals today, but the Market State drops to OSCILLatory, this is shown on the Market State page.  Please see Glossary  for any unfamiliar terms.

On 4/12/05 I wrote about the reporting of volume figures on the NYSE, which are important to calculating the buy and sell signals of our system. I find that the figures reported on PBS (Nightly Business Report) several hours after the market closes are consistently the lower numbers which add up to about the total volume reported by NYSE from the regular trading session, not including any trading from other exchanges. I find that the figures reported at the end of trading by NYSE must include trading on other exchanges because they usually add up to a larger figure than the total volume for the day reported on PBS. If we are to have a signal we can act upon before the market closes, we must use NYSE reported figures. These will give signals which may be acted upon before the market closes. We have the possibility that a signal may change (it hasnt happened so far) after the late numbers come out. As of now I dont see any way around this.

4-19-05 Dear Readers: In a nice follow-through to yesterday, the S&P closed up 7 to 1153.

The on-balance volume (OBV)(note 2) today was +806 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -630 to -558. We dropped a +448 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Wednesday-Friday due to dropping a negative number from the 5DMA from six days prior. Please see Glossary  for any unfamiliar terms.

4-18-05 Dear Readers: Finally we get a small up day. Short-term BUY signal today (see next paragraph). The S&P closed up  3 to 1146.

The on-balance volume (OBV)(note 2) today was +352 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -797 to -630. We dropped a -166 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday due to dropping a positive number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of  -28, gives a Short-term BUY signal. Since we have Long-Purchase State as Dirty, we scale-in purchases by buying with only 50% of available cash for equities. We bought equal amounts of SPY, IWM and QQQQ. Please see ETF page for meaning of these symbols. I forgot to mention that the Whipsaw State changed to Clean when  the sell signal of 4/8/05 returned a profit for the notional buy of 4/4/05. In other words the buy signal on 4/4 which we ignored because it was a whipsaw, would actually have been profitable, so the whipsaw state changes to Clean as we observe this on 4/8/05. Thus today's buys are permitted. The Market State page has been updated for the BUY and the Whipsaw Clean. Please see Glossary  for any unfamiliar terms.

4-15-05 Dear Readers: Well this has been a rough week, at least for those (Short-term Investors) who didnt sell on our sell signal of 4/1/05. Long-term investors sit tight, we still have a BULL market, but see End-of-week update below. Zowie! we got whacked today, the S&P closed down another 19 to 1143. This is a new low for the past five months. See yesterday's column also. Please see Glossary  for any unfamiliar terms.

The on-balance volume (OBV)(note 2) today was -1812 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from -577 to -797. We dropped a -713 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Monday due to dropping a negative number from the 5DMA from six days prior. We are now below -400 in 5DMA, which makes the market oversold, and ripe for an up leg. We would expect an up leg to halt at the recent support/resistance line at 1163, as discussed yesterday. The last couple days' decline mirrors a dramatic advance that occurred 11/3/04 and 11/4/04. It's an amazing mirror image that shows up in a chart (sorry I havent mastered putting charts into this column). The next support level down is about 1095; that occurred 10/25/04. I wouldnt expect a single decline now to that level; we are due a rally back to 1163 first, which coincidentally will make a "nice" Intermediate Down Trend (IDT) channel on the chart of S&P. We declared IDT as True on 3/22/05. We could get a BUY signal as early as Monday on an upturn in S&P and 5DMA. As an additional piece of evidence that a Short-term bottom is close is the spike up in the VIX (volatility Index) that occurred today. It jumped up to the levels not seen since the low of 8/6/04. The VIX is like the inverse of the market (peak in VIX usually correlates with a bottom in market averages, and vice-versa). Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. But the S&P is now below the 40WMA, which does not affect the conclusion that this is a continuing BULL market, and in fact is a buying opportunity (any day now, see paragraph above). This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is BELOW that average. Table 2 of the Long-Term System page was updated for the month of March, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is -2.0% using S&P only as the basis, or -4.2% using 50% of S&P change and 50% of NASDAQ Composite change for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. We're really pushing it; the S&P500 needs to stay above about 1107 (bear bogey) for two weeks to avoid a BEAR market signal, with very slightly increasing S&P bear bogey target values in subsequent weeks thereafter, rising to 1120., 13 weeks from now.

