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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, July 26, 2004 10:30 PM
Subject: Gordon Harms report
<FONT
face="Courier New"><SPAN
>
7/23/04 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
3.9%(Revised) was Up 4.1%
<FONT face="Courier New"
size=2>S&P500 Expected Earnings<SPAN
> -Bullish $68.67 up from
$67.62
<FONT face="Courier New"
size=2>INFLATION: 3 month moving average; 3 up unfavorable
<FONT face="Courier New"
size=2>CPI, Jun is 2.87% (Inflation), up from 2.36% in May Low 1.20 7/02.
<FONT face="Courier New"
size=2>PPI, Jun is 4.22% (Inflation), up from 3.21% in May Low -2.37
2/02.
<FONT face="Courier New"
size=2>ECRI, Jul is 1.00% (Inflation), up from 0.98% in Jun.
<FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>MARKET TREND: Favorable
<FONT face="Courier New"
size=2>S&P500 is 46.32% UNDERVALUED below an estimated 2024 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 -0.59%.
<FONT
face="Courier New"> Prior week was
-0.58%. BUY at greater than approx.-1.50%.
<FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>MARKET TREND: Unfavorable
<FONT face="Courier New"
size=2>May through Oct is seasonally unfavorable on average.
<FONT face="Courier New"
size=2>SP-CP is 1.91% BELOW 1107 the 200sma which is rising. Was
-0.40%.
<FONT face="Courier New"
size=2>SP-CP is 2.70% BELOW 1116 the 50sma which is falling. Was
-1.43%.
<FONT face="Courier New"
size=2>All six trading systems are holding money funds from 6/23/04.
<FONT face="Courier New"
size=2>Trailing S&P earnings<SPAN
> -Bearish
$52.00 down from $52.03.
<FONT face="Courier New"
size=2>NYSE Volume Sum Index<SPAN
> –Bearish,
turned down 7/12/04.
<FONT face="Courier New"
size=2>NASDAQ Volume Sum Index<SPAN
> –Bearish, turned down
7/6/04.
<FONT face="Courier New"
size=2>Long Term Index Cycles<SPAN
> -Bearish 8 of 8
are moving down.
<FONT face="Courier New"
size=2>Short Term Index Cycles<SPAN
> -Bearish 8 of 8 are
moving down.
<FONT face="Courier New"
size=2>Dollar index is down 3.84% from 5/13/04.
<FONT face="Courier New"
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 15.82.
<FONT face="Courier New"
size=2>The S&P500 P/E ratio is 20.89(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&P 500 market value is 3.35 times book value. Was 3.40 last
week.
<FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>MONETARY LIQUIDITY: Favorable
<FONT face="Courier New"
size=2>Three month ROC of M3 money is 2.28%, last week was 2.46%.
<FONT face="Courier New"
size=2>Money Market yield is 0.48%.
<FONT face="Courier New"
size=2>Money Market funds are 1.987 trillion, was 1.977 trillion.
<FONT face="Courier New"
size=2>5 Yr Note yield is 3.64% down from 3.65%.
<FONT face="Courier New"
size=2>10 Yr Note yield is 4.47% down from 4.49%
<FONT face="Courier New"
size=2>20 Yr Note yield is 5.24% down from 5.24%.
<FONT face="Courier New"
size=2>
<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: .62, last week was .77.
<FONT
face="Courier New"> Market: Bullish
> 0.60 and Bearish < 0.30
<FONT face="Courier New"
size=2>Market Vane(Commodity/Futures): 61% Bullish, last week was 62%
Bullish.
<FONT
face="Courier New"> Market: Bullish
< 25% and Bearish > 65%
<FONT face="Courier New"
size=2>AAII 35.7% bull and 23.8% bear. 3 wk SMA Ratio = 0.55.
<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 95 Jun. was 71 May. Estimated
neutral.
<FONT
face="Courier New" size=2>Estimated bullish < 41, bearish > 142.
<FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>RELATIVE VALUATION(Stocks to Bonds): Mixed
<FONT face="Courier New"
size=2>Stock Value Index is 3.15, was 3.09. Buy greater than 1.03.
<FONT face="Courier New"
size=2>S&P 500 dividend yield is 1.35 times 13 week T-Bill yield.
<FONT face="Courier New"
size=2>Five year note yield is 2.03 times S&P 500 yield.
<FONT face="Courier New"
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 2.81%, last wk was 2.76%.
<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 5.36%,
current yield is 5.17%. Was 5.12%.
<FONT face="Courier New"
size=2>STBI Bonds are up 5.46% from 5/13/04.
<FONT face="Courier New"
size=2>Bd-Junk bonds up 4.67% from 5/17/04.
<FONT face="Courier New"
size=2>Zero bonds are up 4.81% from 5/13/04.
