KYLE DeFOOR, CERTIFIED PUBLIC ACCOUNTANT
2930 NORTH SWAN SUITE 209 – TUCSON, ARIZONA 85712
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:
August 20, 1956
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.
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