Ned Davis Research Group

The Outlook For Stocks, Commodities, And Global Themes: Secular And Cyclical Influences Atlanta MTA & CFA Society of Atlanta | September 24, 2008

Tim Hayes, CMT, Chief Investment Strategist The NDR Approach

• Identify investment themes and stay with them until a sentiment extreme is reached.

• We say… »» "Go with the flow until it reaches an extreme and then reverses." »» "The big money is made on the big moves." »» "Let your profits run, cut your losses short."

• We develop reliable indicators and models based on… »» "The Tape" –– Trend, momentum, confirmation & divergence. »» Investor psychology –– Sentiment and valuation extremes. »» Liquidity –– Monetary and economic conditions, supply & demand. • In summary, NDR approach is… »» Objective »» Disciplined »» Risk-Averse »» Flexible

1 Ned Davis Research Group Please see important disclosures at the end of this document. Current Positions

Global Allocation: Overweight/Bullish: Underweight/Bearish:

Stocks »» Bonds (by 10%) »» Stocks (by 15%) Cash 40% »» Cash (by 5%) 15%

Bonds 45% »» Pacific ex. Japan »» U.K. »» U.S. »» Japan

U.S. Allocation:

Stocks 40% Cash 20% »» Cash (by 10%) »» Stocks (by 15%) »» Bonds (by 5%) Bonds 40%

Styles: »» Growth »» Value

Sectors: »» Energy »» Consumer Discretionary »» Basic Resources »» Financials »» Consumer Staples »» Utilities

Commodities: »» Correction within secular uptrend

Bonds: »» 105% of benchmark duration

Neutral Positions: »» Large-caps vs. Small-caps »» Yield curve

2 Ned Davis Research Group Please see important disclosures at the end of this document. We've recommended maximum underweight exposure all year. Now we're ready to add exposure after re-test of lows.

Daily Data 9/19/2006 - 9/19/2008 NDR U.S. Asset Allocation Recommendations 65 65 64 64 63 As of 9/19/2008: 63 62 40% Stocks () 62 61 61 60 40% Bonds () 60 59 20% Cash () 59 58 58 57 57 56 Stock Benchmark = 55% 56 55 55 54 54 53 53 52 52 51 51 50 underweight 50 49 49 48 48 47 47 46 46 45 45 44 44 43 43 42 42 41 41 40 40 39 39 38 38 37 37 36 Bond Benchmark = 35% 36 35 35 34 34 33 33 32 32 31 31 30 30 29 29 28 28 27 27 26 26 25 25 24 24 23 23 22 22 21 21 20 20 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 Cash Benchmark = 10% 11 10 10 OND J F M A M JJ A S OND J F M A M JJ A S (AA501B) 2007 2008

3 Ned Davis Research Group Please see important disclosures at the end of this document. Bottom suggested by record volume…

Daily Data 7/16/1981 - 9/19/2008 (Log Scale) NDR All-Cap Equity Series Volume 1536 1536 S&P 500 Gain/Annum When: 1239 1239 1000 Volume Deviation Gain/ % S&P 500 1000 807 from Trend Is: Annum of Time 807 651 * Above 105 18. 7 47. 5 651 525 92 to 105 0. 7 48. 4 525 424 92 and Below -3. 9 4. 1 424 342 342 276 276 222 222 180 180 145 145 117 9/19/2008 = 1255.1 117 9511 9511 NDR All-Cap Equity Series Daily Volume (millions) 9/19/2008 = 11278.9 6101 6101 3913 3913 2510 2510 1610 1610 1032 1032 662 662 425 425 272 272 175 175 112 112 72 72 46 46 9/19/2008 = 117.0 140 140 NDR All-Cap Equity Series Volume Deviation from Trend 135 50-Day Smoothing/200-Day Smoothing 135 130 130 125 125 120 120 115 115 110 110 105 105 100 100 95 95 90 90

(S52) 1 9 8 6 1 9 9 1 1 9 9 6 2 0 0 1 2 0 0 6

4 Ned Davis Research Group Please see important disclosures at the end of this document. …and it's been on the downside.

Daily Data 9/18/2006 - 9/19/2008 (Log Scale) NDR Multi-Cap Institutional Equity Series Advance/Declining Volume 1558 1558 9/19/2008 = 1255.1 1522 1522 S&P 500 Index 1487 1487 1453 1453 1419 1419 1386 1386 1354 1354 1323 1323 1292 1292 1262 1262 1233 1233 1204 1204 1176 1176 1149 1149 122.02 NDR Multi-Cap Institutional Equity Series Declining Volume / Advancing Volume (Log Scale) 9/19/2008 = 0.18 122.02 57.69 57.69 27.27 27.27 12.89 12.89 6.10 6.10 2.88 2.88 1.36 1.36 0.64 0.64 0.30 0.30 0.14 0.14 0.07 0.07 0.03 0.03

26 NDR Multi-Cap Institutional Equity Series 26 24 Advancing Volume / Declining Volume 24 22 9/19/2008 = 5.41 22 20 20 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2

OND J F M A M JJ A S OND J F M A M JJ A S (S54A) 2007 2008 5 Ned Davis Research Group Please see important disclosures at the end of this document. Global market breadth has gotten "so bad it's good."

Weekly Data 10/09/1994 - 9/21/2008 (Log Scale) MSCI World Index (Local Currency) 1175 1175 1115 1115 1058 1058 1003 1003 952 952 903 903 857 857 813 813 772 772 732 732 695 695 659 659 626 Index Gain/Annum When: 626

594 % of Markets Gain/ % 594 563 Above Smoothing is: Annum of Time 563 535 Above 60% 10. 9 59. 8 535 507 Between 10% & 60% -9. 9 34. 2 507 481 481 * 10% and Below 49. 9 6. 0 457 9/21/2008 = 925.66 457

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Bullish 95 95 90 90 85 85 80 80 75 75 70 70 65 65 60 60 55 55 50 50 45 45 40 40 35 35 30 30 25 Bearish 25 20 20 15 15 10 10 5 5 9/21/2008 = 2.4% So Bad It's Good

(STH0821_C) Percentage of 42 NDR Global Markets Above Their 40-Week Smoothings 6 Ned Davis Research Group Please see important disclosures at the end of this document. Last five bears have ended in August 31 to October 19 period.

Last Five NDR-Defined Cyclical Bear Markets ---- Beginning ------Ending ---- Date DJIA Date DJIA % Gain Days 8/25/87 2722.42 10/19/87 1738.74 -36.1 55 7/16/90 2999.75 10/11/90 2365.1 -21.2 87 7/17/98 9337.97 8/31/98 7539.07 -19.3 45 1/14/00 11722.98 9/21/01 8235.81 -29.7 616 3/19/02 10635.25 10/9/02 7286.27 -31.5 204 10/9/07 14164.53 ?? ?? -22.9* 342*

Median (33 bears since 1900) -26.9 363 A Bear Market requires a 30% drop in the Dow Jones Industrial Average after 50 calendar days or a 13% decline after 145 calendar days. Reversals of 30% in the Value Line Geometric Index also qualify. This applied to the 1990 and 1998 high and low. (The table uses corresponding high and low dates and values for DJIA). *As of 9/15/2008 Ned Davis Research, Inc. T_200B (excerpt)

7 Ned Davis Research Group Please see important disclosures at the end of this document. Along with one-sided breadth and volume, bottom indicated by VIX…

