CPA Verification


October 16,1998

Schannep Timing Indicator, LLC
John D. Schannep, President

We have performed certain agreed-upon procedures, as discussed below, in connection with your Stock Market Major Trend Timing Indicator. The purpose of this indicator is to identify changes in the trend of price movements on the major stock averages. Our procedures and findings were as follows:

1. You provided us with a written narrative on the application of your indicator formula. We reviewed this with you in detail to develop a comprehensive understanding of its application. The results of this formula are referred to as signal dates, either to buy or sell based on the expected price movement of the major stock averages. Data used in applying this formula consisted of momentum statistics on the major stock averages and monetary statistics from the Federal Reserve Board. Our procedures were designed to sample test the signal dates which you obtained with the formula and to compare these dates with actual changes in price movement on the Standard and Poor’s Composite and Dow Jones stock averages.

2. We recomputed the buy and sell signal dates from December 31, 1953 through September 16, 1998 using your indicator formula and the required momentum and monetary statistics. The average momentum statistics for the sample dates were published by Dean Witter Reynolds in its “COMPARE” service and kept current in your own computer. The Federal Reserve Board monetary statistics for the sample dates were obtained from the Federal Reserve Bank of St. Louis, the Wall Street Journal, and the internet. Our computations verified the same dates that you arrived at for this period of time. These signal dates are as follows:

Buy Signals

January 25, 1954
May 5, 1958
January 3, 1961
November 14, 1962
December 27, 1966
April 11, 1968
August 24, 1970
October 22, 1973
November 4, 1974
April 17, 1978
June 11, 1980
August 23, 1982
August 21, 1984
March 16, 1988
January 25, 1991
February 22, 1995

Sell Signals

August 20, 1956
November 12, 1959
May 10, 1962
May 2, 1966
January 22, 1968
March 7, 1969
February 23, 1973
November 20, 1973
October 31, 1977
October 26, 1978
August 31, 1981
February 22, 1984
October 16, 1987
August 24, 1990
June 20, 1994
August 27, 1998

3. We then compared all of the signal dates to actual changes in the price indices for two major stock averages, Standard and Poor’s Composite and the Dow Jones averages. These comparisons are shown on the attached schedules. Schedule A shows actual price movement between the buy and sell signals. Schedule B shows actual price movement between the sell and buy signals. The indices on these averages at the sample signal dates were obtained by us from the Wall Street Journal, the Internet, and the Tucson Public Library Information Line.

4. This is an update of our report originally completed February 20, 1985.

                                                                                 Kyle DeFoor, CPA

Since this update, the Schannep Timing Indicator & TheDowTheory.com Newsletter has been followed and verified by TimerTrac.com. The Hulbert Financial Digest has monitored and rated the Letter since 2001, and CXO Advisory has evaluated and graded it since 2002.

Further updates are available in this section of the website with recent signals within 60 days available for Subscribers only.

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