AlphaProfit Newsletter: May Indicator Update

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AlphaProfit Newsletter: May Indicator Update
May 1, 2009

Dear Valued Subscriber,

The AlphaProfit model portfolio returns as of April 30, 2009 are as follows:

	Apr. 2009	YTD*	1 Year	3 Year	5 Year	Sep. 2003 Inception
AlphaProfit Focus™ Model Portfolio	9.1%	-10.7%	-44.9%	-41.9%	-0.2%	19.2%
AlphaProfit Core™ Model Portfolio	8.5%	-1.3%	-39.4%	-31.8%	-3.1%	9.3%
DJ Wilshire 5000 Total Market Index	10.6%	-0.6%	-34.4%	-28.4%	-9.0%	2.8%

* YTD refers to December 31, 2008 to April 30, 2009 period

The U. S. equity market advanced for the second straight month. The Dow Jones Wilshire 5000 index followed its 8.8% advance in March with a 10.6% gain in April. Stabilizing trends in housing and economic data suggested that the worst for the recession might be over. Coordinated actions from the G-20 meeting and a pickup in M&A activity bolstered investor confidence as well.

As for first quarter corporate performance, year-over-year revenue and earnings comparisons were negative. However, low expectations helped most companies clear the forecast bar relatively easily.

The market took negative news from auto companies and brokerage firms in stride. Periods of decline were relatively short as buying often emerged quickly on any weakness to push equity prices higher.

Lowering AlphaProfit Sector Portfolio Indicator to 'Buy on Dips'

The S&P 500 benchmark is up 29.4% since its March 9 bottom. After advancing 28.8% through April 17, equity prices have consolidated the gains during the past couple of weeks.

While the strength of the current rally augurs well for equity prices from a multi-month perspective, technical indicators suggest that the market is ‘overbought’ on a near-term basis.

There is good possibility for the broad averages to pull back in the weeks ahead. We view such a pullback as a good buying opportunity. We lower the AlphaProfit Sector Portfolio Indicator reading to 'Buy on Dips' and recommend investing new money if the S&P 500 dips below 850.

Maintaining 'Favored Buy' Rating on Transportation

Shares in the transportation group rallied to outperform the DJW 5000 benchmark in April after we rated the group ‘Favored Buy’. iShares DJ Transportation gained 17.7% and Fidelity Select Transportation advanced 11.8%. While share prices in the transportation group can be vulnerable to swine flu concerns, we see this as a passing issue. Supported by the prospect of a stabilizing economy, attractive valuation, and strong balance sheets, transportation shares are likely to continue leading the market. We maintain the 'Favored Buy' rating on the transportation group.

Model Portfolios

Presently, we are not making any changes to the sector and industry recommendations or the model portfolios. The model portfolio composition as well as exchange-traded fund (ETF) and mutual fund recommendations are available in the Subscriber Login area of the web site. Stock recommendations will be included in the May Report due for publication on the 12th.

We welcome your comments.

Best regards,
Sam Subramanian
AlphaProfit Investments, LLC
Ideas. Insights. Results.
http://www.alphaprofit.com

Notes: The AlphaProfit Sector Investors' Newsletter™ is for information purposes only. AlphaProfit Investments, LLC is not soliciting any subscriber to buy or sell any security. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Before buying or selling any mutual fund, exchange-traded fund, security, or investment, read the prospectus carefully. For securities held in brokerage accounts, read the broker's specific terms and conditions which apply to trading of the securities. AlphaProfit Investments, LLC cannot and does not give any assurance that the present or future model portfolio changes will be profitable. Past performance is not a guarantee for future results. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the mutual fund companies, brokers or entities connected with the exchange-traded funds mentioned in the newsletter. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of this newsletter. No part of the AlphaProfit Information may be reproduced or re-transmitted in any manner without written permission of AlphaProfit Investments, LLC.