We're going to have a grand time at the upcoming Las Vegas Money Show and we would love to have you come see us. We'll be demonstrating a sensational new product, VectorVest 7 IntraDay in booth #201 in Caesar's Palace from May 10-13, 2010. It's loaded with fantastic new features and I'm sure you'll love it!

We also will be making Special Presentations on Tuesday and Wednesday, hosting a fabulous Customer Appreciation Reception on Wednesday evening, holding a FREE Retirement Strategies Seminar on Thursday, and giving our great new course: "Trade Like A Pro" on Friday. Here's the line-up:

Dr. Bart DiLiddo, Stock Valuation and Stock Market Cycles:__Tuesday, May 11th - 2:15 PM - Forum 4-6.
Mr. Steve Chappell, The Art of Buying Low and Selling High:_Tuesday, May 11th - 3:15PM - Forum 4-6.
Mr. Don Payton, Introduction to VectorVest 7 IntraDay:______Tuesday, May 11th - 4:15PM - Forum 4-6.
Mr. Dan Misch, How to Build a Winning Stock Portfolio:____Wednesday, May 12th - 3:15PM - Forum 24.
Mr. Steve Chappell, Winning Big the Easy Way:_____________Wednesday, May 12th - 4:15PM - Forum 24.
VectorVest Customer Appreciation Cocktail Reception:_____ Wednesday, May 12th - 7:15PM - Milano 5.
Free Retirement Strategies Seminar:________________________Thursday, May 13th - 2-5PM - Forum 8-9.
VectorVest Course: Trade Like a Pro:_________________________Friday, May 14th - 9AM -5PM - Bally's.

Yes, we will be very busy people, but not so busy that we can't chat with you, answer questions and give you super special low prices on all of our products and services. This is a show you won't want to miss. Come to Caesar's Palace. See VectorVest 7. Conquer the market. Veni. Vidi. Vici.

OPTIONS MAGIC.
I'll never forget that December day in 1999 when Qualcomm soared 194 points from 503 to 697. I couldn't believe it and I sold my shares the very next day as it dropped 50 points. There were no regrets with that one, but my problem with trading high priced stocks is that it's virtually impossible to make big percentage gains with them even if the dollar gains are huge. How often do you see a $200 stock soar 50% or more in a single day? Not very often. That's why I find myself trading $2.00 stocks so much. But I've found a way of turning stocks with triple digit prices into low-priced trades that can give me humongous percentage gains with very little skin in the game. Join Mr. Jerry D'Ambrosio at the VectorVest University for this week's "Strategy of the Week." I call it "Options Magic."

I got a call several weeks ago from a long-term VectorVest subscriber asking if I would be willing to make a "Retirement Strategy" presentation at the facility where he lives in Sarasota, FL. He said it was the most wonderful place he has ever lived and all of the residents were very well to do. Nevertheless, he was so pleased with his experience with VectorVest that he wanted them to learn how they, too, could benefit from its use. After some discussion, I agreed to make a presentation and put together a talk entitled, "How to Make Substantial Income While Living a Life of Leisure."

The whole idea was to illustrate how VectorVest could, in a few hours a week, help Prudent Investors generate significant current income, at least 10 %/yr., and capital appreciation, 10 %/yr., with relatively low risk. I referred to my "Retirement Essays and Strategies" as the basis for the presentation. Mr. Dan Misch, VectorVest Instructor and Product Consultant, and I gave the talk last Monday, April 19th.

I thought the presentation was well received and several very interesting questions were asked. Several attendees asked if we managed money using VectorVest. The answer was yes and no. Yes, we use it for our own accounts and for the company's accounts. No, we do not manage money for others. One gentleman asked if we would teach his daughter how to invest with VectorVest. Our answer was yes, of course, that's what we do.

This whole experience got me thinking. Here I was, a dirt-poor, first generation American, making a presentation on investing to a group of rich guys. How could this happen? I went to college and gained the knowledge I needed to figure out how to make money in the stock market. I graduated with degrees in Chemical Engineering, but it was the math and modeling skills that allowed me to create VectorVest. Had I remained an engineer, I probably would be scrimping and scraping to live the lifestyle I desired, even though I rose to a high executive position. It was the stock market that put real money into my pocket and I was so lucky to learn how to make money that way.

Yes, we will teach your daughter, son, nieces, nephews and grandchildren how to make money in stocks. Think about it. If you get them to invest with VectorVest, you will be doing them The Biggest Favor.

