L A U R A K U N T Z, C P A / P F S, M B T. Founder & Financial Advisor L A U R E L W E A L T H P L A N N I N G

Transcription

1 ADV: One example of money manager research & analysis I often talk about your money managers, meaning the investment professionals that are making the daily decisions in your funds to buy or sell particular securities. I thought you might have an interest in seeing some of the work that money managers may do to analyze stock prices. If you d like to take a look, just do a quick skim through the piece attached to get a sense of the analysis. I don t mean to put you to sleep, but you ll see that this is very analytical! In addition to what I ve sent you, money managers may analyze: - Company assets, liabilities, and cash flows. - Ownership of markets, for example, for those of us who bake chocolate chip cookies, who owns the chocolate chip market? Of course, there are many competitors, but is the main owner Nestles, a European company? - Company future potential (room for growth in markets, etc.) - Barriers to entry (i.e., how easy is it for the competition to get in)? And, they seek to evaluate the softer stuff : - Workforce s and management s experience and energy. - Company culture. - Clarity of company s message. - Etc. And, they may seek methods to confirm information outside the company: - Going to the dock to count truckloads shipped. - Sending in their folks as secret shoppers. - Etc. I thought you might have an interest in this work that goes into proper security selection. You can see that it is quite a science (and art). As always, please let me know any and all questions. My best, Laura L A U R A K U N T Z, C P A / P F S, M B T Founder & Financial Advisor L A U R E L W E A L T H P L A N N I N G 3300 Edinborough Way, Suite 790, Edina, MN fax

2 Securities Offered Through Raymond James Financial Services, Inc. Member FINRA/SIPC. Laurel Wealth Planning LLC is an independent registered investment advisor. Future performance can never be guaranteed. Please read prospectuses before investing. Laurel Wealth Planning LLC & Raymond James Financial Services, Member FINRA/SIPC, provide financial planning and investment advice and do not practice law or accountancy. Laurel Wealth Planning LLC & Raymond James Financial Services do not accept orders and/or instructions regarding your account by e- mail, voice mail, fax or any alternative method. Transactional details do not supersede normal trade confirmations or statements. sent through the Internet is not secure and confidential. Raymond James Financial Services reserves the right to monitor all . Any information provided in this has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Any opinions expressed in this are those of Laura Kuntz and not necessarily those of Raymond James Financial unless otherwise indicated. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this . This is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.

3 Technical Strategy Team - Technical Chart Book RAYMOND JAMES -Technical Chart Book - Providing investors with timely data and technical observations on a broad spectrum of asset classes. Technical Strategy Team J. Michael Gibbs Co-Head of the Equity Advisory Group Michael.Gibbs@RaymondJames.com P. Arthur Huprich, CMT Chief Market Technician Art.Huprich@RaymondJames.com David Hydrick Senior Equity Specialist David.Hydrick@RaymondJames.com 1 Page

4 U.S. Equity Markets The S&P Page

5 S&P 500 (SP50-SPX) 1 Year Daily 1,450 Overhead resistance ,350 1,300 Various horizontal support lines ,250 1,150 1,100 Price 50 ma 200 ma Volume 1, Page

6 S&P 500 Fibonacci Resistance Levels from 4 April 2012 High Daily Chart Fibonacci Levels (The 4/2/12 high) Various short-term Fibonacci resistance levels. (***Fibonacci support levels outlined pg ,) 1,450 78% = = % = Recent rally stalled at the 61.8% resistance level. 1, % = % = ,300 4 June 2012 Low ,250 S&P 500 3/5 3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30 5/7 5/14 5/21 5/28 6/4 6/11 6/18 6/25 4 Page

7 S&P 500 (SP50-SPX) 5 Year Daily 1,800 1, % % % % % % 1,000 Credit Crisis S&P % Price 50 ma 200 ma The S&P 500 s trend line is ~ 5½ % below the recent June 4 th low of , which pulled the market down 10.94% from the April 2 nd high of '08 '09 '10 ' Volume '08 '09 '10 '11 5 Page

