The Madison Letter:

Daily Commentary
by Staff Writers

February 1, 2010

Madison Trader Comments

All major indexes have Madison scores around -20 so if Trend can get a bit more exhausted then we might have a plethora of buy signals on the major indexes soon. If buys are produced, expect to see a Flash Alert. On a ETF basis, several ETFs in the technology space were produced. Therefore we will by the Software HOLDRS (SWH).

We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginnging of April of 2007. We moved to cash Friday morning 1/22 and there are 11 winning trades to 6 losing trades with our market timing results.

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Index Current
Status Date
Open Price
Open Current
Price Current
Rank BUY
Point Neutral
Point SELL
Point Details

S&P 500 Neutral 1073.87 -18.75 1071 1123 1176

DJIA Neutral 10067.33 -17.11 9999 10469 10939

COMPQ Neutral 2147.35 -21.34 2155 2268 2381

NASDAQ 100 Neutral 1741.04 -22.65 1754 1851 1948

VIX Neutral 24.62 11.88 14.09 20.70 27.30

Other Open Signals Long
Short Date
Open Price
Open Current
Price Date
Closed Price
Closed Result %Result Details

EWN Short 07/17/09 16.38 23.20 -6.82 -41.64%

EWJ Short 01/15/10 10.50 9.92 0.58 5.52% Covered

Year to Date performance of the Madison Letter: We have moved to a new format highlighting all trades since inception. This will provide complete disclosure of all winning and losing trades. To visit go to the home page of www.themadisonletter.com.

Long Term Bull Market: We entered a bear market in October 2007. Alpha will be generated on the short and long side with a series of rallies and failures within the bear market. Currently, a bear market rally is nine months old with a small correction that ended in late November. A new pullback is currently underway. :

M Cubed Score
The Federal Reserve has been cutting rates as of Tuesday, September 18,2007 and our M Cubed Score is now a buy from sell. This is a significant change. The FOMC concludes a two day meeting this week and remained accomodative. The yield curve is very positive with a spread of 272 basis points between the 2 year and 10 year while monetary growth is growing at 1.0%.(source of data www.nowandfutures.com) Updated 12/30/09.

Aggressive Trader Comments

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