MUST READS --> | About the Repo Rate Timing Model | About the Coppock/Trendex Indicator
                         | About JSE Seasonality | About the TrendexPrime Timing Model |
                         | *NEW* About the SA Reserve Bank Leading Economic Indicator |
                         | *NEW* The PowerStocks SuperModel Market Timing System |
                         | About Advance/Decline Ratios | About McClellan Market Indicators |
                         | *NEW* The JSE SWISSClock Rapid Market Timer |

The Weekly JSE Pulse lists everything you need to know about the health and expected returns of the JSE at this point in time, together with various market timing signals. Catch the start of every bull run, see how much oomph is left in the market and never be caught in a JSE crash again!

UPDATED ON : MONDAY 27 JULY 2009

1. The PowerStocks SWISSClock Medium Term Market Timer
A set of mechanical rules we have developed utilising the McClellan breadth indicators and our own Advance/Decline data to derive a highly accurate signalling system for market tops and bottoms with 6-8 month time horizons.

PROGNOSIS : BUY. MCSI HAS ROOM TO MOVE ALL THE WAY TO 150. NOT TOO LATE TO GET ON BOARD ON THIS SIGNAL. WE EXPECT A TOTAL OF 20-30% GROWTH ON THIS SIGNAL, SO JUST OVER HALF WAY UP THE LADDER. ALL THREE SUPERMODEL SUB-COMPONENTS NOW FLASHING BUY SIGNALS WHICH MEANS SWISSCLOCK IS NOW IN TURBO-CHARGE RETURNS ZONE.

2. The PowerStocks SUPERModel Market Timing System
Our flagship JSE long term investment market timing model. A combination of the Repo Rate Model, the Trendex Momentum Model and the SA Reserve Bank Leading Economic Indicator Model. Delivered a whopping 113,863% growth (25.6% CAGR) since 1978, no losing trades and never got caught in a single bear market.


2.1 PowerStocks Repo Rate Monetary Policy Timing Indicator (MPI)

Next MPI points expiration : 9th August 2009, 1 point to be deducted.
PROGNOSIS : INITIAL CUT IN DEC 08 EXPIRED IN JUNE 09 WHICH DROPPED THE MPI READING BY 1 POINT. WE ARE HOPING FOR AN INTEREST RATE DROP AT NEXT MONETARY POLICY COMMITTEE MEETING TO NULLIFY THE ADDITIONAL EXPIRATION WE HAVE ON 9 AUGUST. THIS TIMING MODEL STILL RATES THE JSE AS A MEDIUM TO LONG TERM BUY.

2.2 PowerStocks TRENDEX Bull Market Indicator for the JSE

PROGNOSIS : STRONG MEDIUM/LONG TERM BUY. TRENDEX CONTINUES ITS ADVANCE UPWARD SHOWING SLIGHT ACCELERATION (INCREASING SPACES BETWEEN DOTS). THIS LINE SWINGS VERY QUICKLY THROUGH ZERO WHEN THE MARKET GETS MOVING AND THE BULL RUN IS ON FULL TAP.

2.3 Reserve Bank Composite Leading Economic Indicator for the JSE

PROGNOSIS : EVERYTHING SET FOR MEDIUM-TO-LONG TERM GAINS ON THE JSE. SA Reserve Bank Composite index looks like it is finally turning upward. When the SARB oscillator (right chart) reaches and passes through -10 we have a BUY signal triggered for the SARB timing model, which will boost the current score for the SuperModel by +1. Note this indicator is updated on the 20th of each month.

UPDATE 20 JUL '09 : Today the SARB published the leading indicator for May 2009. Both April and May posted strong improvements in the YOY ROC. We believe the YOY ROC decline has bottomed, meaning the SA Economy will bottom in 4-6 months time. Whilst our timing model stipulates you wait for the YOY ROC line to pass through -10% to generate a BUY signal, we feel confident we can generate the BUY signal earlier given the depth of this decline and strength of the bounce. So we are officially generating a BUY for the Econometric timing model, the last timing model within the SUPERModel to do so. This has boosted the score of the SUPERModel by +1.


3. JSE ALSH MARKET BREADTH
3.1 Advance/Decline Line and Ratios

OBSERVATION : Advancing AD-Line hints at broad support for current market climb.No divergence present. On 7th Jul 09 we had a rare event of declines outnumbering advances 7 to 1 which hints at last sellers being flushed from the system. Sure enough the following 2 weeks the market surged. We are in the midst of risk takers getting back into the market. See section 3.2 below.

3.2. PowerStocks McClennan Oscillator & Summation Index

OBSERVATIONS :
Oscillator (MCOS) above zero meaning money flowing back into market. Summation Index (MCSI) still in positive territory (indicating money moving into the market) and pointing upward indicating improvement will continue. Longer term view in SWISSCLock section shows higher MCSI peaks and lower troughs hint at strengthening market. MCOS shown 5 days of minor weakness and could head toward zero signalling a consolidation after the run of the last 2 weeks.

4. JSE SEASONALITY INDICATOR

Seasonality present JULY is traditionally very poor month for ALSH returns
PROGNOSIS : Caution, but unlikely to play significant role this year due to crash. Market may drift for July but we expect it to roar back to life in August.

5. TREND-LINE ANALYSIS FOR JSE ALSH INDEX

PROGNOSIS : As predicted in WJP 2 weeks ago, we have a strong bullish wedge breakout and the ALSH has moved back into its medium term support/resistance channel. This week we expect it to consolidate (weaken) and regain its footing on or close to the medium term support line before attempting a 2nd assault on the medium term resistance line. Last week we predicted 24,000 would be attained within 2 weeks (1 week from now), we are now revising that to 25,000 within next 3 weeks. We have reports back from several subscribers that speculated on SBTOPCAK ALSI40 CALL warrants on our 7 JUL signal, having doubled their money in 7 trading days. Hopefully these speculative gains will be put to good long term investing use!

6. POWERSTOCKS ECONOMIC ENVIRONMENT MONITORS


7. SPECIAL SITUATIONS :
These are rare events that have proven statistically to yield good short term returns if immediately acted upon. About 8-12 arise per year. An example is when certain thresholds are exceeded with the advance/decline and decline/advance ratios (see our "Profiting from the Advance/Decline Ratio" research) When these events occur they are posted here and our subscribers emailed immediately.

SPECIAL SITUATION 1 : The Decline/Advance ratio reached 6.89 on Monday 6 July 2009 selloff.  This is a very rare occurrence (8 times in last 10 years) and indicates a broad sell-off indicitive of capitulation/panic. It is likely this flushed many sellers out the system and we could be at a localised medium term bottom/trough.

SPECIAL SITUATION 2 : All three timing models that constitute the PowerStocks SUPERModel Composite Timing System are now firing BUY signals. This situation has led to traditionally high returns on the JSE based on our 31 years backtests, especially when coupled with a SwissClock timing strategy. Read the bottom of the SwissClock research note to see how this situation leads to turbo-charged JSE results for at least the next 100 days.

SPECIAL SITUATION 3 : It is 5 trading days left this month and we are in to August. August is the 2nd most powerful month seasonally for the JSE next to December and we expect no difference this year. We suggest taking positions before August rolls around. Now might be a good time to start a SwissClock strategy with your favourite ETF. We like SATRIX RESI.

DISCLAIMER : No Indicator or past history can guarantee future returns. Please ensure you read our disclaimers before acting on information on this page. We accept no responsibility for the accuracy of information on this page nor for any outcomes arising from you acting on this information.

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