NAILING A BOTTOM.

Barron's magazine, dated June 24, 2006, was as bearish as it could get. Mr. Alan Abelson, the magazines' chief prognosticator of doom and gloom, gleefully wrote about an impending collapse of the housing market and the catastrophic financial consequences to follow. Ms. Sandra Ward, a Senior Editor, said, "the market's off its May peak and could keep falling through early '07. Are any stocks or sectors safe?" On a more even keel, Michael Santoli was "In Search of a Buyable Panic Point." He said, "The indexes surrendered few clues last week about whether such a buyable panic point had been reached," but "markers of negative market sentiment are numerous. It's now the point where stocks should rally very soon if they are going to." Now what kind of guidance is that?

On June 16th, three days after the market hit its low point, VectorVest said, "We have probably seen the bottom of this downturn. As noted a number of times, the market is deeply oversold when the BSR goes below 0.20. This happened on Monday, June 12th when it hit 0.14. Therefore, a trading rally is in the offing." We advised that "Prudent Investors should get their shopping lists ready. Aggressive Investors and Trader's should play the market up or down as it develops with a bias to the upside." We went long in our Model Portfolio on June 21st.

It may have seemed a tad too early for some people to go long when we did, but we have nearly 20 years of experience with the BSR and had confidence that we were on the right track. Indeed, the BSR is a great tool to use when you're Nailing A Bottom.

P.S. If you think this call was sheer luck, read my essay and strategy dated October 21, 2005.

FWS FAVORITES, 2006.
I simply love the Fourth of July. I love the summer's heat. I love barbequed ribs. I love to drink beer. And I love fireworks. I also love buying low-priced stocks that double, triple or quadruple in a matter of weeks or months. So that's what I wrote about last year, July 1st, actually. Also see my essays dated June 30, 2000, July 2, 1999, and July 2, 1998.

Last year's essay focused on "Finding Firework Stocks." The following week I wrote about finding low-priced Firework Stocks, and finally, I wrote about "FWS Favorites." FWS Favorites is a WatchList of Firework stocks created each week from the techniques I described in my essays of July 1, 2005 and July 8, 2005. Some of the best performers, 07/15 price to peak, shown in the very first FWS Favorites WatchList include NTRI, up 356% in 43 weeks, XWG, up 94% in 11 days, VPHM, up 87% in 14 weeks, ASPN, up 166% in 8 weeks and ENG, up 70% in 14 days.

Just for the fun of it, we are illustrating the performance of a portfolio of FWS Favorites as this week's "Strategy of the Week." Make sure you see it at the VectorVest University. Have a safe and happy 4th of July and don't forget the sky's the limit with FWS Favorites, 2006.