Financial Markets Forecast & Analysis

By: Robert McHugh | Sun, May 1, 2005
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Summary of Index Daily Closings for the Week Ending April 29, 2005
Date DJIA Transports S&P NASDAQ Jun 30 Yr Treas
Apr 25 10242.47 3470.80 1162.10 1950.78 114^06
Apr 26 10151.13 3404.55 1151.74 1927.44 114^02
Apr 27 10198.80 3417.54 1156.38 1930.43 114^11
Apr 28 10070.37 3388.58 1143.22 1904.18 115^01
Apr 29 10192.51 3426.44 1156.85 1921.65 114^27

(Next Two Weeks)
Substantial Rise Low      
Market Rise Medium   Very High   80%
Sideways High   High   60%
Market Decline Medium   Medium   40%
Substantial Decline Medium   Low   20%
      Very Low Under   20%
(Next 12 Weeks)
TREND PROBABILITY   Substantial   800 points+ (DJIA)
Substantial Rise Low   Market Move   200 to 800 points (DJIA)
Market Rise Medium   Sideways   Up or Down 200 (DJIA)
Sideways Medium      
Market Decline High      
Substantial Decline High      

The Dow Industrials rose 34.8 points, in line with our Short-term TII indicator last Friday of positive 19.00. All the hard-fought gains from December 31st, 2003 through March 7th, 2005 (61 weeks worth of glorious Bull market rally) have been wiped out during the initial stages of the resumption of the Bear in just eight short weeks (from March 7th through April 29th). In fact we sit more than 250 points below that December 31st level tonight, even after a 122 point up day Friday. For all the hype and hoopla, we remain more than 1,500 points below the Dow Industrial's all time top more than five years ago. An investor would've been far better off in moneymarket deposits in an FDIC insured bank for the past five years.

The market action over the past ten trading days has been indecisive, sideways, a "line" according to Charles Dow. Prices fell on the even numbered trading days and rose on the odd numbered trading days. Starting on April 18th it was down 16, up 56, down 115, up 206, down 60, up 84, down 91, up 47, down 128, up 122. The action has been corrective, meaning the direction of the markets after this schizophrenic pause will be the same as the direction prices took before the slow dance began - DOWN.

Equities Markets Technical Indicator Index (TII) ™    
Week Ended Short Term Index Intermediate Term Index    
Jan 7, 2004 (13.50) (37.75)   Scale
Jan 14, 2004 29.00 (29.17)    
Jan 21, 2004 (25.50) (21.83)   (100) to +100
Jan 28, 2004 (39.75) (31.63)    
Feb 4, 2004 (11.95) (33.08)   (Negative)  Bearish
Feb 11, 2005 9.85 (25.79)   Positive  Bullish
Feb 18, 2005 (12.20) (25.29)    
Feb 25, 2005 (2.25) (28.29)    
Mar 4, 2005 (6.65) (32.46)    
Mar 11, 2005 (5.65) (26.79)    
Mar 18, 2005 4.60 (30.33)    
Mar 24, 2005 24.75 (23.92)    
Apr 1, 2005 (1.20) (23.54)    
Apr 8, 2005 16.00 (16.83)    
Apr 15, 2005 (19.15) (27.75)    
Apr 22, 2005 19.00 (33.62)    
Apr 29, 2005 20.25 (31.71)    

This week the Short-term Technical Indicator Index comes in at positive 20.25, indicating a minor corrective rally is likely during the early part of next week, but a decline could follow from a completed corrective top. This indicator is a useful predictor of equity market moves over the next week, both as to direction and to a lesser extent strength of move. It is a risk indicator, not a buy/sell indicator. For example, readings near zero indicate narrow sideways moves are probable. Readings closer to +/-100 indicate with a higher degree of confidence that an impulsive move up or down is likely over the short run. Market conditions can change on a dime, or the Plunge Protection Team can come in and temporarily stop market slides, so it may be unwise to trade off this weekly measured indicator.

The Intermediate-term Technical Indicator Index is a risk indicator, useful for monitoring what's over the horizon - over the next twelve weeks. It serves as an early warning system for unforeseen trend changes of considerable magnitude. This week the Intermediate-term TII comes in at negative (31.71).

