There are only ten days left to get your entries in to our Bear Market Beaters Contest. All you have to do is send in a long only strategy that conforms to the rules spelled out in my March 7, 2008 essay. The First Place Winner will receive a check for $2,500.00. All acceptable entrants will receive a $50.00 VectorVest Savings Certificate.

Yes, I have continued to work on developing a blockbuster Bear Market Beater strategy of my own. My purpose is strictly to satisfy my ego. I want to create a strategy that beats the best strategy that is submitted, but I haven't created anything that looks that good so far. So I'm still working at it and I hope you are too.

Please remember, your entry must be submitted by midnight, April 7, 2008. You just might be the winner of the VectorVest Bear Market Beaters Contest.

RIDING-THE-WAVE MADE EASY.
A 132% gain in the last four-and-one-half months is what dreams are made of. Yes, I know last week's "Strategy of the Week" didn't happen in real-time, but it was a great illustration of how to achieve fantastic results in the future. And the best part of the story is that it's not that hard to do. It is a matter, however, of knowing when to do what. For example:

1. Steve used the Up and Dn signals from the Primary Wave to know when to go long and when to go short. These signals are documented each day in the Timing section of the Views.

2. He used Quick Test and QuickSims to find the best strategies for knowing what stocks to buy long in Up waves and what stocks to sell short in Down waves.

3. Once again, he used the Up and Dn signals from the Primary Wave to know when to exit his long and short positions.

4. He made the whole thing very simple by not trading positions during the waves and by opening and closing portfolios at the next day's Open.

This procedure is so simple anyone can do it. All you have to do is wait for the Primary Wave to flash a new Up or Dn signal. You go long on a new Up signal and short on a new Dn signal. Use Quick Test to select which strategy to go long with or which one to go short with. Place your orders to open or close position at the Open and let them ride the wave.

I love it, and you know what? We're going to do it. I'm going to ask our staff in Ohio to manage the Model Portfolio using the procedure shown right here in Riding-The-Wave Made Easy.

P.S. You really won't have to spend a lot of time finding the best strategies to go long or short with because we will give you a short list to choose from in the Views with each new Up or Dn signal.

VectorVest teaches that one of the cardinal rules of investing is to never buy stocks going down in price. The corollary to this rule is, of course, to only buy stocks which are rising in price. Indeed, this rule seems illogical and is totally contrary to what most of us have been taught to do.

All of us are looking for bargains, so it's natural to believe the brokers, Wall Street Wizards and so-called experts on CNBC when they exhort us to buy stocks which are falling in price. Surely, Apple Inc. is a much better buy at $130 a share than is was at $200. Yes, of course it is, but only if it is going up in price. Only if it's going up in price? How do we know that? The simplest way is to check RT. If it is above 1.00, the stock's price is in an uptrend. As of last night, Apple's RT was 0.56. That tells me Apple's price is getting crushed. So I'm not touching this stock.

But wait just a minute. I really love this stock, and Cramer loves it too. He said to buy, buy, buy it clear through to the end of the year. So, phooey on your stupid RT. I'm going to look at a graph and see what's really going on. The Standard graph shows me that Apple closed at $199.83/share on 12/28/07, broke below its 40-day MA on 01/04/08, got an 'S' rating at $159.64 and hit a low of $119.15 on 02/26/08. Since then, it's been working higher. Has it bottomed? Is it on its way back up?

Apple has tested and bounced off of the $120 level, which is just above the low it hit last August, three times. So it appears to have a lot of support at $120. The RT hit a low of 0.38 on 02/07/08 and has been hitting higher lows since then and Apple's price crossed back above the 40-day MA on Tuesday and went above its Stop-Price on Wednesday. Very good!

Now let's see how it looks on a ProTrader Graph. I like to use a 3-Month, Daily graph with Prices shown as Candlesticks, a 30-Day Weighted MA, 9,12,26 MACD and 20-period Detrended Price Oscillator, DPO. Sure enough, Price has crossed above the 30-day Weighted-MA, the MACD is signaling an uptrend and the DPO crossed above 1.00 on 03/13/08. So it sure looks like Apple has consolidated and is moving higher. But wait. RT is still well below 1.00 and that bothers me. Isn't it awful risky to buy a stock with a low RT? Yes, it is, but that's how aggressive investors make (or lose) their fortunes.

Take Mr. Joe Lewis, the currency speculator, for example. He bought a billion dollars worth of Bear Stearns, BSC, right after the sub-prime debacle last August. I heard he bought in at an average price of $130/share. Yup, that must have sounded great since BSC peaked at $170 in January '07. But he made one fatal mistake. He bought the stock on the way down. Stupid old RT was way below 1.00 and the stock had an 'S' rating when he did that. So, Mr. Joe Lewis broke the cardinal rule and bought BSC, big-time, on the way down. When the BSC Board agreed to sell the company last Sunday to J.P. Morgan for $2.00 per share, Mr. Joe Lewis, a.k.a. the boxer, was KO'D.

P.S. On March 11, 2008, Mr. Jim Cramer told his viewers that it would be silly, just plain silly to sell their Bear Stearns stock. BSC closed that day at $62.97 with a 0.48 RT and an 'S' rating. I don't know if Mr. Lewis was watching the show, but it doesn't appear that he was using VectorVest either.

