Published 05/4/2011

S&P 500 INDEX

The index gave the correction as anticipated and fell into the box we had determined would be the low. Now there are 3 time periods left to end the trend. As mentioned last message tops take time to form and that time is not complete. Starting from the March 16th low there are three time periods to end the trend and the bull campaign. The first was Monday the second of May at 45 days from low but we felt this was likely a counter trend down which will show us the true strength of the trend. The second time period is 60 to 67 days from the March low or Mid May. This will take a significant correction now to set that up. Dropping below the April 8th high at 1339 would give that indication. One of the wave structures to end the trend is to show the current wave up less points and less time that the first wave up at 90 points and 22 calendar days. If this occurs the last drive will be very small and likely create a "false break" high. This is what we are now attempting to confirm. The last time window is 90 to 99 days or mid June and would reflect a "normal" trend for the S&P 500. This was forecast to be a 2 year to 2 and a quarter year bull trend and two years was March.

I also believe the probabilities are high the ALL ORDS INDEX has seen its peak. All we need is some further evidence the index is trending down but the "Broadening Pattern" is in place with an exhaustion leg up to complete with a "false break" for high. The key to a start of a bear trend remains with the banking stocks. They have large bases and need to turn down to confirm the bearish outlook for the index.

We also believe commodities are topping with the 60 year cycle. We played the move down in sugar, missed the short in cotton (we were selling a new high that never occurred) and continue looking at the bean complex but the sideways pattern does not look complete. There are sufficient lower highs but the "overlapping" while moving down is confusing so we are looking for evidence of trending. Silver and Gold both expired 90 day cycle for their last highs and could be significant.