REPORT - WEEK OF 12/27/2004 and 01/03/2005: Usually I close each year with a summary of events from the previous twelve months. This year proves to be the easiest in over a decade of maintaining this newsletter and chronicle. In a nut shell, not much happened in 2004. The market was stuck in a very tight trade range for nearly the entire year.

Of note was the period from August to early September where the I-Wave dropped to Low Risk. If you go back and read the Newsletters from that time frame, you'll find that our Inventory Control Manager, AIM, had us busy buying additional shares of many of the inventory items. As if one was confirming the other, both AIM and the I-Wave were in harmony suggesting that it was time to buy and we'd be doing so with very low risk to the portfolio. Those purchases proved to be well timed and the indexes rose nicely through the end of the year.

I'm still finishing up year end analysis. Most looks pretty good. My retirement account, while up in value for the year did not make double digit gains. The virtual portfolio with 13 ETFs managed a 12.6% gain for the year. In that portfolio gains came in the small and mid cap value funds, small cap growth, utilities, energy, industrials and telecomm. Those sectors carried the rest of the positions which came in with single digit gains. The technology sector fund came in with essentially zero gain. Not one of the 13 sectors had a loss for 2004.

We start 2005 with a higher risk indication from the I-Wave than last year. It started 2004 at 31% Cash for stocks and this week shows. 42% suggested for the same class of equities. While still well below the High Risk level, it does indicate a bit more in the way of general market risk. Three of the four components are Neutral with one being Bullish right now. That said, Relative Valuation is nearing its own Bearish levels. This single component seems to have the best correlation with the market's potential. It's indicating we're at or near an interrim market top. Certainly this first trading week of 2005 indicates a bit of rotation or consolidation. We'll be watching these components carefully over the next few weeks to see if some direction can be discerned.

We've made a start on creating the Small Cap I-Wave and will have more details on that coming soon. Don C. wrote me with information on how small caps are viewed in relation to overall market moves. We'll have to see if some of that interpretation can be worked into the SCI-Wave.

REPORT - WEEK OF 12/13/2004 and 12/20/2004: The year is winding down and if it remains pretty much as is, our Warehouse should have had a tough but profitable year. We've had sales. We've had buys. Not a lot of either, but a few. Some stocks remain below where they started the year while some have had modest recoveries.

Only the Divergence component is currently bullish. It shows that concensus opinion is in favor for good market performance looking out about 2 to 5 months from now. (Note, it has been a month since the Divergence component started giving bullish signals). The remainder of the components are showing moderate risk with their Neutral rankings currently.

Again this week I would like to add a word of caution to those of you AIMing Small and Mid Cap Value and Growth funds. This is based upon the speculative rise in value of these stocks over the last 13 weeks.

So, while we see little of concern in the I-Wave's current readings, we see there is some reason for concern in the smaller cap arena. We have yet to factor in the small cap speculation reading into our IW's overall equation. This is because of a lack of historical data at this point. We have only a year's worth so far. In early 2005 we plan on launching a new I-Wave specifically for Small Cap stocks. We'll then have two separate barometers for the market with each applied to its own portion of the total. This should be helpful for those of you who participate in both portions of this market and might want to shift from one to the other periodically. I don't as of yet know how deep the data base might be for the smaller cap stocks, so don't know if I'll be able to extend back in time as far as the current I-Wave (1982). We'll have to see also if the same exact ranges as the traditional I-Wave are logical for the smaller cap stocks. That remains to be seen.

REPORT - WEEK OF 12/06/2004: While the major U.S. indexes didn't move much overall for the week of 12/06 there was plenty of other activity in the individual issues behind the scenes. Reports of much greater activity at the AIM Equity Warehouses around the world came in at Investors Hub throughout the week.

Risk as measured by our I-Wave remained unchanged this week. Three components moved slightly higher in their own risk categories while one came down. They balanced each other in that regard. Nothing moved far enough to change their risk status. Page down on the I-Wave Page to see the latest graphs of the individual components.

I spent part of the week in Cleveland, Ohio where I was witness to around 70 newly trained nurses receiving their Masters and Bachelors degrees from Cash Western Reserve University's F.P. Bolton School of Nursing. It's nice to see so many bright people choosing Applied Science as a career path. The spread of ages was larger than I had anticipated as was the number of males in the program. This would lead me to believe that continuing education and career changes were part of this story. A few years ago I was also delighted to see so many Bachelor of Science degrees being handed out to women. When I graduated, we had very few women in the sciences.

The week showed decline in the price of crude oil and a nominal rise in the exchange rate of the U.S. dollar. Whether this is consolidation of gains made by currency and commodity traders or a trend reversal is too soon to tell. The close link does give some weight to the belief that energy units are the base of value of many currencies today.

REPORT - WEEK OF 11/29/2004: Another pretty good week for the Warehouse just passed. We had some sales in a few different inventory items and are only a percent or two in price away from a bundle more orders. Almost all inventory rose in value this last week.

I posted a note on our AIM Users Bulletin Board about an additional possible use for the I-Wave. You can read more about the potential of Re-Balancing at Investors Hub. Here's a quick summary in graphic form.....

With the I-Wave still showing only moderate risk, sitting dead center of the Bell Curve's Average Risk range, it looks as though this rally might just be able to sustain itself for a while before our next consolidation. I was surprised that the Energy sector didn't drop and stay down after Crude Oil prices sagged this week. I wasn't surprised to note that Gasoline prices here didn't drop much even with the 10% drop in Crude! How is it that the gas stations manage to raise prices 5 minutes after Crude goes up in price, but they can't seem to get the price back down for weeks after a decline?

Our Warehouse Sales Limit Order book is full and up-to-date. If we're fortunate enough to see prices rise a bit more in the coming weeks, I imagine our Sales and Shipping Departments are going to be very busy. For all you other Warehouse operators, please keep up the good work.

REPORT - WEEK OF 11/22/2004: With the I-Wave centered in its Average Risk range and all four components Neutral in their own ranking, I'd say the markets are pretty well centered on first glance. It might take a more detailed look to see what is happening in this case. While all appears to be rosy, there's some trouble spots developing. It might take some time for them to become pronounced, but it's always healthy to watch for symptoms rather than later hunting for cures.

