The market bottomed on Thursday, August 16th and I wrote an essay the very next day entitled "Looking to Go Long." Had you purchased the top ten stocks ranked by VST as of August 17th and held them through yesterday, you would have been up 25.27% with 10 winners and no losers.

Of course that is hindsight, but here's what I said on August 17th: "If you're an Aggressive investor or Trader, you should have bought stocks today. If you're a Prudent Investor, you should be getting your shopping list ready. If you're Riding-the-Wave, as we do in the Model Portfolio, you should be checking strategies with which to go long."

Just as I had expected, we got the signal to go long on Wednesday, August 21st. The Model Portfolio is up 19.55% since then and closed yesterday, up 54.70% so far this year. Clearly, it has been a wonderful time to make money in stocks since the market bottomed on August 16th. The question is, however, have you been making money?

If you have not made money over the last eight weeks, please give us a call. Tell us what you think has gone wrong and we will work with you to correct it. We are not Investment Advisors and will not make specific stock recommendations. But we can show you how to make money with VectorVest.

The process is very simple: We wait for the market to go into an uptrend; then we buy high VST stocks. We don't necessarily buy the top VST stocks shown in Stock Viewer all time, so we show you how to use the UniSearch tool. It contains over 200 strategies that you could use when the market goes up. Seventy seven percent of these strategies have made money since August 17th. Which are the best strategies?

Simply look at our "Strategy of the Week" illustrations. We show you how to use the UniSearch tool and manage a portfolio over and over again with our selections of the best strategies. This week we will be illustrating a wonderful new strategy called "AC's Climbers." It shows you how to buy good stocks in the fastest rising Industry Groups. Visit the VectorVest University to see how it's done. You'll love it.

With VectorVest and the market in rally mode, you should be Making Money.

ELIMINATION OF PINK SHEET ADRs.
American Depository Receipts represent ownership in the shares of a foreign company trading on U.S. financial markets. Most of these shares have been trading on the New York and American stock exchanges until recently. Since the costs for being listed on these exchanges have gone up a great deal over the last few years, many of these ADRs have switched to Pink Sheets.

Unfortunately, we have found that it is impossible to get closing Price and Volume for these Pink Sheet ADRs on the day they close. This means that the Price and Volume data you have been getting on Pink Sheet ADRs has been a day late. We cannot accept this situation because it poses potential liability issues. Therefore, we have been eliminating these stocks from the database. If you have any questions, please call Product Support at 1-888-658-7638.

Let's mark Thursday, August 16th, as the probable bottom of this downturn. The Price of the VectorVest Composite closed at $28.09, five cents lower than its previous close, but 70 cents higher than its intraday low of $27.39. A big price reversal such as this is a very good sign that buyers were jumping back into the market.

On many occasions, I have said that a Buy/Sell Ratio, BSR, below 0.20 indicates an oversold market condition and a time when investors should sense that a bottom is near. This event first happened on Friday, August 3rd, but it didn't feel right to me, so we stayed out of the market. Sure enough, the market rallied the next three days; then plunged yesterday to its capitulation low of $27.39. At this point, the BSR hit an intraday low of 0.05; then rallied back to close at 0.10, up 0.02 from Wednesday's close of 0.08. When the BSR closes up from a previous day while the Price of the V V C closes down, a bullish divergence is produced which signals that price momentum has swung to the upside.

Another sign that we've probably seen the bottom is that the Price of the V V C closed on Thursday only eight cents higher than it did on March 5th, the low point of the previous downturn. Had the Price of the V V C closed below this level, $28.01, we would have had to go way back to July 2006 for the next support level, which is $24.82. Whew, that would have been painful for those who stayed long all the time.

The best evidence that we have probably seen the bottom is that the Fed lowered the Discount Rate by 50 basis points to 5.75%. While this is not as strong a signal as lowering the Federal Funds rate, which is at 5.25%, it says that the Fed is aware of what is going on and will step in with a rate cut when needed.

