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----- Original Message -----
From: <A
title=mike-burk@xxxxxxxxxxxxxxxxxxxxxx
href="">Mike Burk ; <A
title=mike-burk@xxxxxxxxxxxxxxxxxxxxxx
href="">Mike Burk
To: <A title=mike-burk@xxxxxxxxxxxxxxxxxxxxxx
href="">Mike Burk
Sent: Monday, June 07, 2004 6:43 PM
Subject: Gordon Harms report
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face="Courier New"><SPAN
>
6/4/04 MARKET CLOSE
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face="Courier New"><SPAN
>
TIMING IS EVERYTHING
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size=2>
<FONT face="Courier New"
size=2>MARKET CLIMATE/OUTLOOK-
<FONT face="Courier New"
size=2>Low Interest Rates<SPAN
>
-Bullish
<FONT face="Courier New"
size=2>Gross Domestic Product<SPAN
> -Bullish Up 4.2%
was Up 4.1%
<FONT face="Courier New"
size=2>S&P500 Expected Earnings<SPAN
> -Bullish $65.46 up from
$64.46
<FONT face="Courier New"
size=2>INFLATION: 3 month moving average; Mixed, 2 up and 1 down
<FONT face="Courier New"
size=2>CPI, Apr is 1.91% (Inflation), up from 1.79% in Mar. Low 1.20 7/02.
<FONT face="Courier New"
size=2>PPI, Apr is 2.24% (Inflation), up from 1.96% in Mar. Low -2.37
2/02.
<FONT face="Courier New"
size=2>ECRI, Jun is 0.99% (Inflation), down from 1.01% in Apr.
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size=2>
<FONT face="Courier New"
size=2>MARKET TREND: Favorable
<FONT face="Courier New"
size=2>SP-CP is 2.96% above 1090 the 200sma which is rising. Was
3.04%.
<FONT face="Courier New"
size=2>SP-CP is 0.40% above 1118 the 50sma which is rising. Was
0.35%.
<FONT face="Courier New"
size=2>S&P500 is 51.42% UNDERVALUED below an estimated 2310 fair
value,
<FONT
face="Courier New"> based on
historical S&P 500 earnings, P/E and US30 bond yield.
<FONT face="Courier New"
size=2>S&P500 annual earnings growth is 71.7%/year. Low -51.41% on
4/19/02.
<FONT
face="Courier New"> Long term
S&P earnings growth rate average is near 6%.
<FONT face="Courier New"
size=2>S&P500 Inflation adjusted real dividend yield is -0.19%.
<FONT
face="Courier New"> Prior week was
-0.19%. BUY at greater than approx.-1.50%.
<FONT face="Courier New"
size=2>Dollar index is up 4.62% from 2/17/04. Was up 7.07%.
<FONT face="Courier New"
size=2>Short Term Index Cycles<SPAN
> -Bullish 6 of 8 are
moving up.
<FONT face="Courier New"
size=2>NYSE AD Sum Index<SPAN
>
–Bullish turned up 5/19/04.
<FONT face="Courier New"
size=2>NASDAQ AD Sum Index<SPAN
>
–Bullish turned up 5/21/04.
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size=2>
<FONT face="Courier New"
size=2>MARKET TREND: Unfavorable
<FONT face="Courier New"
size=2>Long Term Index Cycles<SPAN
> -Neutral 4 are
up and 4 are down.
<FONT face="Courier New"
size=2>Trailing S&P earnings<SPAN
> -Bearish
$52.03 up from $48.74.
<FONT face="Courier New"
size=2>May through Oct is seasonally unfavorable on average.
<FONT face="Courier New"
size=2>All six trading systems are holding money funds from 6/4/04.
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size=2>
<FONT face="Courier New"
size=2>MARKET VALUATION: Unfavorable
<FONT face="Courier New"
size=2>Estimated S&P500 P/E for the coming year is 17.15.
<FONT face="Courier New"
size=2>The S&P500 P/E ratio is 21.57(4 to 20 is range: 1870 to
1997)
<FONT
face="Courier New"> based on
trailing earnings. Trailing P/E was 45 in April 2002.
<FONT face="Courier New"
size=2>S&P500 market value is 3.46 times book value. Was 3.46 last
week.
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size=2>
<FONT face="Courier New"
size=2>MONETARY LIQUIDITY: Favorable
<FONT face="Courier New"
size=2>Three month ROC of M3 money is 2.85%, last week was 3.32%.
