Trade Alert - July 17, 2005

Recommended Portfolio Allocation Changes- This Week

The S&P 500 Hits 4-Year Highs

There was good follow-through last week on the market's positive reversal the previous week when our indicators triggered a stepped-up bullish posture. There will likely be some profit-taking in the coming weeks but all of our technical indicators now say the bull is back.

We have only one change this week in an investment model:

In the Performance Xtender -- The model triggered a sale of our 20% position in Energy stocks. The Energy Complex, including crude oil, has lost positive momentum in recent weeks vs. the rest of the stock market. And crude oil may have signaled an intermediate top this past week that could usher in a multi-month correction. Energy stocks followed suit and also may have signaled a top. The model is reallocating the proceeds from the sale of Energy into a Large Cap stock fund.

There were three extremely positive developments this past week. First, the apparent reversal and breakdown in the price of crude oil should be very bullish for the market in the next several months. Second, technology stocks and the Nasdaq 100 Index had a huge move during the week. A stong technology sector should also be very bullish for the market. Third, the broadly-based S&P 500 Index made a very significant breakout in the market by establishing new 4-year highs. This accomplishment should also augur well for the market. And, across the board, most individual market sectors are now advancing nicely.

It was facinating to see the market's reaction to the terrorist bombings in London, since the market has been almost straight up since then. Such market behavior in the face of such bad news is another positive sign that this bull has at least one more good move left in him.

Recommended Portfolio Allocations

Model Portfolio Details

'Performance Xtender'

Recommended Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
SELL Energy Fund	20%	RYEIX	15%	ENPIX	20%	XLE
BUY Large Cap Fund	20%	RYZAX	20%	BLPIX	20%	SPY
Corporate Bonds Cash	If you are following this Model Portfolio with ProFunds investments, you should use the remaining 5% money market balance to complete the trade.

Current Recommended Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
LargeCap Fund	40%	RYZAX	40%	BLPIX	40%	SPY
MidCap Fund	40%	RYAVX	40%	MDPIX	40%	MDY
SmallCap Fund	20%	RYAZX	20%	SLPIX	20%	IWM
Corporate Bonds Cash

'Max Xtender'

Recommended Changes for this week	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
Corporate Bonds Cash	-

Current Recommended Portfolio Allocations	Rydex Funds		ProFunds		ETFs
	Allocation	Ticker	Allocation	Ticker	Allocation	Ticker
Lev'd SmallCap Fund	50%	RYTNX	50%	UAPIX	100%	IWM
Lev'd MidCap Fund	50%	RYTNX	50%	UMPIX	100%	MDY
Corporate Bonds Cash	NOTE: Rydex does not have leveraged SmallCap or MidCap funds. Therefore, their leveraged LargeCap fund (RYTNX) is substituted. ETF investors should be 100% margined in both IWM and MDY, for a fully invested 200% position.