8 S&P 500 S&P 500 & MACD 22-Jun-2011 to 25-Jun-2012 (Daily) Last: ,450 1,350 1,300 1,250 1,150 1,100 Price(SP50) Price - 50 Day Moving Average Price Day Moving Average 1, Jun-2011 to 25-Jun-2012 (Daily) MACD Latest: MACD (12, 26) MACD Signal (9) MACD Divergence -50 Data Source: FactSet Prices 6 Page

9 S&P Fibonacci Retracement Levels Fibonacci retracement levels are derived by looking at major highs and lows in a market s move and determining support levels based upon various retracement levels of that move. We highlight various Fibonacci support areas on the S&P 500, as they have provided useful support levels in previous market corrections. ***The term Fibonacci comes from the Italian Mathematician, Leonardo Pisano, who introduced his observations in Liber Abaci (Book of the Abacus) in He used the name Fibonacci as a shortened version of the Latin filius Bonacci the son of Bonaccio in his seminal work, which forever changed western mathematics. In one chapter he describes the population growth of rabbits with the number pattern 1+2=3; 3+2=5; 5+3=8.(Fn=Fn-1 + Fn-2). The resulting number sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, , 233,.... It is this sequence, the Fibonacci sequence, that the ratio comes from. ( The ratio, and patterns based upon it, are ubiquitous and seen in everything from pinecone & sunflower seed patterns, distances between finger digits, the dimensions of the Parthenon,... To even patterns in financial markets. 7 Page

10 PREVIOUS CORRECTION % April 26 to July 1, 2010 Correction S&P500 finds support at the 38.2% retracement level S&P 500 Fibonacci Retracement Levels & the % Correction Daily Chart Fibonacci Levels (The 4/26/10 high) % Correction 1, % = , % = ,000 50% = % = /1/ The S&P 500 trades to , just above 38.2% retracement level Credit Crisis Low S&P /09 7/09 10/09 1/10 4/10 7/10 10/10 8 Page

11 PREVIOUS CORRECTION % May 2 to Oct. 3, 2011 Correction Again, the S&P500 finds support at the 38.2% retracement level S&P 500 Fibonacci Retracement Levels & the % Correction Daily Chart 1, % Correction Fibonacci Levels (The 5/2/11 high) 1, % = % = ,100 50% = , % = Credit Crisis Low /3/11 - Market closes at , slightly below the retracement level and reverses to the upside the following day S&P /09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 9 Page

12 CURRENT CORRECTION S&P 500 Fibonacci Retracement Levels from Oct 4, 2011 Low Daily Chart Fibonacci Levels (The 4/2/12 high) 23.6% = % = ,300 50% = = next retracement level 61.8 = = horizontal support & a retracement level 78% = ,100 S&P Oct 2011 Low (***NOTE: This chart shows the retracement levels from the October 4 th 2011 low. The longer-term retracement levels are shown on the next chart.) 4/11 7/11 10/11 1/12 4/12 1, Page

13 S&P 500 Fibonacci Retracement Levels from Credit Crisis Low Daily Chart 1, % = Fibonacci Levels (The 4/2/12 high) A longer-term retracement level is (Note that there is also a 50% retracement level at on previous page.) 1, % = ,100 50% = , = % = Credit Crisis Low 700 S&P /09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 11 Page

14 FIBONACCI LEVELS S&P 500 Price Index to present 1,600 HIGH /31/07 1, % 1, % 1, % % LOW /31/82 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 12 Page

15 S&P 500 Price Index to present 2,000 1, S&P500 IS EXHIBITING MANY CHARACTERISTICS OF PREVIOUS PERIODS OF CONSOLIDATION During the Great Depression, the S&P500 s upper area of consolidation hovered around 18. There was a mid-cycle low point in In the 1970s, the S&P500 s upper area of consolidation was around the 100 mark. There was a mid-cycle low in Currently the S&P500 s upper resistance is We may have seen a mid-cycle low during the Credit-Crisis. 2,000 1, The Credit-Crisis low is very similar to the 1970s. It occurred 102 months from the March 2000 highs The 1970s mid-cycle low occurred 104 months from the previous bull market high '29 '31 '33 '35 '37 '39 '41 '43 '45 '47 '49 '51 '53 '55 '57 '59 '61 '63 '65 '67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 13 Page