SYNTHETIC LONG STOCK POSITIONS.
Dan and I met with the Sarasota User Group on Monday evening, and it was great fun. I spoke about Retirement Strategies and Dan gave a presentation on VectorVest RealTime. I ended my talk by advocating the use of Covered Calls to lower risk and generate extra income from optionable dividend paying stocks when a gentleman asked me what my favorite option trade was? I said it was to buy Calls and sell Puts to create synthetic long stock positions on high priced stocks such as BIDU, GOOG and AAPL. I used AAPL to illustrate what I meant.

Apple had closed at $247.07/share on Monday, so it would cost me $24,707 plus commissions to buy 100 shares of stock at that price. The Options Pricing Model said that it would cost me $8.23/share or $823.00 plus commissions to buy one AUG 250 Call Option Contract, which controls 100 shares of stock. So I had a choice. I could spend $24,707 to own 100 shares of Apple stock or I could spend $823.00 to buy one AAPL Aug 250 Call Contract. Well, I knew that I would make money if AAPL's price went up, but AAPL's price would have to be at least $258.23/share by the August Expiration date just for me to break even. I didn't like that, so I said I would sell one AAPL Aug 250 Put Contract for $11.03/share or $1,103 less commissions to offset the cost of the Call Contract. In fact, I would more than offset the cost of the Calls, I'd be about $280 to the good. So what's wrong with this picture?

By selling the Puts, I'd be incurring $25,000 worth of downside risk. But I was buying the Calls because AAPL was on a roll and I think I have enough sense to get out of the position if it went against me. Just in case you didn't know it, AAPL released sensational earnings after the close on Tuesday and the stock is now trading at $271 per share. The July 250 Call is trading at $27.80 per share and the July 250 Put is trading at $6.30 per share. (There are no Aug Contracts.) Nevertheless, you'd be up about $2,400 or about 10% on 100 shares of stock or up about $2,430 on your option trade in which you had a net credit. That's why I like Synthetic Long Stock Positions.

THE CAROLINA COCKTAIL.
The questions started coming fast and furious when Dan Misch spoke about the VectorVest RealTime Derby last Monday night. It is such a fantastic tool and we want you to benefit from it, even if you can't trade during the day. So we have been listing the top five 5-Day Derby Winners in the "Strategy" Section of the Views each day because these Strategies have been performing the best. Logically, one would think they're good Strategies to use to look for hot stocks. If you did nothing more than run the Strategies in UniSearch and cherry-picked stocks from the graphs, you'd find a ton of great winners. I specifically remember talking about the beautiful graph for ROHI we found Monday night with Timsons Tigers. The stock closed at $1.80 on 04/19. It's at $3.45, up 91.7% in four days, as I write this.

Man, if you don't like looking at graphs; then learn how to create killer searches. Here's an idea for you. Build a WatchList of the top 10 stocks found by the five 5-Day Winners listed every Friday. Then sort the WatchList by VST/Actual Price. I call this The Carolina Cocktail. The performance of the top ten stocks in these WatchLists since February 12th has been amazing. If you want to see how to make a Carolina Cocktail, join Mr. David Thornton, Director of Sales and Marketing, at the VectorVest University to see this week's celebratory "Strategy of the Week" presentation: "The Carolina Cocktail."

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.
Charles Dickens, "A Tale of Two Cities"
English Novelist (1812 - 1870)

The present is so like that period past, I have an uneasy feeling in my bones. I've never seen a greater disparity of views on what our country should do and where the financial markets are heading. There are those who believe we are all going to hell, while many believe our glory days still lie ahead.

Alas, matters political are beyond the scope of this essay, so let's take the stock market for example. Yesterday, I had just finished watching a video in which the speaker made an extremely strong case for the onset high inflation and rapidly rising interest rates due to our profligate spending, when I saw Mr. Ken Heebner on CNBC speaking enthusiastically about the great bull market that lies ahead. Now I know that there will not be a great bull market if inflation and interest rates run wild. I also know that Mr. Heebner is a great investor, so he could be right. But I take what he says with a grain of salt because he is always bullish and he was bullish throughout the recent crash.

To add to the confusion, yesterday's Wall Street Journal ran a front page article entitled, "Evidence Mounts of Strong Recovery," but yesterday's Jobless Claims report didn't suggest that a strong recovery is on the way. Moreover, Fed Chairman, Ben Bernanke, was reported in the Journal to express an "optimistic but cautious" view of the economy and pointed to a "sharp and dispersed slowdown in inflation." That means he's not confident of a strong recovery and he'll not raise the Fed Funds rate soon.

Finally, I received an unsolicited email from a newsletter writer who has been predicting a market crash for over a year now. He promised to not send anymore warnings until the crash finally occurs. Is today's 126 point drop in the Mighty Dow the start of the predicted crash or are we about to embark on another leg of this great bull market?

