The ULTRA Timer Report

The SPX is still in a well-defined downtrend. The recent rally should be just about over as the SPX has hit the downtrend line R1.

We think the SPX has further to fall before a major bottom is in place. We are approaching the most bearish month of the year, September. Historically the market has only recorded a gain 40% of the time in September. And there is still a significant threat of a pre-election terrorist event before the November election.

We still may buy the SPX with non-mechanical accounts when S1 is reached. However, considering the season, we will not be chasing this market even if R1 is overcome.

Nasdaq 100 Technical Price Analysis

NDX Head-and-Shouders Top (HST)

It is difficult to imagine a more bearish looking chart for the NDX. As expected, the NDX has rallied back up to retest S1 and has filled the gap that occurred upon S1's failure. As you can see in the chart above the NDX should run a little higher (1360ish) before turning back down.

NDX Relative Strength (NDX-RS=NDX/SPX)

In early July NDX-RS broke down below well-defined support S3 which was bearish for the NDX. NDX-RS is now in a well-defined downtrend.

Summary

The NDX is going much lower and most likely taking the SPX down with it.

RUT Technical Price Analysis

RUT at Resistance

The RUT is at R1 which should turn the RUT back downward.

RUT Relative Strength (RUT-RS = RUT/SPX)

RUT-RS broke down below two levels of support and has now formed a well-defined downtrend resisted by R2.

Summary (No Change)

Considering the break of S1 and the non-bullish nature of RUT-RS, we will not consider non-mechanical positions long positions in the RUT at this time.

XAU Technical Price Analysis

XAU Remains Bullish

Catching bottoms in the XAU has just been too easy in the last few months. This rally should have further to go as the stock market turns lower, bonds rally and the risk of another interest rate increase drops. We will contine to buy XAU calls anytime the XAU approaches S1.

ULTRA's DUALB gold system that has been spectacular in real-time for ten years has just closed out another winning trade in the XAU. While we do feel that the XAU will again drop into the lower 80s, we think this DUALB sell signal is premature on a long-term basis..

Interest Rate Analysis

Uptrending Channel (No change)

As expected the US 5-year Treasury Note Yield above (TN) was turned downward by R1 forming an uptrending channel. We expect rates to fall further to S1. If S1 fails to support TN we expect a retest of the 2003 lows. This event would probably correspond with a very weak stock market into the November election.

ULTRA's Recommended Strategies

Recommended Strategy Risk = LOW-MEDIUM

Recommended Index = SP500.
Strategy Positions are HERE .
Strategy Descriptions are HERE.

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