16 S&P 500 (SP50) Price to Earnings 01-Mar-1999 to 22-Jun-2012 (Daily) Average: 17.3 High: 30.4 Low : 8.4 Latest: 13.0 Price to Earnings 35 Valuations are reasonable... Current PE 2000 PE high: Post Credit Crisis PE high: Valuation support ~ 12x earnings 10 ***These PE figures are compiled by FactSet and may vary from other data vendors by calculation methods. PE at Credit Crisis Low : 8.6 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Data Source: FactSet Market Aggregates 5 14 Page

17 Fed's QE & The S&P 500 1,800 Credit Crisis QE 2 Ends Fed extends Twist 6/20/12 1,600 QE 1 Ends POMO & QE2 Operation Twist 1, S&P 500 QE 1 '08 '09 '10 ' Page

18 U.S. Major Markets Series 16 Page

19 S&P Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: ,450 NASDAQ Composite Index 22-Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: ,200 1,350 1,300 3,100 3,000 2,900 2,800 1,250 2, Day Moving Average 200 Day Moving Agerage Price(SP50) 1,050 DJ Industrial Average 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,150 1,100 14, Day Moving Average 200 Day Moving Agerage Price(COMP) 2,200 Russell Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,600 2,500 2,400 2, , ,000 12, ,000 11,500 11, , Day Moving Average 200 Day Moving Agerage Price(DJII-USA) 10, Day Moving Average 200 Day Moving Agerage Price(RUT-RUX) Page

20 DJ Transportation 22-Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: ,800 PHLX / Semiconductor 22-Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: ,600 5,400 5,200 5,000 Semis rejected at 50 & 200 day moving avg , , ,400 4,200 4,000 Important Support level Day Moving Average 200 Day Moving Agerage Price(DJ20-USA) 3, Day Moving Average 200 Day Moving Agerage Price(SOX) 300 5,800 S&P 500 vs. DJ Transportation 22-Jun-2011 to 25-Jun-2012 Price (Local Currency) 1, S&P 500 vs. PHLX / Semiconductor 22-Jun-2011 to 25-Jun-2012 Price (Local Currency) 1,450 5,600 5,400 5,200 Transports did not make new highs... 1, Semis have been leading the market... down 1,350 5,000 1, ,300 4,800 1,250 1,250 4, ,400 4,200 4,000 (Dow Theorist don t like this chart) 1,150 1, ,150 1,100 3,800 S&P 500 (Right) DJ Transportation (Lef t) 1, S&P 500 (Right) PHLX / Semiconductor (Lef t) 1,050 Source: FactSet Prices Source: FactSet Prices 18 Page

21 S&P 500 vs. PHLX / Semiconductor Jun-2007 to 26-Jun-2012 Price (Local Currency) 1,800 S&P 500 and Semiconductors 5 year view The semiconductor index started making lower highs before last year s 20% correction. 1, S&P 500 PHLX / Sem iconductor 300 Currently, the divergence between the S&P 500 and the semis is wide. 1, S&P 500 (Right) Source: FactSet Prices PHLX / Semiconductor (Left) The semiconductor index bottomed before the S&P 500 did during the credit crisis. '08 '09 '10 ' Page

