Weekly Update 07/23/04

Stocks:

The markets accelerated to the downside on the 21 st . This was the first day of the GT -Prediction Point on the Fibonacci Days Forward Matrix. Our short position in the S&P madcap 400 gained 2.24% from the high on the 20th . The short term oscillators are oversold, however the weekly cycles composite has probably one to two more weeks before it has reached its lower level. We should see continued downward price presser into the 54-T Day low (See Cycles Matrix) expected this Friday. The GT -Fund Targeting™ Weekly Matrix has six indices breaking below the 50 mark this week, bringing the total to thirteen of the sixteen stock indexes in negative territory.

While we should get some bounce action after this, we still have the longer term 78-Week cycle dropping into September. We may see a rest in the decline but I do not think this low will be the low of the cycle.

Bonds:

The 30-Year Treasury remains on a buy signal but the Relative Strength Indicator is dramatically decreasing. This does not mean the top is in but the growth will come slower and the risk will slowly increase. We should see two more high pushes before the downward cycles takes over into the next price low due August 17 th give or take a couple of days.

The High Yield Bonds issued a sell signal this week. They have given a hansom profit and could easily correct with the OTC market over the next two weeks. The Cycles Composite and the Percent R indicator suggest weeks to a month of consolidation.

Gold:

The XAU system issued a sell signal on 7/20/04 at 87.78 up from the 85.99 buy level. With exact day trading, we would have made slight profit; the risk clearly out weighted the reward. I believe it was wise to sit this one out. Furthermore, the cycles oscillators are just turning over on the XAU. This market should be in for a violent downturn. We do not issue short signals on the XAU but if we did I'm sure this would generate a new short position. If you stayed with this market, get out. If you have a core position you still might want to cut it in half. In last weeks update I thought the XAU was heading for 79-80 area. I now think there is a good possibility of breaking through it.