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									                                    The Starboard Side Report
                                                          The week ending 1/30/2009

Weekly Commentary
The manic market continues its one step forward and two steps back sideways shuffle. Amidst all of the doom and gloom,
we still remain constructive on the upside potential of stocks from these levels. As we mentioned last week, it may be a case
of needing more time to bounce along the bottom and build more of a base before heading higher. In our last report, we showed
two powerful bottom formations that ending in the first quarter (1938 & 2003). Today we have included a look at the most
powerful first quarter bottom of all time in 1933. The parallels are quite similar in that we have a new democratic administration
enacting a massive jobs stimulus in the midst of an epic banking crisis. As you can see in the below tab, the market rallied
over 100% in the first four months of FDR's first term. That was from a much lower base, so we won't see another rally
of that magnitude from the whole market. However, it isn't out of the question for certain beaten down stocks and sectors.
We guarantee that the newspaper headlines as that rally bloomed during the depths of the Great Depression were not
very positive either. The final bottom comparison we will make was the only other 50% decline of the 1900's and that was
referred to as the "Bankers' Panic of 1907." We have attached a chart that shows an overlay of that market crash with
the present episode. As you can see they are very similar in more than just name.

In another effort to point out the historical significance of the recent sell-off, please see the attached chart below
that we have titled "US Stocks 10-year Rolling Return." In the commentary and chart you can see that we have
reached a pretty significant inflection point for US equities. On a total return basis, large-capitalization stocks have
just had the worst rolling decade in their entire history. The negative -1.5% return just surpassed the 1938 period that
we mentioned last week. This paints a picture of a deeply depressed market that has the ability to spring back to
life rather quickly.

Over the past few months we have been gradually laying out the case for why we believe a relatively major stock rally is possible.
We have also stressed that by no means will the economic news be good over the next several years. It will take a long time
to fully deleverage and restore confidence to the American consumer. However, time and again throughout history, markets
have produced some pretty impressive countertrend rallies in the face of horrible economic fundamentals and pessimism. We
feel that we are setting-up for one such rally. Some of the bottoming evidence that we have presented in recent reports includes:

  -    A major capitulation washout on the NYSE Bullish Percent of 4% on October 10th
  -    Very high investor cash positions earning little interest
  -    A bottoming pattern similar to other 50% panic decline episodes in 1907,1929,1933,1938,1974 and 2003
  -    Price-to-earnings valuations near 50-year lows after factoring in the level of interest rates
  -    Only the second time in 200 years of market history that the 10-year rolling return of large cap stocks has turned negative.

The bottom line is that massive stock panics have historically been followed by big up markets the following year. The only exception
was in 1930-1932 when the US economy contracted by 50% and the market fell 90%. We do not see that as a likely scenario
given the massive amounts of money being thrown at the problem, our large trade deficit and our free floating currency.

Global Market Update
We have expressed our positive views on Asia many times in this report, but the one other region that appears to be in good
shape coming out of this crisis is Latin America. We base this assessment on the strong relative strength characteristics that
this area is exhibiting. This outperformance is most likely the result of the extremely vast natural resources of
countries such as Brazil and Chile.

European Bullish Percent Indexes reversed higher into X's across the board. This may be signaling that the late week sell-off
will not have downside follow through next week because the US often reverses higher within a few days of Europe.

US Sector Snapshot
The Baltic Dry Index is something that we have referenced on occasion in this report. It is a non tradable (hence not subject
to price manipulation) basket of bulk goods shipping prices. It has historically been a very good barometer of the strength of the
global economy and a good proxy for commodity performance. Please see the attached chart for a look at a possible
bottom in this index.

Summary/prices/quotes/statistics contained herein have been obtained from sources believed reliable and are not

The opinions in this report do not constitute, and should not be construed as, recommendations to purchase or
sell referenced securities and should not be the sole basis for an investment decision.
66% rally following the "bankers painc"
in 1907.

The blue line is the Dow from 12-30-07
through the present.