<SPAN
><FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>DOMINANT MARKET INDICATOR(Beasley): Favorable but NYSE score is
OUT.
<FONT
face="Courier New"><SPAN
>
OTC-C <SPAN
> Neg
Env, Score 3/15(IN > 4/15), OUT 7/12/04.
<FONT
face="Courier New">
NYC-I DOMINANT Pos Env,
Score 10/13(IN > 3/13), IN 6/9/04.
<FONT
face="Courier New">
Total score is 13 of 28,
last weeks score was 13.
<FONT face="Courier New"
size=2>
<FONT
face="Courier New">CYCLES<SPAN
> 5 WEEK<SPAN
>
10 WEEK<SPAN
>
20 WEEK<SPAN
>
9 Month<SPAN
>
<FONT face="Courier New"
size=2>WIL-5 <SPAN
> OS-Dn,07/21/04<SPAN
> OS-Dn,07/01/04<SPAN
> N-Dn,07/16/04<SPAN
> OS-Dn,02/24/04
<FONT face="Courier New"
size=2>DJ-30 <SPAN
> OS-Dn,07/21/04 <SPAN
> OS-Dn,07/01/04<SPAN
> N-Dn,07/20/04<SPAN
> OS-Dn,02/24/04
<FONT face="Courier New"
size=2>RUT-I <SPAN
> OS-Dn,07/21/04<SPAN
> OS-Dn,07/01/04<SPAN
> N-Dn,07/13/04<SPAN
> OS-Dn,07/09/04
<FONT face="Courier New"
size=2>NDX-X <SPAN
> OS-Dn,07/23/04<SPAN
> OS-Dn,07/02/04<SPAN
> N-Dn,07/14/04<SPAN
> OS-Dn,07/12/04
<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
<FONT face="Courier New"
size=2>
<FONT face="Courier New"
size=2>SECTOR Averages ranked by percent gain from 4/5/04:(Last intermed.
High)
<FONT
face="Courier New"><SPAN
>
Energy <SPAN
> 5.4<SPAN
> OTC-C<SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> -11.1
<FONT
face="Courier New"><SPAN
>
DJ-20 <SPAN
> <SPAN
> 3.0 <SPAN
> <SPAN
> Emerge<SPAN
> <SPAN
> <SPAN
> <SPAN
> -11.9
<FONT
face="Courier New"><SPAN
>
VMFXX
0.2 <SPAN
> New-Asia
<SPAN
> <SPAN
> -13.5
<FONT
face="Courier New"><SPAN
>
Bd-Junk <SPAN
> <SPAN
> <SPAN
> 0.1<SPAN
> Hi-Tech
<SPAN
> <SPAN
> <SPAN
> <SPAN
> <SPAN
> -17.2
<FONT
face="Courier New"><SPAN
>
Zero-Bd <SPAN
> <SPAN
> -0.1 <SPAN
> Precious<SPAN
> <SPAN
> <SPAN
> -18.2
<SPAN
><FONT face="Courier New"
size=2>
<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)...7/09/04....14...VMFXX....0.00......47.8/12.1......28.2
<FONT face="Courier New"
size=2>LOSDF(Microc2x)...7/09/04....14...VMFXX....0.00......40.0/10.4......25.2
<FONT face="Courier New"
size=2>MDSDF(Microc2x)...7/09/04....14...VMFXX....0.00......42.6/10.4......21.9
<FONT face="Courier New"
size=2>NCALP(Microc2x)...7/09/04....14...VMFXX....0.00......54.2/12.1......22.4
<FONT face="Courier New"
size=2>S&P500(Microc2x)..7/09/04....10...VMFXX....0.00......15.1/9.3.......12.3
<FONT face="Courier New"
size=2>OTC-C(Microc2x)...7/09/04....10...VMFXX....0.00......32.2/16.7......12.6
<FONT face="Courier New"
size=2>S&P500
Buy/Hold...7/23/03...252...SP500..............10.0/49.2.......9.9
<FONT face="Courier New"
size=2>OTC-C
Buy/Hold....7/23/03...252...OTC-C..............11.5/77.9.......7.6
<FONT face="Courier New"
size=2>REF: Data from Barron’s weekly magazine.
<FONT face="Courier New"
size=2>“We can never be sure of the past or predict the future precisely.”
<FONT face="Courier New"
size=2>Stephen Hawking
<FONT face="Courier New"
size=2>In politics the distribution of opinions means some may be correct about
the past; some will be correct about the future, but in either case we have no
way of knowing which are correct right now.
<FONT face="Courier New"
size=2>
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src="gif00201.gif"><FONT face=Arial
size=2>
<FONT face=Arial
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Virus Database: 481 - Release Date: 7/22/2004
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