Volume was strong on Friday's rally, but breadth was okay for an up day, not great. Of concern for the Bulls is that NYSE 52 week new highs fell far short of new 52 week lows, 97 short. That is not encouraging for those hoping a sustainable rally began when the Industrials bounced off 10,000 on April 20th.

Also concerning for Bulls is that equities hit deep oversold levels more than a week ago in many indicators, levels that normally kickoff a sustainable spirited advance. Yet nothing is happening. Markets have been working off these oversold conditions with the sideways back and forth action, getting to neutral territory and then falling. What this means is that prices need to fall further to spur the kind of demand necessary to support a multi-week advance.

Our last Fibonacci turn date for a significant turn was April 1st's closing bottom for Minuette degree wave i down, the decline from March 4th, 2005 (closing basis). It was a 19 trading day decline that took prices from 10,940.55 to 10,404.30. The Dow Industrials then turned higher - albeit not much of a turn up - into a closing top on April 7th, 2005 of 10,546.32. 4/7/05's minor turn day top, Minuette degree wave ii, interestingly came at an exact Fibonacci phi mate relationship with a very minor bottom on April 9th, 2003. In fact the decline into that 4/9/03 minor bottom was so small that it did not appear on our radar screen. But in fact it was there. Here's the math for an April 7th, 2005 phi mate turn date: April 7, 2005 was 1,314 trading days from 1/14/2000. April 9, 2003 was 812 trading days from 1/14/2000 (the all-time closing top for the Dow Industrials), 812 / 1,314 = .618. 4/7/05 is 502 trading days from 4/9/03. 502 / 1,314 = .382.

That leads our focus to the next significant Fibonacci phi mate turn date window, which we have identified as the four trading days of May 6th, May 9th, May 10th, or May 11th, 2005. The best mathematical fit is May 10th. This should be a significant turn, and it is looking like it could be a sustainable bottom, Minor degree 1. Here's the math for the May 10th, 2005 phi mate turn date: 5/10/05 is 1,337 trading days from 1/14/2000. 1/29/02 is 511 trading days from 1/14/00. 5/10/05 is 826 trading days from 1/29/02's bottom. 511 / 1,337 = .382, and 826 / 1,337 = .618.

After that, the next Fibonacci phi mate turn date window is May 25th through May 28th. Memorial day is the 30th, a Monday. Holidays generally draw rallies so it would make sense that Minor degree wave 2's corrective rally of Minor 1 would occur over the three weeks from May 10th to Memorial Day. That would allow for Minor 2 to take about a third of the time Minor 1 down took.

Consumer Confidence is highly correlated to the movement in equities, and on occasion is predictive, usually when it gets out in front of stock price movement. The above chart shows the University of Michigan Consumer Sentiment Index versus the Dow Industrials over the past six years. The major top in the DJIA in 2000 was forewarned by a Head & Shoulders top pattern in the MCSI. Once that pattern completed, equities plunged for two years. We've got another one of these blasted Head & Shoulders patterns in the MCSI that just completed, as a matter of fact, on Friday. This index fell almost 5 points in April, a huge drop in confidence. This chart is warning us that equities are about to sink into nitrogen-rich moist dark soft humus.

The charts on the next two pages show four analogs comparing the price action during some of the worst Bear Markets over the past century with that of the current time period. The value of analogs is to give us a blueprint from the past where investor psychology was similar to today. The thinking is that investors respond in the same fashion over and over. History repeats itself.

The first analog compares the average of the 1929 to 1936 and 1968 to 1975 Bear Markets with the Dow Industrials from 1999 through now. The correlation is striking and the prognosis for prices near-term is sobering. The second chart compares the 1972-73 period with the 2004-05 period. Again, amazing correlation and disturbing prognosis. On page 6 we compare the 1928-29 crash period with 2004-05. This chart warns of an imminent waterfall collapse in equities. The fourth analog at the bottom of page 6 compares the S&P 500 from 1998 through 2002 with the S&P 500 from 2002 through the present, and forecasts price movement over the next two years. Same warning. Voices from past Bear markets screaming out to us, "Beware."

The 10 day average Call/Put ratio is a contrary indicator, used to identify when extreme pessimism or extreme optimism occurs, for it is often at these extremes that a sustainable countertrend reversal begins. We received one of those extreme readings on April 22nd when the ratio fell below 1.00 to .97. The ratio has since risen to 1.06 Friday, April 29th, and has generated a "buy." But, it is hard to trust this signal at this point given the struggle for prices to get legs over the past ten days. Being conservative, we wouldn't trust this buy signal until this ratio rallies higher from here, to well over 1.10.