22 S&P 500 vs. High Grade Copper (NYM $/lbs) 5 22-Jun-2007 to 25-Jun-2012 Price (Local Currency) 1,800 Taking the Market s pulse with Dr. Copper. 4.5 At this point, copper has not made a higher low in current correction. 1, S&P 500 High Grade Copper (NYM $/lbs ) Copper and the S&P 500 confirm last year s bottom. Copper - 6 month chart 1,000 2 Again, there is a positive divergence between Copper and the S&P 500 during the first correction following the Credit Crisis low, i.e. Copper bottomed before the S&P Copper bottomed and made a higher low before the S&P 500 bottomed in March of 2009 High Grade Copper (NYM $/lbs) S&P 500 (Right) High Grade Copper (NYM $/lbs) (Left) '08 '09 '10 '11 Dec Jan Feb Mar Apr May Jun 600 Source: FactSet Prices 20 Page

23 Sentiment CBOE Market Volatility Index 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: CBOE Market Volatility Index 22-Jun-2007 to 25-Jun-2012 (Daily) 5 Year - Daily Last: ish 5yr chart shows areas where fear usually is stretched Day Mov ing Average 200 Day Moving Agerage Pric e(vix-cbo) 0 '08 '09 '10 '11 50% Retracement of down move from August H 38.2% Retracement of down move from August S S S H 50 Day Moving Average 200 Day Moving Agerage Price(VIX-CBO) 10 S 21 Page

24 S&P 500 Sector Series S&P 500 Sectors: Energy Materials Industrials Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunication Services Utilities 22 Page

25 600 S&P 500 & S&P ENERGY 1, S&P 500 & S&P MATERIALS 1, , , ,300 1,250 1, ,300 1,250 1, , , S&P 500 (Right) S&P 500 / Energy -SEC (Left) 1, S&P 500 (Right) S&P 500 / Materials -SEC (Left) 1, S&P 500 & S&P INDUSTRIALS 1, S&P 500 & S&P CONSUMER DISCRETIONARY 1, ,350 1, ,350 1, , , ,150 1,100 S&P 500 (Right) S&P 500 / Industrials -SEC (Left) 1, ,150 S&P 500 (Right) 1,100 S&P 500 / Consumer Discretionary -SEC (Left) 1, Page

26 360 S&P 500 & S&P CONSUMER STAPLES 1, S&P 500 & S&P HEALTH CARE 1, , , , , , , , , , , S&P 500 (Right) S&P 500 / Consumer Staples -SEC (Left) 1, S&P 500 (Right) S&P 500 / Health Care -SEC (Left) 1, S&P 500 & S&P FINANCIALS 1, S&P 500 & S&P INFORMATION TECHNOLOGY 1, ,350 1,300 1,250 1, ,350 1,300 1,250 1, , , S&P 500 (Right) S&P 500 / Financials -SEC (Left) 1, S&P 500 (Right) S&P 500 / Information Technology -SEC (Left) 1, Page

27 150 S&P 500 & S&P TELECOMMUNICATION SERVICES 1, S&P 500 & S&P UTILITIES 1, , , ,300 1,250 1, ,300 1,250 1, S&P 500 (Right) 1,100 S&P 500 / Telecommunications Services -SEC (Left) 1, ,100 S&P 500 (Right) S&P 500 / Utilities -SEC (Left) 1, Page

28 International Markets Series 26 Page

29 MSCI The World Index 22-Jun-2007 to 25-Jun-2012 (Daily) 5 Year - Daily 1,100 MSCI World Index found resistance at the 50 day 1,000 S H S The MSCI World Index found support at its trend line Day Moving Average 200 Day Moving Agerage Price(WO-MSX) '08 '09 '10 ' Page

30 Spain IBEX Jun-2002 to 25-Jun-2012 (Daily) 10 Year - Daily Last: Spain IBEX Jun-1992 to 25-Jun-2012 (Daily) 20 Year - Daily Last: H 16,000 16,000 S S 14,000 12,000 10,000 14,000 8,000 6,000 4, Day Moving Average 200 Day Moving Agerage Price(180824) 2,000 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 12,000 The 20-year chart on the IBEX 35 is particularly troubling. 10,000 8,000 Spain s credit crisis lows 6, Day Moving Average 200 Day Moving Agerage Price(180824) '03 '04 '05 '06 '07 '08 '09 '10 '11 28 Page