<FONT face="Courier New"
size=2>Money Market yield is 0.50%.
<FONT face="Courier New"
size=2>Money Market funds are 2.004 trillion, was 2.009 trillion.
<FONT face="Courier New"
size=2>5 Yr Note yield is 3.83% down from 3.88%.
<FONT face="Courier New"
size=2>10 Yr Note yield is 4.68% down from 4.74%
<FONT face="Courier New"
size=2>25+ Yr Note yield is 5.44% down from 5.51%.
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<FONT face="Courier New"
size=2>PSYCHOLOGY: Mixed; 3 Neutral, 1 Bull
<FONT face="Courier New"
size=2>CBOE Equity Total Vol. Put/Call Ratio: .79, last week was .67.
<FONT
face="Courier New"> Market: Bullish
> 0.60 and Bearish < 0.30
<FONT face="Courier New"
size=2>Market Vane(Commodity/Futures): 63% Bullish, last week was 62%
Bullish.
<FONT
face="Courier New"> Market: Bullish
< 25% and Bearish > 65%
<FONT face="Courier New"
size=2>AAII 33.3% bull and 26.2% bear. 3 wk SMA Ratio = 1.00.
<FONT face="Courier New"
size=2>3 wk SMA Ratio > 1.10 = Bullish, >> Bullish = > 1.50, <
0.35 = Bearish
<FONT face="Courier New"
size=2>USB Index of Consumer Optimism 71 May. was 73 Apr. Estimated
neutral.
<FONT
face="Courier New" size=2>Estimated bullish < 41, bearish > 142.
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size=2>
<FONT face="Courier New"
size=2>RELATIVE VALUATION(Stocks to Bonds): Mixed
<FONT face="Courier New"
size=2>Stock Value Index is 3.58, was 3.71. Buy greater than 1.03.
<FONT face="Courier New"
size=2>S&P 500 dividend yield is 1.52 times 13 week T-Bill yield.
<FONT face="Courier New"
size=2>Five year note yield is 2.23 times S&P 500 yield.
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size=2>
<FONT face="Courier New"
size=2>BONDS: Favorable
<FONT face="Courier New"
size=2>The 30 year U.S. Govt. bond real yield is 3.55%, last wk was 3.43%.
<FONT
face="Courier New"> The historical
average, real yield is near 3.00%.
<FONT face="Courier New"
size=2>The average 30 year U. S. Govt. historical bond yield expected
<FONT
face="Courier New"> is 4.91%,
current yield is 5.46%. Was 5.43%.
<FONT face="Courier New"
size=2>STBI Bonds are down 8.48% from 3/16/04. Was down 7.32%
<FONT face="Courier New"
size=2>Bd-Junk bonds are down 3.35% from 1/23/04. Was down 3.64%.
<FONT face="Courier New"
size=2>Zero bonds are down 7.66% from 3/17/04. Was down 6.79%.
<SPAN
><FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>DOMINANT MARKET INDICATOR(Beasley): Favorable but NYSE score is
OUT.
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face="Courier New"><SPAN
>
OTC-C DOMINANT Neg Env, Score 6/15(IN > 4/15), IN
5/25/04.
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face="Courier New">
NYC-I<SPAN
>
Neg Env, Score 3/13(IN > 3/13), OUT 4/27/04.
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face="Courier New">
Total score is 9 of 28,
last weeks score was 9.
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size=2>
<FONT
face="Courier New">CYCLES<SPAN
> 5 WEEK<SPAN
>
10 WEEK<SPAN
>
20 WEEK
9month
<FONT face="Courier New"
size=2>WIL-5 <SPAN
> OB-Up,05/18/04<SPAN
> <SPAN
> N-Up,05/25/04<SPAN
> OS-Up,05/27/04<SPAN
> OS-Dn,02/24/04
<FONT face="Courier New"
size=2>DJ-30 <SPAN
> OB-Up,05/18/04<SPAN
> <SPAN
> N-Up,05/25/04<SPAN
> OS-Up,05/27/04<SPAN
> OS-Dn,02/24/04
<FONT face="Courier New"
size=2>RUT-I <SPAN
> OB-Dn,06/03/04<SPAN
> OB-Up,05/21/04<SPAN
> OS-Up,05/25/04<SPAN
> OS-Dn,02/09/04
<FONT face="Courier New"
size=2>NDX-X <SPAN
> OB-Dn,06/03/04<SPAN
> N-Up,05/25/04<SPAN
> OS-Up,05/27/04<SPAN
> OS-Dn,02/06/04
<FONT face="Courier New"
size=2>N = Stoch >20 <80, OS = Stoch <20 OUT/Buy, <st1:place
w:st="on">OB = Stoch >80 Hold/Sell
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size=2>
<FONT face="Courier New"
size=2>SECTOR Averages ranked by percent gain from 4/15/04:(Last intermed.
