We have repeatedly had such incredible success with our low RT bottom-fishing strategies that some of our subscribers might think that's all they need to do to make money. Yes, bottom-fishing is a great way to make sensational, short-term profits in a bear market, but everyone should recognize that the explosive gains shown by these strategies could be ephemeral. I have discussed this phenomenon before (see my 07/25/08 essay on "Making a Quick Killing") and I have seen it happen over and over again.

When I first created VectorVest I was convinced that the only way to go was to buy high VST stocks in rising markets and sell low VST stocks in falling markets. After a few years, I had to face the facts and admit that some of the worse stocks in the database would explode off of bottoms and some of the best stocks would underperform. If you want to have some fun, check it out for yourself.

Take the bottom of October 9, 1998 for example: If you use UniSearch to find the "Worst Stocks > $1.00," as of that date, and use QuickTest to see how the 10 worst stocks ranked by VST Asc. performed, you would see that they were up 15.49% in one week, 29.14% in two weeks, 39.60% after three weeks, 50.43% after four weeks and so on. These guys just kept going higher and higher. Man 'O Man, they were up 118.75% after one year and up 567.8% as of March 10, 2000, the peak of the Tech Bubble. As of last night, they we're down an average of 40.93% with one winner and nine losers.

Now if you ranked the same universe of stocks by VST Desc., and again use the top 10, you would see that they were up only 2.64% in one week, 5.06% in two weeks, 7.50% after three weeks, and so on. These guys just weren't doing nearly as well as the "worst" stocks. After one year, they were up only 43.93% and as of March 10, 2000, they were up 82.72% compared to 567.8% for the bad guys. But hold on a second, as of last night they were up 212.04% with seven winners and three losers.

So which stocks really were the best and which were the worst? It all depends on how you play the game. If you're an Aggressive Investor, you should go for the low RT bottom-fishing stocks and stick with them as long as they perform. If you're more of a Prudent Investor, I suggest that you take advantage of our bottom-fishing strategies when we recommend them; then transition to high VST stocks when we get a C/Up signal. Yes, I know the "worst" stocks in the example illustrated above soared for over a year, but that's rare and it's not going to happen in a bear market. So, as far as I'm concerned, it's Time to Transition.

P.S. You may be wondering why the "worst" stocks do so well coming off of bottoms and the performance of the "best" stocks is only ho hum. The answer lies in what the Pros do. The Pros become defensive and go into the "best" stocks when the market goes down. They will also short the weaker stocks, driving them into the ground. When they sense a bottom, they'll cover their short positions, driving the "worst" stocks sharply higher. They'll also buy many of the volatile, "high Alpha" stocks, they had previously shorted, driving them even higher. Finally, they'll rotate out of their defensive positions, causing these solid stocks to underperform; then go into high momentum stocks, i.e., high VST stocks, as the rally rolls on.

The Price of the VectorVest Composite flashed a green light and gave a preliminary signal of a sustainable uptrend last Tuesday, just as we said it probably would. Now we need to see the Buy to Sell Ratio, BSR, go above 1.00 to give us a Confirmed Up, C/Up, signal. I expected that getting a C/Up signal soon was nothing short of a cinch until CNBC began showing the crazies in Congress yesterday talking about taxing greedy executives 90% of their bonus awards. Now I'm not so sure of what will happen in the short-term. But I do know that sooner or later we will get a C/Up signal. What should we do when it does come?

Personally, I'm going to put a chunk of my money into the Yellow Brick Road, YBR. No, I haven't forgotten the problems we encountered on our last trip and I don't want them to happen again. So the first thing VectorVest is going to do is add some more lanes to the YBR. A major problem in that last episode was that thousands of people tried to buy the same stocks at the same time. We learned a long time ago that Prices just go crazy when that happens and it's not good for anybody but the market maker. So we're going to provide alternative strategies for you to use for C/Up or C/Dn situations. Mr. Glenn Tompkins will be presenting these Strategies in this week's "Strategy of the Week" Presentation and I believe you'll be pleased by what you see.

Given the size of our user base, however, there still could be a traffic jam at the open. So you, dear reader, should also consider some of the other suggestions posted in last week's essay, "Avoiding the Stampede." The first suggestion was to get in before the crowd. Don't be afraid to start buying some stocks before we actually get the C/Up signal. Sure the risk may be a tad higher, but you'll be getting better prices and probably make more money. And you don't need to buy 10 stocks like we do in our illustrations. You can cherry-pick if you wish and buy any of the top stocks from any of the Strategies. The whole idea is to do what makes sense to you, but don't be a lemming.

