Trade Bulletin 5/24/11 (PART 1 OF 2)

As we have been mentioning in our previous blogs, we have been stalking a bottom formation that formed in early February; it has been progressing quite nicely. We began adding our positions, thus increasing our market exposure from roughly 30% to roughly 50% as dictated by our discipline. This was followed by a time of patient observance and the market proceeded up as expected. Our next expectation was for the market to pull back to the top of the trading range and it did that also. As we discussed in previous communications, a pullback provides an opportunity to accumulate (add) positions since it is the last “lifting off” spot from the trading range; moreover, if the pattern happens to fail here (head down instead of up) we would know quickly. This afforded us the ability of a low risk entry point into the market. While at this entry point we took market exposure to 80%, we quickly (within two days) found out that our last point of entry was actually the point at which the setup began failing. As you can see from the recent activity we quickly took off positions, dropping our market exposure slightly by over 20% to an overall 58%. The beginning of a trending market has been aborted and we are back in our trading range until our system confirms otherwise. Investment selection will hence follow suit.

Symbol: CHA Action: SELL

China Telecom Corporation Limited is an integrated information service provider in the People’s Republic of China. It offers a range of telecommunications services, including wireline voice services, mobile voice services, Internet access services, value-added services, integrated information application services, managed data and leased line services and other related services. Revenue from China Telecom’s wireline voice services accounted for 37.5% of its total operating revenue during the year ended December 31, 2009. In 2009, revenue from the Company’s mobile voice services accounted for 9.6% of its total operating revenue; revenue from its Internet access services, value-added services and integrated information application services accounted for 24.6%, 10.3% and 6% of the Company’s total operating revenue, respectively; revenue from its managed data and leased line services and other services accounted for 5.5% and 6% of its total operating revenue.

Symbol: MUR Action: SELL

Murphy Oil Corporation (Murphy) is an oil and gas exploration and production company with refining and marketing operations in the United States and the United Kingdom. The Company operates primarily as a holding company. Its operations are classified into two business activities: Exploration and Production, and Refining and Marketing. Murphy’s exploration and production activities are subdivided into six geographic segments, including the United States, Canada, Malaysia, the United Kingdom, Republic of the Congo and all other countries. Murphy’s refining and marketing activities are subdivided into segments for United States Manufacturing, United States Marketing and the United Kingdom. In August 2010, a wholly-owned subsidiary of the Company purchased an unfinished ethanol production facility in Hereford, Texas.

Symbol: TNA Action: BUY and SELL

Direxion Daily Small Cap Bull 3X Shares (the Fund), formerly Direxion Small Cap Bull 3X Shares, seeks daily investment results of 300% of the price performance of the Russell 2000 Index (the Small Cap Index). The Small Cap Index measures the performance of the small-cap segment of the United States equity universe, and consists of the smallest 2,000 companies in the Russell 3000 Index, representing approximately 10% of the total market capitalization of the Russell 3000 Index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Fund creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Small Cap Index. The Fund will also invest in financial instruments that, in combination, provide leveraged and unleveraged exposure to the Small Cap Index. The Fund’s investment advisor is Rafferty Asset Management LLC.

Symbol: QLD Action: BUY

ProShares Ultra QQQ (the Fund), formerly Ultra QQQ ProShares, seeks daily investment results that correspond to twice the daily performance of the NASDAQ-100 Index. The NASDAQ-100 Index represents the largest non-financial domestic and international issues listed on The NASDAQ Stock Market. To be eligible for inclusion, companies cannot be in bankruptcy proceedings and must meet certain additional criteria, including minimum trading volume and seasoning requirements. The Index is calculated under a modified capitalization-weighted methodology. The Fund takes positions in securities and/or financial instruments that, in combination, should have similar daily return characteristics as 200% of the daily return of the Index. The Fund’s investment advisor is ProShare Advisors LLC.

Symbol: SSO Action: BUY

iShares MSCI Malaysia Index Fund (the Fund) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the Index). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund invests in the sectors, such as financial, communications, industrial, utilities, energy, basic materials, consumer non-cyclical and consumer cyclical. The Fund’s investment advisor is BlackRock Fund Advisors.

Symbol: BGU Action: BUY

Direxion Daily Large Cap Bull 3X Shares (the Fund), formerly Direxion Large Cap Bull 3X Shares, seeks daily investment results of 300% of the price performance of the Russell 1000 Index (the Large Cap Index). The Large Cap Index measures the performance of the large-cap segment of the United States equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Fund creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Large Cap Index. The Fund will also invest in financial instruments that, in combination, provide leveraged and unleveraged exposure to the Large Cap Index. On a day-to-day basis, the Fund also holds money market instruments. The Fund’s investment advisor is Rafferty Asset Management LLC.