The red line in the Dow between 1906
and 1908.
The President was inaugurated in March back then.
It took about a month for the market to finds its legs
after FDR took office before rocketing 100% higher.
                            "This graphic representation of nearly the entire history
                            of the stock market (1810-2008) shows the rolling
                            10-year average annual total returns for U.S. equities,
                            with an average of 8.4%. For the 10-year period ended
                            December 31, 2008 the average annual return reached a
                            record low of –1.5%. Previously, the lowest 10-year return
                            for larger-capitalization stocks was –1.3% in 1938.
                            Looking back at every point when the market returned less
                            than 2.5% for 10 years, it then returned an average of 13.3%
                            over the next 10 years, with a range of 7.1% to 18.6%."

                            The quote above from our research vendor Dorsey Wright
                            describes the data in the chart to the left. It shows pretty
                            compelling evidence that the main risk at this point is not
                            owning equities as opposed to being in cash. This is
                            especially true if you consider that the Federal Reserve
                            is trying to inflate away the value of cash.

                            The good news is that similar levels in the past have
                            resulted in large stock rallies during the following year.
                            The bad news is that they also marked the entry into
                            a much more challenging economic period. In addition,
                            even though dramatic oversold rallies occurred, the market
                            remained in a very volatile range for the next 8-10 years.

1938 bottom   1974 bottom
This is a chart of the Baltic Dry Index. This
measures the cost of shipping various raw materials
such as iron ore, grains and coal.

This index signals that Global Economic activity
peaked in the first half of last year.

After a precipitous decline in global trade during
the credit crisis last fall, shipping is finally starting to
shows signs of life for the first time in a while.

Bottom forming in bulk goods shipping rates.
                              Intermediate-term Technical Indicators                           Weekly Market Data                               Short-term Technical Indicators
                                 NYSE         OTC          Option       Avg Sector        Global        Corporate                      High Low       High Low         NYSE          OTC
                                 Bull %      Bull %        Bull %         Bull %          Bull %         Bonds                          NYSE             OTC         10-week       10-week
                              47.12%        29.95%        42.91%         37.18%          36.67%           Buy                           6.91%           6.9%          48.02%       43.82%
                                O's           O's           O's            O's             O's           in X's                          O's             O's            O's          O's

                                                                                                      Starboard Sector Matrix
                            0%                                                                                       50%                                                                                100%

         Sector                          Low Risk Sectors                                                     Average Risk Sectors
                                                                                                             Bullish Percent Between 30-70%                                High Risk Sectors
         Matrix                      Bullish Percent Between 0-39%                                          Bullish Percent Between 40-69%                               Bullish Percent Between 70-100%
                                                        Soft- 34%                 Oil- 46%
                                                                         Inet- 24%Heal- 40%                          Util- 54%
  Higher Return Potential                 NW Quadrant                             Food- 40%            Prec- 46%     Gas- 54%
     Positive Relative                     Buy Zone Chem- 34%           Semi- 34% Biot- 40%            Mach-44%                     Osrv- 56%
         Strrength                                    Elec- 30%         Medi- 32% Aero- 44%            Busi- 38%
                                                                        Fina- 30% Drug- 42%            Stel- 46%
                                           Wall-22%      Wast- 32%      Game- 34% Tran- 42%            Real- 48%
                                                         Retl- 36%                Metl- 48%

                                                                       Comp- 34%
 Average Return Potential                                                             Rest- 40%
     Mixed Relative                                      Leis- 26%      Tele- 34%     Insu- 42%
        Strength                                         Prot- 26%

                                                                        Auto- 34%

  Lower Return Potential                               Savg- 18%        Fore- 28%       Buil- 40%                                                                                 SE Quadrant
    Negative Relative                                  Bank- 16%        Hous- 24%                                                                                                 Danger Zone
        Strength                                       Text- 20%