At the top of the next page, we show the VIX. It has traced out a classic Bullish Flag pattern, with an upside target of at least 21. Now if the VIX is Bullish, that is bad for equities because the VIX represents the risk premium options writers need to charge given the prognosis for the direction of the market. The higher the VIX, the more risk in writing puts, the more risk that stocks will fall. Call options can be covered by owning the underlying security, thus they do not carry the same level of risk as writing puts. Options writers are often right.

The bottom chart on page 7 shows the ratio of the S&P 500 with the VIX since 1998. We see that the same pattern that warned of the year 2000 top in equities is present again now. In the past, whenever this ratio fell below 35, a sustainable bottom was in place. Whenever this ratio rose above 68, equities were topping and crashes followed. This ratio has hovered above 68 for quite a while, telling us not to trust the rally from 2003 as another large decline was coming. With this ratio falling below 68 on Thursday for the first time in over a year, we have the first indication from this ratio that the decline it warned of is underway. Until this ratio falls below 35, we must expect more decline.

The Percent Above indicators remain in no man's land, sitting in neutral territory in all four of our indicators. The percent of DJIA stocks above their 30 day moving average sits at 53.33 on Friday, the percent above their 10 day moving average is at 60.00, and the percent above their 5 day is 63.33. For the past two weeks prices have declined once these levels were achieved. If they do not decline from here, it won't take much more rally to push these indicators into overbought extremes, setting the stage for another sharp selling period.

The 14 day stochastic Fast indicator pulled away to the upside from the Slow reading, 46.67 vs. 35.33. You can almost see an a-b-c correction wave in this indicator. We saw the Fast break sharply above the Slow but stall around 40 last week - wave a; then the two converged - wave b; and now the Fast breaks above the slow - wave c. Certainly this is not the action of an impulse move higher, but rather is indicative of a correction. A Bearish Head & Shoulders pattern is evident as well, further supporting the notion that another sharp down-leg is coming soon.

The chart at the top of the next page, courtesy of, shows the Dow Industrials since August 2004. It formed a Rising Bearish Wedge termination pattern that completed on March 7th, 2005, then plummeted nearly 1,000 points, on time. This pattern suggests prices fall to the start of the pattern, in this case the October 25th low of 9,708. So that is a reasonable target estimate for the next leg lower. The bottom chart on page 11 gives the hourly prices since March 1st. Here we see a Bearish Flag pattern that has formed during the past three weeks, portending a downside target of 9,735ish. Also forming since April 18th is a Bearish Head & Shoulders pattern. Once prices break decisively below 10,070, a minimum downside target from this pattern is 9,870ish.

Proportionality argues that the rally since April 20th in the Dow Industrials is a Minuette wave iv, not a Micro wave 2 of Minuette iii down. This is important information because it gives us a terrific handle on where the bottom will likely be for this decline before a sustainable multi-week rally unfolds. We know that wave three cannot be the shortest according to Elliott's rules. Minuette wave i was 627.75 points. Minuette wave iii was 556.65 points. Therefore, Minuette wave v, the final leg for a bottom must be less than 556.65 points.

Markets seek order. Check this out. Wave iii in the DJIA was .887 of wave i. .887 is the square root of .786. .786 is the square root of a Fibonacci phi .618. So, if iii was .887 of i, it stands to reason that v should end up being either .786 of iii - or .618 of i. .786 of iii means v's coming decline will be 437 points. .618 of i means v's decline will be 387 points. If iv tops around 10,300, then this Fibonacci ratio analysis projects a sustainable bottom around 9,862 to 9,912. Both are above October 25th's key 9,708 level - as is the Bearish Flag pattern target mentioned before. Not dropping below 9,708 should offer a terrific rallying call for Bulls to send prices higher for several weeks.

Our best guess is that Minuette wave v will bottom inside our coming Fibonacci phi mate turn date window of May 6th to May 10th. Then Minor degree wave 2 should be a sustainable rally, lasting several weeks into the Memorial Day holiday Fibonacci phi mate turn window. Then once we fail to make a higher high, fear should erupt as a nasty Minor degree wave 3 puts a hurt on the market from June into July. The above chart shows the S&P 500 has three Bearish patterns that have identical minimum downside targets of 1,110 - two different Bear Flags and a Head & Shoulders top. The wave count is similar as for the Dow Industrials.