Daily Data 12/31/1996 - 9/19/2008 (Log Scale) Standard & Poor's 500 Stock Index vs VIX Index 1534.8 1534.8 1475.4 1475.4 1418.4 1418.4 1363.5 1363.5 1310.8 1310.8 1260.1 1260.1 1211.3 1211.3 1164.5 1164.5 1119.4 1119.4 9/19/2008 = 1255.08 1076.1 1076.1 1034.5 1034.5 994.5 994.5 956.0 956.0 S&P 500 Gain/Annum When: 919.0 919.0 883.5 Gain/ % 883.5 VIX Index Is: Annum of Time 849.3 849.3 * Above 28.5 100. 0 12. 1 816.5 816.5 Between 21.5 and 28.5 -4. 9 32. 0 784.9 784.9 21.5 and Below -4. 0 55. 9 754.5 754.5 44.0 44.0 High Fear Implied Volatility Index 9/19/2008 = 32.1 40.7 40.7 37.6 37.6 34.7 34.7 32.1 32.1 29.7 29.7 27.4 27.4 25.4 25.4 23.4 23.4 21.7 21.7 20.0 20.0 18.5 18.5 17.1 17.1 15.8 High Complacency 15.8 14.6 14.6 13.5 13.5 12.5 > 28.5 $10,000 becomes $26698 12.5 11.6 < 28.5 $10,000 becomes $6346 11.6 10.7 Buy and Hold $10,000 becomes $16944 10.7 9.9 9.9 M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S (DAVIS72) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

8 Ned Davis Research Group Please see important disclosures at the end of this document. …and intraday volatility.

Daily Data 10/03/1928 - 9/19/2008 (Log Scale) Dow Jones Industrial Average 12127 12127 Median DJIA % Returns 8935 Since 6/27/1950 (14 Cases)* 8935 6584 6584 Days After All Signals Indicate Initial 4851 Later Signals Periods 4851 3574 Readings Above Top Band 3574 10 1. 1 0. 5 (>110% Above 1-Yr. Avg.) 2633 22 1. 6 0. 9 2633 1940 1940 63 5. 9 2. 3 1430 1430 126 8. 0 4. 0 1053 1053 189 16. 8 6. 2 776 776 252 20. 0 7. 2 572 572 421 421 *mixed results prior to 1950s DJIA % Gain/Annum When: 310 (10/03/1928 - 9/19/2008) 310 229 229 Volatility Gain/ % 169 Index is: Annum of Time 169 124 * > 20% Above 1-Yr. Avg. 15. 0 16. 5 124 91 Between Bands 3. 9 63. 9 91 67 > 20% Below 1-Yr. Avg. 0. 3 19. 6 67 50 50 1 9 3 3 1 9 3 8 1 9 4 3 1 9 4 8 1 9 5 3 1 9 5 8 1 9 6 3 1 9 6 8 1 9 7 3 1 9 7 8 1 9 8 3 1 9 8 8 1 9 9 3 1 9 9 8 2 0 0 3 2 0 0 8

19.4 Bands vs. One-Year Moving Average: 19.4 15.4 9/19/2008 = 5.15% 15.4 12.3 Top (Heavy Dashed Line) = 110% Above Avg. (5.36%) 12.3 9.8 Middle = 20% Above Avg. (3.07%) 9.8 High Volatility 7.7 Lower = 20% Below Avg. (2.04%) 7.7 6.2 6.2 4.9 4.9 3.9 3.9 3.1 3.1 2.5 2.5 2.0 2.0 1.5 1.5 1.2 1.2 1.0 1.0 0.8 0.8 Intraday Volatility Index: 0.6 Low Volatility 0.6 % Spread Between Intraday High and Low 0.5 0.5 (Three-Day Smoothing Log Scale) 0.4 0.4 (S232) DJIA Intraday Volatility Index -- Historical Perspective

9 Ned Davis Research Group Please see important disclosures at the end of this document. Upturns in crowd sentiment and consumer confidence would support a cyclical recovery…

Daily Data 12/01/1995 - 9/16/2008 Monthly Data 2/28/1967 - 8/31/2008 (Log Scale) Standard & Poor's 500 Composite Index (updated weekly on Wednesday mornings) Dow Jones Industrial Average 1560 1560 19769 Oct 2007 19769 1500 1500 16025 DJIA Gain/Annum When: Jan 2000 16025 (2/28/1969 - 8/31/2008) 1440 1440 12990 Jun 1998 12990 1380 1380 10530 Consumer Gain/ % 10530 8536 Confidence is: Annum of Time 8536 1320 1320 6920 Above 110 -0. 2 22. 3 6920 1260 1260 5609 Between 66 and 110 6. 3 65. 9 Mar 2003 5609 1200 1200 4547 * 66 and Below 23. 0 11. 8 4547 1140 1140 Sep 1987 3686 Feb 1989 3686 1080 1080 2988 2988 2422 2422 1020 1020 Feb 1992 1963 1963 960 960 Jan 1991 S&P 500 Gain/Annum When: 1592 Dec 1972 1592 900 900 Oct 1968 NDR Crowd Gain/ % 1290 1290 840 Sentiment Poll is: Annum of Time 840 1046 1046 780 Above 62 -2. 5 34. 7 780 848 848 720 53 - 62 from Above -1. 4 16. 6 720 687 Oct 1982 687 660 53 - 62 from Below 12. 7 16. 3 660 557 May 1980 557 * 53 and Below 14. 8 32. 4 8/31/2008 = 11543.5 452 Dec 1974 452 D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1970 1975 1980 1985 1990 1995 2000 2005 75 Extreme Optimism (Bearish) 75 71.9 72.2 145 145 72 70.5 72 140 140 69.6 69.5 135 135 69 69 130 Extreme Optimism = Bearish for Stocks 130 66 66 125 125 120 120 63 63 115 115 60 60 110 110 58.1 105 105 57 57 100 100 95 95 54 54 90 90 51 51 85 85 49.9 80 80 48 49.7 48 47.6 75 75 45 46.6 45 70 70 65 65 42 42.5 42 60 60 55 55 39 39 50 50 38.0 36 Extreme Pessimism (Bullish) 37.1 36 45 45 9/16/2008 = 40.6 40 Extreme Pessimism = Bullish for Stocks 40

(S574A) NDR Crowd Sentiment Poll -- Transitional Mode Basis (S1060A) Consumer Confidence (Conference Board) Source: The Conference Board

10 Ned Davis Research Group Please see important disclosures at the end of this document. …as would more signs of housing recovery…

Monthly Data 1/31/1999 - 7/31/2008 (Log Scale) New, Existing, and Total Home Sales 1352 Seasonally Adjusted Annual Rates 8402 1282 In Thousands 8157 1216 Total Existing Home Sales 7920 1153 7/31/2008 = 5000 7690 1093 New Home Sales Scale Right 7466 7/31/2008 = 515 () 1037 Scale Left 7249 983 () 7038 932 6833 884 6634 838 6441 795 6254 754 Total Home Sales 6072 715 7/31/2008 = 5515 5895 Scale Right 678 () 5724 643 5557 609 5396 578 5239 548 5086 520 4938 M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J 2000 2001 2002 2003 2004 2005 2006 2007 2008

20 20 16 New Home Sales 16 7/31/2008 = -37.3% 12 () 12 8 8 4 4 0 0 -4 -4 -8 -8 -12 -12 -16 -16 Total Existing Home Sales Total Home Sales -20 7/31/2008 = -14.9% 7/31/2008 = -17.7% -20 -24 () () -24 -28 -28 -32 -32 -36 -36 Source: National Association of Realtors, Haver Analytics

(E246M) New, Existing, and Total Home Sales (Smoothed Year-to-Year Changes)

11 Ned Davis Research Group Please see important disclosures at the end of this document. …and a persistent narrowing of credit spreads.