First up, lets look at what is happening with Relative Valuation. In recent times the average P/E of the Value Line 1700 and their Small/Mid Cap 5000 have been rising. This coupled with the FED allowing their overnight funds rate to creep up slowly is starting to pressure our RV component.

With the rise in values we've also seen more speculative activity. Our Speculation component show continued warming of both the small/mid cap and larger cap stocks.

It had been my hope that the Small/Mid Cap Speculation addition would give us greater understanding of market trends. This now appears to be satisfying my hopes. As the depth of the database develops, we should have a better feel for how large its range is compared to the larger cap stocks we've been monitoring since 1982.

The change in attitude about the markets was nearly immediate starting on Nov. 3rd, but it had actually started to change a bit just prior to the election.

I see very little of concern in the Zeal ! component. While there is some IPO activity we're not seeing huge numbers. The available number of issues to be traded has remained very steady.

We celebrate the Fall Harvest with our Thanksgiving holiday. While at VIEW it's not been a big harvest, we've picked the fruit which had ripened. We've planted seeds with care for future harvests and remain confident we'll see them mature as well. We remain thankful for the industrious efforts of all those employees of all those companies represented in our Warehouse's inventory. I also want to thank all who've generously shared their colective experience of investing and use of AIM on our bulletin boards. Our group remains a calm sanctuary of intelligent investors. Thank you all.

REPORT - WEEK OF 11/15/2004: Sales and purchases were made this week with the overall inventory generally rising in value. It is a continuation of better and more active market conditions since the U.S. elections in early November. The NASDAQ touched briefly above 2100 this week and the Dow managed to rise along with the S&P500.

Of the four components of the I-Wave Relative Valuation and Speculation are the two that have risen first in this short rally. While both show room for the markets to continue to rise, the head room isn't all that large. There's maybe 10% more for the markets to rise before we see the I-Wave's risk indicators start to signal bearishness. That's more than enough of a move for many of my inventory items to have sales. Most are within a few percentage points of selling at this time.

Foreign investing as I monitor with the various non-U.S. Exchange Traded Funds continues to be brisk. I've been watching EPP(farEast less Japan), EWG (Germany), EWJ (Japan) and EWW (Mexico) as proxies for this area. The virtual AIMing of these ETFs shows rises generating sales in recent times.

Our cash reserves are holding up well and have been building slightly in recent times. This trend is a welcome change after so little activity through most of 2004. I hope your own accounts are doing well and that your AIM is true.

REPORT - WEEK OF 11/08/2004: This week started off a bit slow and seemed to be a consolidation period after the election. By Friday it showed a very nice gain overall for the major U.S. indexes. The Index ETFs I follow gave confirmation with sales in IDU (utilities), IJT (small cap growth), IYJ (industrials), IYC (consumer cyclicals), IYM (basic materials), IJJ (mid cap value), IJS (small cap value) and SPY (S&P500 Index) since the elections took place on the 2nd of November. This is a strong and broadly based move.

We are much closer to selling inventory across many business sectors in our own Warehouse as well. So far the I-Wave isn't nervous about the shift in attitude. It will keep close track on the market's mood swings in the future. For those of us who use AIM, it is important to keep both our inventories correctly managed and to watch for surplus cash buildup in our banking operations. Balancing both with the I-Wave's direction should give us good results.

CBK provided the JZV Warehouse with additional cash this week when it had its first sale of shares since starting that holding in August. A fair price was received at $19.96 on 8% of the inventory. This provided the Warehouse with a 15% initial profit on those shares.

The Speculation component again this week shows there's early evidence of a warming of that activity.

Value Line's large and mid/small cap P/E ratios rose again this week to 18.3 and 19.5 respectively. We are also aware that an excessive rise in this measure can stall a market. If interest rates continue to rise while the P/E remains flat, the market can be tolerant of short term rates as high as 6%, believe it or not! After that we cross into the Bearish territory of Relative Valuation. I'd prefer to see interest rates steady out closer to their historic levels of 3% to 4.5% and also hope to have the P/Es continue to improve with healthier earnings.

REPORT - WEEK OF 11/01/2004: With the U.S. Elections behind us it might be possible to see the markets forget some of their fears and move forward. If the last part of this week has been an indicator of direction, the end of 2004 will be nicer than the beginning.

Our faithful I-Wave had given us ample notice that the markets were poised for a move upward sometime in the last quarter. In early September it showed us the green light for investing at Low Risk. Since that time the NASDAQ and S&P500 have moved up nicely. The Dow 30 have not been as good, but may show some better strength post-election.

Relative Valuation along with the other components is in its Neutral range. P/Es remain high, but interest rates offset tht to a degree keeping things under control for now.

Note that the Small and Mid Capitalized stocks from Value Line have shown a steep increase in Speculation in the last two weeks. The larger cap stocks are also following this trend. While not yet out of control, it shows a marked increase in activity.

Divergence rose in the last weeks before the election. It's the jumpiest of the components and well have to watch to see if it settles down in the next few weeks.

Not in a long time have we seen the Zeal component show us much but the slow decline in the number of issues to be traded. Recently we've seen a halt to the drop in issues and maybe this spells the end of that long trend.

We all need to keep close watch on our Limit Orders over the next few weeks. Some of mine have already started to fill. We sold 5% of our IYC Consumer Cyclical Index fund just yesterday. More are coming near their own selling points. We need to also revise our Next Buy prices as sales take place. With the market seemingly waking up for the first time in 2004, it's not time for AIM Users to fall asleep.

REPORT - WEEK OF 10/25/2004: It appears the lawyers are all lining up to see if they can get a piece of any U.S. Election peculiarities come next Tuesday. After all, even if there's not much money in the litigation they will precipitate, there's always the "free advertizing" aspect. All we can hope for is a clean and undisputed election. That might be as futile as hoping the market will go your own way!

So, regardless of weather, GET OUT AND VOTE!

No inventory adjustments have been made at VIEW this week. Our Purchasing and Sales departments both remain on active alert, but the phones aren't ringing and there's nobody at the Shipping docks, either. We're collectively holding our breaths.