Please see "Guide" tab for more details about the sector matrix

This copywritten material has been provided by Dorsey Wright & Associates.
Statistics contained herein have been obtained from sources believed reliable and are not necessarily complete and cannot be guaranteed.
The opinions in this report do not constitute, and should not be construed as, recommendations to purchase or sell referenced securities and should not be the sole basis for an investment decision.
 Report Key           Sector
     Aero        Aerospace Airline
    Auto           Auto & Parts
    Bank               Banks
     Biot          Biotechnology
     Buil             Building
    Busi        Business Products
    Chem             Chemicals
    Comp            Computers
    Drug                Drugs
    Elec            Electronics
     Fina             Finance
    Food         Food & Beverage
    Fore        Forest Prods/Paper
    Game              Gaming
     Gas            Gas Utilities
    Heal            Healthcare
    Hous         Household Goods
     Inet             Internet
     Insu            Insurance
     Leis              Leisure
    Mach        Machinery & Tools
    Medi               Media
     Metl       Metals Non Ferrous
      Oil                Oil
    Osrv            Oil Service
    Prec          Precious Metals
     Prot      Protection Equipment
    Real            Real Estate
    Rest            Restaurants
     Retl             Retailing
    Savg         Savings & Loans
    Semi          Semiconductors
     Soft             Software
     Stel            Steel/Iron
    Tele            Telephone
    Text        Textiles & Apparel
    Tran       Transports (Non-Air)
      Util        Electric Utilites
    Wall            Wall Street
    Wast       Waste Management

Green letters= Bullish Bull% Chart
Red letters= Bearish Bull% Chart
Global iShares and Closed-end Funds Relative Strength (RS)
Source: Dorsey Wright & Associates
                                                         Point     RS        RS       RS        RS
                                                       & Figure   Signal   Column    Signal   Column    Total
Symbol      Name                                        Signal    vs US     vs US   vs Gold   vs Gold   Points
APB         Asia Pacific Fund Inc                        Sell      Sell       O       Sell       O        0
CEE         Central European Equity Fund                 Sell      Sell       O       Sell       O        1
CH          Chile Fund Inc                               Sell      Sell       X       Sell       O        1
EEM         iShares MSCI Emerging Markets Index          Buy       Buy        X       Sell       O        3
EWA         iShares MSCI Australia Index Fund            Sell      Buy        O       Sell       O        1
EWC         iShares MSCI Canada Index Fund               Buy       Buy        O       Sell       O        2
EWD         iShares MSCI Sweden Index Fund               Buy       Buy        O       Sell       O        2
EWG         iShares MSCI Germany Index Fund              Buy       Buy        X       Sell       O        3
EWH         iShares MSCI Hong Kong Index Fund            Sell      Buy        O       Sell       O        1
EWI         iShares MSCI Italy Index Fund                Sell      Buy        O       Sell       O        1
EWJ         iShares MSCI Japan Index Fund                Sell      Buy        X       Sell       O        2
EWK         iShares MSCI Belgium Index Fund              Sell      Sell       O       Sell       O        0
EWL         iShares MSCI Switzerland Index Fund          Sell      Buy        X       Sell       O        2
EWM         iShares MSCI Malaysia Index Fund             Sell      Buy        X       Sell       O        2
EWN         iShares MSCI Netherlands Index Fund          Sell      Buy        O       Sell       O        1
EWO         iShares MSCI Austria Index Fund              Sell      Buy        O       Sell       O        1
EWP         iShares MSCI Spain Index Fund                Sell      Buy        X       Sell       O        2
EWQ         iShares MSCI France Index Fund               Buy       Buy        O       Sell       O        2
EWS         iShares MSCI Singapore Index Fund            Sell      Buy        O       Sell       O        1
EWT         iShares MSCI Taiwan Index Fund               Sell      Sell       O       Sell       O        0
EWU         iShares MSCI United Kingdom Index Fund       Sell      Sell       O       Sell       O        0
EWW                                                      Sell
            iShares MSCI Mexico Investable Market Index Fund       Buy        X       Sell       O        2
EWY         iShares MSCI South Korea Index Fund          Buy       Buy        X       Sell       O        3
EWZ         iShares MSCI Brazil Index Fund               Buy       Sell       X       Sell       X        3
EZA         iShares MSCI South Africa Index Fund         Buy       Sell       X       Sell       O        2
EZU         iShares MSCI EMU Index Fund                  Sell      Buy        O       Sell       O        1
FXI         iShares FTSE/Xinhua China 25 Index           Sell      Buy        X       Sell       O        2
GF          New Germany Fund Inc                         Sell      Sell       X       Sell       O        1
IF          Indonesia Fund, Inc.                         Buy       Sell       X       Sell       O        2
IFN         India Fund Inc                               Sell      Sell       O       Sell       O        0
INP         iPath MSCI India Index ETN                   Sell      Sell       O       Sell       O        0
IRL         Irish Investment Fund                        Sell      Sell       O       Sell       O        1
IYY         iShares Dow Jones U.S. Total Market Idx      Buy      None        O       Sell       O        1
JFC         Jardine Fleming China Region Fund            Sell      Sell       O       Sell       O        0
KF          Korea Fund Inc                               Buy       Buy        O       Sell       O        2
MXF         Mexico Fund Inc                              Buy       Buy        O       Sell       O        2
SGF         Singapore Fund Inc                           Sell      Buy        O       Sell       O        1
SNF         Spain Fund Inc                               Buy       Sell       X       Sell       O        2
SPX         S & P 500 Index                              Buy       Sell       O       Sell       O        1
TF          Thai Capital Fund                            Sell      Sell       X       Sell       X        2
TKF         Turkish Investment Fund Inc                  Sell      Sell       O       Sell       O        0
TTF         Thai Fund Inc                                Buy       Sell       O       Sell       X        2
TWN         Taiwan Fund Inc                              Sell      Sell       O       Sell       O        0