Daily Data 4/13/2005 - 9/19/2008 Daily Data 9/20/2006 - 9/19/2008 Credit Default Swap Spreads II (High Yield) OAS on Agencies, Mortgages, Corporates, and High Yield In Basis Points North America Crossover Index 9/19/2008 = 350.00 100 OAS = Option-Adjusted Spread (in basis points) U.S. Agencies 100 450 450 90 90 400 400 80 80 350 350 70 70 300 300 60 60 50 50 250 250 40 40 200 200 30 30 150 150 Mortgage-Backed Securities North America High Yield Index 9/19/2008 = 600.45 180 180 800 800 160 160 700 700 140 140 600 600 120 120 500 500 100 100 400 400 80 80 300 300 60 60 200 Source: Dow Jones Indexes 200 40 40 North America High Yield BB Index 9/19/2008 = 402.29 U.S. Investment-Grade Corporate Credit 600 600 400 400 540 540 360 360 480 480 320 320 420 420 280 280 360 360 240 240 300 300 200 200 240 240 160 160 180 180 120 120 North America High Yield B Index 9/19/2008 = 735.24 1000 Source: Lehman Brothers 1000 800 800 U.S. High Yield 900 900 700 700 800 800 600 600 700 700 500 500 600 600 400 400 500 500 400 400 300 300 300 300

M JJ A S OND J F M A M JJ A S OND J F M A M JJ A S OND J F M A M JJ A S OND J F M A M JJ A S OND J F M A M JJ A S (B385A) 2006 2007 2008 (B384) 2007 2008

12 Ned Davis Research Group Please see important disclosures at the end of this document. Peaks in risk premium have been especially helpful to small-caps. Sustained market momentum would also help.

Weekly Data 6/26/1981 - 9/19/2008 Ratio of Russell 2000 / Russell 1000 Index

All Periods = -0.1% GPA 1.6 1.6 All Periods When Proxy is RISING = -3.2% GPA 1.5 All Periods When Proxy is FALLING = 3.2% GPA 1.5

1.4 Direction of Proxy Determined by Current Value versus 8 Weeks Ago 1.4

1.3 1.3

1.2 1.2

1.1 Russell 2000/ Russell 1000 Ratio 1.1 Gain/Annum When:

1.0 Gain/ % 1.0 Risk Premium Proxy is Annum of Time 0.9 0.9 * Above 2.2 9. 5 36. 0 0.8 Between 1.7 and 2.2 -1. 6 38. 9 0.8 Below 1.7 -10. 2 25. 0 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

5.7 5.7 Russell 2000/ Russell 1000 Ratio Gain/Annum When: Russell 2000/ Russell 1000 Ratio Gain/Annum When: 5.4 5.4 5.1 Risk Premium Proxy is Gain/ % Risk Premium Proxy is Gain/ % 5.1 Rising and Annum of Time Falling and Annum of Time 4.8 4.8 4.5 * Above 2.2 6. 6 20. 9 Above 2.2 13. 6 15. 2 4.5 4.2 Between 1.7 and 2.2 -7. 6 19. 9 Between 1.7 and 2.2 5. 1 19. 1 4.2 3.9 Below 1.7 -16. 2 7. 6 Below 1.7 -7. 5 17. 5 3.9 3.6 3.6 3.3 3.3 Moody Baa Bond Yield minus 10-Year Treasury Bond Yield 3.0 3.0 2.7 2.7 2.4 2.4 2.1 2.1 1.8 1.8 1.5 1.5 1.2 1.2 9/19/2008 = 4.01%

(AA144) Equity Risk Premium Proxy

13 Ned Davis Research Group Please see important disclosures at the end of this document. Small-caps tend to outperform after market bottoms and ahead of economic recoveries.

Chart has been reanalyzed. S&P 500 Index & Small Cap Index Around Bear Market Bottoms Small-Cap/Large-Cap Ratio Around Post-War Recession End Dates 156 156 110 110 154 154 Recession % Change % Change End Dates Six Months Later 12 Months Later 152 152 109 10/31/1949 2. 27 1. 00 109 S&P 500 Total Return Index () 150 150 5/31/1954 2. 71 11. 33 4/30/1958 6. 72 11. 92 148 Small Cap / Large Cap () 148 108 2/28/1961 -1. 04 3. 96 108 11/30/1970 12. 37 0. 76 146 Small Cap Total Return Index () 146 3/31/1975 5. 99 23. 20 144 144 107 7/31/1980 8. 68 15. 51 107 11/30/1982 14. 18 6. 32 142 142 3/31/1991 1. 38 9. 03 11/30/2001 12. 88 7. 09 140 140 106 106 138 138 Mean 6. 62 9. 01 136 136 105 105 134 Bear Market Bottoms * 134 Recession End Date 104 104 132 132 130 130 103 103 128 128 126 126 102 102 124 124 122 122 101 101 120 120

118 118 100 100 116 116 114 114 99 99 112 112 110 110 98 98 108 108 106 106 97 97 104 104 Small-Caps = Ibbotson Small Cap Total Return Index before 1979 102 102 96 Russell 2000 Total Return Index thereafter 96 * Based on NDR-Defined Bear Market Bottoms, 1929-Present Large-Caps = S&P 500 Total Return Index 100 See study T_200B 100 Monthly Data Starting in 1947 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 (AA0142) <--- Months Before Bottom ---> <--- Months After Bottom ---> AA0148A <--Months Before--> <--Months After-->

14 Ned Davis Research Group Please see important disclosures at the end of this document. Sustained relative strength among Consumer Discretionary stocks would indicate improved economic outlook, boosting market breadth, and making a cyclical bull more likely.

Weekly Data 1/19/1973 - 9/19/2008 (Log Scale) S&P 500 Consumer Discretionary Sector Long-Term Mean Reversion 452 S&P 500 Consumer Discretionary Sector 9/19/2008 = 240.9 40-Week Smoothing 452 289 289 185 185 118 118 75 75 48 48 31 31 20 20 13 13 8 Source: S&P/MSCI GICS NDR estimates prior to 9/11/1989. 8 23 23 20 20 18 18 16 16 14 14

12 S&P500 Consumer Discretionary Sector / S&P 500 (Cap-Weighted) 9/19/2008 = 19.2 40-Week Smoothing 12 40 S&P 500 Consumer Discretionary Sector (Y/Y) minus S&P 500 Cap-Weighted (Y/Y) Overbought = Downside mean reversion potential 40

30 +3 30

20 +2 20

10 +1 10

0 M 0 Scale = % Points -10 -1 -10 Dashed Lines = Std Dev

-20 -2 -20 Oversold = Upside mean reversion potential Std Dev = -0.0 S&P 500 Consumer Discretionary Sector (3Y/3Y) minus S&P 500 Cap-Weighted (3Y/3Y) Overbought = Downside mean reversion potential 60 +3 60

40 +2 40

20 +1 20

0 M 0 -1

-20 Scale = % Points-20 -2 -40 Dashed Lines = Std Dev -40

-60 Oversold = Upside mean reversion potential Std Dev = -0.5 -60

BA560D 1 9 7 4 1 9 7 5 1 9 7 6 1 9 7 7 1 9 7 8 1 9 7 9 1 9 8 0 1 9 8 1 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

15 Ned Davis Research Group Please see important disclosures at the end of this document. Sustained relative strength from Financials would send an even stronger message.

Weekly Data 1/19/1973 - 9/19/2008 (Log Scale) S&P 500 Financials Sector Long-Term Mean Reversion 734 S&P 500 Financials Sector 9/19/2008 = 303.6 40-Week Smoothing 734 461 461 290 290 182 182 114 114 72 72 45 45 28 28 18 18 11 Source: S&P/MSCI GICS NDR estimates prior to 9/11/1989. 11 37 37 33 33 29 29 25 25 22 22 19 19 17 17 15 S&P500 Financials Sector / S&P 500 (Cap-Weighted) 9/19/2008 = 24.2 40-Week Smoothing 15 50 S&P 500 Financials Sector (Y/Y) minus S&P 500 Cap-Weighted (Y/Y) Overbought = Downside mean reversion potential 50

40 +3 40

30 +2 30 20 20 10 +1 10

0 M 0 -1

-10 Scale = %-10 Points

-20 Dashed Lines = Std Dev -20 -30 -2 -30 -40 Oversold = Upside mean reversion potential Std Dev = -1.2 -40 S&P 500 Financials Sector (3Y/3Y) minus S&P 500 Cap-Weighted (3Y/3Y) Overbought = Downside mean reversion potential 80 80 +3 60 60 40 +2 40 20 +1 20 0 M 0 Scale = % Points -20 -1 -20 Dashed Lines = Std Dev

-40 -2 -40 -60 Oversold = Upside mean reversion potential Std Dev = -1.2 -60

BA560G 1 9 7 4 1 9 7 5 1 9 7 6 1 9 7 7 1 9 7 8 1 9 7 9 1 9 8 0 1 9 8 1 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

16 Ned Davis Research Group Please see important disclosures at the end of this document. Next bull market may be shorter and more shallow than usual -- this remains a secular bear market.