With an unchanged profile showing in the I-Wave, we'll just have to wait and see how the election affects the markets next week. Risk is neither low or high, so like Goldielocks, I guess we'll have to assume it's "just right!" This week we saw the P/E ratio of the Value Line 1700 stocks fall back to where it had been at 17.5. This gives a bit of breathing room to the Relative Valuation component before we would see a Bearish reading. All four components remain in their own Neutral range (80% of the data for each).

REPORT - WEEK OF 10/18/2004: All four components of the I-Wave are currently in their own Neutral territories. Since this represents the bulk of the data, the 80% of the bell, it's hard to learn much from it. About all that the tea leaves are telling us is that risk is still below average for the I-Wave, but not by as much as a month ago. The apparent risk is well within the usable parameters of AIM. If we keep our cash reserves in line with what the IW is indicating, we should do just fine.

We picked up a few more shares of PRX this week along with taking the proceeds from selling CHIR and shifting the value to shares of IBB, the Biotech index fund. We also added a small amount to our CGNX position. So, we had two additions and one shift in assets this week.

In looking at some of our remaining holdings it appears that those with foreign exposure in their businesses are doing better than those which are purely domestic. This is interesting. I have also been studying some Exchange Traded Funds that invest in non-U.S. assets. Many of these have done very well in 2004.

I'm also noticing that the telecommunications equipment suppliers are doing generally a bit better than the market as a whole. Since I have holdings in this area still, it is showing improvement as well.

We are impressed with the continuing strength of both govt and corporate bond funds. REITs are also continuing to hold up quite well. This would indicate that the market doesn't believe we'll see a rapid rise in interest rates any time soon. We continue to wait to deploy further cash to these high income producers.

REPORT - WEEK OF 10/11/2004: The debates are finally over as of Wednesday night. Thank goodness! Now all we have to do is get past the darned election. For me, it seems that they shouldn't even start campaigning until Sept. 1st. If they can't convince me in two months, they never are. I never want to again here "....and I approve this message." First it should be "approved" or "approve of." Where's the grammar teachers when we need them. It's like this tee shirt message I saw this week:

So, with all the torment that the electorate has been suffering what is this group doing with their investable cash? Trimtabs.com shows a fairly steady, if not large inflow of money to U.S. domestic mutual funds. Bond plus Income and Growth funds have had small but steady outflows. So, the direction is right for improving markets, but the size of the flows are small enough to not yet drive the market. Here's what they have to say:

I think the Money Pump will start to flow better once the election is behind us and the new administration is decided. Maybe the Oil Pump will also. During the current period of indecision we're stuck with everyone holding their collective breaths.

The I-Wave remains relaxed with a near low risk reading. This seems contrary to the worry that pervades the marketplace. Risk has been below average so much of the time for the last two years that the graph look like it is broken.

REPORT - WEEK OF 09/27/2004 & 10/04/2004: This last week gave all LONG investors a nice boost. It provided liquidity for some of us using the Lichello AIM method by triggering the first in what we can only hope will be a long string of sales.

In my own Equity Warehouse we shuffled inventory around and re-allocated some assets. In our Retirement account we moved to a stronger Equity/Cash position because of excess cash on hand. We did this in conjunction with the recent "low risk" I-Wave reading and that our Technology Fund has been in the doldrums for a while.

I considered making changes to the equity/cash positions in both IBB and IYG as both of those are also somewhat richly endowed with cash. However, neither of those two funds seemed to be at the right time for making such changes. September 30th marked the end of the second full year of my ETF strategy in my retirement account. All of my Retirement Account holdings are available for your study.

I created a new page with ten business sector Exchange Traded Funds and three style type ETFs for your review. Some of these are the same as what I hold in my retirement account. The rest are either other components of the S&P 500 Index or small and mid cap value and growth type indexes. These should help those interested in trying out ETFs get a feel for where they've been since coming on the scene in 2000.

The I-Wave's Low Risk call from a couple of weeks ago seems to be showing some reward so far. That reward is with some penalty as we see the Relative Valuation move to its Neutral range.

Our Speculation component generally lags the markets by a couple of weeks and remains Bullish at this time. If the markets continue to improve, Speculation will move quickly back into its own Neutral range.

The change in attitude can be seen in our Divergence component as sentiment has shifted from being worried about the market to its current more confused status.

Finally, we see very little to be concerned about so far with the IPO Surge Index or what I call Zeal. Although it appears that we may finally have reached a balance between new issues coming to the market and others disappearing, this component is still a long way from its own Bearish territory.

All in all the I-Wave's components are telling us that there's not much to worry about right now beyond the usual. We still have a month before the U.S. presidential elections. The geopolitics of certain fascist groups still hold up their own risk for the markets. High oil prices hold the possibility of slowing economic growth world wide. If we are careful with our AIM investments even these things will do us no harm.

REPORT - WEEK OF 09/20/2004: Today, Tuesday, the FED added another 0.25% to their Fed Funs Rate. This may seem like a big move on top of a lowly rate of just 1.5%, but in reality it is only a small move back toward more normal rates. The Federal Reserve Bank, like all other banks charges what they feel the market will bear. It appears they now think the market can stand 1.75%.

It's not been that often that we've had interest rates rising at the same time we've had a Low Risk environment as described by the I-Wave. Most times we've seen higher risk profiles during times of rising interest rates. This time much depends upon how quickly earnings are growing for business. If earnings rise as rapidly as interest rates, then we could see an extended positive market while the I-Wave remains healthy.

The I=Wave has been below its long term average for so long as to almost be monotonous. Take a look at this graphic to see what I mean. Here we take the previous sum and add to it the current difference between the historic average and current value. This week, for instance, we took the previous sum total of 34.18 and subtracted 10.4 from it. That's because the current I-Wave value is 10.4 points under the long term average of about 41. As recent as July of 2002 the cumulative IW value was over 1000. Now it's nearly back to zero.

Mr Lichello's AIM has guided us well through all of the market's traumas. As long as we don't let our own exuberance take us in unsafe directions AIM should continue to guide us well into the future.

