195 replies to this topic

[Vector]

and general consensus thinking back in June was that a recovery back to new highs was "definitely out of the question!!!" Bingo, just as we expected...we're back at new highs.

[da_cheif]

Bradley date and the wed before the week of expiration....oct 11.....weird wollie wed......how do they do that....

http://www.amanita.a...bradley2006.gif

[da_cheif]

Heres a chart for the bears.....and something for everybody to chew on......

http://www.geocities...acs64/4year.jpg

courtesy larry moores on wollie world

Now courtest of George Rodart on WW one for da bools

http://www.georgerod...SPX-061008w.gif

[da_cheif]

investors intll US Market Timing Advisors Sentiment 11 October 2006 By Mike Burke & John Gray Overview Three consecutive sessions with record highs for the Dow Jones Industrials prompted more optimism amongst the over 120 market newsletter we read. There are not many advisors who want to present a bearish outlook to their subscribers as those conditions lead the news. The latest data shows the bulls moving up to 52.2%, from 49.5% and 47.4% the previous two weeks. That was there highest reading since early April, just after the S&P 500 moved above 1,300, for a five year high. The bears moved down to 30.4%, falling below a narrow range they had held for seven weeks. Their recent high was 37.1% on 4-August. Those calling for a correction were little changed at 17.4%. Last week’s reading at 17.2% was the fewest calling for correction since 31-Dec-04, when we counted 16.5%. Advisory sentiment shows a large shift from mid-June, when the bulls and bears were even at 35.6%. That was a very positive signal that stocks were trading at a low risk area, and buying was in order. Even with the shift of recent weeks the readings are not at the extreme show at the end of 2005, when there were 60.4% bulls, 20.8% bears and 18.8% correction. Sentiment is now neutral but it is certainly heading in a bearish direction. Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative as they reflect fully invested positions leaving little cash for additional purchases. At market tops we typically see them in the low 20%s. The difference between the bulls and bears was 21.8%. Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. It was ‘0” mid-June and has been expanding ever since. It is still below bearish spreads above 30%, but is moving in that direction. Sentiment Charts Bullish Themes “As enter the first full calendar month of the autumn season, the Marketimer stock market timing model remains in positive territory. This suggests that the primary trend of the cyclical bull market that began shortly after our March 11, 2003 buy signal (S&P 500 Index close 800.73) remains intact. Marketimer has rated the stock market as attractive for purchase during periods of weakness below the S&P 1250 level. This recommendation was initially published in the June 7 edition and we have seen 15 closes below that price level since that time. Such periods of weakness represented outstanding buying opportunities for subscribers seeking additional stock market exposure.” (5-Oct-06) Bob Brinker’s Marketimer, 858 Happy Canyon Rd #255, Castle Rock, CO 80108-3908 “Remember the tail end of the great 1990’s bull market, when everyone from the UPS delivery man to the barber was interested in the market? Today they’re watching gasoline prices fall, which brings a feeling of relief, and they’re watching housing prices fall, but they’re not thinking about the stock market. In the meantime, we urge you to invest aggressively, because in six months, you’ll be counting your profits. The best opportunities now like in traditional bull market sectors like technology, healthcare specialty retail and financials.” Cabot Market Letter, 176 North St, PO Box 2049, Salem MA 01970 Bearish Themes “Despite waning upside momentum, lagging breadth and surging investors optimism, the two main blue-chip indexes, the DJIA and S&P 500, rallied to new recovery highs. This technical combination is normally lethal for rallies. The small and mid cap sectors as well as the Dow Transports are succumbing to the bearish pressure, and the blue chip indexes should not be far behind. With investor optimism reaching a multi-year extreme, US Treasury notes and bonds should be at the forefront of a decline.” (6-Oct-06) The Elliot Wave Financial Forecast, PO Box 1618, Gainesville, GA 30503 “Dick Arms states this week that a study he completed some years ago confirmed September as the best inverse projector of stock prices over the next eleven months. As this September has been uncharacteristically strong, he expects lower markets to ensue. Moreover, his ‘Yo-Yo’ indicator measures the resistance o advances and that resistance is growing.” (28-Sep-06) Crawford Perspectives, 6890 East Sunrise Dr, #120-70, Tucson, AZ 85750-0840 Newsletter Extracts Capital Market Update Universal Economics | Paul Macrae Montgomery, Editor | 753 Thimble Shoal Blvd, Suite B, Newport News VA 23606 | 757-597-9528 “Widely discussed recently is an indicator known as the 4-year cycle in stock prices. This is not a cycle we use in our work, because we do not understand the operative dynamic responsible for it. Nevertheless, it has worked better that some of the cycles we do use. This cycle was first publicly explicated in the June 30, 1952 issue of Barron's, which means that the alleged cycle has been working in real time for more than fifty years -which is an amazing record for any indicator. In recent months, however, it seemed as if every human was talking about this 4-year cycle, which along with the "seasonal cycle," virtually guaranteed that stocks would have a bad September, and then make a major low in October. Based on our forty years experience with market cycles, the only "guarantee" we can think of is that when everybody is focusing on a particular cycle, it never works as expected. Given the recent popularity of these cycles, our guess was that they would show up in some venue other than the stock market - as a top in Bonds or as a bottom in Commodities, for example. Of course the ultimate irony to these new cycle converts would be for October to see a major top in stock prices instead of the universally expected major bottom. The possibility of a top here has some cyclic support according to the work of our late colleague, George Lindsay. While the 4-year "bottom-to-­bottom" cycle is much better known, Lindsay demonstrated that markets often display a ”bottom-to-bottom-to-­top" pattern. As Peter Eliades recently pointed out, the last two major bottoms in Stocks occurred on October 8, 1998 and October 10, 2002. Using Lindsay's "bbt' pattern, one adds the 1463 days between these two lows to the second low, to get a projected top - which in this case calculates to October 12, 2006. There also was a major low on October 11, 1990. Adding the 2919 days between that low and the October 1998 low to the latter date projects a top for October 5, 2006. Also, adding the time between the major low of October 4, 1974 to the October 1990 low, yields October 18, 2006 as a target top date. (According to Peter, going back to the 1942 and the 1974 lows, generates a major top target of March 2007. As we noted, these are not cycles we use in our work, but we should keep our minds open and our eyes on the exits). “ (8-Oct-06) Sentiment Allows for More Gains The Chartist | Dan Sullivan, Editor | POB 758, Seal Beach, CA 90740 | www.thechartist.com “The climate at this juncture is much more subdued then it was the last time the Dow was in record high territory, back in 2000, when investors were literally throwing money at the market. We view the current skepticism as a healthy sign. The short interest ratio on the Nasdaq is now at a multi-year high, while the short interest ratio on the New York at 5.9 is close to a seven year high. In our last letter we referred to the ISE sentiment index, which measures opening long customer's transactions on the International Securities Exchange, (one of the largest options exchanges in the world.) Transactions made by market makers and firms are not included because they are not considered market sentiment due to the often spe­cialized nature of these transactions. The main strength of the ISE sentiment index is based on the fact that large institutional buyers or sellers are eliminated, thus giving a better sense of individual investor’s sentiment. The most recent reading of the ISE ten day moving average was at 107, which was one of the lowest readings in over three years. This means that option buyers are accumulating 107 calls versus 100 puts. It should be noted that last December buyers of calls exceeded puts on the ISE by bet­ter than 2 to 1. This heavy concentration of negative sen­timent has been prevalent throughout the rally which is a strong indication that it has considerably further to run. Public shorts are also close to a multi-year high, exceeded only by the extreme readings that came directly after the carnage of the World Trade Center in September 2001. The bottom line here is that the public remains skeptical. The latest from the American Association of Individual Investors now shows only 51 % in the bullish camp, despite the fact the Dow is right on the verge of recording historic closing highs. Back in late 2001 this bullish con­tention was over 70%. The latest from Investors Intelligence, the service that tracks over 140 investment newsletters, now shows 47.6% in the bullish camp versus 33.7% bears. The bearish reading is just about where it was in mid-July when this rally got under way, while the bulls have only picked up about 5%. Also, the daily advance-decline line has just recorded bull market highs for the third consecutive day. According to the textbooks, the daily advance-decline line (in most instances) will signal that a bull market is on shaky ground by topping out well ahead of the key indexes. This is still another indication that more upside is in the cards.” (28-Sep-06)

