VectorVest is pleased to announce the introduction of a new video presentation called "The Daily Color Guard Report." This report will provide a concise analysis of the stock market's daily activity as seen through the eyes of the Color Guard. It will also provide guidance for various investment styles, along with a report of the day's five biggest winners from the VectorVest RealTime Derby.

The Daily Color Guard Report may be accessed by clicking on a button which will appear beginning June 1, 2009 on the home page of VectorVest U.S. and related products. It should be available by 8:00 pm EST, Monday through Thursday. The traditional Market Timing presentation will continue to be available at the VectorVest University each Friday. So go where the action is: The Daily Color Guard Report.

DERBY READY STRATEGIES.
As if VectorVest RealTime weren't exciting enough, the VectorVest RealTime Derby is going to be a blast. This tool may well revolutionize real time trading. It runs dozens of strategies either at the previous day's close or the current day's open, (it's your choice), creates mini-portfolios of the top ten stocks from each strategy; then tracks each portfolio's performance from the current day's opening bell. Watching these portfolios break out at the open and perform during the day is akin to going to a Race Track. That's why we call it the VectorVest RealTime Derby.

In developing this incredible tool, we have learned that very low-priced stocks, low-volume stocks and/or Pink Sheet stocks often appear in the midst of things, and we don't think it's a good idea to trade them in real time. THEREFORE WE ARE REVISING MANY OF OUR EXISTING STRATEGIES TO EXCLUDE STOCKS LESS THAN $1.00 PER SHARE, STOCKS WITH AVGVOL LESS THAN 100000 AND/OR PINK SHEET STOCKS. ALL LONG STRATEGIES WILL BE AJUSTED TO EXCLUDE CONTRA ETF's.

In other words, all the portfolios used in the VectorVest RealTime Derby will have stocks that are equal to or greater than $1.00 per share, AvgVol equal to or greater than 100,000 shares per day and not traded on the Pink Sheet exchange. Long portfolios will not contain any Contra ETF's. This is made possible by using only Derby Ready Strategies.

Referring back to my essay of March 6, 2009, "Itching to Rally," it was clear to me that investors wanted to buy stocks very badly. They were discounting all manner of bad news, believing whatever lies were being told and ready to climb the slippery slope of hope. Boy, did they!

The Price of the VectorVest Composite is up 31% from its March 9th close and investors' sentiment has undergone a mighty change. Investors now believe that the bear market is over and stock prices are more likely to go up than down. The only problem is that they are not convinced. Why should they be?

The bear market isn't over and it won't be for a long time to come. The economy is in terrible shape and there's no guarantee it's going to get much better soon. All the talk about the housing market hitting bottom on June 30th, "green shoots," and GDP going up in the fourth quarter is just a lot of hooey. For months, Dr. Ben Bernanke, Head of the Fed, has been saying that the economy will be growing by the end of the year. Yet, the minutes of the Fed's April FOMC meeting, released Wednesday, shows a forecast of a worsening economy in 2009.

Yesterday's news that Standard & Poor's said the U.K. has a 1 in 3 chance of getting its credit rating downgraded from the AAA sent stock prices plunging around the world. It also raised concerns about the U.S.'s AAA credit rating, sending both the U.S. dollar and U.S. government bond prices lower. Government data showing on-going jobless claims at a record high and a Philadelphia Fed survey showing further contraction of manufacturing activity also dampened hopes for an early end to the recession. So what are bullish investors thinking?

They're thinking that bad news offers new opportunities to buy stocks at lower prices. Their strategy has changed from "selling the peaks," when they were bears, to "buying the dips," now that they're bulls. Instead of sliding down the slippery slope of hope, they're Climbing the Wall of Worry.

After attending the Las Vegas MoneyShow for more than 15 years, this was our best experience, by a long shot. The mood and sentiment of the attendees was upbeat and the feeling of confidence was back in the air. It was so nice to have so many satisfied customers visit our booths, hear our presentations and come to our reception.

The success stories I heard were most gratifying. Several customers told me how they got out of the market when we warned of the long bear market on November 2, 2007, and many others were raving about their gains since the March 9th bottom. One gentleman showed me a "real money" portfolio that was up 187%. Another showed me a portfolio that was up 242%. Still another said he bought Jail Break options on our C/Up signal in March, and he's up 525%.

A relatively new customer said, "VectorVest saved his life." He lost his job last December and began trading silver and gold futures to make some money, but he was losing his shirt. Then he discovered VectorVest and put Jail Break to work when we nailed the bottom. He gave his testimonial before 450 people at one of my presentations and showed everyone an equity chart of his portfolio which was going at a 45 degree angle. Do we appreciate this kind of feedback? You bet we do, and we gratefully say Thank You From Las Vegas.