REPORT - WEEK OF 09/13/2004: It would appear that the migratory GREEDY have started to return to the markets. They'd been off on a flight to unknown regions for quite some time. Only occasional SCARED have been seen in recent months. Otherwise the Wall Street Jungle had been very quiet. These sightings have been confirmed by several AIM Users in the last week. Several have reported the return to their AIM Feeding Stations, where the GREEDY gather to replenish themselves. Lucky for the GREEDY that the AIMers are there with supplies picked up over the last 6 months. We wouldn't want them to go hungry!

While value is increasing in several of my inventory items, I can't say there's been any rush to the Sales Dept. My hope is we'll start to see some shift in attitude after Triple Witching is over. Then we need to get through the rest of the election process as well as hurricane season to be ready to get back to more "normal" condiditons for the market.

In the mean time, the bond and stock markets have been competing for investor's money. It may seem odd for this to occur. Interest rates have started to rise and are expected to continue to do so for some time to come. This traditionally has put undue pressure on income vehicles with a loss of liquidity and/or a discount to face value. It started, but the reaction seems to have been too much too fast as there's been a reasonable rebound. In one time frame this could be construed as a dead cat bounce.

In the mean time, we have the I-Wave telling us for the second week that we have a "Low Risk" environment for holding equities. This doesn't mean No Risk, but rather that the down-side risk is low and the upside potential is quite good.

If you feel you have adequate cash reserves for your various equities, consider the idea of postponing your AIM designated trades during this Low Risk environment. It's possible that we will see higher prices when the I-Wave returns to its Average Risk territory.

REPORT - WEEK OF 08/30/2004 & 09/06/2004: I've been busy racing cars for the AIM Team, so haven't been able to follow the nonsense of the Equity Markets the last few weeks. Lucky for me I had Mr. Lichello's ghost watching over the Warehouse. We managed to purchase a bit more JBL for 20.96, and sold lots of IYE at $58.69 while I was busy hustling the race car around Gingerman Raceway's nifty track.

The Team did well in the Sprint Races on Saturday, but we managed to only finish half of the 10 hour enduro in Pete Wilson's Miata.

With nothing settled in the U.S. Presidential Election as of yet, I don't see anyone placing long term bets in the market yet. But, now that most market participants are back from their summer holidays it does seem there's a bit more trading volume. We may see some speculation return to the market with the increase in volume. Speculation is currently giving us a Bullish signal.

Contrary to what is discussed in the traditional Financial magazines and television stations, we're getting a Bullish signal from our Relative Valuation component as well.

Here's what my Retirement Account looks like at this time.

Recently we had a buy in the Biotech Sector and a sell in the Energy Sector. Inside a diversified mutual fun, neither of these transactions would have been possible. Also, AIM would not have made a trade of any kind with such tiny moves. Long term I feel this is going to be an excellent way to manage my retirement account. We've been able to stay with the Lipper Balanced Fund index on a ROCAR basis through most of the time frame since starting this account. There's more than enough cash currently on hand to keep AIM busy buying if the need should arise. You can look over the individual component histories of my retirement plan to see what it is I'm using.

REPORT - WEEK OF 08/23/2004: Not too much to report from the Purchasing Department this week. They all spent money last week, so are now on hold for another month assuming we don't see Low Risk by the I-Wave.

The I-Wave has been nearing the Low Risk level, but so far hasn't crossed the threshold. In the mean time the market has been feeling a bit spunkier. Modest gains were seen in most indexes last week and this week, while choppy, we've seen some small gains again.

Tiffany & Company is being added to the PIC List after being identified with a #5 Timeliness by Value Line. This stock has been on the "Highest Growth Stocks" list for several years in V/L, but this is the first time it's carried such a low timeliness rank. The stock has fallen nicely in recent times but manages to have strong cyclical moves worthy of AIM.

http://stockcharts.com/def/servlet/SC.web?c=TIF,uu[h,a]wahlyyay[df][pb26!e30][vc60][iLk14!Lf14]&pref=G

I'll be occupied with some race car activity this weekend and next. I'll attempt to get I-Wave news posted while not rolling along at 135 miles per hour!

REPORT - WEEK OF 08/09 and 08/16/2004: As mentioned on the I-Hub AIM Bulletin Board (and Therapy Center!) if it weren't for PalmOne's stock performance over the last 13 weeks, the entire I-Wave Risk Indicator would have settled into its Low Risk territory. The continuation of the below average risk trend is now about two years in the making.

Right now one component is in its Bullish zone while two others are on the edge of their own bullish zones. Only one is solidly in its Neutral range - Zeal. With the IPO activity we've seen this year it's not surprising to see this component rise a small amount.

As I've mentioned in the past, it's nice to get a Low Risk signal from the I-Wave, but even better when most of the components are confirming it with their own Bullish remarks. With three of the four right on the edge, we can feel pretty good about our current IW reading.

So, what do we do with this information? If nothing else, it should help to confirm any Buy signals we've been getting from AIM in recent times. Those dollars being spent now are at considerably less risk than at the beginning of the year. Here's what's been happening at Veale International Equity Warehouse:

Bought 23% more CGNX at $25.22
That used up a tidy sum of our Cash Reserves making all those purchases. There's still a sizable reserve left for further buying should time, price and temptation combine to overwhelm the Purchasing Department.

APCC, a PIC List Selection (and a stock I also own) returned to the #5 Timeliness slot within Value Line this week. Value Line considers this very "out of favor" for the next 12 months. However, it's been our experience that #5 Timeliness usually offers us good value when buying high growth stocks. Let's see how the PIC APCC account is doing right now:

You can see that AIM's been putting some cash back to work here on a monthly basis. It might take a while to take some profit here, but we can easily see that much of the risk of buying this stock as a new holding is now abated. AIM was wise enough to take profits when V/L was still considering APCC more timely. AIM's been busy adding to the position just when V/L announces that its no longer a timely stock. I think they are out of phase, personally!

I completed some more detailed I-Wave history graphs for the web site. I took 7 year segments of the data base and isolated them graphically. You can now look at the I-Wave in the periods of 1982 - '88, 1989 - '95 and 1996 - '02. Of course you can always look at the current data as well here in the Newsletter. Please let me know if this way of viewing the 22 years of history is beneficial.