[da_cheif]

investors intell US Market Timing Advisors Sentiment 18 October 2006 By Mike Burke & John Gray Overview This week saw a pause in the rising optimism of the advisors, with the % of bulls unchanged at 52.2%. The further record highs for the Dow Jones Industrials should have increased their levels, so the lack of more bulls is a small plus. There were fewer bears at 30.0%, down from 30.4% a week ago and their recent high at 37.1% in early August. Those calling for a correction were 17.8%, up from 17.4% and 17.2% the previous two weeks. The latter reading was the lowest for this category since 31-Dec-04, when we counted just 16.5%. The increasing bullish sentiment is a negative factor but a normal occurrence. The Dow Jones Industrials are up over 1,200 points from its summer lows. Few newsletters will maintain their subscriptions if their editors continue bearish pronouncement in the face of a move like that. Advisory sentiment shows a large shift from mid-June, when the bulls and bears were even at 35.6%. That was a very positive signal that stocks were trading at a low risk area, and buying was in order. Even with the shift of recent weeks the readings are not at the extreme show at the end of 2005, when there were 60.4% bulls, 20.8% bears and 18.8% correction. Sentiment is now neutral but it is certainly heading in a bearish direction. Other market indicators are positive but short term timing tools are very overbought, increasing the near term risk of a pullback. Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative as they reflect fully invested positions leaving little cash for additional purchases. At market tops we typically see them in the low 20%s. The difference between the bulls and bears was 22.2% and still moving in a negative direction. Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. It was ‘0” mid-June and has been expanding ever since. It is still below bearish spread levels above 30%, but that is getting closer. Sentiment Charts Bullish Themes “The decline in interest costs and energy prices enabled the DJIA to climb to an 11,927.77 intraday, a new all-time high, besting January 2000’s peak at 11,908.50. Until recently the rally has been rather narrow, but this week saw it quite bullishly expand to a number of stocks. While the DJIA was grabbing most of the headlines during the last three months, it was not the leader. From the DJIA’s July 18th 10,658.35 intraday low, it jumped 11.9% to its new 11,927.77 high on Thursday October 5th. During the same time the NASDAQ Composite rallied from a 2,012.78 low to a 2,306.35 high today, a 14.6% rally. The NASDAQ is still more than half way away from its March 2000 all time peak at 5,132.52. With the DJIA more overbought than NASDAS, we look for that average to continue to out perform the DJIA, especially during the traditional November to March general market advance.” (5-Oct-06) Tomorrow’s Stocks, PO Box 14111 Scottsdale, AZ 85267-1411 “The technical indicators remain positive. Most of our indicators are at overbought levels. Should we panic? No. They are saying the market is strong and momentum is great. In such an environment the odds favor higher prices. The time to worry is when our indicators start turning down to levels that, in the past, signalled the end of the move. Enjoy the rally. As I predicted, this move is baffling the sceptics.” (9-Oct-06) The Peter Dag Portfolio, 65 Laekfront Dr, Akron, OH 44319 Bearish Themes “Consistent with market’s tendency to drop over the six month and twelve month periods following the final tightening moves [of the Fed], the major indices have tended to decline during the period from the last hike to the first cut in the subsequent easing cycle. That was the case in twelve of the fifteen cases since 1920. Accordingly our asset allocation is 40% stocks (15% underweight), 40 bonds (5% overweight) and 20% cash (10%) overweight.” Ned Davis Research, 2100 RiverEdge Pkwy, # 750, Atlanta GA 30328 “Call me “picky-picky”, but it still bothers me (remember the Dow Theory?) that the Dow Transports have failed to confirm the new high in the Dow Industrials. Yes, the Transports are now moving up in the Dow’s direction, which is up, but as of yesterday’s close (4-Oct-06) the Trannies were still 430 points below their record high of May 9th. That high was 4,998.95” (15-Oct-06) Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 Newsletter Extracts Spending Dow Theory Letters | Richard Russell, Editor | PO Box 1759, La Jolla, CA 92038 “Do you remember Richard Koo's book, The Balance Sheet Recession (I wrote about this book at length) in which Koo noted that the US consumers were tapped out, that corporations had no particular incentive to spend, and that it was up to the government to spend in order to keep the economy simmering? Well, I doubt if Bush or his buddies read the Koo book, but Bush is a super-spender. In fact, Bush will go down as the biggest spender in history. The wars in Iraq and Afghanistan plus the added "war on terror" are sending US government spending into never-never land. And oh yes, do you remember (I do) Eisenhower's comments in his last speech in which Ike warned about the “military-industrial complex”? When the America's military and its defense contractors and its politicians get together, the result is spending, and I mean HUGE spending. For instance, consider the following - The Air Force is controlled by fighter pilots, old fighter pilots and new ones. And these guys love the F-22, a super jet­fighter plane that was originally designed to beat the Russian fighter pilots during the cold war. The F- 22 cruises at Mach­2, twice the speed of sound. It is invisible to radar, it's a technical marvel. The only problem is that it's