SDS-SSO Model Update - July 17, 2009

Dear Blogger, thank you! again for subscribing to the S&P 500 long/short ETF Model and welcome to new members who just joined and new list subscribers. today's analysis is available for download: SDS-vs-SSO-20090717-subscriber.xls.zip - (or feel free to browse the directory.) ignore the missing data error message that may pop-up when opening up the file. Excel for Windows looks for metadata that Excel for Mac doesn't generate. if you ever misplace your login, send me a message using the email you originally provided when subscribing through paypal. visit the blog for an archive of all subscriber updates and alerts. the archive is search-able and comments can be posted by everybody. Today's Commentary on better than expected Q2 earnings reports from banks & better than expected outlooks for 2009 reporting from tech companies, markets exploded upward this week for one of the best 1 week performances for the year. the S&P 500 index was a beneficiary closing up 6.97% for the week. with regard to the SDS-SSO S&P 500 index model, there's a couple of things to be watchful of. the 12 day MAs of the standard deviations for SDS & SSO are still very low relative to levels during index breakouts up or down over the last 12 - 18 months . what this means to me is both ETFs are leveled off in a trading range. see the 12 DMA STDEV chart in the spreadsheet. if we're going to breakout up or down, i expect to see these numbers to jump up. another thing to take note of is a right shoulder of a head-n-shoulders pattern is forming in the chart of vector-c amplititude vs. time. historically, these patterns have been muted but discernible. the left shoulder formed 2 months ago and the new right shoulder may be getting ready to top out if it hasn't already. remember, data to determine the geodesic coordinates and so forth are based on 12 DMAs. the model will always have a little lag relative to actual timing of events. finally, the geodesic parameter chart and the time rate of change of the geodesic parameters scatter plot are not in breakout mode as yet. they are still within recent levels since about the second week in june. therefore the model still indicates a mild bullish bias to SSO. the geodesic coordinates are still moving in a bullish direction at an even pace but their location is nowhere near the end of the path from just a few weeks ago. considering the S&P 500 index levels are near the highs of the year, you have to wonder whether this recent run up is in a right shoulder formation process (i.e. about to go down) or we are just at the beginning of a new move upwards. the next 7 - 10 trading days will be very telling. best regards, mike james Managing Member Equity Informatics, LLC phone:302-220-3864