Trannies sunk to a new low for 2005 on April 27th, the lowest level since October 26th, 2004. The chart above shows that prices dropped decisively below the 50 and 200 day moving averages, and the bottom boundary of the intermediate-term rising trend-channel. Volume has been up on down days the past few weeks.

On April 14th, both the Dow Industrials and the Dow Transports closed below their previous lows, the January 24th, 2005 lows. These lower lows came after the Transports hit an all-time closing high of 3,876.13 on March 7th, 2005 (a Fibonacci phi mate turn date, by the way), unconfirmed by the Dow Industrials. The Industrials failed to confirm that all-time high in the Transports, only making it to 10,940.55 on March 4th, far short of its all-time top more than five years ago, on January 14th, 2000, at 11,722.98. An all-time high in one Dow index unconfirmed by another warns that the new alltime high should not be trusted, that in this case, it is not all right to go long. That non-confirmation proved prescient didn't it? Worse, when such an upside Primary trend non-confirmation is followed by a lower low downside confirmation by both averages - which happened April 14th - we get a Primary downside "sell" signal confirmation. The last Primary trend "sell" signal came back in September 1999, and was later reconfirmed in February 2000.

So now both the secondary and primary trend is down again. The decline since March 7th has been labeled an Elliott Wave Minuette degree wave i down of a much larger degree Minor wave 1. Much more downside is expected over the next several years.

Above is the latest chart for the NASDAQ 100. Submicro degree wave {2} up ended by reaching within one point of a Fibonacci .500 retrace of wave {1} on Friday morning, 4/8/05 at 1,503.21, then declined impulsively. It bounced in a Nano degree wave {ii} on Tuesday the 12th, then tanked the rest of the week. Last week saw a countertrend rally labeled as Nano degree wave {iv}. This week prices declined into wave {v} down, the final push lower for Subsmicro {3}. As we back and forth lower, it is important to keep in mind how many more waves lower of varying degrees lie ahead of us here. The answer is several. As far as the big picture is concerned, we are merely starting a huge move lower.

Over the short-term, how low are we going? Well, if Minuette wave iii extends, then 1.382 times the length of wave i puts the $NDX at 1,345. If wave iii equals 1.618 times wave i, then we're looking at 1,311. This is a big drop underway, but will include a series of minor corrections along the plunge.

There is a Bearish Flag pattern that completed last week, portending a minimum downside target of 1,335ish, smack in the middle of the EW projection range. Flags are rare and highly reliable patterns.

The Economy: The Commerce Department reported on Friday that Consumer Spending grew 0.6 percent, and personal income grew 0.5 percent. This does not jive with the stock patterns of the Consumer and Retail stock indices, which are Bearish. The reason may be that consumers are buying less quantity, but paying higher prices for items. Gasoline is a prime example. More consumer dollars going to the Oil companies than retail stores. China, America's manufacturer, should be concerned.

New Home Sales are up over 12 percent in March, according to the Commerce Department. Mortgage Interest Rates have been coming down as Bonds rally and Stocks sink, and once again the benefiting asset is Real Estate.

With those two items, that is about as good as this week's news gets. Now for the pain:

March Durable Goods Orders (big ticket items such as machinery, aircraft, equipment, etc…) fell again, this time down 2.8 percent, according to Commerce. It was the worst monthly decline in two and a half years. They also revised February's figure to a 0.2 percent decline from an originally reported 0.5 percent increase. We may be in the infancy of the next recession. Remember, the average stock market decline in recessions is 43 percent. Business obviously is battening down the hatches.

With no elections in site, the Commerce Department is on a roll. It reported on Thursday that U.S. GDP growth slowed during the first quarter of 2005 to 3.1 percent from the fourth quarter's annualized growth rate of 3.8 percent. It was the slowest reported growth figure in two years.

Chain Store Sales growth fell last week to 0.3 percent versus 1.0 percent the prior week. Rising gasoline prices rob discretionary spending from household budgets, and act as a governor over shopping trips.

The Labor Department reported that Jobless Claims rose substantially for the most recent week reported, still above 300,000.