NDR-Defined Cyclical Bull & Bear Markets Median Magnitude & Duration Based on secular trend 1900 to present Cyclical Bull Markets # Cases % Gain # Days (Yrs) Median - All 33 65.7 573 (1.6) Median within Secular Bulls 16 77.2 870 (2.4) Median within Secular Bears 17 50.6 371 (1.0) Cyclical Bear Markets # Cases % Gain # Days (Yrs) Median - All 32 -26.1 375 (1.0) Median within Secular Bulls 12 -19.4 245 (0.7) Median within Secular Bears 20 -32.8 532 (1.5) NDR-Defined Secular Bear Markets: 01/19/1906 - 08/24/1921, 09/03/1929 - 04/28/1942, 02/09/1966 - 08/12/1982, 01/14/2000 - current. All other periods are secular bull markets. Cyclical Bull & Bear market data based on studies T_200A & T_200B. Current cyclical bear market excluded from median calculations. Ned Davis Research, Inc. T_STH0821.1

17 Ned Davis Research Group Please see important disclosures at the end of this document. Negative per annum returns since 2000, especially after inflation.

Daily Data 3/31/1900 - 9/19/2008 (Log Scale) Dow Jones Industrial Average vs. Secular Trends 11941 11941 8513 Secular Bull Markets Secular Bear Markets 8513 DJIA Nominal Annualized Gain (GPA) DJIA Nominal Annualized Gain (GPA) 6069 6069 4327 Dates GPA Dates GPA 4327 3085 3/31/1900 - 1/19/1906 8. 0 1/19/1906 - 8/24/1921 -1. 1 3085 2199 8/24/1921 - 9/3/1929 24. 9 9/3/1929 - 4/28/1942 -10. 6 2199 1568 4/28/1942 - 2/9/1966 10. 5 2/9/1966 - 8/12/1982 -1. 5 1568 1118 8/12/1982 - 1/14/2000 16. 8 1/14/2000 - 9/19/2008? -0. 3 1118 797 797 568 568 405 405 289 289 206 206 147 147 105 105 75 Shaded Areas Indicate Secular Bear Markets 75 53 9/19/2008 = 11388.44 53 38 38 1 9 0 5 1 9 1 0 1 9 1 5 1 9 2 0 1 9 2 5 1 9 3 0 1 9 3 5 1 9 4 0 1 9 4 5 1 9 5 0 1 9 5 5 1 9 6 0 1 9 6 5 1 9 7 0 1 9 7 5 1 9 8 0 1 9 8 5 1 9 9 0 1 9 9 5 2 0 0 0 2 0 0 5 733 733 Secular Bull Markets Secular Bear Markets 612 DJIA Real Annualized Gain (GPA) DJIA Real Annualized Gain (GPA) 612 510 510 Dates GPA Dates GPA 426 426 3/31/1900 - 1/19/1906 6. 5 1/19/1906 - 8/24/1921 -5. 4 355 355 8/24/1921 - 9/3/1929 26. 1 9/3/1929 - 4/28/1942 -10. 1 297 297 4/28/1942 - 2/9/1966 7. 3 2/9/1966 - 8/12/1982 -7. 9 247 247 8/12/1982 - 1/14/2000 13. 2 1/14/2000 - 9/19/2008? -3. 3 207 207 172 172 144 144 120 120 100 100 84 84 70 70 58 58 49 DJIA Adjusted Using Quarterly Consumer Price Index 49 41 41 34 9/19/2008 = 450.00 34 28 28

(S0202) Inflation-Adjusted Dow Jones Industrial Average vs. Secular Trends

18 Ned Davis Research Group Please see important disclosures at the end of this document. In tandem with secular bear in U.S. equities, gold and commodities have remained in a secular bull.

New Chart Monthly Data 3/31/1968 - 8/31/2008 (Log Scale) DJIA Secular Trends vs. Real DJIA & Real Gold 14116 14116 12566 12566 11186 Real DJIA (in current dollars) 11186 9958 9958 8864 8864 7891 7891 7024 7024 6253 6253 5566 5566 4955 4955 4411 4411 3926 3926 3495 3495 3111 3111 2770 2770 2466 2466 2195 8/31/2008 = 11544.0 2195 1954 1954 Secular Bear Market Secular Bull Market Secular Bear Market Real DJIA: -6.5% per Annum Real DJIA: 11.8% per Annum Real DJIA: -2.6% per Annum Real Gold: 9.4% per Annum Real Gold: -5.1% per Annum Real Gold: 11.3% per Annum 1832 1832 1616 1616 1426 Real Gold Spot Price (in current dollars) 1426 1258 1258 1110 1110 979 979 864 864 762 762 672 672 593 593 523 523 461 461 407 407 359 359 317 317 280 280 247 8/31/2008 = 829.3 247 218 218

(AA875) 1970 1975 1980 1985 1990 1995 2000 2005

19 Ned Davis Research Group Please see important disclosures at the end of this document. For oil and gold, sentiment points to recoveries from corrections.

Daily Data 7/30/1992 - 9/19/2008 (Log Scale) Daily Data 6/02/1989 - 9/19/2008 (Log Scale) West Texas Spot Crude Oil Gold Bullion 145.7 150 150 967 Gold Bullion Gain/Annum When: 967 129 Crude Oil Gain/Annum When: 129 900 900 837 Gain/ % 837 111 111 Gold Sentiment Index Is: Annum of Time Energy Sentiment Gain/ % 779 779 95 Seven-Day Smoothing: Annum of Time 95 Above 66.4 -0. 4 26. 6 725 725 82 Above 61.5 -0. 1 30. 0 77.0 82 Neutral moving down -0. 9 21. 1 69.8 675 71 71 675 Neutral moving up 7 18. 5 Between 42 and 61.5 5. 9 43. 1 628 628 61 61 * 37.9 and Below 10. 7 33. 8 * 42 and Below 31. 0 26. 9 55.2 584 584 52 56.2 52 50.5 543 543 45 46.8 45 506 506 39 37.2 37.8 40.7 39 470 470 33 33 438 438 29 29 407 407 25 25.2 25 379 379 21 21 353 353 18 18 328 328 17.5 16 16 305 Composite's Direction is Determined 305 14 14 284 By Whether it is Higher or Lower 284 Than it Was 3 Days Ago 12 12 264 9/19/2008 = 860.60 264 S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S J S D M J S D M J S D M J S DM J S D M J S D M J S D M J S D M J S D M J S DM J S D M J S DM J S DM J S D M J S DM J S D M J S DM J S DM J S D M J S 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 85.3 84 83.9 84 84 Excessive Optimism 84 80 Extreme Optimism 79.5 80 80 80 77.5 76 76 76 74.0 76 72 72 72 71.3 72 68.5 68 68 68 68 64 64 64 64 60 60 60 60 56 56 56 56 52 52 52 52 48 48 48 48 44 44 44 44 40 40 40 40 36 36 39.2 38.0 36 36.8 36 32 32 32 32 28 28 28 28 24 24 27.0 27.5 24 24 20 20 Extreme Pessimism 23.0 16 16 20 9/19/2008 = 33.64 20 Extreme Pessimism Composite Direction = UP 9/19/2008 = 34.0

(DAVIS60) NDR Crowd Sentiment Poll for Energy Futures (Seven-Day Smoothing) (DAVIS63) NDR Crowd Sentiment Poll for Gold Bullion -- Directional Mode Basis

20 Ned Davis Research Group Please see important disclosures at the end of this document. The China-driven commodity demand theme may soon resume.

