04/14/06 Market Update

Stocks:

Monday witnessed the price for the Russell 2000 break below its ascending tops line. Then in a typical technical pattern, the price touched the lower wedge line and spent the rest of the week oscillation between the two. The breakout of this pattern should be the trend direction for the next few months. Based on the over-bought and divergent levels on the weekly and monthly charts, it should break to the downside.

Russell 2000 -- Daily

The 4-Year Cycle on the S&P 500 below shows jus how late we are in the cycle. It is typical in a bull market for the peak to be to the right of the middle of the cycle peak. As you can see, we are well right of the cycle center. This cycle is expected to bottom late September to mid-October. The price should at least drop to the rising trend line on the Russell chart above.

On the Guerrilla Tactics Fund Targeting™ matrix the Bear Funds Composite has crossed above it EMA and shows promise for the next few weeks.

Name	close	change	% change	Target	FT Ema	FT %^ Y1	FT %^Y5	Cross EMA?	Cross 50?	Cross 65?	EndDate
BEAR_WK	12.65	0.11	0.88	38.13	29.99	0.40	-0.03	1	0	0	04/14/06
CHINA_WK	15.25	-0.05	-0.33	83.94	78.34	-0.01	0.52	1	0	0	04/14/06
EMERG_WK	23.99	-0.18	-0.77	78.01	72.93	-0.02	0.34	1	0	0	04/14/06
EURO_WK	37.33	-0.40	-1.07	65.25	67.71	-0.08	0.11	-1	0	0	04/14/06
GOLD_WK	10.50	0.03	0.27	81.38	76.16	-0.02	0.28	1	0	0	04/14/06
HI_YLD_W	7.74	-0.01	-0.15	49.32	61.79	-0.26	-0.13	-1	-1	-1	04/14/06
HQ_BD_WK	12.09	-0.03	-0.25	14.89	30.45	-0.41	-0.36	-1	0	0	04/14/06
INT_BD_W	23.49	-0.17	-0.72	53.56	65.46	-0.20	-0.09	-1	0	-1	04/14/06
INT_EQ_W	32.31	-0.22	-0.68	69.98	76.26	-0.10	0.02	-1	0	0	04/14/06
LATN_A_W	40.67	-0.22	-0.54	65.85	63.39	-0.01	0.01	1	0	0	04/14/06
MUNI_WK	10.75	-0.01	-0.13	25.13	41.97	-0.31	-0.51	-1	0	0	04/14/06
PAC_BS_W	21.61	-0.27	-1.23	78.61	78.57	-0.06	0.36	1	0	0	04/14/06
RL_EST_W	24.13	-0.56	-2.28	32.52	54.66	-0.32	-0.53	-1	0	0	04/14/06
SM_CO_WK	37.28	-0.29	-0.78	57.60	69.32	-0.19	-0.11	-1	0	-1	04/14/06
US_EQ_WK	46.07	-0.32	-0.69	57.98	67.99	-0.18	-0.07	-1	0	-1	04/14/06
US_GOVT_	10.45	-0.06	-0.59	13.06	24.47	-0.37	-0.44	-1	0	0	04/14/06
UTILS_WK	12.37	-0.14	-1.14	24.01	42.75	-0.35	-0.61	-1	0	0	04/14/06

Bonds:

Bonds continue to drop as expected in last week’s update. The move has met the minimum requirements for a Wave 5 decline, but as I wrote last week, the market will drop to the lower support at 106.5 and probably the major support at 104.5. Our signal is short and profitable.

30-Year U.S. Treasury Price -- Daily

Gold:

The XAU continued its decline as prognosticated in last week’s update. It should continue it zigzag decline over then next 5 to 6 weeks.

XAU -- Daily

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