The comments expressed here are based upon study

The comments expressed here are based upon study and interpretation of available data as it relates to our historical models of the best-performing stocks. This is not a prospectus; no effort on our part with respect to sale or purchase of any securities is intended or implied. Any chart appearing in this material is for educational purposes and is not, and should not be construed as a recommendation or rating to buy or sell any security. It is possible that at this date or some subsequent date, the officers, directors and/or shareholders of Investor’s Business Daily, Inc. or their affiliates own securities or buy or sell securities listed in the following pages, or those not mentioned. © 2010 Investor’s Business Daily. All rights reserved. Investor’s Business Daily, IBD, CAN SLIM and corresponding logos are registered trademarks owned by Investor’s Business Daily, Inc. © 2010 Investor’s Business Daily. All rights reserved.

• Why You Need to Spot Market Tops • Count Distribution Days to Spot a Market Top Other indicators of topping action: - Weak, Abnormal Behavior in Leading Stocks - Low-Quality Stocks Leading the Market • How to Protect Yourself When a Market Tops “You absolutely must have a proven, reliable method to accurately determine whether you’re in a bull or bear market…This is the most important lesson you can learn if you want to stop losing and start winning. ” - William J. O’Neil, IBD Founder & Chairman © 2010 Investor’s Business Daily. All rights reserved.

Why You Need to Spot Market Tops • When market goes into downtrend, 3 of 4 stocks go down with it. • By systematically spotting market tops, you can lock in gains and avoid big losses when market enters correction. Spotting Market Tops is Easy with Investor’s Business Daily Check Market Pulse graphic in The Big Picture for changes in market direction. © 2010 Investor’s Business Daily. All rights reserved.

IBD Shows You When to Get Into – and Out of – the Market

Count Distribution Days to Spot a Market Top What is a distribution day? When one or more major market index closes down more than 0. 2% on increased volume from prior day. If you get 5 or 6 distribution days over any 5 -week span, the general market almost always turns down. Easily Track Distribution Days See number of distribution days in Market Pulse graphic on page A 1 in Investor’s Business Daily. © 2010 Investor’s Business Daily. All rights reserved.

Nov. 2007 Nasdaq Top (Daily Chart) Day 1: Nasdaq hits new intraday high, but reverses hard on heavy volume. 4 2 1 11/8: Market officially enters a correction. Oct. 17 & 18: Bounces back on good volume. But three distribution days in less than a week tells you to be cautious. 3 5 3 Days 2 & 3: Volume on down days picking up, a sign that conviction among sellers is growing. Day 4: Sells off hard. Closes at very bottom of intraday range. 2 1 Day 5: 5 th distribution day in less than 2 weeks. Oct. 22 & 23: Nasdaq bounces back. But don’t be fooled! 4 prior distribution days warn you to be cautious. 4 Free Online Course See “CAN SLIM®” “Lesson 7” course in “Education” section of Investors. com. © 2010 Investor’s Business Daily. All rights reserved.

Stalling Action: “Heavy Volume Without Further Upward Price Progress” Stalling Distribution Day Index closes up for day on volume heavier than previous day, but price gain is significantly smaller than prior day’s increase. © 2010 Investor’s Business Daily. All rights reserved.

Other indicators of a market top: Watch for Weak, Abnormal Behavior in Leading Stocks Leading stocks are bellwether for overall market. When they show weakness, the overall market is not far behind. Signs of weakness include: • Late-Stage Bases: If leading stocks are in 3 rd and 4 th stage bases, uptrend could be running out of steam. • Climax Runs: Climax runs in leading stocks may be sign party is ending. © 2010 Investor’s Business Daily. All rights reserved.

Late-Stage Bases Qualcomm’s Run Up, 2003 - 2005 3 1 st 1. stage base is a double bottom with handle. 2. Base on base formation. All count as 2 nd stage base. 3. Breakout from 3 rd stage base fails immediately. 4. 29% correction undercuts 3 rd stage base. Resets base count. 2 Buy 1 4 2 2 Beware of Late-Stage Bases • Best to buy a stock in its 1 st or 2 nd stage base. • 3 rd stage bases can work, but chance of failure increases. • 4 th stage bases have high probability of failure. Best to avoid them. Free Online Course See “Charting the Course” “Counting Bases” in “Education” section of Investors. com. © 2010 Investor’s Business Daily. All rights reserved.