Global Reflation Theme (I) Daily Data 7/01/1996 - 9/19/2008 (Log Scale) 10

7 MSCI China Index / MSCI World Index 5 Scale Right 9/19/2008 = 3.89 4

3

117 2 107 97 89 Dow Jones Emerging Markets Index / 81 Dow Jones Developed Markets Index 74 Scale Left 67 9/19/2008 = 98.05 61 56 51 57 46 51 42 46 41 37 NDR Global Basic Resources Sector/ 33 NDR Global Composite 30 Scale Right 27 9/19/2008 = 46.88 24 22 582 Reuters-CRB Continuous Commodity Index 20 522 Scale Left 468 9/19/2008 = 470.69 18 419 376 337 302 271 243 218 195 S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S (I 0105) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

21 Ned Davis Research Group Please see important disclosures at the end of this document. Olympic host countries have usually performed well after the games.

Performance of Host Country's Stock Market during and around Summer Olympics since 1988 Absolute Performance One Year Six Months Six Months One Year Year Country Stock Market1 Start Date End Date Prior Prior During Following Following 1988 South Korea South Korea Composite Index 09/17/88 10/02/88 33.73 4.65 1.97 48.06 38.68 1992 Spain Madrid General Index 07/25/92 08/09/92 -20.91 -16.41 0.96 11.83 26.68 1996 U.S. Dow Jones Industrial Average 07/20/96 08/04/96 16.15 3.29 5.26 19.95 44.48 2000 Australia All Ordinaries Index 09/15/00 10/01/00 15.19 2.51 -0.98 -3.30 -6.57 2004 Greece Athens Exchange Index 08/13/04 08/29/04 3.85 -8.81 2.81 36.24 38.02 2008 China MSCI China Index 08/08/08 08/24/08 -10.11 -15.28 -3.39 n/a n/a Mean 6.32 -5.01 1.11 22.56 28.26 Median 9.52 -3.15 1.47 19.95 38.02 Relative Strength3 One Year Six Months Six Months One Year Year Country Stock Market1 Start Date End Date Prior Prior During Following Following 1988 South Korea South Korea Composite Index 09/17/88 10/02/88 48.26 3.07 1.35 30.82 9.99 1992 Spain Madrid General Index 07/25/92 08/09/92 -12.86 -8.08 0.73 1.79 3.82 1996 U.S. Dow Jones Industrial Average 07/20/96 08/04/96 1.30 0.94 2.59 6.69 7.96 2000 Australia All Ordinaries Index 09/15/00 10/01/00 -1.25 4.10 1.05 17.62 31.79 2004 Greece Athens Exchange Index 08/13/04 08/29/04 -4.75 -4.36 0.19 23.38 20.53 2008 China MSCI China Index 08/08/08 08/24/08 7.56 -11.67 -1.55 n/a n/a Mean 6.38 -2.67 0.73 16.06 14.82 Median 0.02 -1.71 0.89 17.62 9.99 1. All data is in local currency terms except for MSCI China Index, which is in U.S. dollars. 2. Relative strength based on stock market index / MSCI World Index ratio. Ned Davis Research, Inc. T_INF0810.1

22 Ned Davis Research Group Please see important disclosures at the end of this document. While economic deceleration global in scope, China has had needed soft landing.

Monthly Data 1/31/1985 - 8/31/2008 Chinese Economic Factors 28 28 27 % Industrial Production 27 Value Added 26 Smoothed Year-to-Year Change 26 25 8/31/2008 = 14.50% 25 () 24 24 23 23 22 22 21 21 20 Consumer Price Index 20 Year-to-Year Change 19 8/31/2008 = 4.9% 19 18 () 18 17 17 16 16 15 15 14 14 13 13 12 12 11 11 10 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 Prime Lending Rate 2 8/31/2008 = 7.47% 2 1 () 1 0 0 -1 -1

-2 Source: Haver Analytics -2

(IE15000) 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

23 Ned Davis Research Group Please see important disclosures at the end of this document. In 2009, watch for renewed economic growth globally, but also the return of inflation and interest rate pressures.

Monthly Data 3/31/1968 - 8/31/2008 Gold vs Real T-Bill Yield

950 Gold Gain/Annum When: 950 900 Gold 900 850 Gain/ % 850 Real T-Bill Yield Is: Annum of Time 800 800 1.2 and Above -2. 4 49. 5 750 750 700 Between 0.2 and 1.2 12. 4 18. 0 700 650 * 0.2 and Below 22. 5 32. 6 650 600 600 550 550 500 500 450 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50

6 Real T-Bill Yield 6 5 5 4 4 3 3 2 2 1 1 0 0 -1 -1 -2 -2 -3 -3 -4 -4 -5 -5 -6 -6 -7 8/31/2008 = -3.7% -7

(DAVIS74) 1970 1975 1980 1985 1990 1995 2000 2005

24 Ned Davis Research Group Please see important disclosures at the end of this document. Despite economic contraction, bond/gold downtrend intact -- inflationary pressures stronger than disinflationary forces.

Monthly Data 3/31/1968 - 8/31/2008 Consumer Price Index (Year-to-Year Change)

14 CPI Gain/Annum When: 14 13 Gain/ % 13 Bond/Gold Ratio Annum of Time 12 12 Above Smoothing 3. 6 58. 7 11 * At Smoothing & Below 6. 2 41. 3 11 10 All Periods 4. 7 100. 0 10 9 9 8 8 8/31/2008 = 5.4% 7 7 6 6 5 5 4 4 3 3 2 2

1970 1975 1980 1985 1990 1995 2000 2005

240 Ratio of Bond Total Return Index to Gold Bullion 240 8/31/2008 = 116.7 220 () 220 200 24-Month Smoothing 200 8/31/2008 = 122.9 180 () 180 160 160 140 140 120 120 Bond/Gold Ratio Rising = Disinflationary 100 Bond/Gold Ratio Falling = Inflationary 100 80 80 60 60 40 40 20 20

(AA812) Long-Term Government Bond Total Return Index / Gold Bullion

25 Ned Davis Research Group Please see important disclosures at the end of this document. Cycles show rallying in first half of '09.

Dow Industrials Four-Year Presidential Cycle Dow Industrials 10-Year Decennial Pattern

25 25 99 99 24 24 96 96 93 93 23 23 90 Decennial Pattern 90 22 22 87 (Based On Daily Data, 1/2/1900 - 12/31/2008) 87 21 21 84 84 20 20 81 81 Presidential Election Pattern () 78 78 19 (Based on Daily Data, 1/2/1900 - 12/31/2007) 19 75 75 18 18 72 72 17 17 69 69 16 mid-'09 16 66 66 63 15 15 63 Trend Is More Important 60 60 14 14 Than Level 57 57 13 13 54 54 12 12 51 51 11 11 48 48 45 45 10 10 42 mid-'09 42 9 9 39 39 8 8 36 36 7 7 33 33 30 30 6 6 27 27 5 5 24 24 4 4 21 21 3 3 18 18 15 15 2 2 12 12 1 1 9 9 0 0 6 6 -1 Trend Is More Important -1 3 3 0 0 -2 Than Level -2 M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D l Election Year l 1st Presidential l 2nd Presidential l 3rd Presidential l (S01642) Year Year Year Year (S01640) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

26 Ned Davis Research Group Please see important disclosures at the end of this document. Election anticipation and outcome could also have an influence.

