Weekly Update 04-05-2010:

The combined major indexes last week ended at about the same levels as they started.  The reaction to the Non Farm Payrolls report in the futures market was rather subdued, so we will see what the Cash market’s response is today.  However, the market continues to show signs of overbought exhaustion.  From October of last year to January 15^th of this year we saw a 5% increase in price, but an 11% decrease in momentum.  Then again from January to now we have seen another 5% increase in price with another 12% decrease in momentum.  Total volume has been decreasing on rallies and increasing on selloffs.  The RSI (Relative Strength Indicator) is showing a higher overbought reading than it has for the last seven months.  Even though the market could attempt to push higher short term, these readings are NOT a formula for a sustainable rally, just the OPPOSITE, this is showing all of the signs of market exhaustion.  The question remains as to how long this process can continue.  Likely, not much longer.  We may get one more short-term push, if the market can muster the energy for that, but technically this market is poised for a very significant correction to the downside.  We will remain in our SELL signal and let the market play this out.  We will keep you posted if anything changes.  Yours for Safe Sailing in Bull and Bear Markets.