The sum of all the above and more is that Consumer Confidence continues to fall sharply. The Conference Board released its figure this week, reporting Confidence fell from 103.0 in March to 97.7 in April. That's a huge monthly decline. Confirming this was the final report by the University of Michigan for the month of April. They reported that Consumer Sentiment was even worse at the end of the month than the beginning, and fell from 92.6 in March to 87.7 in April. Again, these are huge monthly drops. Bearish. Reuters reported on this week that Wal-Mart conducted a poll of small business owners and found that less than half the respondents of their survey are confident that the U.S. economy will be strong over the next six months. U.S. Venture Capitalists apparently agree as their investment total is down 16 percent for the first quarter of 2005 versus 2004, according to a report from VentureOne and Ernst & Young LLP, as reported on

Money Supply, the Dollar and Gold:

The Fed is aware of the problems developing in the economy. They jawbone concern about inflation and raise short-term interest rates to great fanfare, however the reality is the Fed has opened the Money Supply spigots once again. Seasonally Adjusted M-3 rose 53.6 billion last week, an annualized rate of growth of 29.2 percent. Non-seasonally adjusted M-3 growth is up 243.9 billion over the past eleven weeks and is up 107.1 billion over the past three weeks (19.4 percent annualized rate of growth). Our research indicates that whenever M-3 rises for over a month, equities subsequently rally. Deflation is creeping into the economy in non-gasoline products. The Fed knows that deflation is death to an economy, sort of like a spiraling black hole that sucks everything into it. Look for massive infusions of liquidity into the system over the next few months. That should buoy stock prices and inflation assets, fueling minor rallies starting over the next month or so. Question is, from what lower levels will this coming corrective rally in equity and precious metals assets commence?

The trade-weighted US Dollar is breaking south, as expected in last week's report, from an Ending Diagonal Triangle pattern (a.k.a. Rising Bearish Wedge) - a typical termination pattern - that formed Micro degree wave 5 of Minuette c of Minor 4 up. That pattern helps us eliminate the Alternate count we've been showing the past few weeks. The Dollar should be on its way to a retest of its recentlows, a test of 80.00. The decline should proceed in five-wave, stair-step fashion, with the move from April 14th's 85.32 to April 22nd's 83.36 a Micro degree wave 1, and the current move up a Minor degree wave 2, eventually dropping to a primary degree wave (1) sustainable bottom, to be followed by a multi-month A-B-C corrective rally for Primary degree wave (2).

Gold is shown above, courtesy of We await a breakout in Gold either to the top boundary of the Rising Bearish Wedge, or to below the lower boundary of both the Rising Bearish Wedge and the long-term rising trend-channel. Rising Bearish Wedges tend to correct to the beginning of the pattern, which in this case is around 375ish. However, should the Fed continue to pump money into the system - which it sure looks like they are doing - then the correction in Gold could be quite shallow, take on the form of an Elliott Wave "flat" pattern, possibly the shape of a triangle with lots of overlapping waves - or delayed. Short-term, it is difficult to say whether Gold has topped or not. March 11th, 2005 may have been the top.

But there is room for Gold to rise to - and perhaps slightly above - the upper boundary of the Rising Bearish Wedge, to 460-465ish. Inside the Rising Bearish Wedge, Gold has recently formed a continuation Symmetrical Triangle Pattern, which increases the odds Gold will peak toward 465 before falling.

At the top of the next page is our highest probability scenario for Silver in the intermediate term. A Symmetrical Triangle has formed, that is a continuation pattern, portending higher prices ahead. The Triangle would be an Intermediate degree wave 4, to be followed by one more sharp thrust higher to complete primary degree wave (1). That would be followed by an A-B-C Intermediate degree decline that could last several months. The second chart on the next page shows the second scenario that is possible, that being wave (1) topped on December 2, 2004 at 8.17, a truncated Intermediate degree wave 5 following a Rising Bearish Wedge. If prices bust below 6.80, this scenario is occurring.

Oil. After selling off 12 percent from its high of 58.10 March 17th, to 51.01 on April 18th, prices rebounded to 55.90 Friday for Minor degree waves 1 down and 2 up of the "A" portion of an A-B- C correction. Prices topped March 17th by forming an Ending Diagonal Triangle (a.k.a. Rising Bearish Wedge) pattern for Intermediate degree wave 5 of Primary (1). The Ending Diagonal Triangle pattern suggests prices will decline to the point where the Wedge started, in this case to the low 40s. This week prices plummeted as we expected in a Minor wave 3 down. We left the red arrow on the above chart exactly where we drew it last week. The permabulls have been explaining the disappointing performance of stocks all year as the temporary consequence of rising oil prices. Yet, while Oil fell 14 percent from March 17th to April 28th, the S&P 500 also fell 4 percent.

