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Dear Toolbox Readers,

This week we are making some format changes to the Intelligence Report.

We find that when people (including us) make financial commentary the advice is often very different if you are a "trader" or if you are an "investor".

So, Starting Today...

Every Issue will have a commentary from a short-term trader point of view and a look at the market from a medium to long-term perspective.

So without further ado..

This Week for Traders...

Last week we talked about how important it is to look at each trading day from the market "open" rather than yesterday's close and we saw again this week where that has played a big role if you are trading intra-day or even on a short-term basis.

Take a look at these charts...

Do you see the long red or white candles? What that tells you is that they opened the market one way, and then took it the other direction in a big way.

Traders often get taken apart because they are looking at the action from "yesterdays close". It's sad really because you don't get to see this everywhere. Almost exclusively the financial Internet uses yesterday's close as it's basis for stock quotes.

Sometimes the market is making huge moves to the upside or the downside while the mainstream news and sites are telling you the market is down from "yesterday's close".

Short-term traders need to be in the Research lab to see what is really going on in the intra-day. And you really should look at trading some of the picks.

This weeks biggest gainers were...

and Now, This Week for Investors...

Last week we talked about the BPNDX indicator and what it means for long term market timing. I also said that I was going to wait for a "trendline break" for confirmation.

Well, this week we seem to have gotten the signal and we now feel it would be safe to be back in on the long side of the overall market.

On the chart below you'll see that the RSI, the fast and slow stochastic have all turned up. This is a good sign, especially on a weekly chart.

As usual we suggest using the leveraged ETFs for your long-term trading as we really do not believe in "buy & hold" anymore.

We have seen too many small investors get taken apart and financially crippled by holding bad investments and so we suggest that you be a long-term trader instead.

Along those lines you should know that you CAN MAKE MONEY when the markets go down by being properly positioned in the inverse ETFs.

We recommend that you learn the ropes here because you can make serious money while the market tanks, even in your IRA or 401k.

NEW!...

In the Desktop Financial Portal, on the "charts" page, we have added the "Bullish Percent Index" for the DOW as well as the S&P500.

Yes we still have the link to the NASDAQ Index as well, but people have asked and so we added the other two major indices to give a better, more in-depth look.

This is our long-term market indicator that we use to gauge what is going on overall. If you are thinking of going long the market again we like the double-long ETFs DDM, QLD, SSO and UWM.

All these symbols are two times the index, so be sure and set a stop under the recent lows, just in case.

Here is a look at the SSO (double-long the S&P500)

This chart could be a classic bear market rally, so be sure and set your stops.

If you are going to put some money to work here and have a medium-term outlook, your stop should be under the very recent lows.

If you have a longer term perspective you could put a stop under the "panic" lows of two weeks ago.

Overall economic picture still remains bleak. The dollar is worthless and the monetary policy of the US is a disaster. You cannot borrow your way out of debt and I don't care what Ben Bernanke says.

This Year So Far...

We have some real interesting sectors leading the way this year. Some would actually shock you. I'll give you just one. The Homebuilders are up 20.72% so far! WOW!

There are some other sectors that would surprise you too, become a premium member and watch the year unfold with us.

Finally...

Coming next week...

Has it ever occurred to you that there are 77 million baby boomers all retiring on the same 700 stocks? What will happen when they start selling?

If you have not done so already...

Download the Desktop Toolbox Today &

Become A Member of The Research Lab

Until Next Time...

Best Wishes and Good Investing,
Bill McKinley & Doug Newberry
The Investing Systems Network

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