unbelievably costly - it comes three for a billion dollars or about $350 million a copy. The plane is manufactured by Lockheed-Martin. A fleet of 183 of these planes has been budgeted by the administration. The F- 22 lobby (Lockheed, the Air Force and some Senators) is tremendously powerful. Beyond the 183 F- 22s already ordered, the Air Force says it needs a total of 381 of these planes. That would come to a total bill of around $13 billion. And then there's the up-keep. As I said, the F- 22 was designed to fight the Russians. But the Russians are no longer our enemy. Today our enemies are the Muslim extremists. And these guys don't give a darn about jet-fighters, they fight on the ground with rockets and rifles and dynamite and machine guns and home-made mines. So why are we spending billions of dollars on more F-22's when the US already controls the skies? Well, it keeps Lockheed-Martin busy, and it maintains a bunch of jobs in selected states. And it's all just part of the military- industrial complex. It makes work, and it runs up astronomical bills. So the big picture is that the US spends vast amounts of money, it runs up monster debts and deficits, and it has a super­high tech military. The miracle, of course, is that in the face of this, the dollar holds up in the foreign exchange market. Since the greater part of the reserves of most developed countries is held in dollars, it's to nobody's advantage to see the dollar go down the drain. It's really a case of "If you don't push the emergency button, I won't push the emergency button." Every nation is playing the fantasy game with fantasy money. And the reality is that this incredible fantasy game will go on as long as everybody keeps playing it.” (11-Oct-06) Contrary Indicators Growth Stock Outlook | Charles Allmon, Editor | POB 15381, Chevy Chase, MD 20825 ”Investors should pay careful attention to important psychologi­cal indicators which own an excellent record of calling important turns in both the stock mar­ket and the U.S. economy. Let's begin with the famous Barron's market call of January 1973. If you have not read about it, perhaps you can access earlier issues through your Internet con­nection. Barron's crackled with this headline: "Not a Bear Among Them." January 1973 not only proved to be the zenith of a great bull market, a serious economic slide soon followed. I'm sure the editors of Barron's would love to take back that forecast. Business Week gained even more fame with bum calls on both the stock market and the U.S. econ­omy. Remember that famous cover of August 13, 1979, "The Death of Equities." The Dow hovered around 800 at the time. Today the DJIA stands well over 11,000. Years ago, one chap at a major broker­age firm came up with the bright idea of multiple magazine cover stories as a reasonably accurate contrary indicator. Right under our noses, CNBC daily pumps out plenty of debatable market calls. TV viewers should look for a consensus, not only among various pro­gram anchors, but particularly among numerous guests. Perhaps 35 years ago, I suggested that seri­ous investors, in times of market stress, should call ten stockbrokers. A consensus of 80% - 90% implies that you do just the opposite. A 100% consensus among stockbrokers would call either for full margin, or going short big time, whichever is contrary. For three decades I spoke at numerous investment conferences around the world. I urged attendees to look for a major consensus among speakers, and then do the opposite of what various "experts" were recom­mending. In July 1982, I spoke at a large conference in San Francisco and couldn't believe my good luck. The first six or eight speakers were terrified that the sky would fall tomorrow. At my large workshop, I recommended 36 stocks for purchase from my Ju­nior Growth Stocks. About a year later, those 36 stocks were up almost 90%. So it pays to keep your ears and eyes open, checkbook at hand, during times of market turmoil.” (15-Oct-05) Short Interest The Granville Market Letter | Joseph E. Granville Editor | PO Drawer 413006 Kansas City, MO 64141 "The ‘Short Interest’ is one of the greatest of all indicators if you know how to read it. Most people don’t give a darn about the short interest because most people never go short. Statistics are hard to come by. True of any indicator, it depends on whether it’s seen in a bull market or a bear market. Right now we have an all-time high short interest. In 1929 we had an all-time high in the short interest a month before the crash. Here are the exact quotes from The Wall Street Journal: 16-Sep-1929 ‘Because of the big short interest which is believed to exist in the stock market, it is the growing view that a good technical recovery is in prospect, So many of the traders turned bearish recently and out of stocks that the internal market structure is probably stronger than in some time.’ 26-Sep-1929 ‘Brokers who keep in touch with the situation tell you that the short interest is larger than usual. It has been the kind of market that induces short selling. The largest short interest is in the motor stocks.’ 9-Oct-1929 ‘Of course, the operations for a rally were aided by the technical position of the market which had become oversold in many directions by the bears, with the short interest larger than in some time.’ 25-Oct-1929 ‘Every important student of the market expresses the opinion that there is a substantial short interest in the market.’ Now we look at the current market and see a parallel where by a record high short interest was deemed bullish before the Dow peaked but would be interpreted bearishly after the down peaks and then proves the shortsellers to have been right as they always are in a bear market.” (5-Oct-06)