Symbol: FXE Action: SELL

CurrencyShares Euro Trust (the Trust) is a grantor trust. The Trust issues shares (the Shares) in blocks of 50,000 (a Basket) in exchange for deposits of euro and distributes euro in connection with the redemption of Baskets. The investment objective of the Trust is for the Shares to reflect the price of euro plus accrued interest. The Shares are intended to offer investors an opportunity to participate in the market for the euro through an investment in securities. The Shares are bought and sold on NYSE Arca. The Shares are backed by the assets of the Trust, which does not hold or use derivative products. The Trust holds euro and, from time to time, issues Baskets in exchange for deposits of euro and distributes euro in connection with redemptions of Baskets.

Symbol: ADSK Action: BUY

Autodesk, Inc. (Autodesk) is a design software and services company. The Company serves customers in the architecture, engineering and construction, manufacturing, and digital media and entertainment industries. The Company operates in four segments: Platform Solutions and Emerging Business (PSEB), Architecture, Engineering and Construction (AEC), Manufacturing (MFG) and Media and Entertainment (M&E).The principal software products of these segments include general design software, including AutoCAD and AutoCAD LT (horizontal design products), discipline-specific design software, including AutoCAD-based products (vertical design products), model-based design software, including Autodesk Inventor products, Autodesk Revit products, AutoCAD Civil 3D, and Autodesk Moldflow. In January 2009, the Company completed the acquisition of ALGOR, Inc., a provider of analysis and simulation software. In November 2009, it acquired PlanPlatform Ltd.

Symbol: ANSS Action: BUY

ANSYS, Inc. (ANSYS) develops and markets engineering simulation software and services used by engineers, designers, researchers and students across a range of industries and academia, including aerospace, automotive, manufacturing, electronics, biomedical, energy and defense. It focuses on the development of open and flexible solutions. It distributes its ANSYS suite of simulation technologies, through a global network of resellers and distributors (collectively, channel partners) and direct sales offices in global locations. ANSYS’s product portfolio consists of ANSYS Workbench, Multiphysics, Structural Mechanics, Fluid Dynamics, Explicit Dynamics, Electromagnetics, Simulation Process and Data Management, Academic, High-Performance Computing and Geometry Interfaces. ANSYS Workbench is the framework upon which the Company’s suite of advanced engineering simulation technology is built. electromagnetics product suite provides electromagnetic field simulation software.

Symbol: FLIR Action: BUY

FLIR Systems, Inc. (FLIR) is engaged in the design, manufacture and marketing of sensor systems. The Company’s products are used in a range of applications in commercial, industrial and government markets worldwide. FLIR offers a variety of system configurations. The Company operates through two divisions: Commercial Systems and Government Systems (GS). Commercial Systems segments include Thermography, Commercial Vision Systems, and Raymarine. The Company’s GS division includes Government Systems and ICx. Thermography products are sold for commercial and industrial applications. Products include sensitive cameras with analytic capabilities and image processing. Commercial Vision Systems (CVS) is focused on the commercial markets for infrared imaging technology. On October 4, 2010, the Company acquired ICx Technologies, Inc. On May 14, 2010, FLIR acquired Raymarine Holdings, Ltd. (Raymarine).

Symbol: HSIC Action: BUY

Henry Schein, Inc. is a distributor of healthcare products and services primarily to office-based healthcare practitioners. The Company serves 700,000 customers worldwide, including dental practitioners and laboratories, physician practices and animal health clinics, as well as government and other institutions. It conducts business through two segments: healthcare distribution and technology. These segments offer different products and services to the same customer base. The healthcare distribution segment aggregates dental, medical, animal health and international operating segments. The technology group provides software, technology and other value-added services to healthcare practitioners, primarily in the United States, Canada, the United Kingdom, Australia and New Zealand. On December 31, 2009, the Company acquired a majority interest in Butler Animal Health Holding Company, LLC. In April 2011, the Company acquired Alpha Scientific, Inc.

Symbol: IGV Action: BUY

iShares S&P North American Technology-Software Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the S&P North American Technology-Software Index (the Index). The Index is designed to measure the performance of United States-traded stocks of software-related companies in the United States and Canada. The Index includes companies that are producers of client/server applications, enterprise software, application software, and personal computer (PC) and home entertainment software. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund’s investment advisor is BlackRock Fund Advisors.

Symbol: PLXS Action: BUY

Plexus Corp. (Plexus), along with its subsidiaries, provide optimized product realization solutions through a product realization value stream service model. It provides these services to original equipment manufacturers and other technology companies in the wireline/networking, wireless infrastructure, medical, industrial/commercial and defense/security/aerospace market sectors. It provides advanced product design, manufacturing and testing services to its customers with a focus on the mid-to-lower-volume, higher-complexity segment of the electronic manufacturing services market. Plexus offers a range of integrated services, which include product development and design, prototyping and new product introduction services, test equipment development, material sourcing and procurement, agile manufacturing services, fulfillment and logistic services, after-market support and regulatory requirements.

