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To: Les H who wrote (1578)	3/5/2002 11:52:45 PM
From: John Madarasz	Respond to of 29596

Stockmarket Cycles update for Tuesday, March 5th The S&P 500 index moved back below its declining 200 day moving average today. We are not yet convinced yesterday's move above the 200 day MA will be the final foray into that territory, but so far the index has halted at an area which makes it easier to maintain a bearish case. Today provided far more interesting evidence, however, that this advance may be ending. Our regular subscribers are aware of an indicator we call "Days up per 54." Here is what we wrote on our January 4th update of this year, at the exact S&P 500 closing high of the past six months: On the daily a-d line today, the reading was 34 up days over the past 54 days. That was the highest reading since July 2nd-3rd, 2001, and before that, January, February, and March of 2001. Before that, you have to go all the way back to April 1998. Those prior readings occurred during a topping formation....... We should emphasize that if this is indeed a new bull market, readings above 33 and 34 can occur over long periods of time while the market continues higher and higher. If this remains, as we believe, a bear market, then readings of around 33 or 34 should correspond with the end of rallies. That is another reason why the next week or so of market behavior can be critically important. It turned out to be a bullseye call as, the very next day, most indices began a downtrend which lasted for a month on the Dow Jones Industrial Average and almost two months on the S&P 500. Why do we bring this up now? Today, on the daily a-d line, for the first time since January 4th the reading was 34 up days over the past 54 days. Do remember, however, the second paragraph quoted above. If this is indeed a new bull market, a reading of 34 may turn out to be insignificant. If you don't mind, we'll be from Missouri on this one. Show us! This indicator, for whatever reason, has worked very well over the past few years in identifying market tops. We will opt to give it the benefit of the doubt once again. One of the mistakes we made too often in the amazing bubble market of the 1990s was to set an area beyond which we felt we should force ourselves out of bearish positions, then when we saw that area met, we would discover a new reason to maintain our bearishness. We have vowed never to let that happen again. Last week we told you a few consecutive closes by the Dow above its 840 day moving average would probably be warning enough to get us to exit our Rydex Ursa positions. As you know from last week's updates, that is the equivalent of a 40 month moving average, but the more we thought about it the more we realized the only proper way to use the 40 month moving average was to wait for a monthly close. Because that would not happen in the current case for almost another four weeks, we have decided on our final objective short term strategy. We will exit the Rydex Ursa Fund any time there are two consecutive closes above the 200 day moving average on the S&P 500 index. We realize the rule we repeated yesterday views a close above a declining 200 day moving average as a sell signal, but we want subscribers to have a simple rule to follow. We should warn you ahead of time that even if that occurs, we will most likely jump back on the short side on any subsequent close below the 200 day moving average. Based on the "Days up per 54" indicator cited above, there is a good technical reason to be looking for at least a short term top here and now. Mutual fund switchers-Rydex switchers are in the Ursa Fund, Fidelity Select switchers are in cash positions. We have outlined our short-term strategy for exit from the Rydex Ursa Fund in the above paragraph. Should those conditions come to pass, we will notify you on our telephone update. All mutual-fund switchers should continue to call the telephone update each market day after 3:20 p.m. Eastern time and each market evening. Stock-index futures traders-the first part of yesterday's prediction has taken place almost exactly. There has been an approximate 13 point decline on the S&P March futures. Tomorrow, we look for a retest of this morning's early high. That is where we want to sell short. Here is the strategy-on Wednesday, sell short the March S&P at 1,156.70 market if touched with a stop at 1,162.70. If you are not short at the time of the close of the cash markets, sell short the March S&P market on close if the S&P 500 cash index closes below 1,144.88. The XAU still has a projection down to at least the 62 area. There are no new projections for March bonds. Have a great day . We'll talk to you tomorrow stockmarketcycles.com

To: Les H who wrote (1578)	3/6/2002 10:44:16 PM
From: Les H	Respond to of 29596

10-day TRIN and 10-day Open TRIN for Wednesday Mar 6, 2002 5-day TRIN 10-day TRIN 10-day A/D 10-day U/D 21-day A/D 21-day U/D DJIA/NYSE 0.87 0.97 1.52 1.59 1.25 1.21 OTC 0.83 1.04 1.18 1.32 1.00 0.94 S&P 500 1.19 1.28 1.69 1.43 1.31 1.06 S&P 100 1.12 1.26 1.61 1.38 1.27 1.10 Nasdaq 100 1.46 1.49 1.42 1.30 1.06 0.91 10-day TRIN = 10-day MA of (A/D divided by U/D) 10-day Open TRIN = 10-day A/D ratio divided by 10-day U/D ratio TRading INdex overbought <= 0.75 oversold >= 1.25 Adv/Dec ratio overbought >= 1.15 oversold <= 0.85 Up/Dn vol ratio overbought >= 1.15 oversold <= 0.85