The Madison Letter:

Daily Commentary
by Staff Writers

May 24, 2010

Madison Trader Comments

Since the March 2009 rally began, each selloff ended at a higher level than the previous selloff. Now that is at risk. The low in February before we began the current rally was 1044.50. The other important low was "The Flash Crash" low of 1065.79. Currently, in hindside "The Flash Crash" did matter.

All our major indexes are open buys and the VIX an open sell. This is one of our most powerful signals in recent memory and is struggling which is very telling. The VIX should sell off this week add move back into the high 20s.

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 7 losing trades with our market timing results. We established a buy on Monday 5/10/.

[Image 1]

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

S&P 500 Buy 1135.68 1087.69 -15.72 1070 1154 1238

DJIA Buy 10755.74 10193.39 -16.18 10063 10747 11432

COMPQ Buy 2365.97 2229.04 -15.71 2187 2383 2580

NASDAQ 100 Buy 1931.52 1822.77 -15.44 1788 1941 2094

VIX Sell 28.65 40.10 22.38 11.93 28.54 45.14

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 17.36 -0.98 -5.98% Covered Short

EWZ Long 05/06/10 66.22 61.14 -5.08 -7.67%

EEM Long 05/06/10 39.31 37.34 -1.97 -5.01%

EZA Long 05/06/10 56.01 52.71 -3.30 5.89%

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 releases its latest meeting minutes this Wednesday. The yield curve is very positive with a spread of 270 basis points between the 2 year and 10 year (it was 281 basis points on 3/26/10) while monetary growth annual rate of change is falling at -8.70%.(source of data www.nowandfutures.com) Updated 5/17/10.

Aggressive Trader Comments

The Madison Letter Archives