Jerry favours Analysis 5/13/05
The market for the most part was down agin this week.This was no surprise to us,and should have been no surprise to you.
Our longer term position has been that the bull market which began in October of 2002 would end in the year 2005. On a best case basis,the Dow could reach a final bull market high between here and late June of this year,but at this point it still appears the fianl high in the Dow was seen in March of this year. In either case,our Lindsay Standard Time Spans signal that dramatically lower prices are coming in stock prices between here and the end of the year 2005.
On a short term basis,we still cannot rule out some further short term rally which could carry the Dow back up near the 10500 area before the next major move down to new lows gets underway. If that occurs the rally will not likely last more than 1 or 2 weeks before an even stronger decline to new lows gets underway. Any rise above 10386 on a print basis and 10417 intraday in the Dow next week would confirm that that rally is underway,but this would not alter our position that even lower prices are coming between here and the end of 2005. In fact,the odds would be high that no final bear market low would be likely between here and early 2006,when the next true bull market is due to begin.
Given the current extreme oversold condition in our short term charts,we could well see a brief rally over the next week or two which at best might carry the Dow back up near or jjust above 10500,however this would not alter our position that much lower prices are coming this year,and the proper position is to be short,and /or long one of the bear market funds, like the Rydex Ursa Fund. Whether we see a brief rally for a week or more next week ,or bottom line position is that much lower prices are coming this year and most likely into early 2006 before the next major bull market begins.
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