Market Bias Forecast

July 2007

Copyright 2007, A New Story Foundation, Inc

All rights reserved.

What is a Market Bias Forecast?

• In researching social instability, A New Story Foundation has developed a highly successful method for forecasting market movement in several key commodities and equity indices.

• Market Bias is the composite outlook of a quantified estimate of bullish and bearish investors’ perspectives.

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

Market Bias

• Using a symbol set to represent the collective mood of bullish traders, a story is compiled for the market movement from that perspective.

• Strength of change is estimated for the entire month and for each time segment.

• The procedure is then repeated for the bearish perspective.

• Strength numbers for both bulls and bears are averaged. A price chart / price range is derived from these composite numbers.

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

July 2007 – Summary

• Theme: Extremely volatility!• Crude soaring and then down, The Stock

Market falls hard after the 4th of July holiday, the US Dollar joins it within a week.

• We have modified our forecasting method which could double the previous accuracy to at least 2 out of 3 forecasts 90%+ correct (from 1 out of 3).

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

Crude Oil

• Bullish perspective for July:“A bit more, and then profit taking

time.” • Bearish perspective for July:

“The economy can’t sustain these high prices .”

• Overall strength of change is very slightly

bearish: -1 (out of max -5)

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

Crude Oil - price

• Crude should continue to climb the first half of the month, with a steep sell-off into August.

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

% Price Change, Cumulative - July 2007

-10

-8

-6

-4

-2

0

2

4

6

8

10

2 9 16 23 30 3-Aug

Crude Forecast 1 New Method

Crude Oil - range

September contract expected high 77, low 68, close 68.50 for a net loss of 3.4% for the month.

Crude Oil Range - July 2007

68

69

70

71

72

73

74

75

76

77

78

Forecast

S&P Index Futures

• Bullish perspective for July:“This can’t be the top of the market

yet.” • Bearish perspective for July:

“The volatility either way makes direction difficult to determine.”

• Overall strength of change is moderately

bearish: -2.5 (out of max -5).

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

S&P Futures - price

• If not already peaked, look for a market top in the first week.

• The market should decline most of the month into August.

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

% Price Change, Cumulative - July 2007

-8

-7

-6

-5

-4

-3

-2

-1

0

2 9 16 23 30 3-Aug

S&P 500 Forecast 1 New Method

Stock Market Cycles - “O” Model

• Alternate, independent method shows observed cycles in the S&P indicating trend turn down in July (the two trend lines peak July 18th).

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

S&P Cycles July 2007

-1.000

-0.800

-0.600

-0.400

-0.200

0.000

0.200

0.400

0.600

0.800

1.000

7/2/2007 7/9/2007 7/16/2007 7/23/2007 7/30/2007

Trend 1 Trend 2 Timing 1 Timing 2

“O” Model Composite

• Note: The “O” Model forecast indicates timing and direction, but not degree.

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

S&P Cycles July 2007- composite

-0.400

-0.200

0.000

0.200

0.400

0.600

0.800

7/2/2007 7/9/2007 7/16/2007 7/23/2007 7/30/2007

Week beginning

S&P Futures - range

Current contract expected high 1545, low 1440, close 1450, with a net loss of 4.4% for the month.

S&P Futures Range - July 2007

1380

1400

1420

1440

1460

1480

1500

1520

1540

1560

Forecast

U.S. Dollar Index

• Bullish perspective for June:“… but it’s oversold.”

• Bearish perspective for June:“Sell every rally.”

• Overall strength of change is mildly bearish: -2 (out of max -5)

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

Dollar Index - price

• The two forecast versions were divergent– a median is also given for the $.

• Primary difference is depth of drop in 2nd week.

June 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

% Price Change, Cumulative - July 2007

-1.5

-1

-0.5

0

0.5

1

2 9 16 23 30 3-Aug

US Dollar Forecast 1 New Method Median

Dollar Index - range

Current contract expected high 82.5, low 81, close 81.4 for a net loss of 0.4%.

Dollar Index Range - July 2007

80.00

80.50

81.00

81.50

82.00

82.50

Forecast

July 2007 Market Bias Forecast. Copyright 2007, A New Story Foundation, Inc.

Market Bias Summary - volatility

This composite shows large changes in the dollar the 1st and 2nd week, and Crude between 1st and 3rd weeks.

Rate of Price Change - July 2007

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

2-6 9-13 16-20 23-27 30 - Aug 3 Next Month

Crude Oil Dollar Stocks

Disclaimer

The reliability of the forecasts corresponds with our current ability to reliably ascertain and score the collective mood of bullish and bearish investors for each time period under review.

A New Story Foundation is not a brokerage firm nor are we professional investment advisors. Please consult the appropriate person/firm for specific investment advice.

More information about our research can be found on our website at http://www.anewstory.org.

Thanks for your interest!