For GT Blog June 2, 2009

The great advance in most of the major world bourses from the early March 2009 lows rolls along leaving the bears sitting on the sidelines praying for a correction. Nothing gets in the way as fears of swine flu and a GM bankruptcy are brushed off

Back here on May 12 I referred to my Toronto Star "recognition point" column of March 3, 2009 setting out the technical conditions that have to be met in order to declare a new bull market. One condition was met a week earlier when the TSX cleared the recognition point (TSX Comp 9500) and entered into bull market territory. The current advance is now an official 2nd up-leg or Elliott wave (3) bull market advance

The "recognition point" can occur anywhere from a third to one-half way into the Wave 3 advance - if we assume the half way point we can now set time and price magnitude levels this would give us a price target of 11500 on the TSX Composite Index and a time target of the first week of July 2009

Now the bulls have a pleasant investing dilemma - do they hold on for more or should they rotate down to lower risk stocks? The bears have an unpleasant investing dilemma - do they sit on cash and pray, or should they capitulate and jump into lower risk stocks?
Our weekly Rotation Table clearly sets out the risky leaders - Metals & Mining, Financial, Technology and Energy. The lower risk laggards are Gold, Staples, Telecom & Utilities