High)
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face="Courier New"><SPAN
>
Realty
3.6 <SPAN
> <SPAN
> Latin<SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> -6.8
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face="Courier New"><SPAN
>
DJ-20 <SPAN
> <SPAN
> 2.7<SPAN
> <SPAN
> <SPAN
> Japan<SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> -8.1
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face="Courier New"><SPAN
>
Finance <SPAN
> 0.4
<SPAN
> Precious <SPAN
> <SPAN
> <SPAN
> <SPAN
> -8.1
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face="Courier New"><SPAN
>
VMFXX <SPAN
> <SPAN
> <SPAN
> 0.1<SPAN
> <SPAN
> <SPAN
> Emerge<SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> -10.1
<FONT
face="Courier New"><SPAN
>
Europe<SPAN
> <SPAN
> <SPAN
> <SPAN
> 0.0<SPAN
>
New-Asia <SPAN
> <SPAN
> -10.3
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size=2>
<FONT face="Courier New"
size=2>FUNDS: SCHUS.Fam(1071) ranked from 4/15/04:(Last intermed.
High)
<FONT
face="Courier New"> <SPAN
> <SPAN
> ATCHX<SPAN
> <SPAN
> 10.8<SPAN
> <SPAN
> <SPAN
> TIFQX<SPAN
> <SPAN
> <SPAN
> -11.2
<FONT
face="Courier New">
BKPIX<SPAN
> <SPAN
> <SPAN
> 6.2 <SPAN
> <SPAN
> <SPAN
> UNWPX<SPAN
> <SPAN
> <SPAN
> -11.6
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face="Courier New">
CSSPX<SPAN
> 6.1<SPAN
> <SPAN
> <SPAN
> SCGDX<SPAN
> <SPAN
> <SPAN
> -12.1
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face="Courier New">
SSREX<SPAN
> <SPAN
> 5.1<SPAN
> <SPAN
> <SPAN
> MILAX<SPAN
> <SPAN
> -14.3
<FONT
face="Courier New">
SUSI<SPAN
> <SPAN
> 5.0<SPAN
> <SPAN
> <SPAN
> WSCVX<SPAN
> <SPAN
> -19.8
<FONT
face="Courier New">
<FONT face="Courier New"
size=2>SYSTEM(NCALPHA)...TRADE....C/MDY..HOLD.....G/L.......ANN/MDD....ONE
YEAR
<FONT face="Courier New"
size=2>SHARP(Microc2x)...6/04/04.....0...VMFXX....0.00......47.8/12.1......36.4
<FONT face="Courier New"
size=2>LOSDF(Microc2x)...6/04/04.....0...VMFXX....0.00......40.0/10.4......32.5
<FONT face="Courier New"
size=2>MDSDF(Microc2x)...6/04/04.....0...VMFXX....0.00......42.6/10.4......27.4
<FONT face="Courier New"
size=2>NCALP(Microc2x)...6/04/04.....0...VMFXX....0.00......54.2/12.1......31.0
<FONT face="Courier New"
size=2>S&P500(Microc2x)..6/04/04.....0...VMFXX....0.00......15.1/9.3.......15.7
<FONT face="Courier New"
size=2>OTC-C(Microc2x)...6/04/04.....0...VMFXX....0.00......32.2/16.7......22.9
<FONT face="Courier New"
size=2>S&P500
Buy/Hold...6/04/03...252...SP500..............10.0/49.2......13.8
<FONT face="Courier New"
size=2>OTC-C
Buy/Hold....6/04/03...252...OTC-C..............11.5/77.9......21.0
<FONT face="Courier New"
size=2>REF: Data from Barron’s weekly magazine.
<FONT face="Courier New"
size=2>
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src="gif00166.gif">
<IMG
src="gif00167.gif">
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