Dow Industrials -- First Year Presidential Cycle (Republican Was in Office) 6/30/2008 - 9/18/2008 125 125 124 124 123 Current Cycle (2008-2009) () 123 122 Incumbent Republican Party Wins () 122 Incumbent Republican Party Loses () 121 121 120 120 119 119 118 118 117 117 116 116 115 115 114 114 113 113 112 112 111 111 110 110 109 109 108 108 107 107 106 106 105 105 104 104 103 103 102 102 101 101 100 100 99 99 98 98 97 97 96 96 95 Cycle composites equal-weighted, geometric averages of previous cycles 95 94 Based on Daily Data From 1900 Through 2007 94

JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC (STH0821A_C) 2009

27 Ned Davis Research Group Please see important disclosures at the end of this document. Bottom Line

„„ Watch for confirmation of cyclical bear market bottom.

„„ Stock market likely to advance ahead of economic recovery in 2009.

„„ But secular forces to limit equity gains while supporting continuation of China-driven commodity demand theme.

„„ Commodity corrections likely to give way to resumption of long-term uptrends.

28 Ned Davis Research Group Please see important disclosures at the end of this document. Addendum

Ned Davis Research Group Please see important disclosures at the end of this document. Monthly Data 3/31/1986 - 8/31/2008 (Log Scale) NDR Global Balanced Account Model (Constrained) -- Real Time 725 725 Full Date Range 601 (3/31/1986 - 8/31/2008) 601 499 499 % Information 414 Equity Line GPA* Ratio* 414 343 343 Model 9. 4 0. 22 285 Real Time 285 Benchmark 7. 7 0. 00 236 (7/31/2005 - 8/31/2008) 236 196 % Information 196 162 As of 8/31/2008: Equity Line GPA* Ratio* 162 135 Model () = 753.0 Model 5. 6 0. 25 135 112 Benchmark () = 530.6 Benchmark 3. 9 0. 00 112 Model Equity % 8/31/2008 = 40.0% 80 80 70 70 60 60 50 50 40 40 30 30 Dashed Lines Indicate Benchmark Weights 8/31/2008 = 50.0% 60 Model Bond % 60 50 50 40 40 30 30 20 20 10 10

50 Model Cash % 8/31/2008 = 10.0% 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5

(I 04000RT) 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 *Transaction Costs Not Included

A2 Ned Davis Research Group Please see important disclosures at the end of this document. Chart has been modified. Monthly Data 12/31/1988 - 8/31/2008 (Log Scale) Six-Way Global Equity Allocation Model -- Real Time 1426 1426 Full Time %Gain/ Information Real Time %Gain/ Information 1200 (Since 12/31/88) Annum* Ratio (Since 5/3/07) Annum* Ratio 1200 1010 Overweights 13. 2 0. 57 Overweights -8. 64 0. 38 1010 850 MSCI World 6. 4 0. 00 MSCI World -10. 72 0. 00 Overweights 850 715 Underweights 2. 5 -0. 37 Underweights -16. 75 -1. 04 715 602 602 507 507 426 426 359 359 MSCI World Index 302 302 254 254 214 214 180 180 151 151 127 127 107 107 90 Underweights 90 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

Pacific Ex Japan Over Over Weight Weight United States

Emerging Markets Market Market Weight Weight Europe Ex UK

United Kingdom Under Under Weight Weight Japan

(I 6000RT) Six-Way Model Recommendations *Transaction Costs Not Included.

A3 Ned Davis Research Group Please see important disclosures at the end of this document. NDR Global Market Index Ranking Four Position Current Previous Weeks Composite Entry Entry Current Gain/ Rank Week Ago Market Reading Date Price Price Loss (%) Chart OVERWEIGHT Ranked 1-3 — Buy/Overweight: 1 1 1 Indice D.C. Bursatil 13.73 06/29/2008 37147.82 38975.28 4.92 I5092 2 2 13 IBB General Index -6.40 09/07/2008 9440.32 9331.77 -1.15 I5026 3 5 3 S&P/TSX Composite -7.56 06/08/2008 14969.55 12912.99 -13.74 I5020 Ranked 4-13 After Reaching Ranks 1-3 — Hold/Continue to Overweight: 4 3 2 IGPA Index -15.90 06/22/2008 14706.88 12772.98 -13.15 I5022 8 4 5 Colombo Exchange Index -26.37 03/23/2008 2536.18 2250.32 -11.27 I5078 PREVIOUSLY OVERWEIGHT NONE PREVIOUSLY UNDERWEIGHT Ranked 14-29 After Reaching Ranks 30-42 NONE UNDERWEIGHT Ranked 30-39 After Reaching Ranks 40-42 — Continue to Underweight: 33 32 30 Warsaw WIG Index -58.15 01/20/2008 47128.67 38360.99 -18.60 I5068 35 37 38 BSE 100 -60.72 08/31/2008 7621.40 7285.77 -4.40 I5042 38 40 41 Athens Exchange Index -65.39 06/22/2008 3619.11 3209.26 -11.32 I5038 Ranked 40-42 — Sell/Underweight: 40 39 32 Helsinki HEX General -68.27 04/20/2008 9446.89 7753.71 -17.92 I5032 41 42 33 Jakarta Exchange Index -68.55 09/14/2008 1804.06 1891.73 4.86 I5044 42 41 42 ISEQ Overall Index -88.62 07/01/2007 9306.25 4136.32 -55.55 I5046

Full Rank Four Developed Previous Weeks Market Current Rank Week Ago (**) Market Country Composite Price Chart 1 1 1 Indice D.C. Bursatil Venezuela 13.73 38975.28 I5092 2 2 13 IBB General Index Colombia -6.40 9331.77 I5026 3 5 3 ** S&P/TSX Composite Canada -7.56 12912.99 I5020 4 3 2 IGPA Index Chile -15.90 12772.98 I5022 5 6 10 ** Swiss Performance Index Switzerland -22.04 5898.23 I5082 6 10 6 ** KFX Copenhagen Denmark -22.23 398.80 I5030 7 11 8 ** S&P 500 Index U.S. -23.55 1255.08 I5090 8 4 5 Colombo Exchange Index Sri Lanka -26.37 2250.32 I5078 9 7 7 Johannesburg All-Shares Index South Africa -27.39 25402.11 I5072 10 18 17 Bovespa Index Brazil -27.42 53055.38 I5018 11 9 11 ** London FTSE 100 U.K. -27.78 5311.30 I5088 12 14 9 Bolsa Index Mexico -29.13 25701.03 I5056 13 17 23 ** Paris CAC 40 France -33.90 4324.87 I5034 14 15 22 ** Frankfurt Xetra DAX Germany -34.64 6189.53 I5036 15 13 4 ** OBX Stock Index Norway -35.78 320.70 I5062 16 8 14 ** NZSX 50 FF Gross Index New Zealand -37.16 3187.13 I5060 17 25 35 ** Madrid General Index Spain -40.12 1238.18 I5076 18 22 21 ** Stockholm All-Share Index Sweden -41.20 268.01 I5080 19 12 12 ** Amsterdam AEX All-Share Netherlands -41.65 590.36 I5058 20 19 19 ** TOPIX Index Japan -42.05 1149.12 I5052 21 21 36 ** Brussels Bel-20 Index Belgium -42.17 3052.83 I5016 22 31 31 Merval Index Argentina -44.57 1662.52 I5010 23 16 26 Seoul Exchange Index South Korea -44.78 1455.78 I5074 24 20 25 ** All Ordinaries Australia -45.53 4840.70 I5012 25 28 28 ** Straits Times Singapore -46.96 2559.07 I5070 26 24 34 ** Milan MIBtel Index Italy -48.34 21227.00 I5050 27 33 15 Prague PX-50 Index Czech Republic -48.60 1316.20 I5028 28 26 24 ** Austrian Traded Index Austria -50.72 3212.98 I5014 29 30 16 Mishtanim 100 Israel -51.90 836.20 I5048 30 27 29 Budapest Exchange Index Hungary -53.76 19062.34 I5040 31 38 39 ** Hong Kong Hang Seng China -56.19 19327.73 I5024 32 36 40 Lima Exchange Index Peru -57.88 11841.43 I5064 33 32 30 Warsaw WIG Index Poland -58.15 38360.99 I5068 34 23 18 Bangkok SET Index Thailand -59.50 624.83 I5086 35 37 38 BSE 100 India -60.72 7285.77 I5042 36 35 37 Kuala Lumpur Composite Malaysia -60.81 1025.70 I5054 37 29 27 Manila Exchange Index Philippines -64.05 2462.79 I5066 38 40 41 ** Athens Exchange Index Greece -65.39 3209.26 I5038 39 34 20 Taiwan Trade-Weighted Index Taiwan -65.69 5970.38 I5084 40 39 32 ** Helsinki HEX General Finland -68.27 7753.71 I5032 41 42 33 Jakarta Exchange Index Indonesia -68.55 1891.73 I5044 42 41 42 ** ISEQ Overall Index Ireland -88.62 4136.32 I5046 ** = Developed Market Real-Time Performance Results 8/15/1999 - 9/21/2008 (Weekly Rebalancing); Top Category Has Gained 16.0% Per Annum; Equal-Weighted Universe Has Gained 6.8% Per Annum; Bottom Category Has Gained 7.4% Per Annum