Symbol: STZ Action: BUY

Constellation Brands, Inc. is a wine company with a market position in each of its core markets, which include the United States, Canada, the United Kingdom, Australia and New Zealand. The Company’s wine portfolio is complemented by select premium spirits brands and other select beverage alcohol products. It has three business segments: Constellation Wines (branded wine, spirits and other), Corporate Operations and Other, and Crown Imports (imported beer). In January 2010, the Company sold its United Kingdom cider business.

Trade Bulletin - May 4th, 2011

Two weeks ago our system received a confirmation that a market bottom had taken place. This was our signal to get 50% of funds invested. By purchasing the indices (ETF’s) we got close to 50%. While this provided a great entry point to accumulate positions, it was also a point from which to sell positions that experienced a pullback, and didn’t recover. We decided to sell DBA, SWK and CHA. They have all been great trades for us. We sold them all with a profit giving us the ability to more raise cash and later reallocate the assets into stocks that currently have more potential.

Symbol: DBA Action: SELL

PowerShares DB Agriculture Fund (the Fund) is a separate series of PowerShares DB Multi-Sector Commodity Trust (the Trust). The Fund’s subsidiary is DB Agriculture Master Fund (the Master Fund), a separate series of DB Multi-Sector Commodity Master Trust (the Master Trust). The Fund offers common units of beneficial interest (the Shares) only to certain eligible financial institutions (the Authorized Participants) in one or more blocks of 200,000 Shares, called a Basket. The proceeds from the offering of Shares are invested in the Master Fund. The proceeds from the offering of Shares are invested in the Master Fund. DB Commodity Services LLC serves as the managing owner, commodity pool operator and commodity trading advisor of the Fund and the Master Fund. The Bank of New York Mellon serves as the administrator of the Fund and the Master Fund.

Symbol: CHA Action: SELL

China Telecom Corporation Limited is an integrated information service provider in the People’s Republic of China. It offers a range of telecommunications services, including wireline voice services, mobile voice services, Internet access services, value-added services, integrated information application services, managed data and leased line services and other related services. Revenue from China Telecom’s wireline voice services accounted for 37.5% of its total operating revenue during the year ended December 31, 2009. In 2009, revenue from the Company’s mobile voice services accounted for 9.6% of its total operating revenue; revenue from its Internet access services, value-added services and integrated information application services accounted for 24.6%, 10.3% and 6% of the Company’s total operating revenue, respectively; revenue from its managed data and leased line services and other services accounted for 5.5% and 6% of its total operating revenue.

Symbol: SWK Action: SELL

Stanley Black & Decker, Inc. operates in three segments: Construction & Do-It-Yourself (CDIY), Security, and Industrial. The CDIY segment manufactures hand tools, corded and cordless electric power tools and equipment, lawn and garden products, consumer portable power products, home products, accessories and attachments for power tools, consumer mechanics tools, storage systems, and pneumatic tools and fasteners. The Security segment provides access and security solutions for consumers, retailers, educational, financial and healthcare institutions, as well as commercial, governmental and industrial customers. The Industrial segment manufactures and markets professional industrial and automotive mechanics tools and storage systems, metal and plastic fasteners and engineered fastening systems, hydraulic tools and accessories, and specialty tools. On March 12, 2010, Stanley Works completed a merger with the Black & Decker Corporation and changed its name to Stanley Black & Decker, Inc.

Trade Bulletin - April 25, 2011

As many of us are aware, there has been a general nervous market sentiment due to the S&P’s downgrading of the U.S. debt. However, despite negative news looming within the market, we are still determined to carry out our discipline, which at present has us focused on trading the completion of a bottom. As previously mentioned in our updates to you over the last month, we had been waiting for the confirmation of a bottom. Recently, our system received a final signal for the 50 percent pullback in the S&P from one of our final indicators. This designated to us that a bottom had likely been put in place, as well as the beginning of a markup in price action.

Why is this important? This point of the market bottom usually provides the lowest risk entry point to add bullish positions to the portfolio. Rarely does a trade fail at this point. Historically, a 50 % retracement after a move off the bottom is a very strong indication of strengthening buying pressure as selling pressure is not strong enough to force prices lower. Furthermore, this point usually marks the movement up out of the trading range into the trending range as the bottom is less likely to fail here.

