The Madison Letter:

Daily Commentary
by Staff Writers

May 10, 2010

Madison Trader Comments

Here we go. Monday we will move from cash back into the market. Being in cash has saved us about 71 points. Trend scores have dropped under 40 and volume turned positive into the close. On a ETF level, we pick up several buys last Thursday. For the week, the S&P 500 was lower for a second week. The S&P 500 has failed at the 1150 level and Dow Jones failed at the 10500. A logical test would be 1100 for a bottom. We are close.

All our major indexes will initiate buys on Monday;s open and the VIX will initiate a sell. This is one of our most powerful signals.

We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginnging of April of 2007. There are now 12 winning trades to 6 losing trades with our market timing results. We established a cash position on Thursday, April 8th that will become a buy on Monday.

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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 Buy 5/10/10 Market 1110.88 -26.97 1131 1190 1249

DJIA Buy 5/10/10 Market 10380.43 27.90 10559 11012 11465

COMPQ Buy 5/10/10 Market 2265.64 -27.65 2321 2465 2610

NASDAQ 100 Buy 5/10/10 Market 1849.44 -27.80 1893 2003 2114

VIX Sell 5/10/10 Market 40.95 29.34 6.68 20.43 34.18

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 17.56 -1.18 -7.20%

EWZ Long 5/6/10 66.22 63.90 -2.32 -3.50%

EEM Long 5/6/10 39.31 38.19 -0.88 -2.24%

EZA Long 5/6/10 56.01 54.07 -1.94 -3.46%

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 one year old with a small correction that started last week. :

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 its last two day meeting and remained accomodative. The yield curve is very positive with a spread of 281 basis points between the 2 year and 10 year (it was 272 basis points on 3/26/10) while monetary growth annual rate of change is falling at -5.0%.(source of data www.nowandfutures.com) Updated 3/26/10.

Aggressive Trader Comments

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