HELLO HOUSTON.

If there ever was a time to attend a VectorVest Seminar, it is now. The world markets are in turmoil and you'll need every bit of guidance and information you can get to come out ahead. That's what we like to do, i.e., make money in both up and down markets. Come see how it's done. Attend the Houston Two-Day Investment Seminar. Your satisfaction is guaranteed. So, Hello Houston.

BUY LOW, SELL HIGH.
The closing bell had hardly finished ringing Tuesday, when the questions began to arise: What caused the crash to happen? How long will it last? How far will the market go down? Is this the beginning of a bear market? What do I do now?

As far as I can tell, the sell-off started in Shanghai, China. That market had become very speculative and rumors were flying that the government was going to take action to cool it down. Stock prices in China had simply gone too high and investors were behaving irrationally, a lot like what we had in late 1999 and early 2000. A familiar refrain was that when a company announced bad news, its stock price would sky-rocket. In a blow-off rally, the Shanghai Composite Index closed at an above 3,000 record high on Monday; then crashed on Tuesday.

On Wednesday, I heard a stock market expert appearing on CNBC say the downturn would last only a day or so because Dr. Ben Bernanke told Congress the crash was not due to any single event. On Thursday, I heard a different stock market expert say the downturn would last a long time because it wasn't caused by any one thing. Of course, nobody knows how long this downturn will last or how far down stock prices will go. That's why VectorVest tracks the market the way it does and lets our indicators tell us what is going on. Clearly, we had been warning about a correction for several weeks now. Read, especially, my essay of 01/19/07 entitled "Topping Out." Although you may have been taken aback by the severity of the downturn, I hope that we, at least, helped prepare you for the downturn.

So what do we do now? We'll let this downturn play itself out and watch it carefully. Our Market Timing Indicator, MTI, went below 1.00 yesterday, indicating that the underlying trend is down. So we've got to see where it bottoms-out. Then we'll see where our Buy/Sell Ratio, BSR, bottoms-out. Note that after last year's May downturn, the MTI bottomed at 0.57 on May 24th, while the BSR bottomed at 0.10 on June 13th. Once these indicators have bottomed-out and start moving up, we'll start looking for an entry point for buying stocks again.

In the meantime, we'll try to make a few bucks selling stocks short or buying some contra fund ETFs. If that's not your cup of tea, simply take some money off the table and be patient. On three occasions recently, we've illustrated strategies showing that holding cash during a downturn isn't all that bad of an idea. Just remember. Our goal is to help you Buy Low, Sell High.