4-14-05 Dear Readers: Another rough ride. The S&P closed down hard by 12 to 1162.1. This is a new low for the past four months. The previous lows at this level were 1163.8 on 1/24/05 and 1165.4 on 3/29/05. We did close more than one point below the 1/24 close, so we do count it as a significant new low, and that portends more declines over the near term (few days). It verifies also the presence of an Intermediate Down Trend (IDT) which we declared on 3/22/05. When IDT is true, we scale-in purchases, buying with only 50% of available funds for equities on first BUY signal, etc. Please see Glossary  for any unfamiliar terms.

The on-balance volume (OBV)(note 2) today was -1444 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from -174 to -577. We dropped a +572 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Friday-Monday due to dropping a negative number from the 5DMA from six days prior. We are now below -400 in 5DMA, which makes the market oversold, and ripe for an up leg. We could get a BUY signal in the next few days on an upturn in S&P and 5DMA. Please see Glossary  for any unfamiliar terms.

4-13-05 Dear Readers: Friday the thirteenth came early this week. The S&P closed down hard by 15 to 1174.

The on-balance volume (OBV)(note 2) today was -1012 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +65 to -174. We dropped a +184 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Thursday due to dropping a positive number from the 5DMA from six days prior. The downturn in S&P and 5DMA while the 5DMA was above the upper threshold of +19, gives a SELL signal, but it is sterile since we have no positions on. We are now below the lower threshold of -28 in 5DMA where we could get a BUY signal in the next few days on an upturn in S&P and 5DMA. Please see Glossary  for any unfamiliar terms.

4-12-05 Dear Readers: The S&P made a nice advance and closed up 7 to 1188.

The on-balance volume (OBV)(note 2) today was +448 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from +37 to +65. We dropped a +306 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a negative bias to the 5DMA Wednesday-Thursday due to dropping a positive number from the 5DMA from six days prior. No signals today. The upturn in S&P and 5DMA did not give a BUY signal since the 5DMA was not below the lower threshold of -28. Please see Glossary  for any unfamiliar terms.

There is a situation that probably none of you will care about, but it is important to the Systems you read about every day here. The volume of advancing and declining stocks is available after close of business on Yahoo. The final numbers are reported on the Nightly Business Report (PBS). Up until recently, these numbers were almost identical and we have always used the numbers reported on PBS. Recently apparently the volume numbers continue to change for a couple hours after the market closes because of the after hours markets. And apparently PBS is reporting the late numbers, which almost always differ significantly from the closing numbers from Yahoo that we report daily, and correct to the exact values seen on PBS. Of course the volume numbers are used in constructing the 5DMA, the values of which determine many of the signals in the Short-term System. Until now there has not been a case where a SIGNAL had to be changed because of a change in volume numbers. Eventually though there will be such an occurrence. My inclination is that since the indexes are reported at the close of regular trading,  I think the volume numbers should be taken as well from the close of the regular session, and not the different numbers that are reported late on PBS. As I said, up to now it has not made any difference in the signals reported. But when it does occur, I will use the close of the regular session (the volume reported about 30-45 min after the close used to be the un-varying numbers) as the proper volumes for the signals.

4-11-05 Dear Readers: In a boring day, the S&P closed unchanged at 1181.

The on-balance volume (OBV)(note 2) today was -166 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +71 to +37. We dropped a +4 from the average from six days ago, giving a neutral bias to the 5DMA today. We will have a negative bias to the 5DMA Tuesday-Thursday due to dropping a positive number from the 5DMA from six days prior. No signals today. Please see Glossary  for any unfamiliar terms.

4-8-05 Dear Readers: In a decisive move, the S&P closed down 10 to 1181. If we had any Short-term positions on, we would be selling them today (see next paragraph).

