1/4/20097:07 PM Pacific

Let’s start with this NASDAQ cash chart from the 12/30 report as we are now only 30 points away from the target. I suggested it might line up with the Intermediate-term target in the S&P cash from my 2009 forecast report, but it more likely matches up with S&P e-mini target in the second chart below. NASDAQ CASH chart from 12/30/2008 Report

The chart below is a current chart of the S&P e-minis showing the probable later stages of the double zigzag I wrote about on 12/21/2008. Since we broke out of the significant resistance zone on Friday That I first brought to your attention on 12/16/2008, we will probably get to the respective short-term cash targets for NASDAQ (1297) and S&P (950) without a significant retracement. I show the optional Y on the chart at a 1.618 extension (which aligns with the intermediate-term target) as a possibility, but it is less likely that we will get there in one big push. More probable is that we complete the double zigzag, retrace, and get there with another zigzag. Note that a 1:1 Fibonacci extension of the move up from the low to W projects to 101225 on he chart below and is close enough to the 1.618 Fibonacci extension up from X to represent a confluence and therefore an increased probability target. This of course is also the ultimate target based on my 2009 forecast before price turns lower again.

1/4/20097:07 PM Pacific

Probable double zigzag off the low nearing completion

The chart below shows the only viable impulse pattern that is still technically feasible. I favor the corrective zigzag structure over this pattern. For this pattern to gain favorable bias, the retracement from the 950 area would need to be very shallow before heading higher. This chart also shows a definite change of trend using regression trend channel analysis.

1/4/20097:07 PM Pacific

Intermediate-term change of trend

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