R-Squared Update

At this point of the move the primary thrust has used up a lot of it's energy and we start seeing some corrective price action. If the swing cycle runs full term here, the rally that began 11/02 still has room to run as the R2 indicator moves back up to the top of the range, at which point I'd start looking for a signal to short the market at a break from the peak. If this swing trade doesn't run full cycle, we should start seeing the indicator deviate from it's "sine wave" type motion and perform what I've described before as a "Crazy Ivan". This would be any abnormal indicator movement that frequently signals an early trend change. We haven't seen one yet thru today's close. I did take a very small (20%) short position via BGZ after I closed out my (100%) BGU long, it's still open with a tight stop. On a side note, breadth took a good sized hit today. The next day or two should be very interesting. (2 charts)

U.F.O.

Good advice. We are not there yet. Keep us in the picture should the pattern faulter. The technicals yesterday were very stubborn, but there are suggestions the rally could be topping in the oscillators . The P/C (1.06) has stayed near a 1.1 buy ratio. One more drive up in the S&P towards 1200 seems probable. I think the break will come from the NDX which is still on a technical buy, the broken wedge notwithstanding. Best, Islander

Got stopped out on the odd-lot BGZ position. Totally flat right now. U.F.O.