PARADOX OF THE PEAKS.
Mr. Warren Buffett said it best, "The time to be fearful is when everyone is greedy and the time to be greedy is when everyone is fearful." Intuition, however, tells us to do just the opposite--we like to buy stocks when the market is soaring and back-off when the market is falling. Indeed, VectorVest advocates buying rising stocks in rising markets and selling falling stocks in falling markets. So who's right, Mr. Buffett or Mr. VectorVest?

Both: Mr. Buffett likes to buy stocks at bargain prices and he knows that stocks are at low prices when the market is at five-year lows. Mr. VectorVest also likes to buy stocks at bargain prices and he knows that stocks are at low prices when his Market Timing indicators are exceptionally low. In both cases, people are fearful when the market is low. Indeed, the Investor's Intelligence Indicator of Investment Advisors Sentiment hit an all-time low of 21.3% Bullish Advisors on October 31, 2008. (Please see the Investment Climate Graph.) The trick to making this approach to bargain hunting work, however, is to know when the market has stopped going down. Mr. Buffett makes no claims in this regard. Mr. VectorVest has done it time after time.

Currently, the market has risen dramatically from the March 9th bottom and Mr. VectorVest has become more fearful as the Price of the VectorVest Composite has gone higher and higher. Many of our Users have noted that our key Market Timing Indicators had risen to extremely high levels, thereby suggesting Bullish conditions. Inexperienced Users may have believed that was a good time to be greedy, but it was not. It was a time to become fearful. That's the lesson of the Paradox of the Peaks.

Our experience with the current C/Up Yellow Brick Road campaign is much better than the one we had starting on January 9, 2009. What was done differently?

First of all, we took steps to prepare you better for your entry into the market when we got the C/Up signal. For example, I wrote an essay on "Avoiding the Stampede" on March 13th, well before we actually got the C/Up signal on March 26th. Then I wrote another essay on March 20th, called "Off to See the Wizard." This essay explained that we would be suggesting several strategies for you to consider when going long on the C/Up signal because we knew that our subscribers would move-the-market if too many tried to pile into the same stocks at the same time. So we reiterated our guidance on avoiding the stampede and suggested five additional Strategies that were described in our "Strategy of the Week" presentation called, "The YBR Express Lane." Therefore, we suggested six Strategies on March 26th, when the C/Up signal arrived.

We also said, "Please do not buy any stocks tomorrow unless the market is moving higher and please use limit orders." I can't emphasize enough how important it is to buy rising stocks only when the market is rising. Well, the market did not rise the next day. In fact, it got hammered for the next two trading days and the Primary Wave went from Up to Dn. So we sat tight. Finally, on April 1st, the Primary Wave turned to Up again, and we alerted the "Yellow Brick Roaders" to prepare for entry. We went long with "Explosive GRT & EPS Stocks" on April 2nd.

Now, the fun began. It turns out that the suggested Exit criteria for the Yellow Brick Road Strategy was a 50% Gain or 30% Loss. I found that I liked the 50% Gain, but I became increasingly uncomfortable with the 30% Loss. Some of these stocks, such as ALTI, soared early on but came down sharply shortly thereafter. I didn't like that. Why should I be using a 30% Stop-Loss when the stock had soared nearly 36%? Normally, I would raise my Stop so that I could capture most of the gain. Moreover, I'd be a damn fool if I ended up losing 30% on the stock. So I tightened my exit criteria and I began using a Ratchet Stop when I thought the market was getting toppy.

The VectorVest Ratchet Stop is defined as, "the highest Stop-Price reached while the stock was in your portfolio." In the case of ALTI, this would have been $1.09, one cent below our purchase Price of $1.10 per share. The Model Portfolio shows that ALTI was sold at $1.10 per share on April 28th. Subsequently, I began using a 20% Ratchet Stop to exit positions. These Stops are usually higher than the VectorVest Ratchet Stops.

Nevertheless, I ran a back-test this morning just to see what the affect of using a Ratchet Stop instead of the 30% Stop-Loss would have been on this portfolio's performance. As of yesterday's close, the Ratchet Stop portfolio was up 35.71% and the 30% Stop-Loss portfolio was up 40.01%. Our actual gain since April 1st is 36.94%. Not bad in any case. Even though the 50/30 G/L portfolio had the best performance, I still prefer using a combination of 50% Gain and the VectorVest Ratchet Stop.