The on-balance volume (OBV)(note 2) today was -713 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +96 to +71. We dropped a -585 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a negative bias to the 5DMA Monday-Thursday due to dropping a positive number from the 5DMA from six days prior. The simultaneous downturn in S&P and 5DMA, while the 5DMA was above the upper threshold of +19, gives a Short-term SELL signal, but it is sterile since we have no positions on. We are still watching the Whipsaw State for clearance to buy again. I was actually glad to see the up move this week because it makes the S&P Intermediate Down Trend (IDT) chart shape more normal looking (for an IDT). Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition of a continuing BULL market. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of March, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is +1.3% using S&P only as the basis, or -0.3% using 50% of S&P change and 50% of NASDAQ Composite change for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The S&P500 needs to stay above about 1113 (bear bogey) for one week to avoid a BEAR market signal, with declining S&P bear bogey target values in subsequent weeks thereafter.

Short-sellers paragraph. We cant put on any short sales on this sell signal since we are in Run-5 marker state, which doesnt "allow" short sales.

4-7-05 Dear Readers: Another rise, the S&P closed up 7 to 1191. We have nicely exceeded the resistance level of 1184, but we need more follow-through.

The on-balance volume (OBV)(note 2) today was +572 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from +25 to +96. We dropped a +215 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Friday due to dropping a negative number from the 5DMA from six days prior. We are now above the upper threshold for a sell signal which could come with the downturn in S&P. We are still watching the Whipsaw State for clearance to buy again. The ARM (first half of ARM & FIRE SELL signal) from yesterday expired because the S&P did not turn down today. Please see Glossary  for any unfamiliar terms.

4-6-05 Dear Readers: Today was just about the most peculiar day I have seen in 40+ yr of watching the market. Signals and cross signals all occurring simultaneously. We must analyze each by checking market behavior against the rules. This may portend either strong future BULLish action or strong future BEARish action. The next few days should clarify a lot of this. Another modest rise, the S&P closed up 3 to 1184.1. Here we are again at the resistance level of 1184, and that's probably related to the prior remarks in this paragraph.

The on-balance volume (OBV)(note 2) today was +184 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +220 to +25. We dropped a +1160 from the average from six days ago, giving a large negative bias to the 5DMA today. We will have a negative bias to the 5DMA Thursday due to dropping a positive number from the 5DMA from six days prior. We are still watching the Whipsaw State for clearance to buy again. The sell bogey of 1181.4 was violated by more than one point so the Market State rises to Run-5, while at the same time we get an ARM (first half of ARM & FIRE SELL signal) because the 5DMA closed down while above the upper threshold of +19. It is very unusual for the market to rise and generate a Run-5 State but not have a buy signal at the same time, and to boot we got the first half of a SELL signal!  Any down action tomorrow in S&P will complete the SELL signal, but it will be sterile since we have no positions on. The Market State page has been updated for the rise to Run-5. Please see Glossary  for any unfamiliar terms.

Short Sellers Paragraph. The bogey of 1181.4 was violated by more than one point, so we must buy back the short positions we did on 4/1/05 at a loss of about 1%, or 0.5% since we used only 50% of available funds for equities. We dont record short sale results in the history since so few readers do shorts and short results would distort (for better or worse) the regular Short-term System results. Please see Glossary for any unfamiliar terms.

4-5-05 Dear Readers: The market had another rise today, closing up 5 to 1181. We are once again close to the resistance level of 1184.

The on-balance volume (OBV)(note 2) today was +306 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -60 to +220. We dropped a -1094 from the average from six days ago, giving a large positive bias to the 5DMA today. We will have a negative bias to the 5DMA Wednesday-Thursday due to dropping a positive number from the 5DMA from six days prior. No signals today; we are still watching the Whipsaw State for clearance to buy again.  Please see Glossary  for any unfamiliar terms.

Short Sellers Paragraph. If we get a close of 1182.4 (previous minor high plus one point), our rule will force close out of the short sales done on 4/1/05. We dont record short sale results in the history since so few readers do shorts. Please see Glossary for any unfamiliar terms.

