The recent pullback was clearly not the deep correction of 10 percent or more that we anticipated back in January. Last week's Market Analysis
discussed the various triggers that would turn us bullish. In this release of the General Outlook report, we present a myriad of technical factors that have caused us to abandon the intermediate-term bearish stance. For example, although the S&P 500 has yet to exceed its January 15th high, and sectors like Financials and Retail continue to underperform, the Russell 2000 has outperformed the S&P 500 and the Nasdaq for two consecutive weeks. Moreover, the $SOX index made quite the bullish statement last week by closing above the 2004-2007 consolidation area and registering its highest weekly close since mid January 2004. As far as the S&P 500, our Elliott wave analysis conducted on the hourly time frame suggests an upside target of 1960.