31 Italy - FTSE MIB 21-Jun-2002 to 25-Jun-2012 (Daily) 10 Year - Daily Last: ,000 40,000 35,000 Italy looks very similar to Spain (previous chart) on 14 May 2012, a month ago. 30,000 25,000 20,000 Italy s Credit Crisis lows 15, Day Moving Average 200 Day Moving Agerage Price(152165) 10,000 '03 '04 '05 '06 '07 '08 '09 '10 '11 29 Page

32 U.S. Dollar per Euro 22-Jun-2009 to 25-Jun-2012 (Daily) 3 Year - Daily Last: 1.25 U.S. Dollar per Euro 21-Jun-2002 to 25-Jun-2012 (Weekly) 10 Year - Weekly Last: The euro is under pressure H year Weekly chart 50 Day Moving Average 200 Day Moving Agerage Price(EURUSD) 0.8 '03 '04 '05 '06 '07 '08 '09 '10 ' S S Day Moving Average 200 Day Moving Agerage Price(EURUSD) 1.1 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 30 Page

33 Germany DAX (TR) 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,000 France CAC Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,200 S H S 7,500 7,000 4,000 3,800 3,600 6,500 3,400 6,000 3,200 5,500 3,000 5,000 2, Day Moving Average 200 Day Moving Agerage Price(DAX-XEX) 4,500 FTSE 100 / England 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: , Day Moving Average 200 Day Moving Agerage Price(PXL-ENX) 2,600 S&P/TSX Composite / Canada 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,000 6,000 13,500 5,800 5,600 13,000 12,500 5,400 5,200 5,000 12,000 11,500 4,800 11, Day Moving Average 200 Day Moving Agerage Price(180555) 4, Day Moving Average 200 Day Moving Agerage Price(TSEC-TSE) 10, Page

34 S&P ASX 200 / Australia 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: ,800 KOSPI Composite Index / Korea 22-Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: ,300 4,600 2,200 4,400 2,100 2,000 4,200 1,900 4,000 1,800 3,800 1, Day Moving Average 200 Day Moving Agerage Price(XJO-ASX) 3,600 Japan Nikkei Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: Day Moving Average 200 Day Moving Agerage Price(KOSPI-KRX) 1,600 FTSE Xinhua China Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: H 10,500 20,000 19,000 S S 10,000 18,000 9,500 17,000 16,000 9,000 15,000 14,000 8,500 13, Day Moving Average 200 Day Moving Agerage Price(NIK-NKX) 8, Day Moving Average 200 Day Moving Agerage Price(186655) 12, Page

35 Global 10Y Treasury Yields French 10 Year Yield - German 10 Year Yield 6.0% USA Japan United Kingdom Germany Canada 6.0% 2 5.0% As return of capital vs. return on capital is still in play, perceived safe havens continue to attract capital. 5.0% % 4.0% 1 3.0% 3.0% 2.0% 1.0% CA: 1.73 UK: 1.66 USA: 1.60 GY: 1.46 JP: % 1.0% % 0.0% '07 '08 '09 '10 '11 Spanish 10 Year Yield - German 10 Year Yield 7 France Benchmark Bond - 10 Year - Yield - Germany Benchmark Bond - 10 Year - Yield -0.5 '08 '09 '10 '11 Spanish & Italian 10 Year Yields Spanish spreads are wide. 5 High correlation between Spanish and Italian yields, with Spain currently slightly higher Spain Benchmark Bond - 10 Y ear - Y ield - Germany Benchm ark Bond - 10 Y ear - Yield -1 '08 '09 '10 '11 Spain Benchmark Bond - 10 Year - Yield Italy Benchmark Bond - 10 Year - Yield '08 '09 '10 ' Page