4-4-05 Dear Readers: The market had a modest rise today, closing up 3 to 1176. Whipsaw [non-]buy signal today (see next paragraph).

The on-balance volume (OBV)(note 2) today was +4 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV rose from -78 to -60.We dropped a -88 from the average from six days ago, giving a positive bias to the 5DMA today. We will have a positive bias to the 5DMA Tuesday due to dropping a negative number from the 5DMA from six days prior. The simultaneous upturn in S&P and 5DMA, while the 5DMA was below the lower threshold of -28, gives a buy signal; however yesterday was a sell signal, so today is a whipsaw, and we do not act on the buy signal.  Please see Glossary  for any unfamiliar terms. The Market State page has been updated for the Whipsaw occurrence (stays Dirty, with today's date).

Short Sellers Paragraph. Forgot to mention Friday that the decline in S&P was at least 4 points, so the short sale met that test too.  We do not close out the short positions on the whipsaw buy signal. Please see Glossary for any unfamiliar terms.

4-1-05 Dear Readers: The market ate some dust today, closing down 8 to 1173. Looks like the resistance level of 1181-1184 was again the culprit. Short-term SELL signal today (see next paragraph). And we are dangerously close to the next lower support level of 1163.8 set on 1/24/05. If that level breaks, the next level down is 1094.8 set on 10/5/04, and we may encounter a BEAR market signal on the way down to 1095.

The on-balance volume (OBV)(note 2) today was -585 (million shares). The 5 day moving average (5DMA)(note 1) of the OBV fell from +68 to -78.We dropped a +186 from the average from six days ago, giving a negative bias to the 5DMA today. We will have a positive bias to the 5DMA Monday-Tuesday due to dropping a negative number from the 5DMA from six days prior. The simultaneous downturn in S&P and 5DMA, while the 5DMA was above the upper threshold of +19, gives a Short-term SELL signal. We sold the SPY, QQQQ and IWM we bought on 3/10/05. Please see ETF page for meaning of these symbols. The result was a loss of 3.2%, bringing our result for the year to -2.4%, compared with a result for the unmanaged S&P500 of -3.5%. The primary reason for the loss is the market's change into an Intermediate Down Trend on 3/22/05. The Market State page has been updated for the SELL and the Results_History 2004- has been updated for the round trip. Please see Glossary  for any unfamiliar terms.

Long-Term Investors End of Week/End of Month update. The 200DMA (40 week moving average (40WMA)-Friday closes) of the S&P500 continues its advance; this fulfills the definition of a continuing BULL market. And the S&P is above the 40WMA, which is nice, but not necessary to the definition of a continuing BULL market. This may be seen on Long-term Investor's page, Table 4, which is updated weekly. The last entry in Table 4 shows an increase in the 40WMA over last week, and that the S&P500 close today is above that average. Table 2 of the Long-Term System page was updated for the month of March, and that table shows an increase in the nine month moving average, and that the S&P is above that average line, indicating a BULL Market. We are above the nine month (appx 200 DMA) MA line, but the 40 WMA is what we use for the BEAR/BULL signals. No change in our Long-term positions; we are long SPY and QQQQ in equal amounts, using 100% of available funds for long-term equities. The change in these positions since the BULL market began on 11/5/04 is +0.57% using S&P only as the basis, or -1.0% using 50% of SPY and 50% of QQQQ for the calculation. Please see ETF page for meaning of these symbols. Please see Glossary for any unfamiliar terms. The S&P500 bear target needs to stay above about 1126 for one week to avoid a BEAR market signal, with declining S&P bear target values in subsequent weeks thereafter.

Short Sellers Paragraph. Since the Market State is OSCILLatory, we may short this SELL signal. We do not recommend selling short for any investors unless they have good familiarity with the process and are willing to take the risk. We are using only 50% of available funds for equities for selling equal amounts of SPY, IWM and QQQQ short on today's signal. Please see Glossary for any unfamiliar terms.