[da_cheif]

investors intell US Market Timing Advisors Sentiment 25 October 2006 By Mike Burke & John Gray Overview The bulls were only slightly higher this week at 52.7% from 52.2% the last two weeks. This stabilizing is occurring despite the new highs for many averages. The bears were also up fractionally to 30.1%, from 30.0% last time. We have been anticipating increased optimism amongst the advisors as the Dow Jones Industrials make successive records, but those with negative outlooks seen even more reluctant to switch. Their latest comments point to recent gains as reason enough for a reversal down and subsequent decline. Readings continue to be neutral, but moving in a bearish direction. The Dow Jones Industrials have rallied up over 1,350 points from summer lows to highs this week. Yet sentiment still needs further capitulation from some of the remains bears. Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative as they reflect fully invested positions leaving little cash for additional purchases. At market tops we typically see them in the low 20%s. The advisory have made a large shift from mid-June, when the bulls and bears were even at 35.6%. That was a very positive signal that stocks were trading at a low risk area, and buying was in order. Even with the shift of recent weeks the readings are not at the extreme show at the end of 2005, when there were 60.4% bulls, 20.8% bears and 18.8% correction. Other market indicators are positive but short term timing tools hold at overbought levels, where prior market tops were shown. That means near term risk has increased and we are watching for some negative signals from the oscillating charts. Those calling for a correction were down slightly to 17.2% from 17.8% the week before and that equals the lowest reading since the 16.5% From December 31st 2004. The difference between the bulls and bears was 22.6% and is now moving in a bearish direction. Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. It was ‘0” mid-June and has been expanding ever since. It is still below bearish spread levels above 30%, but that is getting closer. Sentiment Charts Bullish Themes “The Gann Swing charts continue to confirm a bullish up trend. In our 18-Sep newsletter, we said: “Not only did the Gann charts indicate it was early to sell, they continue to confirm that the rally is still intact. Gann charts do help us to determine timing, buy their primary purpose is to keep us with the trend. They do this by making higher highs and higher lows in an up trend, or lower highs with lower lows into a downtrend. The larger cycles and indicators may be unfriendly to the market, but the Gann charts remain constructive.” (16-Oct-06) Jerry Favors Analysis, 7748 Chancel Drive, Columbus OH 43235 “The Standard & Poor’s 500 Composite, with its large-cap multinational flavor of component stocks, may very well hit a new all-time high before the stock market corrects. The S&P 500’s all-time high of 1527.46 made on 24-Mar-00 is 13% away from current levels of 1350. But a “last hurrah” move that is concentrated in the mega-cap stocks could easily propel the DJIA beyond 13,000 and the S&P 500 Composite to a new record high too. In so doing, we would expect a host of divergences to develop in the stock market. Wall Street’s greatest ally is that there continues to be a healthy degree of bearish sentiment prevalent in today’s market.” (2-Oct-06) The Primary Trend, Fleet Financial Centre 700 North Water St, Milwaukee WI 53202 Bearish Themes “Our last TDL called for weakness in China’s boom that would aggravate a commodity bust, adding to the unemployment in the Real-Estate Sector. For the first time, US consumers are buying more cars and trucks built by foreign auto makers than vehicles made by Detroit’s Big Three, suggesting more unemployment in the Automotive Sector ahead. Precisely at this time mine workers are striking for a share of profits from copper in Chile, nickel in Canada and iron ore in South Africa, with other unions worldwide watching (perhaps an “Oink Factor”?). Mass Greed is almost in variably a sign of an economic Top Formation because unions seeking to share profits are not willing to pay a share of any losses. We also find geopolitical considerations troubling, especially with America increasingly dependent for energy on volatile relationships with nations such as Iran; also with Venezuela, which has the world’s largest conventional petroleum reserves outside of the Middle East.” (13-Oct-06) The Dines Letter, PO Box 22, Belvedere, CA 94920 “My conclusion is that our capital faces undue risk of a short-term loss if we enter the market now with a large portion of our portfolio. I believe we will get a much better buying opportunity once the excesses of the recent up trend are worked off. Keep your powder dry and your patience in check as we wait for a better buying point ahead.” (Nov 06) Doug Fabian’s Successful Investing, One Massachusetts Ave NW, Washington DC 20001 Newsletter Extracts A Perfect Calm Market Trend Follower | Harland R. Hendrickson, Editor | #203-12 Blackfoot Rd, Sherwood Park, AB TaA 4P4 Canada | www.MarketTrendFollower.com "As October draws to a close, investors everywhere are wondering what happened to the expected big stock market decline, the U.S. real estate crash and the imminent Iranian nuclear war. However, in spite of new highs on many major indices including the Dow & S&P 500, many market prog­nosticators are calling at best for unchanged markets over the next year, or are warning that a fearful decline still lies ahead. Such sentiment is the stuff of major market rallies. There