The HUI is tracing out a classic Gartley pattern (top chart next page) on the daily chart, with a downside target around the 150 area. However, ironically, this pattern is a Bullish pattern. What that means is, once prices correct to the 150 area, it is off to the races as a very nice Bull run begins again.

The bottom chart on the next page (courtesy shows a confirmed Bearish Head & Shoulders pattern for the HUI, increasing the odds that more significant downside is coming, with a minimum downside target nearly the same as the Gartley pattern suggests, driving prices to as low as 152ish.

And using a third tool, Elliott Wave analysis, we see that waves iii through v should carry prices much lower to their wave C bottom. Where might C of 2 bottom? Based upon the Elliott Wave count, a 38.2 percent retrace of Intermediate degree wave 1's rally from 35.31 on November 16th, 2000 to 258.02 on January 6th, 2004 suggests a bottom for the current Intermediate degree wave 2 decline of 172.94 (almost got there). A 50 percent retrace takes prices to 146.67. Interestingly, should Minor degree C end up equal to Minor degree A, that would suggest a bottom of 154, very near the H&S and Gartley targets.

After the carnage, we should be at the bottom of Minor degree C of 2, to be followed by a powerful rally for several months or even years, Intermediate degree wave 3, probably in response to more Dollar devaluation.

10 Year Treasury Note Yields are shown above. There are two patterns that carry equal weight at this time, that are diametrically opposed to each other. Sometimes patterns offer crystal clear insights into the probable path for markets. Sometimes they do not. This is one of those "do not" times. There is a Symmetrical Triangle pattern, a continuation pattern, that suggests yields should rise sharply once they bust above the upper boundary of the Triangle, in the case of this chart, above 45 (4.50%).

There is an equally compelling pattern developed over a similar time frame that suggests yields should fall to the 30 (3.00%) area. This Head & Shoulders pattern is not yet confirmed, and until it is, the probability is not as strong. For confirmation of this pattern, yields must drop decisively below the neckline, below 40 (4.00%). So call it 50/50. However, prices move inversely to yields, and the chart at the top of the next page analyzes Bond prices, offering more insight into the future direction of prices and yields.

U.S. Bonds are retracing the impulsive decline since topping at 117.0 on February 9th and declining to 109.0 on March 23rd. A .500 retrace for Minuette ii pushes Bonds to 113 (been there), and a .618 retrace takes Bonds to 114ish (done that). Prices hit the .786 retrace intraday Friday, April 29th, then backed off. We can count an "a" up and "b" down, and a completed wave "c" up since March 23rd. This rally should be over. Much more rally from here negates the Bearish Head & Shoulders and forces us back to the drawing board with our Elliott Wave count. Repeat, Bonds must decline from here or this economy is in very serious trouble. More upside from here means Bonds are forecasting deflation, ergo, recession.

If our EW count and the H&S pattern are correct, as shown above, then Bonds are poised to plummet to 100. Over the past several weeks (not shown here, but visit the archives and check out issue no. 154) we've been showing a long-term chart of Bonds that identifies a massive Bearish Head & Shoulders top. Concerning is that should prices break decisively below 100, that would confirm the pattern, and increase the probability that the pattern's minimum downside target of 79 would be reached.

The yield curve is flattening, often a precursor to recession. If the Fed goes nuts pumping liquidity into the system to stave off a recession, that will push Bond prices lower - unless the Fed pumps liquidity by buying the long end of the yield curve with newly created Dollars. What happens to Bonds over the next several weeks should be fascinating, as they will likely tell us where the economy's fate lies.

Bottom Line: Equities could rally in choppy fashion another day or so, but should soon decline hard toward the 9,700 to 9,900 area over the next week, likely hitting a sustainable bottom within our Fibonacci turn window of May 6th to 10th. Caution is warranted.

