7/26/2009 8:52:34 AM

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The market's move is signaling something, here's what and how to profit.

Stock Barometer Analysis

The barometer remains in Buy Mode, quite extended. Huge question here is if we get a top and what type of top will it be? I'll try to answer that below.

The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.

Stock Barometer Cycle Time

Monday is day 10 in our Up Cycle.

The Stock Barometer signals follow 5, 8, 13, 21 and sometimes 34 day Fibonacci cycles that balance with 'normal' market cycles. Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.

Potential Cycle Reversal Dates

2009 Potential Reversal Dates: 1/20, 2/11, 3/7, 3/15, 4/8, 4/16, 4/27, 5/7, 6/8, 7/2, 7/17, 9/14. We publish these dates up to 2 months in advance.

With the lack of a 7/17 reversal, you can assume that the signal came late and that this is a move that will take the markets higher into 9/14. That being said, seasonality and or cycles should come into play for a move lower into the end of the month and a continuation of the move higher into 9/14 (with a few larger swings in there).

My Additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.

2008 Potential Reversal Dates: 12/31, 1/11, 2/1, 2/13, 3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2, 10/3, 10/22, 11/10, 12/11. 2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29, 10/19, 11/29, 12/13, 12/23, 12/31, 1/11/08. 2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005 Potential reversal dates: 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.

Spread Indicators

Use the following spread/momentum indicators to assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.

QQQQ Spread Indicator (NASDAQ:QQQQ)

The QQQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer. It's meant to give us an idea of the next turn in the market.

Gold Spread Indicator (AMEX:GLD)

Want to trade Gold? Use our signals with the Gold ETF AMEX:GLD. Gold gives us a general gage to the overall health of the US Economy and the markets.

US Dollar Index Spread Indicator (INDEX:DXY)

Want to trade the US Dollar? Use our signals with the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.

Bonds Spread Indicator (AMEX:TLT)

Want to trade Bonds? Use our signals with Lehman's 20 year ETF AMEX:TLT. The direction of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.

OIL Spread Indicator (AMEX:USO)

Want to trade OIL? Use our signals with AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction has an impact on the stock market.

Supporting Secondary Indicator

We daily monitor hundreds of popular and proprietary technical indicators that break down market internals, sentiment and money flow to give us unique insight into the market. We feature at least one here each day in support of our current outlook.

Summary of Daily Outlook

We remain in Buy Mode, looking for the market to make a sharp correction into the end of the month and a continuation of the move higher in accordance with seasonality.

The advancing market, gold, oil, silver and dropping dollar and bonds, I believe the best trade of the day is the inflation play. At least that is what everything is positioned for right now as we are in our gold and energy trader.

If you're not a Stock Options Speculator subscriber, I went through our June 21 and July 7 weekly recommendations and tallied up the cumulative gains at about 1722%. Yes, as unbelievable as that sounds (and I am not one to overstate performance) we had a 70% success rate in both services and trades that made up to 300% - in only 13 days.

Obviously we can't do that every week and we're beginning to position for a decline. It's a very basic service, because I believe trading is very basic. You use market timing to time your positions and we have access to powerful software to pick the most effectively priced options to play at that time. Put those two tools together, and you have the potential for the explosive profits that we just had (and these are not that aggressive options positions).

If you're interested in giving it a try, please sign up here. On the fence? To sweeten the pot, I'll throw in my free ebook "The Office Day Trader" with your paid subscription. My ebook shows people with office type day jobs how to profit in just a few easy steps and as little as a half hour each day from day trading. Just use the links below to sign up for the SOS today and make sure to request your free ebook!

If you want to learn more, come to my seminar, and we'll get into more detail about how we put these trades together. Sign up soon, as participation is limited.

If you have any questions or comments, email me at Jay@stockbarometer.com.

Regards,