36 The U.S. Dollar, Interest Rates, Commodities, etc. 34 Page

37 US Dollar (NYF) 22-Jun-2011 to 25-Jun-2012 (Daily ) 1 Year - Daily Last: S&P 500 vs. US Dollar (NYF) 22-Jun-2010 to 25-Jun-2012 Price (Local Currency) 1, Day Moving Average 200 Day Moving Agerage Price(DX00-USA) 72 Crude Oil (NYM $/bbl) vs. US Dollar (NYF) 22-Jun-2010 to 22-Jun-2012 Price (Local Currency) S&P 500 (Right) US Dollar (NYF) (Left) 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 Source: FactSet Prices 1,350 1,300 1,250 1,150 1,100 1,050 1,000 Natural Gas (NYM $/btu) 22-Jun-2011 to 25-Jun-2012 (Daily) 1 Year - Daily Last: Crude Oil (NYM $/bbl) (Right) US Dollar (NYF) (Left) 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 Source: FactSet Prices Day Moving Average 200 Day Moving Agerage Price(NG00-USA) Page

38 Oil - Crude and Brent 130 Spread b/t brent and crude oil Brent Crude Oil (ICE $/bbl) - Price - Crude Oil (NYM $/bbl) - Price Crude Oil (NYM $/bbl) 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 Source: FactSet Prices Brent Crude (ICE $/bbl) Gold (NYM $/ozt) 22-Jun-2007 to 25-Jun-2012 (Daily) 5 Year - Daily Last: Gold is below an important trend line ,000 1,800 1, /10 10/10 1/11 4/11 7/11 10/11 1/12 4/ Gold (NYM $/ozt) vs. 10Y T-Note (CBT) 22-Jun-2007 to 25-Jun-2012 Price (Local Currency ) 2,000 Gold (NYM $/ozt) (Right) 10Y T-Note (CBT) (Left) 1,800 1, , , Day Moving Average 200 Day Moving Agerage Price(GC00-USA) '08 '09 '10 ' '08 '09 '10 '11 Source: FactSet Prices 36 Page

39 Gold (NYM $/ozt) vs. US Dollar (NYF) 22-Jun-2007 to 25-Jun-2012 Price (Local Currency ) Gold (NYM $/ozt) (Right) US Dollar (NYF) (Left) Recently, inverse correlation b/t the Gold and the US $ has picked up '08 '09 '10 '11 2,000 1,800 1,600 1, Source: FactSet Prices Gold (NYM $/ozt) vs. Silver (NYM $/ozt) 22-Jun-2007 to 25-Jun-2012 Price (Local Currency ) Gold (NYM $/ozt) (Right) Series of lower highs on Silver... Will Gold follow??? Silver (NYM $/ozt) (Left) '08 '09 '10 '11 2,000 1,800 1,600 1, Source: FactSet Prices 5 & 10 Year yields Spread b/t US BAA corp & US 10 yr. - 1 YR Daily 3.6 Drop in Gov t yields is CBOE Treasury Note Yield 10 Year (Hidden) CBOE Treasury Note Yield 5 Year (Hidden)... Pushing spread b/t Corporate & US Gov t debt further apart. Market often trades inversely to this spread (see chart on next page.) Moody's BAA Corporate Bond Yield - Yield - US Benchmark Bond - 10 Year - Yield Page

40 1,800 S&P 500 VS Moody's BAA-10YR Moody's BAA Corporate Bond Yield - Yield - US Benchmark Bond - 10 Year - Yield (Left) S&P Price Index (Right) 7 1, ,000 Spreads began to widen before the credit crisis hit the Market Spreads made highs about the time the Fed initiated its latest two liquidity programs. 1 '03 '04 '05 '06 '07 '08 '09 '10 ' Page

41 Economic Data 39 Page

42 Unemployment Rate - Percent, Sa - United States US Unemployment rate 12 CONSUMER CONFIDENCE Composite Series: Index Numbers, 1985=100, Consumer Confidence Index - United States 0 '48 '51 '54 '57 '60 '63 '66 '69 '72 '75 '78 '81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 Personal Savings Rate Consumer Inflation Expectations vs Unleaded Gas price The drop in fuel prices is expected to help consumer confidence & inflation expectations Personal Income, Personal Saving As A Percentage Of Disposable Personal Income, Bil. $, Saar - United States 0 '59 '61 '63 '65 '67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 ' Usa Consumer - Expected Inflation Rate, Stock Or Quantum, % Balance - United States (Right) S&P GSCI Unleaded Gasoline - Commodity Index (Left) 300 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/ Page

