OUTLOOK

"Bullish on the S&P 500"

7/30/2007

We believe the S&P 500 will rally to 1500 or more from its recent close of 1458.95 on 7/27/07.  We believe this rally will occur within 8 weeks.

Our last Bullish Signal on the S&P 500 was recorded in our Outlook on 3/7/07, just after the market collapsed due the selloff in Shanghai.  Although for different reasons, our S&P 500 system is indicating similar extremes in negative sentiment and oversold conditions, as it did in early March of 2007.  We expect these extreme conditions to unwind and add fuel to a rebound rally.  Based on our Bullish Outlook, we have taken long positions to profit from a rally in the S&P 500.

Mark Yuan, CFA