Climax Runs 3 May 2006 4 Climax Run Checklist 1. Stock goes up 25% to 50% in 1 to 3 weeks after advancing significantly from its original base over many months (usually at least 18 weeks from a first- or second-stage base; 12 weeks or more from later-stage base) 2. Closes excessively (more than 100%) above 200 -day moving average 3. Widest weekly price spread since breakout 4. Exhaustion gap 1 2 Free Online Course See “Sell Signals” “Climax Runs” course in “Education” section of Investors. com. © 2010 Investor’s Business Daily. All rights reserved.

Other indicators of a market top: Low-Quality Stocks Leading the Market Watch out if: a. Stocks that led current uptrend falter a. Lower-priced, lower quality, speculative stocks start to lead If the best stocks can’t lead the market higher, the worst ones certainly won’t do so for very long. Leaders Up vs. Leaders Down If “Leaders down in volume” start to regularly outnumber “Leaders up in volume” in Market Pulse, it may mean market is topping. © 2010 Investor’s Business Daily. All rights reserved.

Holder Beware! Even leading stocks fall when the market tops. How selected market leaders

Google at 2007 Market Top Google Daily Chart, 10/07 – 3/08 10/12/07 11/8/07 Overall Market: Distribution Day 1 Overall Market: Enters correction Google: Hits new high than pulls back. Google: Sells off on big volume. Declines 45% over next 4 months. 10/15 & 10/16/07 Overall Market: Distribution Days 2 & 3 Google: Pulls back. Still well above 50 -day moving average line, but distribution days mounting on Nasdaq. 10/19/07 Overall Market: Distribution Day 4 10/24/07 Overall Market: 5 th distribution day in less than 2 weeks Google: Closes near new highs, but forming “railroad tracks”, a sell signal that often occurs at end of a stock’s price run. Google: Hits new intraday high on big volume, but pulls back to close near bottom of day’s range. “Heavy volume without further upward price progress. ” © 2010 Investor’s Business Daily. All rights reserved.

Focus on technicals when selling. Fundamentals (earnings & sales growth, return on equity, etc. ) for leading stocks are often good when market tops and stocks begin to fall. If distribution days are mounting and the stock’s chart shows weakness, use defensive selling. Don’t wait for fundamentals to show weakness. Don’t Be Fooled by Good Fundamentals 2007 – 2008 Google Daily Chart At 2007 market top, Google showed good earnings & sales growth even as its stock price dropped. © 2010 Investor’s Business Daily. All rights reserved.

How to Protect Yourself When a Market Tops • Cut ALL Losses Short Regardless of market conditions, always sell if a stock drops 7% - 8% below your purchase price. Sell even sooner if distribution days are mounting and your stocks are showing weakness. • Get Off Margin Play it safe and don’t compound any losses by staying on margin. • Lock In Your Gains During the early phase of a bear market, certain leading stocks may seem to hold up. But don’t be fooled! Most will eventually fall with the rest of the market. Be sure to proactively lock in some or all of your gains. © 2010 Investor’s Business Daily. All rights reserved.

How to Spot a Market Top Using Investor’s Business Daily • Read The Big Picture Every Day - Check “Current Outlook”: Did it change to “Uptrend under pressure? ” - Check number of distribution days - How are leaders behaving? • Check IBD’s How’s The Market? Page - Track daily action with large, easy-to-read charts for major indexes in “How’s The Market? ” page in Making Money section of IBD. • Watch the IBD Market Wrap Video - Watch an IBD expert review charts of major indexes and analyze current market direction - Get insight into strength or weakness of leading stocks © 2010 Investor’s Business Daily. All rights reserved.

Coming Next Month… Lesson 2: How to Spot Market Bottoms You’ll learn: a. How to tell when correction has ended and it’s time to buy stocks again a. How to spot a follow-through day, and signs that it’s likely to succeed or fail a. The right way to get back into the market when new uptrend begins …and more! Stay in Touch! Get the latest updates from IBD on Twitter and Facebook! facebook. com/investorsbusinessdaily twitter. com/IBDinvestors © 2010 Investor’s Business Daily. All rights reserved.

The comments expressed here are based upon study and interpretation of available data as it relates to our historical models of the best-performing stocks. This is not a prospectus; no effort on our part with respect to sale or purchase of any securities is intended or implied. Any chart appearing in this material is for educational purposes and is not, and should not be construed as a recommendation or rating to buy or sell any security. It is possible that at this date or some subsequent date, the officers, directors and/or shareholders of Investor’s Business Daily, Inc. or their affiliates own securities or buy or sell securities listed in the following pages, or those not mentioned. © 2010 Investor’s Business Daily. All rights reserved. Investor’s Business Daily, IBD, CAN SLIM and corresponding logos are registered trademarks owned by Investor’s Business Daily, Inc. © 2010 Investor’s Business Daily. All rights reserved.