On Tuesday, the Fed offered to loan $200 billion to financial institutions for low grade securities. The Mighty Dow soared 400 points. Standard & Poor's said yesterday that the end of subprime mortgage write-downs by big banks may be in sight. Stock prices, which had opened sharply lower, moved sharply higher. The Labor Department reported this morning that consumer prices were unchanged last month. Prices of stock futures soared.

These explosive rallies are typical of bear markets and don't last very long. As I write this essay, the Mighty Dow is up a paltry 60 points from last Friday's close. The reason is that none of these events is going to end or even mitigate the bear market. The Fed, for example, who raised interest rates too high and waited too long to lower them, still believes inflation will moderate due to a slower economy. How can inflation moderate if the government continues to debase the dollar? Standard & Poor's was one of the accomplices in the subprime fiasco. So why should we believe anything they say about the subject? Finally, the CPI report is sheer BS. Am I really supposed to believe that food and energy costs moderated in February? Who are they kidding? (See my essay of 06/15/07.)

This is not a pretty picture folks and this bear market is not going to end soon. So we've got to learn to live with it and make money in it.
Last week I said, "The easy way of making money in a bear market is to sell stocks short." I know a lot of investors don't like to sell short, but it's not that hard to do. To learn how, read my Special Report which can be accessed by clicking on Research at the top of your screen, clicking on Special Reports, then clicking on "How to Short Stocks." Develop your short-selling skills by paper trading with the VectorVest Portfolio Tracker. It's easy to use and it's FREE. When you think you're ready to trade with real money, start out with small positions and always use Stop-Prices.

If none of this appeals to you, try buying Contra ETFs. I wrote an essay on this subject on November 2, 2007, one day after VectorVest signaled a Confirmed Down market. Our "Strategy of the Week" that day was "How to Make Money Using Contra ETFs." I also wrote a special note to new subscribers that day in which I said, "The Confirmed Down signal could be the entree to a long bear market. So don't be deceived by the endless parade of experts who will appear on TV and other places telling you to buy stocks."

Deception plays a major role in bear markets. Take Bear Stearns for example. Just yesterday, its Chairman said their liquidity was fine. Today they're being bailed out by the Fed. When there's a torrent of negative news, investors hope for something positive to happen and become vulnerable to spin doctors. So don't fall for the fluff. Remain positive, learn how to sell short and look for signs of rising earnings. Do these things and you won't slide down The Slippery Slope of Hope.

SELL HIGH, BUY LOW.
This week, Mr. Gordon White will show us how to "Sell High, Buy Low." Shorting stocks is the easiest way to make money in a down market. Please visit the VectorVest University to enjoy Mr. White's excellent presentation.

The market has been getting killed since November 1st and yet the folks on CNBC and Bloomberg TV keep talking buy, buy, buy. Each and every week, Barron's magazine features stocks for you to buy. They know stock prices have been heading down and you'll probably lose money on these recommendations, so what's going on?

The problem is that most investors don't know how to do anything but buy stocks long. Many others can't, for various reasons such as IRA restrictions, do anything but buy long. So the only song the media sings is that of buying long...even when it's not the best thing for you to do. OK, so how can VectorVest help investors who must or only want to buy stocks long?

We addressed this problem during the 2000 - 2002 bear market and developed a number of long only strategies, called Bear Market Beaters, that produced positive results. We have now tested all of these strategies from November 1st to the current time to see how well they would work under current conditions. You guessed it, they didn't work very well at all.

Apparently the market has changed and we now have to create a new generation of BMB strategies. I put one together in about ten minutes this morning that gave an annualized rate of return of 27%. It had a low drawdown of only 8.45%, but there were a lot of trades. I'd say it's an OK strategy, but not great by any means. So what we need are some great new BMB strategies, and I'm guessing that you folks out there can put some really good ones together. So let's have a contest to see who can create the best BMB strategy. Here are the ground rules:

All contestants must use Portfolio Manager.
The starting date is November 1, 2007.
Your first purchase date must be November 2, 2007.
The ending date is March 7, 2008.
The initial investment is $100,000.
Commission is $9.95 per trade.
No margin and no interest.
You must trade at next day's Open or Average.
You must maintain a 10 stock portfolio.
You must use the "Day by Day" Pricing Mode.
You must use a Stop Criteria other than (None).
You must purchase stocks on November 2, 2007 using a viable strategy, cherry picking is not allowed.
You must buy stocks with Price > $2.00 and AvgVol > 100000.
You must use the "Invest average value of portfolio" selection.
You may not use more than two stocks per Industry or Sector.
You may not use duplicate positions of current positions.
Odd Lots are permitted.
All entries must be received by midnight, April 7, 2008. Please send them to angieh@vectorvest.com. All entries will become the property of VectorVest, Inc.

The person with the "best" strategy will receive a check for $2,500.00. The "best" strategy will be the one that is deemed to be practical, easy to implement and provides the best results. The Second Place Winner will receive a check for $1,500.00 and the Third Place Winner will receive a check for $500.00. All acceptable entries will receive a $50.00 VectorVest Savings Certificate.

This contest was a lot of fun the last time we did it, so let's see if all you Bulls can come up with a new generation of Bear Market Beaters, 2008.

NO MO MOJO - INVERTED.
The easy way of making money in a bear market is to sell stocks short. Sometimes a strategy is so good it works no matter how you sort it. Yet, you'd always like to know which way is best. Mr. Glenn Tompkins will show us how in this week's "Strategy of the Week," No Mo MoJo - Inverted. Please click here.