I can't predict when the next C/Up signal will arrive, but I can tell you this: I'll be ready to be Off To See The Wizard.

The explosive rally we had been expecting for the last two weeks finally arrived on Tuesday morning. I was ready for it, sitting at my computer when the market opened on Tuesday, just as I had described in my February 13, 2009 essay, "Another Day at the Races."

I was looking at my VectorVest RealTime QuickFolios of the five strategies suggested in Monday night's Views. Wow, "Jail Break - No Contra ETFs" exploded out of the gate and was up over 15%. After a few more minutes, all five of my QuickFolios were moving higher. "Jail Break - No Contra ETFs" was up the most, way ahead of the pack. I was itching to buy, but I waited until 10:00 AM. "Jail Break - No Contra ETFs" was up 17% by then. Obviously, I wasn't the only one eager to buy those stocks. Fortunately, "Jail Break - No Contra ETFs" continued to go up that day and closed with a gain of over 30%.

The next day, Wednesday, "Jail Break - No Contra ETFs" was up another 14% at the open. The Midnight Cowboys who placed orders to buy at the open, but didn't use limit orders, were hung out to dry. I have seen this happen many times before and it's precisely the reason why we try to avoid suggesting specific strategies at specific times. We learned a long time ago that a stampede into a hot strategy moves the market, and that's not good for anybody but the market makers. Although we didn't specifically suggest using "Jail Break - No Contra ETFs" on Tuesday night, it was the strategy we went long with in our Model Portfolio and it was a logical choice to use on Wednesday. So how can we avoid getting caught up in the stampede to buy stocks?

The best way, if you're right, is to get in ahead of the crowd. In this case, it wouldn't have been that hard to do. We had been advising of the possibility of an explosive rebound for almost two weeks and reinforced the message last Friday with my essay, "Itching to Rally." Additionally, we tried to make this buying opportunity eminently clear with our comparison of current market conditions with those of the October 2002 bottom. Had you jumped in early on Monday and bought the top 10 "Jail Break - No Contra ETFs" stocks at 3:45 PM, you would have had a gain of over 67% at 10:15 AM this morning. Of course, this example uses perfect hindsight and we're never going to tell you to buy stocks until we see the market moving sharply higher. But jumping in a little early with part of your cash is not that bad of an idea when the evidence is compelling.

Another, possibly preferable, way of avoiding the bull's rush is to alter an existing search. The secret to these searches was revealed in my essay on "Jail Break," dated November 28, 2008. It's simply a matter of dividing a desirable factor, such as RV, RS, or VST, by RT. This week's "Strategy of the Week" presentation will demonstrate a simple alteration to our favorite bottom-fishing searches that could be just what you're looking for. Using what you learn, you may want to create your own search. It's not hard to do, so give it a shot.

Another way of not paying inflated prices is to pick a strategy that you know works, but didn't jump out of the gate that fast. I've seen this happen with Pirates Long on several occasions. I don't know why it happens, well, maybe a 207% gain in TWC may have something to do with it this time, but Pirates Long was up only 15% on Tuesday and its up 62% as I write this essay.

So even with great guidance and super strategies, the final step to making the most money lies in Avoiding the Stampede.

While stock prices have been going down since the market broke out of the Wicked Wedge on February 10th, I have been watching a little side-show.

Notice that our Market Timing Graph shows a sporadic price pattern of four huge down days which have occurred since February 9th intermixed with a preponderance of relatively small price movements. On many of these days, the market opened to the upside; then went down. This performance is quite different than the sharp sell-offs seen in October and November. Today's activity is a good example.

The February jobs report, released this morning, showed that another 651,000 non-farm jobs were lost in February. Moreover, downward revisions of an additional 161,000 losses were made for December and January. The unemployment rate hit 8.1%, yet stocks prices opened to the upside. The reason given for this counterintuitive response was that traders expected a much worse report. The side-show I've been watching is that of the classic bear market mentality that has taken over. Investors are refusing to accept bad economic news at face value. They're rationalizing it to create reasons to buy stocks. Look for this behavior as we go forward. You'll see it happen over and over again.

Each of the big down days we've seen recently were triggered by something out of Washington. The biggest up day on February 24th was caused by Dr. Ben Bernanke's testimony to Congress, which wasn't even factual. Investors are dying to buy stocks and any scrap of good news, true or not, will serve the purpose. This market is Itching to Rally.