| Issue #47 |
The
ULTRA Timer Report
|
Mar
30, 2005
|
SPX Technical Price Analysis
Patience pays off
The SPX met our downside objective (S1) resulting in a very obvious buying opportunity of which we took advantage just before yesterday's close. Today the SPX has bounced nicely further supporting the importance of S1.
As you can see, the previous two tests of S1 only touched the line once and rallied strongly soon thereafter. We do not believe another test of S1 will occur. However, it is not impossible.
The break of R1 will probably be the trigger of a move up above 1230.
NASDAQ 100 Technical Price Analysis
NDX Not Likely to Reach Objective
We previously thought the NDX would bottom around 1400 which now does not seem likely because of the action in the SPX and the NDX-RS chart (below).
NDX Relative Strength (NDX-RS=NDX/SPX) (No Change)
NDX-RS has broken out above its downtrend line (R2) which is a bullish indication for the NDX and the stock market as a whole.
(The chart above can be produced with ULTRA via the "Graphs" menu item with NDX in the "Database Item or EDF Name:" field and SPX in the "Divided by:" field).
RUT Technical Price Analysis
RUT Bounces off Support
We believe that the RUT has bottomed at S1 and will now make a run at new highs. The trigger will probably be the break of R2 coinciding with a similar break in the SPX.
RUT Relative Strength (RUT-RS = RUT/SPX) (No Change)
RUT-RS is still in a slight downtrend but has found good support at S3. We expect R3 to be overcome in the coming stock market rally.
(The chart above can be produced with ULTRA via the "Graphs" menu item with RUT in the "Database Item or EDF Name:" field and SPX in the "Divided by:" field).
Stock Market Summary
We remain bullish on the stock market in 2005 due to the Head-and-Shoulders Bottom in the monthly SPX chart. We believe that the extent of the recent correction ended yesterday wiith the SPX hittiing the support (S1) we've talking about for months.
With capital not managed by ULTRA mechanical methods:
We are currently 100% invested (as of the 3/29/05 close), all of which is in SPX related funds.
At today's close we'll move 1/3 into NDX related funds due to the breakout in the NDX-RS chart. As soon as RUT-RS breaks out we'll move 1/3 into RUT related funds resulting in thirds: 1/3 SPX, 1/3 NDX, 1/3 RUT.
XAU Technical Price Analysis
XAU Nearing Support (S1)
After timing the XAU almost perfectly in 2004, we've been having trouble in 2005. Last time we said, "if 100 fails signficantly we'll probably take a loss and close the position" which we did on 3/21/05 at 97.79.
Gold Market Summary
We are still bullish for the XAU in the long-term. We'll buy the XAU the next time it touches S1.
Interest Rate Analysis
US 5-year Treasury Note Yield (TN)
Uptrending Channel
TN remains in the uptrending channel that we predicted in early 2004. Rates have risen signficantly in the last few weeks and we are now nearing the top of the R1/S1 channel. We now expect rates to top out in the next few weeks..
ULTRA's Recommended Strategy Risk (No change)
We still believe that 2005 is going to be a bullish year and that high-risk strategies, (those that are invested over 60% of the time) can be used for investors willing to take on that risk.
We continue to believe that as your annual return goals increase, your odds of high drawdowns increase, and your overall odds of attaining those goals decrease. Investors should use great caution when following strategies that seek to return 30% (or more) annually. And NEVER risk all your money on ANY single system or strategy EVER.
ULTRA's RECOMMENDED STRATEGIES
Our "RECOMMENDED STRATEGIES" are outperforming their benchmarks by 4.7% so far in 2005 and have kept drawdowns to -2.7% as compared to -6.9% for the benchmark indexes. We are currently 5% invested which is not great considering our bullish opinion of the market.
These are very low risk strategies that have not exceeded 6% drawdowns in years. Therefore, we cannot expect them to "pick bottoms". As the market rises, these strategies will begin to buy in.
However, If we are wrong about our bullish opinion, the strategies' defensive position will save our bacon...
Recommended
Strategy Risk = LOW-MED-HIGH
Sincerely,
Steve Hunter, ULTRA Financial Systems Inc.
ULTRA
Financial Systems Inc.
P.O. Box 3938, Breckenridge CO 80424
Phone: 970-453-4956 Fax: 970-453-2467
© 2005 ULTRA Financial Systems, Inc.