<<<<<----------'AIM For Financial Stability!'---------->>>>
Tom Veale

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I-WAVE - Week of 08/02/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______33% Down 2 - Average Risk Stock Mutual Funds (Diversified)________22% Down 1 - Average Risk IW Risk Oscillator____________________"-2" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 08/02/2004: I'm very lucky. Over ten years ago I started posting information about AIM on the partially public bulletin boards of the Prodigy network. It was slow at first, but there came to be a regular group of readers and posters that shared ideas on Mr. Lichello's AIM concept and possible investments to use with it. At that time I also started to publically discuss my I-Wave and its use as a risk indicator in conjunction with AIM. My, how time flies!

I don't know how many times I've read or heard from the various participants, "Your bulletin board seems to attract really good people and there's almost never any bickering." After sampling other bulletin boards, I have to agree that we've collected a very good group of quite civil people. Civility has a lot to do with the character of the individuals who display it. When civility breaks down, the civil people start by attempting to ignore the "food fight" mentality of those who spread insults rather than ideas. Following shortly afterward, the interested parties just give up and go away, not wanting to be hit with a wad of Mashed Potatoes themselves.

Well, what's the damage there? It's much like when one window is broken in a neighborhood and is left unrepaired. It acts as an invitation to others to throw stones. Pretty soon all the civil people move out. That's sad, because there's then no more exchange of ideas by those who keep civil discourse and shared ideas as part of their daily activity.

As I said, I'm very lucky. Thank you all for making it worth while.

The I-Wave is still slowly falling back toward its Low Risk point. We see a drop of two points this week with a month's worth of decline in risk prior to this. All of the components are currently in their own Neutral ranges. Speculation remains moderate in both the larger and smaller cap stocks.

We added a new inventory item this week. While a stock that we've been nursing along for a while had been signalling for a Buy, we took the value of that purchase and started a new position in Christopher & Banks (CBK). In the future when we are getting sell orders in either this new stock or the other one, we'll be selling the other and phasing out of it. CBK will receive the proceeds from those sales. The choice of starting this new position now was made based upon following the stock in our PIC example portfolio for a while. Right now CBK has been in the Buy mode in our hypothetical model, so we took that as a good sign to bet started.

There's not much else to report this week. I have updated all the I-Wave Component Graphs for those of you who are curious. As you'll see, all are in the lower half of their own data fields. This is generally good news for us for the future.

Note below the updated "Readership" analysis of the aim-users.com web site. The Canadians are a growing part of our regular readers and contributors. Thank you all!

<<<<<----------'AIM For Risk Controlled Growth!'---------->>>>
Tom Veale

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I-WAVE - Week of 07/26/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______35% Down 1 - Average Risk Stock Mutual Funds (Diversified)________23% Down 1 - Average Risk IW Risk Oscillator____________________"-1" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Bullish Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 07/26/2004: The week brought on some AIM activity for VIEW. Buys were made in several accounts.

Bought 17% more ADCT at $2.25
Bought 22% more GENE at $3.93
Bought 10% more CGNX at $28.04
Bought 7% more IBB at $63.88

There are other stocks that are calling for more purchases but I'm attempting to stick control the Purchasing Department at one purchase per inventory item per month.

Again this week the Speculation component of the I-Wave is showing bullishness. This is because there's not much in the way of gains in the last 13 weeks and losses actually are in greater number. This trend is as true of the small and mid cap sectors as it is of the larger cap markets. Even "value" sectors are suffering.

At 35% Cash indicated this week for the I-Wave Stocks, we're well below the average value for stocks. While not "Low Risk" yet, the market is offering us some interesting possibilities in some sectors. It's interesting to note that several of my "biotech" stocks have been asking for more AIM buys right when the "biotech index" ETF was also requesting attention. This confirmation that it's a "sector" rotation and not just an individual company problem gives extra confidence in making AIM buys.

In absolute terms, the I-Wave risk has been declining for a long time.

We've had "below average" risk for essentially two years now. That's the good news. The bad news is that there's also been very little speculative activity and therefore not much in the way of a trading range for AIM. We're just going to have to wait for more speculation to return to the market. Then we'll see some bigger price swings with which to work.

Are you able to control your urges to spend too quickly? Are you controlling your urge to flee the markets completely? Maintain your vigilance. Review your equities frequently to assure yourself they are still suitable for your portfolio. Let AIM help when it can. Over the years I've found quiet markets to be the most frustrating - far more so than even bear markets.

<<<<<----------'AIM For Peace Of Mind!'---------->>>>
Tom Veale

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I-WAVE - Week of 07/19/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______36% Down 1 - Average Risk Stock Mutual Funds (Diversified)________24% Down 1 - Average Risk IW Risk Oscillator____________________"0.0" - Steady Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Bullish Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 07/19/2004: It would appear that there's just no such thing as "good news" any more. July doesn't want to give LONG investors anything to cheer about. In Value Line's Best Performers list, the "best" this week is up just 54.9% in the last 13 weeks while the "worst" is down over 65% in the same time frame. There's been enough carnage already to shift the I-Wave's Speculation component to finally show an over-sold condition. While it may not be the end of this current down trend, it does indicate a "bullish" time for investors this week.

Note how the Speculation component has become much less volatile in the last 12 months. It has been moderate in its measure of speculation and also much less volatile. This hasn't been particularly good for AIM market traders. You can view the rest of the IW component to see how they are doing as well. Please note that one is bullish while three remain neutral. If we look at speculation in the small and mid capitalization arena we find that it, too is moderate. So, where's the money flowing to these days? From what I've been able to gather, stock funds and foreign funds have been getting well below their average weekly inflows that were present since the beginning of the year. This lack of "new" cash for equity buying is putting a damper on the market. As I've stated before this will probably continue through the elections in November. It would appear that "new" cash is being accumulated in money market funds for now.