           Bullish Percent=                            11.63%
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
Moderately Bearish
                    Global Bullish Percent Risk Monitor
92                                                                   92
90                                                                   90
88                                                                   88
86                                                                   86
84                                                                   84   70% and Above= Higher Risk
82                                                                   82
80                                                                   80
78                                                                   78
76                                                                   76
74                                                                   74
72                                                                   72
70                                                                   70
68                                                                   68
66                                                                   66   Green= Bullish Percent in X's (buyers in control)
64                                                                   64   Red= Bullish Percent in O's (sellers in control)
62                                  China                            62
60                                                                   60
58                                                                   58
56                                                                   56
54                                                                   54
52               South Korea                                         52
50                                                                   50
48                                           London                  48
46                                                                   46
44                                                US                 44
42                                                                   42
40               Latin America      Japan                            40
38   Singapore                      Switzerland           Germany    38
36                                                                   36
34     Europe      Asia   Australia                                  34
32                        Middle East         Global BP              32
30   Canada                         Indonesia                        30
28                                                        Thailand   28
26                                                                   26
24               Hong Kong          India    Taiwan                  24
22                                                                   22   30% and Below= Lower Risk
20                                                        Malaysia   20
18                                                                   18
16                                                                   16
14                                                                   14
12                                                                   12
10                                                                   10
8                                                                    8

     Source: Dorsey Wright & Associates
s (buyers in control)
(sellers in control)
Sector Matrix Description

The Starboard Sector Matrix will try and help us identify which of the 40 Dorsey Wright sectors are the most attractive on a risk/reward basis.

The analysis in the matrix combines two concepts
1. Sector Bullish Percent (risk)
2. Relative Strength (potential reward)

Sector Bullish Percent
The Bullish Percent of a sector is simply a compilation of the percentage of stocks in that sector whose charts are on a Point & Figure (P&F) buy signal
Sectors rotate in and out of favor over time. The Sector Bullish Percent charts provide a snapshot of supply/demand and helps measure risk
When the chart is in X's that means demand is in control; When chart is in O's then supply has taken over
It is a useful contrarian indicator used to measure the amount of bullishness and bearishness towards the given sectors
The higher the percentage of stocks in a sector on a P&F buy signal, the greater the risk and vice-versa.
When over 70% of stocks in a sector are on a buy signal it raises the caution flag (especially when supply takes over and chart goes into O's)
When under 30% of stocks in a sector are on a buy signal, it is usually time to start putting a shopping list together
The Sector Bullish Percent risk spectrum is represented in the top row of the matrix from 0 - 100%

Relative Strength
Relative strength is a comparative analysis used to measure the performance of one asset to another.
Positive relative strength is correlated with outperformance and like Bullish Percent can be charted using the P&F charting methodology
The relative strength analysis provided by Dorsey Wright compares each sector to the market via four different proprietary indicators
These indicators are then cross referenced to determine the strongest relative performers, thereby providing us with a disciplined methodology for measuring potential reward.
The relative strength potential reward spectrum is represented on the side column from high to low relative strength

Ideally, we are looking for sectors to fall into the NW quadrant because of low bullish percentage (lower risk) and positive or improving relative strength (higher reward potential)

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