is a lot of money sitting nervously, waiting on the sidelines for a dip, while the increasingly battered bears keep selling into ever-higher market levels in an attempt to pick the top in an ongoing bull market. With a plethora of bearish commentators and newsletters out there, contrarian wisdom suggests the market likely es­tablished a significant low this past June, setting the stage for much higher prices over the next year. Historically over the last 70 years, the next 12 months of the 4-year cycle has been the best period during the whole 4-year cycle. How could the market have completed its 4-year low with such a shallow correction (between 8% & 13% depending on the index) while so many things out there could go wrong? The answer is "because we have entered a ’perfect calm’." Or put another way, a bull market climbs a wall of worry. Nothing is going wrong but many are afraid that at any min­ute, something will. This is the exact opposite of a ’perfect storm’ when everything that can go wrong actually does. In fact history shows that four-year cycle lows can be pretty shallow. And judging from two previous such events, the shallower they are, the more significant the ensuing ad­vance tends to be. The 4-year cycle low in 1986 had a de­cline of only 10%; then the S&P 500 posted a 50% rise over the next year. After a similar decline of 10% in 1994, a 4­year cycle low, the S&P 500 posted a 170% rise into 1998. Both times loads of sidelined cash pushed markets up sig­nificantly. The prospect of piles of capital flooding into the market at once isn’t the only thing the market has going for it. In fact there’s a lot of good news out there simply being ignored. Firstly, take the "housing bubble." Some analysts suggest that housing prices are not collapsing, just pausing. If it doesn’t continue to collapse this will give a real boost to the markets. U.S. new home sales fell just over 10% in August vs. May, but in September, housing starts actually edged higher to an annual pace of 1.77 million units, up from 1.67 million in August. Prices slipped only $10,000 to $304,000 in the same period; down, but certainly not out. If the real estate market is only slowing, it is actually good news since it allows the economy to catch up to ballooning mortgages. Secondly, energy prices have declined significantly and could go lower over the next six months. Crude is 26% be­low its highs of only three months ago and natural gas re­cently sunk to 2-year lows, off 60% from its high of $15.78 at the start of the year. That means more money for consum­ers to spend and invest. And since energy is a key cost com­ponent for many industries, it also translates into higher earn­ings because the cost of production and transportation has fallen significantly over the past six months. Thirdly, interest rates appeared to have stopped rising for the time being and may begin to head the other way. The Fed and Bank of Canada have both signaled that their higher rate policy is likely behind us. Since the cost of money is the fuel of the economy, lower rates are the equivalent to pushing down hard on the economic accelerator. Fourthly, it’s mostly quieter on the terrorist’s Middle East and North Korean fronts. We are getting the monotonous drone of saber rattling, despotic threats and the sadly persis­tent news of ever more casualties, but that is hardly the rec­ipe for a major market capitulation. Will one come? The truth is there is a good chance a big slide will eventually transpire, but in the meantime one should simply enjoy the trend. Finally, and most importantly - no news is good news. A perfect calm is the most satisfying sound to the ears of the stock markets. It is the ideal environment for the economy and market to muddle through while posting yet higher and higher prices. The anxious either wait to buy or sell prema­turely, while the market keeps going up. Finally they throw in the towel and buy for the long-term, often only months or weeks before the final top. The fact is markets always involve risk. Such is the cost of pursuing returns above the rate of inflation. As always, risk is present in today’s markets; but historically a prepon­derance of bearish observers usually translates into a good time to be fully invested.” (21-Oct-06) Go, But Proceed with Caution The Sudbury Bull & Bear Report | Jim Miekka, Editor | 6735 14th St South, St Petersburg FL 33705 | 727-866-8682 "October options expired last Friday. Since expiration ­Fridays often mark turning points in the market, this week may well be the beginning of a drop into the four-year cycle lows that we have been discussing for so long. There are some interesting crosscurrents at work in the stock market. Historically, stocks do not rise between mid­summer and mid-October during the second year of the presidential cycle. Obviously, they did this year, which may indicate that we will have a strong end to this year, with a strong continuation into 2007. We will want to be fully invested to take advantage of such a market rise. Another school of thought suggests that the cycle lows are only postponed and that there may be a significant decline later in November. However, because the McClellan Summation Index is very high, currently over +4000, coupled with the buy signals that are now in effect, I expect the maximum market decline to be five percent or less. There should be enough down days in the next few weeks to have us fully invested by November 21. Until next week, continue to invest 10% of your mutual fund dollars in the prescribed manner each time the S&P 500 has a down day. “ (22-Oct-06)