What are the benefits of such a market? Well for the investor looking for bargains, it offers a nice chance to do some bottom fishing. This week's Barrel Of Fish from Value Line include 40 stocks that are down between 36% and 54% in the last quarter. It is interesting to note that over half of the 40 are "technology" related stocks. Semiconductor manufacturers, software providers, computer component suppliers, etc are all well represented. Over my years of following this "Worst Performers" list in Value Line, any time I've seen ten or more stocks from the same sector it's meant there's been a serious sell off and that sector has been "over-sold." So, look to the Tech sector for relative bargains right now.

Another aspect of what we've been experiencing recently is that we have subdivided the market again. We have the NYSE doing pretty well on the one hand while the NASDAQ statistically having bad days one after another. Advances have held up well on the NYSE while on the NASDAQ they have been bearish for weeks. This last week Declining stocks outnumbered Advancing stocks by over 2:1. The same is true with the new highs and lows. NYSE is still posting more new Highs while the NASDAQ is posting more new Lows. How long this current pendulum swing will continue is not known. The last time we had Speculation this low, we had a nice 10% NASDAQ rally before the latest correction. Look back to earlier this year to see this.

The recent set-back in Technology has been enough to trip our first accumulation of extra shares. We purchased more of IYW (technology index fund) on July 15 at $43.79. We're ready with more cash should the market be nice enough to dip deeply and let us buy more.

<<<<<----------'AIM For Prosperity!'---------->>>>
Tom Veale

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I-WAVE - Week of 07/12/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______38% Up 1 - Average Risk Stock Mutual Funds (Diversified)________25% Unchanged - Average Risk IW Risk Oscillator____________________"+2" - Rising Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 07/12/2004: Of the dozen or so business sectors that I follow, only Energy and Basic Materials have managed to rise at all in the last two weeks. Not that the others are down significantly, just that they're all down. This is also reflected in the S&P500, the NASDAQ Composite and Dow 30 with lower closes for each of the last two weeks. Not a very glamorous start for July!

<<<<<----------'AIM For Portfolio Risk Management!'---------->>>>
Tom Veale

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I-WAVE - Week of 07/05/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______37% Up 2 - Average Risk Stock Mutual Funds (Diversified)________25% Up 2 - Average Risk IW Risk Oscillator____________________"+2" - Rising Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Bullish (Click for further EXPLANATION)

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REPORT - WEEK OF 07/05/2004: Another week with not much happening at the Equity Warehouse. I've not had a trade since around the middle of June. This week we saw a significant change in attitude after Mr. Edwards was selected as the running mate for Mr. Kerry. Not much of a business "vote of confidence" I'd say. Well, we've known that the uncertainty of the elections has been the main cause of the stagnation of the markets. Because of this refocus on the election, investors are placing their bets and rebalancing their portfolios. Apparently Technology isn't where they want their money at this time.

A surprise for me was that the bond funds strengthened at the same time. I guess we could figure a stronger bond market with the stock market weaker, but after all the cautionary talk about rising interest rates and inflation, it seems a bond rally is a bit misplaced. Maybe the realization that it's going to take a year or two to get short term rates back to more typical levels is why bond fund investors are willing to risk some money right now.

With most of the I-Wave's components in their own Neutral territory I'm afraid it's not of great predictive value. Market risk is moderate by historical measures. There's lots of uncertainty and that seems to be keeping the enthusiasm in check. Speculation in both the larger and smaller cap stocks remains quite moderate. Hardly any exuberance at all - Rational or Irrational!

<<<<<----------'AIM For Portfolio Risk Management!'---------->>>>
Tom Veale

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I-WAVE - Week of 06/28/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______35% Down 1 - Average Risk Stock Mutual Funds (Diversified)________23% Down 1 - Average Risk IW Risk Oscillator____________________"+1" - Rising Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Bullish (Click for further EXPLANATION)

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REPORT - WEEK OF 06/28/2004: At the close of last week we saw the NASDAQ above 2000 for the first time in about 10 weeks. Do we dare call this a Summer rally? The Dow 30 has been stalled for couple of weeks. Underneath the big indexes we see some better news. Advances lead decliners last week by almost a 2:1 margin on both the NASDAQ and the NYSE. New Highs have also increased steadily with New Lows receding. So, there's underlying health that doesn't seem to want to expose itself in the major indexes.

Even with this current strength there is very little measurable speculation across the entire spread of company capitalizations. Some speculative money has been going into IPOs (initial pubilc offerings), but the dollar volume hasn't been great enough to affect the broader markets.

We continue to read only news in the weekly publications as the day to day is so loaded with trivia. I'm beginning to think that even weekly news is possibly more noise than signal. If I come across what I feel is a good publication for investors I'll bring it to your attention.

<<<<<----------'AIM For Portfolio Profits!'---------->>>>
Tom Veale

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I-WAVE - Week of 06/21/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______36% Up 4 - Average Risk Stock Mutual Funds (Diversified)________24% Up 3 - Average Risk IW Risk Oscillator____________________"+2" - Rising Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Bullish (Click for further EXPLANATION)

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I-WAVE - Week of 06/14/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______32% Unchanged - Average Risk Stock Mutual Funds (Diversified)________21% Unchanged - Average Risk IW Risk Oscillator____________________"-1" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Bullish (Click for further EXPLANATION)

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REPORT - WEEK OF 06/14/2004 AND 06/21/2004: A mix of buys and sells perked up the mood at VIEW in the last two weeks. Energy has been doing well while some technology stocks have been fading. I-Wave risk remains relatively low, but as you can see from the direction this week, it's starting to rise a bit. We'd had six weeks of negative Oscillator values prior to this week's change. That's been a pretty good indicator that risk has been declining. Now we're seeing at least a one week reversal. Most of that came from the increase in the 13 week Treasury rate jumping to over 1.4% this week.

We continue to wait out political and social events of this summer and fall while the market seeks to find direction.

<<<<<----------'AIM For 30% LIFO Gains!'---------->>>>
Tom Veale

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I-WAVE - Week of 06/07/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______32% Unchanged - Average Risk Stock Mutual Funds (Diversified)________21% Unchanged - Average Risk IW Risk Oscillator____________________"-2" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 06/07/2004: While this week has shown a bit more volatility than we've seen in recent weeks, it's hard for the investor to discern what meaning this might have for the market. I mentioned on the PIC List Bulletin Board this week that there's several worries around. The FED's anticipated move, earnings revisions, "bad guys" doing bad things. Phew! So many distractions!