Ned Davis Research, Inc. ICS_1

A4 Ned Davis Research Group Please see important disclosures at the end of this document. NDR Global Sectors - Mean Rank By Sector Mean of Previous Individual Sectors Rank History Rank Week Sector Sector Ranks Ranked Charts 100 100 Health Care 79.9 8 IG38A IG38B 94 72 Insurance 68.1 9 IG42A IG42B 88 33 Food & Beverage 68.1 8 IG34A IG34B 83 38 Automobiles & Parts 62.4 4 IG20A 77 44 Telecom 60.5 7 IG50A IG50B 72 94 Chemicals 59.1 6 IG28A 66 83 Media 58.5 9 IG44A IG44B 61 66 Personal & Household Goods 54.9 8 IG46A IG46B 55 61 Retail 53.9 8 IG48A IG48B 50 55 Utilities 53.2 8 IG54A IG54B 44 77 Technology 48.6 7 IG52A IG52B 38 22 Travel & Leisure 48.4 8 IG26A IG26B 33 16 Banks 43.3 12 IG22A IG22B IG22C 27 88 Oil & Gas 37.9 5 IG32A 22 50 Industrial Goods & Services 36.1 13 IG40A IG40B IG40C 16 27 Construction & Materials 35.5 7 IG30A IG30B 11 11 Financial Services 30.0 10 IG36A IG36B 5 5 Basic Resources 16.2 6 IG24A * = New Overweight or Underweight Performance Results 2/17/1985 - 9/21/2008 (Weekly Rebalancing); Overweight Category Has Gained 15.4% Per Annum; Equal- Weighted Universe Has Gained 8.5% Per Annum; Underweight Category Has Gained 1.1% Per Annum Ned Davis Research, Inc. ICS_44.RPT

A5 Ned Davis Research Group Please see important disclosures at the end of this document. Monthly Data 2/28/1979 - 8/31/2008 (Log Scale) Monthly Data 12/31/1979 - 8/31/2008 (Log Scale) Russell Indices NDR Growth/Value Model 5432 5432 156 156 4330 When Model Large-Cap Mid-Cap Small-Cap % 4330 Reading Is: TR GPA TR GPA TR GPA of Time 3452 3452 * Above 55% 8. 9 19. 2 27. 9 24. 2 143 Russell 3000 Growth Total Return Index / 143 2752 Between 35% and 55% 7. 6 12. 3 8. 2 34. 2 2752 2194 2194 35% and Below 17. 2 13. 0 7. 1 41. 6 132 Russell 3000 Value Total Return Index 132 1749 Buy/Hold 11. 8 14. 2 12. 2 100. 0 1749 1395 1395 121 121 1112 1112 886 886 112 112 707 707 563 Large-Caps = Russell Top 200 Index (Heavy Solid Line) 563 103 103 449 Mid-Caps = Russell MidCap Index (Narrow Solid Line) 449 358 Small-Caps = Russell 2000 Index (Dashed Line) 358 95 95 285 285 Model Reading: 228 228 87 87 Above 55%: Favors Small Caps 181 181 Between 35% and 55%: Favors Mid-Caps 145 Below 35%: Favors Large Caps 145 80 80 115 115 74 When Model Ratio Growth Value % 74 Reading Is: GPA TR GPA TR GPA of Time * Above 45% 5. 4 21. 7 15. 5 42. 8 1 9 8 0 1 9 8 1 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 68 68 45% and Below -7. 5 2. 9 11. 2 57. 2 90 90 8/31/2008 = 59.6% Buy/Hold -2. 2 10. 6 13. 0 100. 0 85 85 62 62 80 80 75 75 Growth/Value Model 8/31/2008 = 52.1% 70 70 90 90 65 65 80 Favors Growth 80 60 60 55 55 70 70 50 50 60 60 45 45 40 40 50 50 35 35 40 40 30 30 25 25 30 30 20 20 20 20 15 15 10 10 10 10 Favors Value 5 5

(AA605) NDR Large/Mid/Small-Cap Model (AA610) 1 9 8 0 1 9 8 1 1 9 8 2 1 9 8 3 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

A6 Ned Davis Research Group Please see important disclosures at the end of this document. Currency Market Relative Strength Ranking Currency Total Rank One Week Ago Four Weeks Ago Market Composite Short-Term Model Intermediate-Term Model Long-Term Model 1 1 1 U.S. Dollar 69.81 50.00 94.44 65.00 2 2 2 Japanese Yen 63.19 83.33 50.00 56.25 3 5 7 Canadian Dollar 25.00 30.00 20.00 25.00 4 4 4 Australian Dollar 22.22 33.33 8.33 25.00 5 6 5 British Pound 19.58 40.00 0.00 18.75 6 3 3 Swedish Krona 18.61 33.33 10.00 12.50 7 7 6 Swiss Franc 16.67 25.00 0.00 25.00 8 8 8 Euro 0.00 0.00 0.00 0.00 Model readings represent the percentage of indicators in the model that are positive scaled from 0% to 100% (100% = all indicators positive); Total Composite is an arithmetic mean of the Short-Term, Intermediate-Term and Long-Term model readings; Model readings are linked to corresponding charts. For example, to access the Daily Euro Short- Term Model chart, click on the "Short-Term Model" reading for Euro. Ned Davis Research, Inc. ICS_2.RPT

A7 Ned Davis Research Group Please see important disclosures at the end of this document. MSCI U.S. / MSCI World Ratio Four-Year Presidential Cycle vs. Current Election Cycle U.S. Dollar Index Four-Year Presidential Cycle vs U.S. Dollar Index Current Election Cycle 7 7 101.1 Presidential Election Pattern 101.1 100.8 (Based on Daily Data, 1/03/1972 - 12/31/2007) 100.8 6 6 100.5 100.5 5 5 100.2 100.2 4 Presidential Election Pattern 4 (Based on Daily Data, 1/2/1979 - 12/31/2007) 99.9 99.9 3 3 99.6 99.6 2 2 99.3 99.3 1 1 99.0 99.0 0 0 98.7 98.7 -1 -1 98.4 98.4 -2 -2 98.1 98.1 -3 -3 97.8 97.8 -4 -4 97.5 97.5 -5 -5 97.2 97.2 -6 Trend Is More Important -6 Than Level 96.9 Trend Is More Important 96.9 -7 -7 Than Level l l l l l l l l l 1st Presidential 2nd Presidential 3rd Presidential Election 1st Presidential 2nd Presidential 3rd Presidential Election Year Year Year Year Year Year Year Year 92 9/19/2008 = 77.74 92 100.8 100.8 91 91 MSCI U.S. Index / MSCI World Index 90 90 99.9 99.9 (Current Election Cycle) 89 89 99.0 99.0 88 88 98.1 98.1 87 87 86 86 97.2 97.2 85 85 96.3 96.3 84 84 83 83 95.4 95.4 82 82 94.5 94.5 81 81 93.6 93.6 80 80 79 79 92.7 92.7 78 78 91.8 91.8 77 U.S. Dollar Index 77 90.9 90.9 76 (Current Election Cycle) 76 75 75 90.0 90.0 74 74 89.1 89.1 73 73 9/19/2008 = 95.35 72 72

l 2005 l 2006 l 2007 l 2008 l 2005 l 2006 l 2007 l 2008 (I 0290) (I 223A)

