Today is June 7, 2006

Our current signal is BUY

This signal was initiated after the close on June 27, 2005

We still believe that the current drop has been a correction in a bull market. We also believe that it is still possible that the low from Wednesday, May 24th was the bottom of the correction. We mentioned in recent commentaries that a typical correction in a bull market was 10%. The NASDAQ Composite is currently 10% off of its April high. The equity put/call ratio closed today at the highest it has been since August of 2004. The public short sales are at an all time high and the Semiconductor Index is approaching major support at 440, while SMH (the Semiconductor ETF) closed at major support today.

We have mentioned in recent commentaries how frustrating corrections can be. This recent correction is not unlike the fall from October of 2005. Patience and discipline is necessary at these times. We do have defenses built into our system that will trigger a sell signal if the market corrects too much against our current buy signal. Currently, we are far from triggering this defense (sell signal).

We have shown the NASDAQ Composite, S&P 500, and Russell 2000 below. If the indices break their current support from the last few weeks, we do expect a harsh fall. We have added support lines on the charts, showing where we believe the indices may fall if the current base they have been building breaks. It is not uncommon for the market to build a base before a reversal in the trend, in fact it is expected. The next few days should tell us if this is in fact what is happening or if the market is preparing for another downmove.

Take Care,

Stephen Brown
Founder of Nasdaq Wizard, LLC