[da_cheif]

investors intelligence US Market Timing Advisors Sentiment 1 November 2006 By Mike Burke & John Gray Overview The bulls moved up to their highest levels since January, at 53.7% from 52.7% last week. The bears fell to a six month low at 28.4%, from 30.1% last time. While some did move to the bullish camp, others are now amongst these calling for a correction. That group rose to 17.9%, from 17.2% which was their lowest reading since the 16.5% from December 31st 2004. As markets rally advisors normally become increasingly optimistic, but the bears are noting overbought conditions and continue to project impending weakness. The sentiment readings barely hold neutral status, after this further shift toward the bearish direction. The Dow Jones Industrials have stabilized the past week after gaining over 1,350 points from summer lows. Sentiment still needs additional capitulation to mark a traditional top. However the sentiment is also now commented on by the media, delaying the bears from making a move that could occur at the top. Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative as they reflect fully invested positions leaving little cash for additional purchases. At market tops we typically see them in the low 20%s. The advisory have made a large shift from mid-June, when the bulls and bears were even at 35.6%. That was a very positive signal that stocks were trading at a low risk area, and buying was in order. Even with the shift of recent weeks the readings are not at the extreme show at the end of 2005, when there were 60.4% bulls, 20.8% bears and 18.8% correction. Other market indicators are now showing some warning signals after trading at overbought levels for over a month. That means near term risk has increased even further. We are waiting for confirmed bearish signals from moving average breadth oscillating charts. The difference between the bulls and bears was 25.3% and is now moving in a bearish direction. Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. It was ‘0” mid-June and has been expanding ever since. It is still below bearish spread levels above 30%, but that is getting closer. Sentiment Charts Bullish Themes “A strong plank in the bullish case is the advance-decline line. It has been in a bullish channel since the middle of July and in the process has recorded a succession of bull market highs. In most instances the advance decline line topped out ahead of the overall market, and on several times, the lead time has been substantial. The Dow Utilities also have an excellent record of recording their highs in the cycle well ahead of the market. As this is written, the Dow Utilities are in record high territory” (19-Oct-06) The Chartist | Dan Sullivan, Editor | POB 758, Seal Beach, CA 90740 "Psychologically, the puncturing of the 12,000 level is a sign to casual investors that the market is healthy, so it should bring in an increase in buyers. Technically, it simply means the trends are up, which means we are in a bull market. And what about the fact that it took more than seven years for the Dow to climb from 11,000 to 12,000? Does that mean we’ll need another seven years to get to 13,000? Hardly. In fact, we think you could see 13,000 by the end of the year! Perhaps by the end of November!” (26-Oct-06) Cabot Market Letter | Timothy W. Lutts, Editor | POB 2049, Salem, MA 01970 Bearish Themes "The technical indicators remain positive but they are saying the market is overbought and future gains will come at a much slower pace. The number of stocks reaching new highs, new lows, advancing and declining are reflecting strong momentum. They are still rising. The time to worry is when they start declining. What am I concerned about? Most mutual funds hold record low cash in a high-risk market. Most funds never come close to matching the averages over many years. Since when do you hear about mutual funds being concerned about risk? Right now, they are rolling dice without batting an eyelash. And don’t forget the hedge fund monster. Do not kid yourself that the oil dilemma is over and the world rolls merrily on. Equity investors demand action, which they will no doubt receive, in spades…..on the downside.” (1-Nov-06) Growth Stock Outlook | Charles Allmon, Editor | 4405 East-West Hwy, Bethesda, MD 20814 “As Wall Street is making a heavy bet on fourth quarter earnings, it is well to remind readers that signs of a weakening economy and a barrage of market warnings based on increasing technical weakness are more that likely to be projecting lower corporate earnings. When the Dow crossed 12,000 this past week I was immediately reminded of March 12, 2000 when the NASDAQ peaked at 5,300 precisely as some mavens they predicted a climb to 6,000. I think we are seeing an exact replay.” (26-Oct-06) The Granville Market Letter | Joseph Granville, Editor | PO Drawer 413006, Kansas City MO 64141 Newsletter Extracts InvesTech Research | James B. Stack, Editor | 2472 Birch Glen, Whitefish, MT 59937 | www.investech.com “Woohoo! A new, all-time record high above DJIA 12,000 has been reached - and finally on a closing basis! Corporate earnings are looking fantastic. Oil has fallen from $78 a barrel to under $60, while gasoline prices have dropped 22% in the past month. Party On!! So why is it that the Conference Board’s survey of CEO confidence has fallen to the lowest level since the depths of the last recession? In the latest survey, only 16% of CEOs claim the current economic environment is better than 6 months ago. Perhaps more importantly, the number of CEOs who expect economic conditions to improve in the coming months has also fallen to 16% (from 21 % in the second quarter). This is dangerous territory. Are these corporate executives seeing something the stockmarket isn’t? Haven’t they heard the 2-month-old news that the Federal Reserve has stopped raising interest rates? Or is it just that these CEOs haven’t caught the "DJIA 12,000" fever yet?” (20-Oct-06) The Peter Dag Portfolio | George Dagnino, Editor | 65 Lakefront Dr, Akron OH 44319 ”Oh yes, we are getting there – slowly, but steadily. The top is not here yet, but you might want to take some profit off the table. The trend remains up, however. The technical indicators remain positive, but they are saying the market is overbought and future gains will come at a much slower pace. The number of stocks reaching new highs, new lows, advancing, and declining are reflecting strong momentum. They are still rising. The time to worry is when they start declining. I am watching the number of new lows. If they move higher for a few weeks, they may signal the end of the move. Our trusted proprietary indicators are saying there is more room on the upside. It will take several weeks before they give a sell signal. The upside potential, however, remains limited. For these reasons I believe were are closer to the top. The fundamental picture (long-term) remains negative with sentiment indicators still positive. The market is in the midst of the most treacherous period of the year. The market has entered the distribution phase of this rally. Risk is high and it is a prudent strategy to take some profits off the table. Is this the time to go short? Not yet, but I am thinking about it. “ 23-Oct-06) Today’s Options | Bob Jubb, Editor | POB 14111, Scottsdale, AZ 85267 | 602-996-2908 “The DJIA’s new all-time high of 12,108.91 (Wednesday, October 18th) was the main topic on Wall Street this week, although the DJ Utilities also hit a 446.36 all-time high the same day but got almost no mention. However the fact that was ignored by the Street was the #1 performance by NASDAQ. Since their respective summer lows, the NASDAQ has jumped 19.9%, the DJIA 13.6%, the S&P 500 12.6% and the DJ Utilities up 17.4%. Since NASDAQ is still about 2,800 points away from its March 2000 highs, we look for little headline crabbing in the next few months. Fortunately, profits can be had from both large and small cap issues as your current portfolio shows. Disney is much bigger than Ansoft but both should offer you same very exciting profits in the months ahead. Normally the mid-October period is when one becomes aggressive but the 2006 market started in July when we started to become aggressive and purchased ERTS, ORCL and this in August. Now, three months later and 19.9% higher for NASDAQ and 13.6% for the Dow, we find ourselves in a short-term overbought position. True this can last for a long time but we are some­what concerned with the November 7th th Election. A big Democratic win could send stocks down for their first correction since last July. This causes us to become conservative for the next three weeks as more favorable prices may be available by November 10th. We went from 50% cash to 20% cash in August and suggest maintaining this level until after the Election when the dust has settled.” (19-Oct-06)

