| Issue #22 |
The
ULTRA Timer Report
|
February
3, 2004
|
SPX Technical Price Analysis
SPX Uptrend Line Failure
The SPX made a spectacular run from 11/21/03 to the top at 01/26/04 appreciating at an 84% annual rate. Obviously, that rate of return is not sustainable and therefore some type of correction is due. Adding to the case for a correction is the fact that the uptrend line S2 has now failed. A reasonable objective for this correction is S1 currently at around 1085.
February Historical Seasonality (Since 1942)
As with all months, the first and last few days of February have a historical upward bias. If the first three trading days and last two trading days of February are ignored, the remainder of February is not historically bullish. Only 42% of the years have produced gains and the annualized return is minus 9.1%.
The SPX enters a very bullish seasonal period starting at the close on 02/25/04 (February EOM).
SPX Summary
The SPX is due for a correction in February likely finding support around 1085 on S1. This test of S1 could align well with the February EOM bullish period making for a very obvious place to go long with non-mechanical capital.
Nasdaq 100 Technical Price Analysis
NDX Nearing Support (S1)
The NDX is substantially weaker than the SPX (see below) and is nearing support (S1). This is not a bullish situation for the general market and further indicates that a substantial correction is due. I would not be surprised to see S1 fail in February.
NDX Relative Strength
The NDX-RS failed to make it to the upper boundary (R2) of its uptrending channel. It has now been resisted many times by the horizontal R3.
NDX-RS has also just barely broken down out of the channel. This is not good news for the NDX as this channel has been in effect for over a year.
Summary
I will avoid the NDX with non-mechanical accounts. At this point, I'd have to see R3 overcome to the upside to consider the NDX relatively bullish and worthy of the risk.
Russell 2000 Technical Price Analysis
RUT Stops at 600
The RUT has been amazing and attempted to make an all-time high (606.05 on 3/9/00). But it was turned back by the round number 600. As the general market corrects I expect the RUT to test S1.
NDX Relative Strength
RUT-RS fell below a well defined uptrend line S2 that had been in effect since mid-March 2003. RUT-RS has now formed support S3.
Summary
As the markets correct it will be interesting to watch RUT-RS, if S3 remains intact as the correction runs its course, the RUT may be poised to continue its amazing run and overcome 600 to new highs.
XAU Technical Price Analysis
Huge Head-and-Shoulders Bottom (HSB)
The HSB still calls for an eventual move in the XAU up to 160. The neckline (NL) is currently at around 90. As you can see we are getting closer to the retest of 90 which should be a great buying opportunity.
Summary
I will be buying the XAU with non-mechanical capital upon a retest of NL at 90.
ULTRA Tutorial
ULTRA's Recommended Strategies
Recommended
Strategy Risk = LOW-MEDIUM
Recommended
Index = SP500.
Strategy Positions
are HERE .
Strategy Descriptions
are HERE.
Sincerely,
Steve Hunter, ULTRA Financial Systems Inc.
ULTRA
Financial Systems Inc.
P.O. Box 3938, Breckenridge CO 80424
hone: 970-453-4956 Fax: 970-453-2467
© 2003 ULTRA Financial Systems, Inc.