Weekly Update 3-29-2010:

Last Thursday may have been an exhaustion gap reversal day finally marking the exhaustion of this current rally.  Thursday’s gap high pushed into a new high with the S&P500 into the 1180 area and then quickly reversed closing the day two points lower than the previous day’s low.  This was a 15 point move representing about 1 ½% straight up and back down all on Thursday with Friday closing out at 1166 within one point of last Monday’s close of 1165, with about a 30 point range for the week with momentum building to the downside by week’s end.  This week there will be several economic reports that could be market movers ending with the highly anticipated Jobs report on Friday.  So by the end of this week we should know if last Thursday was a top or if this rally can still muster up another bullish push before a significant drop.  Our SELL signal is still very strong.  However, that does not guarantee the market to go down, it only points to a very high probability that this market is topping here.  When the market becomes this overbought, even recent “buyers” become “sellers” just to take some “profits” off of the table.  Then all it takes is a bit of fear and then “stops” start getting taken out as well as “serious sellers” start exiting the market and before long a significant correction is in process.  It seems like we may just be on the precipice of that currently.  Irregardless, our indicators remain on strong SELL position and we will stay committed to that until the market changes those numbers.  We will keep you posted.  Yours for Safe Sailing in Bull and Bear Markets.