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US Market Timing Advisors Sentiment 8 November 2006 By Mike Burke & John Gray Overview Advisors got a bit more cautious as the Dow Jones Industrials dropped six days in a row following its all-time highs. Some uncertainty exists to the election as well. The current bulls declined to 52.1%, from 53.7% last time. That was the high since their low at 35.6% low back on June 16th, just above DJIA readings be 11,000. The bears continue to fall, now at 26.0% from the previous 28.4%. This is the least bears since May 12th, which occurred at the last index highs. Movement from both groups went into the correction camp. Those advisors are looking for shorter term weakness, but are longer term bullish, moved up to 21.9% from 17.9% last time. Not many advisors like being bearish with the Dow making all-time highs, but the recent short-term weakness caused increased worry and that is a modestly good short term sign. However, the decline in the bears is now getting worrisome. The sentiment readings barely hold neutral status, after this further shift toward the bearish direction. Historically, bulls are 55%-60% when indexes achieve record highs, and those extreme levels of optimism often prove negative as they reflect fully invested positions leaving little cash for additional purchases. At market tops we typically see them in the low 20%s. The advisory have made a large move from mid-June, when the bulls and bears were even at 35.6%. That was a very positive signal that stocks were trading at a low risk area, and buying was in order. Even with the shift of recent weeks the readings are not at the extreme show at the end of 2005, when there were 60.4% bulls, 20.8% bears and 18.8% correction. Other market indicators are now showing some warning signals after trading at overbought levels for over a month, but they hold stubbornly bullish. Risk was increased but we have still not seen confirming bearish signals from moving average breadth oscillating charts that would call for general profit taking. The difference between the bulls and bears was 26.1% and continues to slowly move in a bearish direction. Short term opportunities have been indicated after the spread between the bulls and bears contracted to 15% or lower, and then expanded. It was ‘0” mid-June and has been expanding ever since. It is still below bearish spread levels above 30%, but that is getting closer. Sentiment Charts Bullish Themes “Wall Street’s amazing; never-say-die bull has rejuvenated itself for another romp! Four years after the major market bottom of October 2002, stocks are putting on a fresh display of power, the kind of raw energy that bodes well for many months to come. The Dow Jones Industrials Average has already broken out to a new all-time high. Other, broader indices are likely to follow suit during 2007, and again in 2008. Ironically, I’m finding some of the best bargains in an area that was overcrowded with speculators until just a few months ago, oil and gas. From today’s levels, I’m projecting that our top petro picks will soar 50%-80% over the next tow or three years.” (November 2006) Richard E. Band’s Profitable Investing, 9420 Key West Ave., 4th Fl, Rockville, MD 20850 “In summary, all MarkeTimer model portfolios remain fully invested as has been the case since our major buy signal on March 11, 2003 (S&P 500) Index close 800.73). Given the significant rally since the mid-term off-presidential election year lows just under the S&P 500 Index 1250 level this summer, we prefer a dollar-cost-average approach for those seeking to add new money to the market at this time.” (1-Nov-06) Bob Brinker’s Marketimer, 858 Happy Canyon Rd, # 255, Castle Rock, CO 80108-3908 Bearish Themes “We have observed over many years that runs of several days (six or more) in our markets are an important clue to turns of at least intermediate proportion From an oversold low, six + higher days in a row points to much higher prices for the general market. When overbought conditions prevail, as they do now, it strongly tends to time an intermediate peak.” (6-Nov-06) Crawford Perspectives, 6890 East Sunrise Dr, #120-70, Tucson, AZ 86750-0840 “On Sunday, October 15, at 7 in the morning, my sleep was interrupted by an earthquake. It was a 6.6 magnitude earthquake. The bed was shaking for 20 seconds, perhaps longer. But the time felt like an eternity. Thankfully, there were no fatalities in the state of Hawaii on that day. Unfortunately, another earthquake could be coming. A financial earthquake. There are numerous warnings. The economy grew at an annual rate of only 2.6% in the spring, down significantly from a 5.6% percent growth rate in the first quarter of the year. A major decrease of nearly 54 percent. The bottom line, business activities are slowing down quickly.” (1-Nov-06) The Yamamoto Forecast, PO Box 573, Kahului HI 96733 Newsletter Extracts Market Musings The Risk Factor | William John Kuhn, Editor | POB 5996, Bend OR 97708 | 541-389-3676 “Brick walls and pressure cookers - so what ­just make sure I get my tax cut. People say they want more social services, the President says he wants to fight a war and yet we all want to pay less tax. There are so many critical funding issues needing to be addressed that it is hard to know where to begin, but neither Congress nor the President seems willing to talk about anything except cutting taxes. The most recent small example of lack of responsibility is the 700+ mile wall that is supposed to be constructed along the Mexican .border. Congress passed the bill and it was signed by the President, but there is no money to fund the construction. The duel brick walls of Social Security and Medicare are looming on the horizon, yet there has been no discussion this election season. Where is the outrage on making our children and grandchildren repay our debts? The last six years of Republican rule produced tax cuts, record spending increases and a Medicare prescription drug plan that has been widely criticized as fiscally unsound. Where are cries from the fiscally responsible members of Congress? They used to be called Republicans, but they are too busy giving away our precious national resources to pay for a war that never should have been engaged. Just wait for our foreign trading partners to lose their enthusiasm for lending us money. When they stop bidding on our treasury bills and bonds we will see interest rates go through the roof. Not just government paper but all interest rates will rise, making mortgages, car payments and student loans costlier. The pressure cooker is global warming. In 1978 I introduced the investment philosophies of using water, ecology, and alternative energy as significant portions of managed portfolios. I may not have used the term global warming, but I made it clear that we, the American people, especially those of us who could, should change how we do business. We will soon begin to see the negative economic burdens on our daily lives as we move farther into this century. We will see a carbon tax imposed on our automobiles, on home heating, and on everything else resulting from burning fossil fuels. As ocean levels rise we will have to deal with the consequences. As farm land disappears because we allow urban and suburban sprawl we will have to produce more food on less land. There will be a world wide shift to green innovations on many levels providing great investment opportunities. It has been 28 years since the first earth­ friendly investments were made by ‘INVEST/O’, but I remain steadfast and resolute that investing in water, ecology, alternative energy, (and hedge stocks to fight inflation) is the financial course we will follow to manage the rough see ahead.” (31-Oct-06) Major Indexes The Kon-Lin Letter | Konrad Kuhn, Editor | 5 Water Road, Rocky Point NY 11778 | www.konlin.com. Scary September and October massacres did not keep the DJIA from advancing, and on the 19th anniversary of the '87 crash, and after years of dormancy the Dow Jones Industrials crawled over the 12,000 milestone (up 12.7% for year). The Dow Jones Transports and broader market S&P 500 refusing to join the new high is one of the extreme major divergences. Indicators extremely overbought giving warning signals and the VIX (volatility) Index at low extremes (10-11) for months is when you should be more concerned since it confirms investor complacency. Growth plunging and the yield curve inverted suggests an acceleration of the weakening economy. However, the DJIA punched up through overhead resistance to a record high of 12,167.02, advancing 1483 pts without interruption since July's bottom. Hedge funds that took a beating in gold and crude are chasing the big-caps narrow advance and continue to treat bad news as good news, which only increases the advance before the burnout. You see, money managers were buying so they appeared fully invested during the surging market when they release month-end reports. The overextended cyclical bull market is one of the longest on record without a 10% correction. The higher the DJIA goes the more vulnerable the market becomes. A close at 11,550 signals problems. A drop to 11,000 is a sell signal with major support just under that at 10,770 (a 12% correction), and if taken out, the plunge will become ugly with a waterfall decline into the 10,000 area, with the next support at 9,708. The worst case scenario remains at 8,000-8,500. The DJTA rebounded as oil prices dove, but still not close above its May high of 5,013.67.... the worst non-confirmation since the '87 crash. A drop below 4,250 could trigger an avalanche of selling. The NASDAQ being an extreme laggerd has finally eked out a marginally new 5½-year recovery-high (2,379.29) and would give a sell signal at 2,320 with short-term support at 2,210, but if taken out, the decline will intensify. The next level of support is at 2,050-2,010 then 1,890. The worst case scenario is the 1,650-1,600 area. More disturbing, while the DJIA surged to record highs, the S&P 500 did not, another major non-confirmation, but the broader market represented by the Value Line Index (VLE) came charging back to a mere record intraday high, confirming its secular bull market. It also is putting in a double top. A sell signal will be given at 2,100 with multiple support at 2,020-2,0I 0, and, if undercut, next support is at 1,880 then 1,757 with major support at 1,443.” (November 2006)