I'll take my clues from the Color Guard rather than ponder over A Dickensian Rhapsody.

ATTENTION GOLD BUGS.
You may want to re-visit Ms. Angel Clark's excellent 12/31/09 "Strategy of the Week" presentation, "The Midas Touch." I look at it regularly and it appears to be close to giving a buy signal. As of 04/15/10, the Mining(Gold\Silver) Industry Group has an RT of 1.05 with an RT Rank of 176, so it's still early in this up move if it blossoms.

TGIF: WHEN TO WIN BIG THE EASY WAY.
On February 26, 2010, we introduced you to a "Strategy of the Week" called "Winning Big the Easy Way." It showed how one could trade the 5-Day Derby Winners from Friday-to-Friday and make big profits. The results were so impressive that our users wanted to learn more about the strategy. So we gave another presentation on March 5, 2010 which provided detailed, step-by-step, instructions on how to conduct the strategy. A week later, we gave a third presentation in which we illustrated how one might implement the Strategy on days other than Friday. Since then we have tested the Strategy in detail to see how it performed on each day of the week. You will be surprised by the results we obtained. So join Mr. Todd Shaffer, Manager of Research, at the VectorVest University to see this week's startling "Strategy of the Week" presentation: "TGIF: When to Win Big the Easy Way."

When it comes to assessing the Investment Climate, we pay particular attention to the trends of earnings, inflation and interest rates. As of last week's analysis, shown in the Climate section of the Views, we are in a Case 4, Bull Market Scenario in which earnings, inflation and interest rates are rising. Is this good or bad for stock prices?

As CNBC commentator, Mr. Larry Kudlow, likes to say, "Earnings is the mother's milk of the stock market." I agree. The VectorVest "Truth Chart," first described in my essay dated March 21, 2003, shows that Bull Market Scenarios exist when, and only when, earnings are rising. How do we know when earnings are rising? We access the S&P 500 WatchList, click on the Summary row at the bottom of the WatchList, click on Graph in the Local Tool Bar and display EPS to see the 52-week performance of average forecasted earnings per share of all the stocks in the WatchList. We then conduct a trend analysis of a 50-Day moving average of this EPS data and report it each week in the Climate section of the Views. It is also shown graphically in our Market Climate Graph, found by clicking Graphs on the Main Tool Bar. With a very favorable trend reading of 1.36, the earnings picture looks good. But what about those other rascals, inflation and interest rates?

I know, I know, we hear it all the time. Inflation is not a problem. But our trend indicators for the Consumer Price Index, CPI, and Commodity Research Bureau Index, CRB, show that inflation is rising rapidly. The CPI has a very unfavorable reading of 0.01 and the CRB has a modestly unfavorable reading of 0.92. Remarkably, a front page article in Monday's Wall Street Journal said that, "an influential band of policy makers (within The Federal Reserve) is fretting over the opposite: that the already low rate of inflation is slowing further." In other words, they are more concerned about deflation than they are about inflation. My goodness, this kind of cockeyed thinking got former Head of The Fed, Alan Greenspan, in trouble.

We also hear Dr. Ben Bernanke, current Chairman of the Federal Reserve Board, say that he will keep interest rates low for the foreseeable future. I believe him, but he doesn't control market interest rates. He has tremendous influence over market rates with his decisions on monetary policy, but he only controls the Fed Funds Rate and the Discount Rate. I prefer to track market interest rates, i.e., the 90-Day T-Bills, 10-Year T-Notes, and 10 Yr.+ AAA Corporate Bonds, because they give us a better reading on what the Investment Climate is really like.

October 24, 2003, I wrote an essay on, "The Case (4) Scenario." If you substitute the name of Ben Bernanke for Alan Greenspan, you would think I wrote that essay yesterday. Dr. Greenspan was severely criticized, if not berated, this past Wednesday by members of the Financial Crisis Inquiry Commission for his performance as Fed Chairman prior to the housing bubble and near collapse of our financial system. You may recall that Dr. Greenspan raised interest rates throughout the stock market's collapse in 2000 and only began to lower them in 2001. He lowered them again and again, bit by bit, until he got the Fed Funds Rate down to 1.00%; then kept them there for much too long of a time. He said he was fearful of deflation.

Now we have Dr. Bernanke following essentially the same path of raising interest rates too high; then lowering them to historically low levels. And it comes out that some members of his policy making team are afraid of deflation. Will he follow in Dr. Greenspan's footsteps and keep interest rates too low for too long? It all depends on his perception of inflation. Yes, inflation: The Wild Card.