SPI

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GENERAL OVERVIEW OF SPI MARKET

ISSUE DATE: MAY 10, 2006

Over the past 4 weeks SPI has exhibited the usual signs of a bull market top — volatility. This is a change from the steady, progressively higher prices each day leading to the top, then a sudden change to sharp ups and downs and numerous gaps. It is mainly the gaps that alert us to a cycle top being reached. That is, apart from the HEC lines. SPI is still keen to keep going up, as evidenced by the intra day high of May 10, but it is really all over as far as the bull phase is concerned. HEC will hold down any further attempts at higher prices, intra day volatility excluded. There is likely to be continuing volatility as SPI is trapped between HEC and IC2, but once IC2 is broken permanently on the downside then we should see a fall back to the C lines, a fall that may be even more volatile than the price action during April and May.

Watch for any indications of a fast fall to the end of IC3. This is an attraction zone. It would seem unlikely that such a fall could occur but falls from bull market tops can often be rapid in the first stage.