A8 Ned Davis Research Group Please see important disclosures at the end of this document. Daily Data 9/20/2004 - 9/19/2008 (Log Scale) Daily Data 12/31/1979 - 9/19/2008 (Log Scale) U.S. Dollar Index vs. 200-Day Moving Average U.S. Dollar And Gold vs. Dollar-Gold Rolling One-Year Correlation 91.6 91.6 163 163 9/19/2008: U.S. Dollar Index 9/19/2008 = 77.7 90.1 90.1 152 Dollar Gain/Annum When: 152 U.S. Dollar Index (Solid Line) = 77.74 141 141 88.7 88.7 Dollar-Gold Gain/ % 200-Day MA (Dashed Line) = 74.45 One-Year Correlation: Annum of Time 87.3 87.3 131 131 200-Day MA is Falling Above -0.25 5. 5 41. 8 85.9 85.9 122 122 113 * -0.25 And Below -4. 3 58. 2 113 84.5 84.5 105 105 83.1 83.1 97 97 81.8 81.8 90 90 80.5 80.5 84 84 79.2 U.S. Dollar Index Gain/Annum When: 79.2 5/08/1980 - 9/19/2008 78 78 77.9 77.9 72 72 76.6 200-Day Moving Gain/ % 76.6 Average: Annum of Time 997 997 75.4 Is Rising 2. 2 52. 1 75.4 883 Gold Gain/Annum When: 883 Comex Gold 74.2 * Is Falling -3. 2 47. 9 74.2 781 Dollar-Gold Gain/ % 781 73.0 73.0 691 One-Year Correlation: Annum of Time 691 71.8 Moving average direction based on reversals 71.8 612 Above -0.25 -3. 2 41. 8 612 of 0.5% or greater. 541 * -0.25 And Below 5. 2 58. 2 541 N J MM J S N J MM J S N J MM J S N J MM J S 479 479 2005 2006 2007 2008 424 424 985 985 Gold Futures Gain/Annum When: 375 375 939 11/03/1980 - 9/19/2008 939 332 332 895 895 200-Day Moving Gain/ % 294 Commodity System, Inc. (CSI) 294 853 Average: Annum of Time 853 Source: 260 www.csidata.com 9/19/2008 = 865.4 260 813 * Is Rising 6. 2 55. 4 813 775 Is Falling -5. 2 44. 6 775 9/19/2008 = -0.62 738 738 0.0 0.0 704 Moving average direction based on reversals 704 of 0.5% or greater. 671 671 -0.1 -0.1 639 639 -0.2 -0.2 609 609 581 581 -0.3 -0.3 553 553 -0.4 -0.4 527 527 9/19/2008: 503 503 -0.5 -0.5 479 Comex Gold Perpetual Futures (Solid Line) = 865.40 479 200-Day MA (Dashed Line) = 895.99 -0.6 -0.6 456 456 Rolling One-Year (252-Day) Correlation Coefficient: 435 200-Day MA is Rising 435 -0.7 U.S. Dollar Index Daily % Change vs. Comex Gold Daily % Change -0.7 415 415

(I 241) Gold Futures vs. 200-Day Moving Average (I 207) 1 9 8 4 1 9 8 9 1 9 9 4 1 9 9 9 2 0 0 4

A9 Ned Davis Research Group Please see important disclosures at the end of this document. Daily Data 9/04/1984 - 9/19/2008 (Log Scale) U.S. Dollar Index 1995 - Present U.S. Dollar Index vs. 1979 - 1992 U.S. Dollar Index Weekly Data (Log Scale) S 163 U.S. Dollar Index Gain/Annum When: 163 168.0 118.9 Signals are Generated When Sentiment Indicator Profitable Trades: 80% 156 S (9/04/1984 - 9/19/2008) 156 163.9 Falls Below Upper Bracket = Sell Gain/Annum: 7.9% 116.8 149 NDR Crowd Sentiment Gain/ % 149 159.9 Rises Above Lower Bracket = Buy Buy-Hold Gain/Annum: -2.5% 114.7 142 Poll for US Dollar: Annum of Time Latest Signal 5/21/2007 = 82.36 142 156.0 135 B * Above 1.3 1. 6 25. 5 135 152.2 112.7 -2.1 - 1.3 from Above -11. 2 35. 7 129 S S 129 148.5 110.7 123 -2.1 - 1.3 from Below 6. 2 29. 0 123 144.9 Below -2.1 -5. 5 9. 4 Correlation Coefficient = 0.86% 108.7 117 S 117 141.4 S 106.8 112 S S 9/19/2008 = 77.74 112 138.0 S 107 S S S 107 134.6 104.9 S B 102 S B 102 131.3 103.0 S S 97 B S 97 S S S 128.1 101.2 93 B S 93 125.0 B 99.4 89 B B 89 122.0 B 85 B B B 85 97.6 B 119.0 B 81 B 81 116.1 95.9 B B B 77 77 113.3 B B B 94.2 73 73 110.6 92.5 107.9 105.3 90.9 1 9 8 9 1 9 9 4 1 9 9 9 2 0 0 4 102.7 89.3 Excessive Optimism 9/19/2008 = 2.4 100.2 87.7 3 3 97.8 86.1 95.4 2 2 93.1 84.6 90.8 83.1 1 1 88.6 81.6 86.5 80.1 0 0 84.4 82.3 78.7 77.3 -1 -1 80.3 78.4 1995-Present Dollar Scale Right () 75.9 76.5 -2 -2 1979-1992 Dollar Scale Left () 74.6 74.6 72.8 73.3 -3 -3 71.0 72.0

Extreme Pessimism 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

(DAVIS62) NDR Crowd Sentiment Poll for U.S. Dollar -- Transitional Mode (DAVIS43) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

A10 Ned Davis Research Group Please see important disclosures at the end of this document. Biographical Sk e t c h

Timothy W. Hayes, CMT, is NDR’s Chief Investment Strategist. Tim joined the firm in 1986 and currently heads up the firm’s global and U.S. asset allocation services. He serves as Research Council coordinator and oversees NDR’s quarterly Investment Strategy, writing sections on strategy, asset allocation, U.S. stock market and style allocation, and global allocation. Tim writes the Stock Market Focus, which features top-down stock market perspective, quantitatively based analyses, asset allocation recommendations, and sector rankings. Tim also writes Global Focus, which focuses on the most significant global themes in addressing global asset allocation and the outlook for the world’s various stock markets and global sectors. His team also produces a complementary Global Chart of the Day. Tim is featured regularly on CNBC and Bloomberg TV, and his market commentary Timothy W. Hayes, CMT Chief Investment Strategist is often quoted in The Wall Street Journal and other financial media in the U.S. and globally. He has written a book, The Research-Driven Investor, published in November 2000. He has contributed to several other books, and his research articles have appeared in the Journal of Technical Analysis, Technical Analysis of Stocks and Commodities, and other publications. In 1996, Tim won the Charles H. Dow Award for groundbreaking research in technical analysis. Sponsored by Dow Jones Telerate, the Market Technicians Association, and Barron’s, the award recognizes an outstanding original work that best expounds on the principles of technical analysis.

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