The Madison Letter:

Daily Commentary
by Staff Writers

July 21, 2010

Madison Trader Comments

All Madison scores on the major indexes are now back above 0. Can you say whipsaw! Recent buy signals EZA, EWZ and EEM are now all winners in terms of results. Last week we noted, "It makes sense to go back on a buyer's strike until Madison scores move above 0. We will remain with our open buys."It is time to nibble for new buys.

All our major indexes are open buys and the VIX is an open sell. This is one of our most powerful signals in recent memory. However, it is taking forever to play out.

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.

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

S&P 500 Buy 1135.68 1083.48 5.94 1015 1068 1121

DJIA Buy 10755.74 10229.96 5.57 9628 10099 10570

COMPQ Buy 2365.97 2222.49 5.59 2069 2189 2309

NASDAQ 100 Buy 1931.52 1840.67 5.84 1709 1811 1913

VIX Sell 28.65 23.93 -11.16 20.90 27.76 34.63

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

EZA Long 05/06/10 56.01 57.24 1.23 2.20%

EWZ Long 05/06/10 66.22 67.23 1.01 1.53%

EEM Long 05/06/10 39.31 40.08 0.77 1.96%

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 and now have offically exited it. Alpha will be generated on the long side with a series of rallies. Currently, a correction that started in May is now complete and we are in a weekly rally. :

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 new thoughts this Wednesday. The yield curve is very positive with a spread of 254 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.

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