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HALCO TRADING STRATEGIES

(January 5, 2001) CASH S&P INDEX AND DJIA: Historically, there are 34 years since 1951 that have made new highs for the month after January 7 (1350.24) in Cash S&P. If signaled, expect a minimum advance of 1% to 1363.74. 70% of all years would have advanced 2.8% or the 1388 level in Cash S&P. However, failure to penetrate 1350.24 and a decline below 1274.62 in Cash S&P could be followed by a continued decline into the primary cycle low due no later than January 19. A decline below 1274.62 signals a minimum test of 1262 with new lows to 1254 most probable.

4-Year Dow Cycle--The close above the 4-year high at 9338 on 11-23-98 signaled an advance for at least 31 months from the August 98 low to March 2001, with a 77% chance of a rise for 38 months or more (October 2001). The current cycle should follow other cycles that exceeded the previous four-year high, in which all cycles (100%) advance to 10403 with 92% probability of advance to 12590. Average advance --14847-16058.

Post-Election Year--The bull market is likely to continue into January-September 2001, minimum objective 11,349 with 11,716 most probably by September. Average advance 24.4% or 13,250. The low for the post-election year will probably be made between October-December. Average decline 9.3%--measured from September 30 close (10,651) or 9660.40.

Primary Cycle--PC most probably bottomed 12/21 in Cash S&P at 1254.07. Next 1/2 primary cycle low is due week ending 2/2-3/30.

Trading Cycle--Last bottomed on 11/30 at 1318 in the March contract. Next TC low is due 1/9-1/29.

MARCH TREASURY BONDS: Penetration of first week high in January at 106-20 has occurred in 13 years since 1978. All years had a minimum advance of 1% or 107-23. 80% advanced 1.3% to 108-01. However, a decline below 104-03 would signal the crest of the 10-week cycle and a minimum decline to 103-16 to 103.

10.1-Year Cycle--3-year and 10.1-year cycles have bottomed. Bonds should trend higher until the 10.1 year and 60-year cycle top in 2004.5--objective 121-16 (3.7%) or 139 (2.32%).

Primary Cycle--Last PC low bottomed on 9/21 at 9-15 in the March contract. Next 1/2 PC low is due week ending 11/10-1/05.

Trading Cycle--The last TC bottomed on 12/4 at 101-22 in the March contract. The next TC low is due 12/25-1/14.

MARCH SOYBEANS: Primary Cycle--Last primary cycle bottomed the week of 11/03 at 474 in the March contract. Next primary low due week ending 1/19-3/23.

Trading Cycle--Bottomed on 12/5 at 505-3/4 in the March contract. Next low is due 12/26-1/10.

MARCH CORN: Penetration of November high in December has signaled upside objective of 242 as primary cycle crests no later than February 2.

Primary Cycle--Primary cycle bottomed the week of 9/22 at 198-3/4 in the March contract. Next primary cycle low due week ending 1/19-3/30.

Trading Cycle--Last bottomed on 12/7 at 214-1/4 in the March contract. Next low is due 12/28-1/11.

MARCH WHEAT: Penetration of 275 will signal crest of the 13-week non-dominate cycle and a minimum decline to 269-264 as the primary cycle bottoms by February 23.

Primary Cycle--Last primary cycle low week ending 9/22 at 263-1/2. The next PC low due 12/29-2./23.

Trading Cycle--Last trading cycle low on 12/15 at 264-1/2 in the March contract. Next low due 1/21-2/4.

January 5, 2001

Halco Trading Strategies

P.O. Box 795429, Dallas, Texas

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