As the market takes off after the bottom, our discipline dictates us to have 50 percent of allocated funds invested in long market positions. As the trend continues to confirm we will add/replace our existing index ETF’s with stock positions from appropriate business groups based on allocation guidelines. To help mitigate risk we will continue to move our stops up until we once again emerge out of the trend.

Symbol: TNA Action: BUY

Direxion Daily Small Cap Bull 3X Shares (the Fund), formerly Direxion Small Cap Bull 3X Shares, seeks daily investment results of 300% of the price performance of the Russell 2000 Index (the Small Cap Index). The Small Cap Index measures the performance of the small-cap segment of the United States equity universe, and consists of the smallest 2,000 companies in the Russell 3000 Index, representing approximately 10% of the total market capitalization of the Russell 3000 Index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Fund creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Small Cap Index. The Fund will also invest in financial instruments that, in combination, provide leveraged and unleveraged exposure to the Small Cap Index. The Fund’s investment advisor is Rafferty Asset Management LLC.

Symbol: QLD Action: BUY

ProShares Ultra QQQ (the Fund), formerly Ultra QQQ ProShares, seeks daily investment results that correspond to twice the daily performance of the NASDAQ-100 Index. The NASDAQ-100 Index represents the largest non-financial domestic and international issues listed on The NASDAQ Stock Market. To be eligible for inclusion, companies cannot be in bankruptcy proceedings and must meet certain additional criteria, including minimum trading volume and seasoning requirements. The Index is calculated under a modified capitalization-weighted methodology. The Fund takes positions in securities and/or financial instruments that, in combination, should have similar daily return characteristics as 200% of the daily return of the Index. The Fund’s investment advisor is ProShare Advisors LLC.

Symbol: SSO Action: BUY

iShares MSCI Malaysia Index Fund (the Fund) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the aggregate in the Malaysian market, as measured by the MSCI Malaysia Index (the Index). The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund invests in the sectors, such as financial, communications, industrial, utilities, energy, basic materials, consumer non-cyclical and consumer cyclical. The Fund’s investment advisor is BlackRock Fund Advisors.

Symbol: BGU Action: BUY

Direxion Daily Large Cap Bull 3X Shares (the Fund), formerly Direxion Large Cap Bull 3X Shares, seeks daily investment results of 300% of the price performance of the Russell 1000 Index (the Large Cap Index). The Large Cap Index measures the performance of the large-cap segment of the United States equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Fund creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Large Cap Index. The Fund will also invest in financial instruments that, in combination, provide leveraged and unleveraged exposure to the Large Cap Index. On a day-to-day basis, the Fund also holds money market instruments. The Fund’s investment advisor is Rafferty Asset Management LLC.

Symbol: CL  Action: SELL

Colgate-Palmolive Company (Colgate) is a consumer products company. Colgate’s products are marketed in over 200 countries and territories. The Company manages its business in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care segment is operated through four operating segments: North America, Latin America, Europe/South Pacific and Greater Asia/Africa. Its principal brands include Colgate, Palmolive, Mennen, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex, Tom’s of Maine, Ajax, Axion, Fabuloso, Soupline, Suavitel, Hill’s Science Diet and Hill’s Prescription Diet. During the year ended December 31, 2010, the revenues of Oral, Personal and Home Care products accounted for 43%, 22% and 22%, respectively, of its total revenues. During 2010, the revenues of Pet Nutrition products accounted for 13% of the Company’s total revenues.

S&P 500 Activity - What we've been waiting for?

As noted in our previous updates to you this quarter, our indicators have been pointing to a potential bottom. But in order for us to confirm that bottom, we have been waiting for a 50 percent pullback (retracement). In the last week our system indicated a degree of confusion in the marketplace as the daily price activity seemed to consolidate*. However now, as you can see in the image below, the market has finally started a downward move, called a retracement.

This could very well be the retracement we have been waiting for. If it retraces down to about 50 percent of the prior move, we may have our next available entry into a bullish* or bearish* trade, in which case we will adjust our trading strategy once more. To be clear, an opportunity for a bullish entry would arise if downside momentum dried up around the 50 percent retracement point and upside (green) volume began to outpace downside (red) volume. Conversely, we would position ourselves for a bearish entry if downside momentum did not dry up and actually maintained, or increased. Experiencing the latter observation would indicate to us that the expected bottom formation was taking on a more complex development path. We would then seriously consider the possibility of a top formation. Currently, our system indicates that this is unlikely, and we will still await confirmation for our next available entry.

As always, we will maintain our transparency to you by providing the simplest and most legible explanations about the market’s activity. Please feel free to call us if you have any questions.

*Bullish move- an upward trend

*Bearish move- a downward trend

*Consolidate-the movement of an asset's price within a well-defined pattern or barrier of trading levels, usually regarded as a period of indecision amongst investors.