100 Year Dow Study… To see the complete report go to... http://www.tuttleassetmanagement.com/index.php/site/research_analysis/quick_ A Quick Note: Tuttle Asset Management is pleased to announce we have completed the update to our industry-recognized 100-Year Dow Chart & Technical Study including the 2008 bludgeoning. Armed with the benefit of hindsight, we can now confidently look back and evaluate what sort of “Road Map” our analysis provided. Of significance is the massive drop in the P/E data which fell from ~27 near the October 2007 peak toward ~15 at the end of 2008. This data is provided courtesy of Dr. Robert Shiller (Professor of Economics at Yale University and more recently known for the S&P’s Case / Shiller Home Price Indices) On April 27th 2007, Tuttle Asset Mangement released the first update to our 100-Year Market Theory just as the Dow Jones Industrial Average traded over 13,000 and above the long-term secular consolidation channel we outlined. In the update, we made the following observations: • All previous ‘initial’ breaks above the secular consolidation channels of past have failed • All of these ‘initial’ attempts / breaks have crossed above the channel within 7 to 10 years • All the past failed attempts have surpassed the secular channel top by as much as 19% (2007’s reached 20% or DJIA 14,195) • And last, but CERTAINLY not least… All ‘initial’ attempts and failures have resulted in DEVASTATING DOWNTURNS! 2008 will markedly be considered one of the worst economic periods in a century; the fall-out caused one of the greatest destructions of wealth in U.S. History. This devastation calls to mind the key premise of TAM’s Original 100-Year Market Theory accompanying the Dow Chart, which stated: "Excess market valuations, due to extreme price movement upward over extended periods, may take years to work off as earnings catch up with prices." October 2008 became the first instance, outside of a brief moment in February and March of 2003, where the S&P 500’s 10-year P/E crossed back below our overvalued 22 level. You will also notice 2008’s push (and subsequent bounce) against the bottom of the channel. In light of this, many have asked if this indicates an “all-clear” sign. In our 2008 Year end report, we emphasized how a break below the secular channel (2003 lows) is likely. If prices remain below that channel, it increases the probability for the 2nd secular bear market in history – or what we have termed “The Abyss. This is possible for two main reasons. First, not unlike the initial cross above the secular consolidation channel, the subsequent attempt at a bottom has always gone lower than the initial. Second, the bottom has not occurred without the P/E multiple dropping below our notorious undervalued 10 level. Before the end of the first quarter of 2009 quarter TAM will be publishing the ‘Second’ Update to our 100-Year Market Theory which will cover this scenario in much greater detail. Until next time… Sincerely, Kevin A. Tuttle CEO