One of the interesting things Don Carlson (An AIM board regular contributor) and I discussed while meeting recently was the lack of "sector rotation" after the market bottomed in late 2002. He had lots of "Fasttrack" data on hand so we looked at a broad cross section of the markets by sector and found that since the bottom, there's been amazing positive correlation of the majority of the sectors. I've never read of this before, but my theory is that when there's a major market tumble like we went through from 2000 through 2002, all the various sectors' cycles are "reset" to their low points at the same time.

If this is so, it will take time for them to start to fall out of phase with each other as their own business cycles return to normal. Since those cycles aren't all exactly the same period, we'll again see some rotation starting to occur as the market continues to recover. I think I've observed the first of this with a divergence in Biotech vs Tech trade patterns. We'll be watching this more closely over the next 6 months.

The I-Wave is at a relatively calm point in its range. It would appear that we could have a successful rally from these levels without extending the I-Wave into the High Risk territory. Don Carlson was kind enough to confirm the I-Wave's Average value along with it's 10% highest and lowest values. He also ran the top and bottom 20% and found that it coincides with the same values as standard deviation of +or- 1.4. Those values if I remember correctly fell at around 34% and 47% I believe (should have written them down). Don's done some testing using the I-Wave as a filter for AIM with some positive results.

Meetings like this are always a positive thing for me. It brings home just how important it is to have good communication and good explanation. I have a Fortune Cookie message taped inside my pocket secretary (what people used before palm pilots) that says, "Simplicity and clarity should be your theme." Well, I hope this newsletter has stayed with that suggestion. All I can say is I clearly and simply have enjoyed getting acquainted with so many of the AIM users over the years. Thank you.

<<<<<----------'AIM To Ignore The Minutia!'---------->>>>
Tom Veale

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I-WAVE - Week of 05/31/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______32% Up 2 - Average Risk Stock Mutual Funds (Diversified)________21% Up 1 - Average Risk IW Risk Oscillator____________________"-3" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Bullish Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 05/31/2004: A rather short trip to the Low Risk territory didn't hurt the averages last week, but I guess it was just too good. So, now the I-Wave has returned to the Average Risk area if just barely. I'm still not optimistic about any sustained rally until after the U.S. elections in November. After that we'll have to see what's up.

In the meant time we will depend upon AIM to continue to guide our purchasing and sales efforts. Not much has been happening out in the Warehouse again this week. This makes me frustrated and I'm sure all of you feel similar feelings.

Essentially all my accounts ended May with a slight amount better value than the start. All are up slightly for the year as well. Each has also given back some value since reaching their peaks earlier this year. I'm beginning to feel like I could take a 6 month vacation and not much would change while I was away. I have my Limit orders placed should there be either a rally or decline take place, so there's not much for me to do other than take care of paper work while I wait.

I've also noticed a slowing down in the posting on the AIM bulletin board. This has occurred at other times when the market has been stalled. There's not much reason to post if we can't either complain or brag!

Individual stocks in my account have shown the most movement as would be expected. My various Exchange Traded Funds shows remarkable resilience during the month of May. Representative of how the accounts I manage have done would be my IRA. You can look at the most recent results at my Exchange Traded Funds page. Even though each component moved quite a bit, only the one bond fund tripped a Buy order. Overall, the pace was very steady as shown by this graphic

My whole idea for the IRA's makeup is to never get forced into a losing position. If I never lose money, then it's much easier for the account to do well over time - even if it's not making money very quickly. This is a case of slow and steady being a good overall plan. I'm looking forward to a time when we can put more of the accumulated cash reserve back to work in the market.

CENTER> <<<<<----------'AIM, The Investment Business Plan!'---------->>>>
Tom Veale

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I-WAVE - Week of 05/24/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______30% Down 3 - Low Risk Stock Mutual Funds (Diversified)________20% Down 2 - Low Risk IW Risk Oscillator____________________"-6" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Bullish Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 05/24/2004: For the first time in about a year, our beloved I-Wave is giving us a Low Risk signal. While not all of the IW components are in agreement that this is a Bullish period, they all are at the lower end of their own Neutral ranges. So, we can safely assume that AIM's been giving us proper instruction with its advice of Buying in recent weeks. Please check out the latest I-Wave Components to see how each piece is doing.

Declining stocks' losses exceeded advancing stocks' gains last week. This was the driving force that took the IW's Speculation component into its own Bullish range.

This situation doesn't happen that often, but has always been a good sign for things to come. It is a method of measuring just how much selling pressure the market has suffered. The selling burden has been greater than the buying enthusiasm can withstand.

Here at VIEW, we've only had one extra buy this week. We added 13% to our GENE position at $4.50. Many of the rest of our equities' prices move upward during the week and away from their own Next Buy prices. This is the first week in some time where the major indexes moved upward together. While not yet a rocket ship, all added to their indexes.

It will be interesting to see if the I-Wave follows through with a second week of Low Risk for us this coming week. While this week's statistics are better than a week ago, I don't think they're enough better to lift the IW back to its own Average Risk range. This is good news for AIM users. Maybe we'll have a chance to put a bit more of our cash reserves back to work before the next rally.

>>>>>----------'AIM For "Rational Exuberance!'---------->>>>
Tom Veale

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I-WAVE - Week of 05/17/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______33% Down 4 - Average Risk Stock Mutual Funds (Diversified)________22% Down 3 - Average Risk IW Risk Oscillator____________________"-5" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

I-WAVE - Week of 05/10/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______37% Down 8 - Average Risk Stock Mutual Funds (Diversified)________25% Down 5 - Average Risk IW Risk Oscillator____________________"-3" - Falling Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Neutral Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 05/10/2004 and 05/17/2004: The rather quick reversal of the I-Wave's direction might be of surprise to some of you. However, we'd noted that it was our Divergence component that had been driving the IW crazy for several weeks. It has shown very few new Lows and lots of new Highs for literally months. Then at the beginning of March it started to reverse itself. We went from having over 1000 new Highs (with less than 100 new Lows) to having nearly the reverse now.

