This is the Flexible Plan Investments' Market Hotline for Tuesday November 18, 2008. For the week ended Monday, November 17, 2008, the Dow Jones Industrial Average was down 6.73 % and the Nasdaq Composite was down 8.33%.

Our Classic accounts, which follow John Sosnowy’s SIMCO indicators, are invested in equity positions as of October 21, 2008.

Fortunately, we resisted the temptation to buy last week.  A fresh round of price declines continued throughout the week culminating yesterday in a 225-point decline of the Dow Industrials.

The news has not improved and the Congressional indecision over a loan to the auto companies may cause the market malaise that typically leads to lower prices. 

Today’s early bounce may be just that or the beginning of a holiday rally.  Normally that holds off until closer to Thanksgiving (our PSI Index targets a November 24th beginning).   If the market closes up today it would mean the price decline failed to break out below the October 27th low water mark, and that would be very encouraging to market bulls. 

As trend followers we will await the establishment of a new trend rather than trying to predict one.  As such we remain mostly in cash and bonds in managed accounts and at a maximum-hedged percentage in our sub-advised mutual funds.

Year to date, for the period ending November 17, 2008, the Dow Jones Industrial Average is down -37.63%, the S&P 500 is down -41%, and the Nasdaq is down -44.12%.  Our bond measure moved to a buy signal on July 28th.  Our Gold measure registered a new buy signal on November 14th.

Systematic Advantage is at a 29.17% position in stock funds.  Our Political/Seasonality strategy, which invests at the tops and bottoms of our PSI Index, has been invested 100% in Money Market Funds since the close of November 6, 2008.

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Past performance does not guarantee future results. The opportunity for profits carries with it the possibility of losses. A complete list of all of our recommendations over the last 12 months is available upon request. Evolution Asset Allocation rankings reflect only the price action of the funds in each family, rather than the indexes reported herein. Such rankings are shorter term and utilize diversification among different funds. Therefore, they may appear to conflict with the longer term, single asset readings of our market indicators. In fact, the differences merely reflect the contrasting objectives and time horizons of each. Index returns are provided for informational purposes only; they are not meant to be applied as benchmarks since the statistical risk and volatility of client portfolios may materially differ from the indexes displayed.

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