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US Market Timing Buy/Sell Climaxes 13 November 2006 By Mike Burke & John Gray After three weeks in a row with high levels, there was a more subdued 89 buying climaxes last week. Considering the fact that the election has come and gone and prices are still moving up, that is a modestly good sign. The prior three weeks totaled over 600 buying climaxes. The current selling climaxes advanced a bit to 45, from 19 the week before. We are entering the end of year portfolio adjusting period when many investors dump their losing positions for tax purposes. That often drives these depressed shares even lower and many of these stocks wind up with selling climaxes, and ultimately turn out to be excellent buys. We always try to pick up some stocks at the end of year for a “bounce” into the following year, and prior results have proved successful. Short-term indicators remain mostly bullish, but all are below their overbought peak levels and some indicate caution. The medium term timing tools remain positive, but amongst these a downturn for the industry sector sum would increase the negative potential. There were six S&P 500 stocks with buying climaxes last week and none with selling climaxes. That is down sharply from the prior week’s action. The fewer climaxes also meant almost no sector concentration occurred. Buying climaxes take place when a stock makes a 12-month high, but closes the week with a loss. They are a sign of distribution and indicate that stocks are moving from strong hands to weak ones. Selling climaxes occur when a stock makes a new 12-month low, but then closes the week with a gain. They are a sign of accumulation and indicate that stocks are passing from weak hands to strong ones. Our work shows that sellers into buying climaxes and buyers into selling climaxes are right about 80% of the time after four months.