We now have a massive number of new Lows with just over 100 new Highs for last week. Surely this is at least an early sign that the markets have been overdoing the Sell Off thing. If you look at the I-Wave graph you can see that for the previous 12 months "volatility" has been relatively low for it. Recently, however, we're starting to see bigger swings in the IW's range. If volatility increases, so should the frequency of our AIM trading.

An article in this week's BARRONS magazine alludes to the massive percent of average daily volume that's now being controlled by computer programs. They have some neat new names for Program trading if you care to read about them. The estimate is that nearly 40% of an average day's trading is being done as "program trading" by computers. One of the subsets of Program Trading is called "algorithm" trading. Some of this stuff sounds remarkably familiar. Call it computerized arbitrage. The theme of the article is that all this computer generated trading is creating so much background "noise" that it's very difficult to see what long term investors are doing. Maybe it doesn't matter, long term investors are nearly a minority now anyway!

Speaking of short term trades, on Monday I bought a very large percentage more shares of DIGL at $1.31 and yesterday we were able to sell some of those shares for $1.90 for a healthy 45% LIFO gain. Too bad it's not always that easy. Other recent trades include:

Bought 14% more VTSS at 4.83

To summarize the year so far, I'd say that I spent the first two months doing some selling. I spent the second two months cooling my heels waiting for the market to do something. Now I've spent much of the month of May adding to my various positions.

It's that time of year when I start to play around with automobiles. Sometimes they're my own but sometimes they're cars owned by good friends. I helped a friend with his gorgeous Jaguar XKSS get his carburetors set for the season. While at it we found several little problems that needed to be addressed. I've been busy preparing my own race car for its first season. I've also been busy making sure the Piloto is ready for all the activity. It's been several years since I drove competitively so I need to get my license renewed. This involved getting a complete physical. I've not had one in a couple of years. It's been that long that I've included a physical workout to my daily routine. It seems that it's paying off. My blood pressure is down along with all sorts of blood chemistry things that had been hovering near their respective 'red zones." No medicines or drugs, just acting as my own personal drill instructor has brought my cholesterol down from 222 two years ago to 180 now. The rest of the blood chemistry followed suit. I don't think my cholesterol had been below 200 in over 15 years!

All that discussion is a prelude to my apology requesting everyone's forgiveness for missing last week's Newsletter! Maybe I'm getting in shape, but I seem to be getting lazier relative to the newsletter. I'll attempt to get it updated weekly for the rest of the summer or at least warn you when I'm not!

<<<<<----------'AIM To Moderate Market Risk!'---------->>>>
Tom Veale

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I-WAVE - Week of 05/03/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______45% Up 5 - Average Risk Stock Mutual Funds (Diversified)________30% Up 3 - Average Risk IW Risk Oscillator____________________"+4" - Rising Risk Historical Average since 1982 - individual stocks = 41%, mutual funds = 27% All Time High - individual stocks = 74%, mutual funds = 49%, Oscillator = +15; week of 03/20/2000 All Time Low - individual stocks = 18%, mutual funds = 12%, Ocillator = -3; week of 10/21/2002 I-WAVE COMPONENTS: Relative Valuation ____ Neutral Speculation ____ Neutral Divergence ____ Bearish Zeal ____ Neutral (Click for further EXPLANATION)

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REPORT - WEEK OF 05/03/2004: Are you feeling a bit confused about the market's condition and direction? Are you having trouble second guessing what's next? Well, remember that our I-Wave's "Divergence" component has been showing us a Bearish signal for several weeks now.

As you can see, it didn't feel any better this week than in the last few. For over a year we saw nothing but Bullish signals from this component and now the Wall Of Worry seems to be crumbling in on the Short Term Traders. Part of the reason is the U.S. Presidential Election in November, part is the unrest in the Middle East. Part is concern about the future of interest rates. Is there any wonder about the confusion when one thinks about Television News? Well, these short term traders need to turn off their TV sets for the next 12 months and their blood pressure, cholesterol and other stress related metabolics will drop back into normal range. Those of you who've read here over the years know that I recommend "News Holidays" frequently. I think this is a great time for one. Actually, if you find you like it, you may want to go on holiday from the broadcast news permanently. Why is it that radio news doesn't seem as upsetting as what comes across the TV? So, you're not alone in feeling confused. Most of the market participants are as well.

A new company has shown up as a PIC List Candidate. Swift Transportation, a trucking company, makes the list as of last week. We've added it to our hypothetical portfolio at $17.39/share with $6000 allocated to the stock and $4000 set aside for its Cash Reserve (graphs will show up soon). I've never been a fan of the truck transport industry as an investment area. There's darned few good trucking companies. Even the good ones' stocks have severe reactions to fuel prices. Well, if anything can tame them, AIM should be able to. Remember, to even make it onto the PIC List companies have to have had ten years of exceptionally good performance. Always study any new idea carefully before investing.

As of a week ago, the PIC list overall was ahead of the S&P500 for the year and positive for the Year To Date. This last week saw several stocks drop to their individual buy points. Overall the portfolio remains substantially profitable boasting an overall profit of better than 30% for its life.

It seems to me that AIM is again giving us better advice than we seem to be able to find in either the financial publications or the television business shows. It had us selling heavily into the rally that many stocks had last year. It had us save our cash for a downturn of substance rather than wasting it on miniature dips. Now it's starting to advise us to start to think about adding to our positions as everyone else worries. Last week, for instance V.I.E.W. was selling shares of the biotech index fund, IBB, at $84.85. This week it's retreated to $77.00. Thank you AIM! Last week we added a few more shares of a corporate bond fund to inventory, CHY, at $14.89. This week it's at $15.18. Thank you AIM! Oh, if life were only so simple!

<<<<<----------'AIM For Steady Portfolio Growth!'---------->>>>
Tom Veale

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I-WAVE - Week of 04/26/2004 Suggested Cash Reserve For New AIM Accounts Using: Individual Stocks (& Sector Funds)_______40% Down 3 - Average Risk Stock Mutual Funds (Diversified)________27% Down 2 - Average Risk IW Risk Oscillator____________________"+