43 Past performance does not guarantee future results. There is no assurance these trends will continue. The market value of securities fluctuates and you may incur a profit or a loss. This analysis does not include transaction costs and tax considerations. If included these costs would reduce an investor s return. Material is provided for informational purposes only and does not constitute a recommendation. It has been obtained from sources believed to be reliable, but accuracy is not guaranteed. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only form a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices overall are rising. MACD The moving average convergence divergence is a trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is typically calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals. MACD Signal - Signal line crossovers are the most common MACD signals. A bullish crossover occurs when the MACD turns up and crosses above the signal line. A bearish crossover occurs when the MACD turns down and crosses below the signal line. MACD Divergence - Divergences form when the MACD diverges from the price action of the underlying security. A bullish divergence forms when a security records a lower low and the MACD forms a higher low. A bearish divergence forms when a security records a higher high and the MACD forms a lower high. S&P The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. NASDAQ Composite Index The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. DJ Industrial Average The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. Russell The Russell 2000 Index is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the Russell 3000 total market capitalization. DJ Transportation - The Dow Jones Transportation Average is a price-weighted average of 20 U.S. transportation stocks. PHLX / Semiconductor - The Philadelphia Semiconductor Index is a modified capitalization-weighted index comprised of companies that are involved in the design, distribution, manufacturing, and sale of semiconductors. 41 Page

44 CBOE Market Volatility Index - The Chicago Board Options Exchange Volatility Index reflects a market estimate of future volatility, based on the weighted average of the implied volatilities for a wide range of strike prices. MSCI The World Index - The MSCI World Index is designed to measure the equity market performance of developed markets. It tracks 23 countries including the United States. Spain IBEX 35 - The IBEX 35 is the official index of the Spanish Continuous Market. The index is comprised of the 35 most liquid stocks traded on the Continuous market. Italy FTSE MIB - The FTSE MIB Index is comprised of the 40 most liquid stocks traded on the Borsa Italiana. U.S. Dollar per Euro The Euro US Dollar Spot Exchange Rate is the price of 1 EUR in USD 1. The euro is the official currency of the European Economic & Monetary Union. It is quoted in the # of USD per euro. 2. The US dollar is the official currency of the United States of America. The spot rate is by convention always equal to one. This is the value against which all other spot rates are measured. Germany DAX (TR) - The German Stock Index is a total return index of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange. France CAC 40 - The CAC 40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. FTSE 100 Index - The FTSE 100 Index is a capitalization-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange. S&P/TSX Composite - The S&P/TSX, the Toronto Stock Exchange Composite Index, is a capitalization-weighted index designed to measure market activity of stocks listed on the TSX. Japan Nikkei The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed on the Tokyo Stock Exchange. S&P ASX 200 / Australia - The S&P/ASX 200 measures the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. KOSPI Composite Index / Korea - The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. FTSE Xinhua China 25 - The FTSE China 25 Index includes the top 25 Chinese companies by total market cap. Global 10Y Treasury Yields - The average yields of 10 year government bonds for the countries of: The United States of America, Japan, United Kingdom, Germany, and Canada. French 10 Year Yield - German 10 Year Yield The difference between average yield of France s 10 year government bond and German s 10 year government bond. 42 Page

45 Spanish 10 Year Yield - German 10 Year Yield - The difference between average yield of Spain s 10 year government bond and German s 10 year government bond. Spanish & Italian 10 Year Yields The average yields of Spanish and Italian 10 year government bonds. QE or Quantitative Easing is unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective Price Earnings Ratio (P/E) is the price of the stock divided by its earnings per share. Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. 43 Page

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