Birkelbach-Current Market Comment

What Recovery?

Many investors now feel that the financial crisis, which peaked with the take over of Bear Stearns, has been fully discounted. We do not agree. The big drama may be over. However, under this new regulatory environment, we believe increased transparency will surface continued problems in the financial sector. In addition, it appears that the increased price of commodities and the continued decrease prices of housing will cause reduced consumer spending. The first sign of this can be seen as Tropicana, the Las Vegas Casino Company has declared Chapter 11. So, while one shoe of the financial crisis has fallen, the second shoe yet to fall may be the consumer, who is no longer able to finance spending with increased debt. Our Strategy Index has given a Sell Signal.

The Intermediate and Long Term Trend of the markets now appears to be Sideways. We believe the upside of this Sideways Trend is as follows: Upside Resistance Dow 14,198; NASDAQ 2,834; S&P 500 1,514 with Downside Support Dow 10,900; NASDAQ 1,940 and S&P 500 1,1,66. Selection and Market timing have become increasingly important

Dow 13,020 NASDAQ 2,483 S&P 500 1,420

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Birkelbach Investment Securities, Inc., its affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in the securities discussed in this report, we may act as principal for our own account or as agent for both the buyer and the seller.

Past performance is no guarantee of future success. Also, while the above suggested prices are as listed on our reports and the sell dates and prices are as issued by our research department, our brokers operate independently and as each individual client has a unique risk tolerance level, the above list should not be deemed as a representation of our clients purchases and sales. Some of our suggestions are volatile and speculative. Therefore, these stocks are only for those investors willing to assume risk. In addition, there may not be enough information available in these reports to make an informed decision. Upon request, we will supply additional information. Purchases should not be made until enough information is obtained and risks understood.

Current Trends	DJIA	NASDAQ	S&P 500
Short Term	Up	Up	Up
Int. Term	Sideways	Sideways	Sideways
Long Term	Sideways	Sideways	Sideways

Forecasted Trends	DJIA	NASDAQ	S&P 500
Short Term	?	?	?
Int. Term	Sideways	Sideways	Sideways
Long Term	Sideways	Sideways	Sideways

Breakout Points	DJIA	NASDAQ	S&P 500
Short Term Up (Resistance)	13,112	2,494	1,421
Short Term Down (Support)	11,700	2,210	1,276
Int. Term Up (Resistance)	13,800/14,198	2,781/2,834	1,514/1,576
Int. Term Down (Support)	10,900	1,940	1,166
Long Term Up (Resistance)	14,309	2,892/4,250	1,576
Long Term Down (Support)	7,416/7,197	1,253/1,108	788/768