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INVESTED POSITION FOR OUR MUTUAL FUNDS.

Yesterday, we increased our Invested position for Bonds to 40% with the
suggestion of Fidelity's Investment Grade Bond fund. Equities stayed at 20%,
Foreign 100% and Gold 100%. We added Duke Energy (DUK) to our Income and
Appreciation portfolio, took profits on our short in the Russell 2000 and
added a new short in PetSmart (PETM). The Gold fund hit the stop yesterday
and we would take profits today.

TECHNICAL MARKET DATA for Monday

Daily NYSE Bullish % : 55.69% | Other Bullish %'s | Opt Stks 44.66%

ASE 45.83% | Nasdaq/OTC 39.95% | NASDAQ 100 18% | DJIA 36.66%

10wk MA's NYSE 43.40%+Opt Stks 34.20%+| ASE 44.27% | NASDAQ 32.58% 100 16%+

30wk MA's NYSE 55.41% | Opt Stks 45.97% | ASE 48.72% | NASDAQ 42.65% 100 20%
The NYSE 10-week M.A. reversed up and moved to Bear Correction status and
the Option 10-Week reversed up to Bull Alert.

THE MARKETS got off to a good start in an option expiration week, not
unusual. NASDAQ volume was down 13% from Friday and NYSE 20% and that is not
a good sign.

The DOW INDUSTRIALS were strong all day following some positive comments by
McDonalds and wound up with a gain of 213.21 points to 9,687.42. The 50 X
150 moved to a low Pole buy, but is below the down trend line and the 200
day Moving Average. We continue to have a downside target of 8850-9350 and
it dropped below the top of that range on Friday morning before rallying. It
is down 3.3% for the year to date. . .

The TRANSPORTS were up 56.79 to 2,729.99 It is also on a Low Pole Buy and
one box below a Buy Signal. It has been showing a series of lower tops and
bottoms since its recent peak.

DOW UTILITIES were up 3.61. It is on a Sell signal below the down trend
line, but did hold at an important support level.

The S&P 500 was up 28.90 to 1,036.17. It moved back to a Buy Signal from a
low pole, but is still below the down trend line and the 200-Day Moving
Average. Unlike other averages, it did NOT exceed its' January peak at 1175.
It is now down 9.7% for the year.

The NASDAQ COMPOSITE was up 48.55 to 1,553.29 and is on a Sell signal way
below the down trend line and also below its 200 Day Moving Average. It is
down 20.4% for the year. OTHER AVERAGES were up yesterday with new short
term buys for the S&P 100, MidCap, NYSE, Value Line, NDX, Morgan Stanley
High Tech, SOX and Biotech indices.

INDICATORS

Indicators continue to be moving down from Overbought levels and only a
couple of them are Oversold. We continue to be in the Unfavorable 5/1 to
10/31 season.

Breadth was strong across the board NYSE A/D line is below 10 days ago for
15 days and is on a P&F sell signal . NASDAQ is below for 37 days. ASE is
also for 15 days. .

Daily High Low ratios shows the NYSE at O 46%, ASE at O 30% and NASDAQ O22%.
Yesterday, the NYSE had 85 new highs and 28 lows. NASDAQ was 70/47 and ASE
was 21/25.

The TIR COMPOSITE was up to 29.3% and continues on a Buy Moving up from
Oversold levels.

INDIVIDUAL STOCK ACTION

In stock action for Monday, not very much in the way of buy signals in
indvidual stocks despite the big move in the Averages. Bio stocks did well
and Cephalon gave a P&F Buy signal.

DAILY BROAD SECTOR SUMMARY

In our BROAD INDUSTRY GROUP BULLISH %'s, there were four down moves with
RESTAURANTS moving from X 74% and Bull Confirmed to O 68% and Bear Alert.
Remember, Bear Alert means a trading move to the downside or worse. This
lowered the tentative BULLISH % SUM to -6.5 from 5.0 last week and it
continues on a Sell signal and in a down column. Movement to +3.0 will be a
positive. We have noted for some time the double negative in the Restaurant
area of lots of Buying Climaxes and lots of insider selling.

PORTFOLIO UPDATE

Yesterday, we took profits in our Russell 2000 short sale, but added a new
short in PetSmart. and also had a new long position in Duke Energy for our
Income and Appreciation portfolio.

We also raised our invested position in Bond funds to 40% with the
suggestion of the Fidelity Investment Grade Bond funds.

At the close, the Fidelity Gold fund went below our suggested stop so we
would take profits there. That leaves us zero for Gold funds, but we still
have some Gold stocks left after taking profits on three of them a week ago.
This is still an area that we like Long Term and are waiting for this
correction to end to raise our position again.

OTHER AREAS

Crude Oil was up 15 cents to $26.08, while London Gold was down $4.30 to
$317.80. both of these continue on Buy Signals.

NARROW GROUP TREND ACTION

Among the 190+ Investors Daily INDUSTRY GROUP TREND CHARTS action was
negative last week with 2 groups up on the charts compared to 142 that were
down. There were 11 new Sell signals: Auto Manufacturers Domestic, Chemicals
Fertilizer, Chemicals Specialty, Commercial Services Staffing, Commercial
Services Misc, Leisure-Photo Equipment, Leisure Services, Leisure
Toys-Games, Machinery Farm, Machinery Materials Handling, Medical Drug
Diversified, The INDUSTRY GROUP BULLISH % moved down to 61.4% and continues
in Bear Alert Status. This is a lagging rather than a leading or coincident
indicator.

NOTEWORTHLY

Yesterday, NESTLE SA made $2.4 billion deal to acquire DREYERS ICE CREAM and
that stock jumped $24.50 to $67.29. Our congratulations go out to Charles
LaLoggia's SUPERSTOCK INVESTOR newsletter (800-450-0551) who had predicted
exactly this for some time. This newsletter specializes in finding companies
that they think may be taken over and they have been very successful in this
endeavor. In April they said about Dreyers "In July, Nestle bought some
Dreyers shares from GE,, following issuance of new shares. Nestle owns 24%
of this takeover candidate in consolidating industry. In late December
Nestle bought the 50% of Haagen-Dazs Ice Cream that it did not own from
General Mills, suggesting that DRYR could ultimately get a takeover bid from
Nestle". We often quote this service in our newsletter. We hold Ionics in
our long term portfolio which is also on their takeover candidate list. In
the same letter they had this comment about Ionics. "Water Treatment company
with low debt in takeover-lively industry is getting close to multi year
breakout near $33-34. ION recently did some financial "housecleaning" of the
sort that often precedes a takeover. In January ION received over $12/share
in cash from sale of the bottled water business."

We have often said that getting 130 odd newsletters is like having our own
Research Department that is far superior to that of any brokers. These
services do say BUY and more importantly they do say selling. They do not do
any Investment Banking or have any other conflicts of interest.