"Then the king arose with the dawn, at the break of day,
And went in haste to the lions' den.
And when he had come near the den to Daniel,
He cried out with a troubled voice.
The king spoke and said to Daniel, "Daniel,
Servant of the living God, has your God whom you constantly
Serve, been able to deliver you from the lions?"
Then Daniel spoke to the king, "O king, live forever!
My God sent His angel and shut the lions' mouths,
And they have not harmed me,
Inasmuch as I was found innocent before Him;
And also toward you, O king, I have committed no crime."
Then the king was very pleased and gave orders for Daniel
To be taken out of the den.
So Daniel was taken up out of the den, and no injury whatever was
Found on him, because he had trusted in his God.
The king then gave orders, and they brought those men
Who had maliciously accused Daniel,
And they cast them, their children, and their wives into the lions' den;
And they had not reached the bottom of the den
Before the lions overpowered them and crushed all their bones."

Daniel 6: 19-24

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As the Bear market resumes, don't be without the latest charts and analyses to help steer you clear of danger.

Key Economic Statistics
Date VIX Dec. U.S. $ Euro CRB Gold Silver Crude Oil 1 Week Avg. M-3
10/29/04 16.27 84.98 128.85 284.75 429.4 7.30 51.76 9359.9 b
11/05/04 13.84 83.89 129.46 283.00 434.3 7.50 49.61 9381.6 b
11/12/04 13.21 83.33 130.39 288.50 445.1 7.66 46.84 9374.3 b
11/19/04 13.50 83.32 130.13 287.25 447.0 7.60 48.44 9372.7 b
11/26/04 12.78 81.81 132.93 288.75 449.5 7.59 49.44 9391.0 b
12/03/04 12.96 80.98 134.53 284.75 456.0 7.99 42.54 9404.1 b
12/10/04 12.66 82.59 132.36 276.25 435.4 6.74 40.71 9414.8 b
12/17/04 11.95 82.20 132.90 285.25 442.9 6.80 46.28 9430.4 b
12/22/04 11.45 82.01 134.06 282.50 441.4 6.93 44.24 9435.7 b
1/07/05 13.49 83.72 130.62 279.25 419.5 6.44 45.43 9463.4 b
1/14/05 12.43 81.13 131.03 283.22 423.0 6.59 48.38 9449.0 b
1/21/05 14.36 83.34 130.60 281.85 426.9 6.81 48.53 9487.4 b
1/28/05 13.24 83.53 130.48 282.50 425.8 6.79 47.18 9513.2 b
2/04/05 11.21 84.25 128.79 281.00 415.9 6.63 46.48 9528.2 b
2/11/05 11.43 84.58 128.80 286.18 420.9 7.20 47.80 9504.5 b
2/18/05 11.18 83.52 130.75 289.75 428.4 7.41 48.35 9480.3 b
2/25/05 11.49 82.65 132.43 298.30 436.2 7.29 51.49 9524.2 b
3/04/05 11.94 82.49 132.66 309.16 435.1 7.34 53.78 9537.8 b
3/11/05 13.19 81.57 134.41 319.00 444.2 7.49 56.46 9513.5 b
3/18/05 13.14 82.10 133.38 316.50 439.7 7.43 57.24 9503.3 b
3/24/05 13.42 84.11 129.80 306.75 424.8 6.98 54.84 9523.4 b
4/01/05 14.09 84.42 128.29 311.25 425.9 7.00 57.27 9560.9 b
4/08/05 12.62 84.41 129.46 304.32 428.8 7.16 53.32 9544.7 b
4/15/05 17.74 84.50 129.28 301.25 426.5 7.02 50.43 9543.6 b
4/22/05 15.38 83.45 130.81 307.75 435.6 7.32 55.39 9597.2 b
4/29/05 15.31 84.42 128.74 303.70 436.1 6.94 49.72 -

Note: CRB, Silver and Oil are down. Dollar up.


Robert McHugh

Author: Robert McHugh

Robert D. McHugh, Jr. Ph.D.
Main Line Investors, Inc.

Robert McHugh

Robert McHugh Ph.D. is President and CEO of Main Line Investors, Inc., a registered investment advisor in the Commonwealth of Pennsylvania, and can be reached at The statements, opinions and analyses presented in this newsletter are provided as a general information and education service only. Opinions, estimates and probabilities expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice. Nothing contained in this newsletter is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. Neither Main Line Investors, Inc. nor Robert D. McHugh, Jr., Ph.D. Editor shall be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided.

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