Just for the record, the Discount Rate is the interest rate charged to commercial banks and other depository institutions on loans received from the Fed. The cut in the Discount Rate was aimed to strengthen the financial system. The Federal Funds rate is the interest rate at which private institutions lend to other depository institutions overnight. A cut in this rate would be aimed at strengthening the economy. Dr. Bernanke, Head of the Fed, hasn't admitted yet that the economy needs help, but it's expected that he will in the September FOMC meeting. In any event, there's hardly a better reason for the market to move higher than a Fed rate cut.

Why did we stay in cash when the market was getting killed earlier this week? The answer has two parts: 1. No one knows how low prices may go and, 2. You never know when the Fed is going to step in and drive the market sharply higher such as it did this morning. Yeah, you're missing the fun of shorting stocks as stock prices moved lower, but you've got a real problem when the market explodes. If you're in cash, you can join the party anytime you wish to.

Assuming you're in cash, what do you do now? If you're an Aggressive Investor or Trader, you should have bought stocks today. If you're a Prudent Investor, you should be getting your shopping list ready. If you're Riding-the-Wave, as we do in the Model Portfolio, you should be checking strategies with which to go long. We are going to go long the day after we get an Up signal from the Primary Wave provided the market is moving higher. I expect this to happen next Tuesday or thereabout. Just stay tuned to these Views, because we're Looking To Go Long.

EASY DOES IT.
If I had a crystal ball, I would tell you exactly which strategy to use when you get back into the market. But I can't see into the future, so we work real hard to see what has worked in the past and hope it works one more time. Fortunately, Ms. Angel Clark has done all the hard work and she has prepared a brilliant presentation on how to reap big profits by buying stocks at the beginning of Confirmed Up signals. Visit the VectorVest University to see this week's "Strategy of the Week," called "Easy Does It."

VECTORVEST REALTIME.
In case you're wondering how I got intraday information on the Price of the V V C and the BSR, I got it from VectorVest RealTime, a new product currently under development. While I don't know for sure when it will be released, I can tell you that it will be different from and better than anything else you have ever seen. It's going to be a sensational product. VectorVest RealTime.

If I've heard it once, I've heard it a hundred times. "Has the market bottomed?" CNBC commentator, Mr. Mark Haines, believes it bottomed last Monday. His colleague, Mr. Joe Kiernan, isn't so sure. Both of these gentlemen have logged thousands of hours watching the market and listening to stock market experts present their views, and yet they can't agree on whether or not the market has bottomed.

Of course they can't. Neither of them is paid to interpret the market and they don't have the tools to help them do so. To make matters worse, they are required to listen to an endless parade of ill-informed, biased guests who do little more than confuse everyone. So we can't pay much attention to CNBC. We need a fact-based system to analyze the market and one that has been shown to work. Fortunately, we have one.

Last week I said we were going to let this downturn play itself out and watch our Market Timing Indicator, MTI, and Buy/Sell Ratio, BSR, very carefully. Now if one looks at a five-year display of our Market Timing Graph, they could easily see that the MTI goes down to or below 0.60 at the bottom of every major downturn. It hit 0.69 last Monday. That isn't low enough to make me feel comfortable that we have seen the bottom of this downturn. Furthermore, I have stated on a number of occasions that a downturn is essentially completed when the BSR goes below 0.20. It closed at 0.38 last Monday. This, too, is not low enough to say the bottom has been reached.

Ah ha, you say. Everyone has gotten bullish since Monday and stock prices have been moving sharply higher. What do you have to say about that, smart guy? Well, no downturn goes straight down from peak to valley. Just look at last May, for example. The Price of the VectorVest Composite fell sharply for eight of eleven days before rebounding. Then it fell for seven straight days to the low point on June 13th, when the BSR hit 0.10. Similar patterns have been seen in virtually every major downturn in the past. So I'm not going to feel comfortable going long until I see the BSR go below 0.20. It's the key to Calling A Bottom.

P.S. Mr. Gordon White will illustrate how to call a bottom by using the Market Timing Graph in this week's "Strategy of the Week" presentation.