April 27, 2003 Indicant.Net Weekly Update

Volume 04, Issue 4 ISSN 1526 6516 © The Indicant Stock Market Report

Short-term Indicant Signaled Bull for First Time Since March 30, 2000 .

Last Tuesday was somewhat shocking. The NASDAQ’s Short-term Indicant signaled Bull for first time since March 30, 2000 . The Short-term Indicant is entirely automated. That contrasts with the Quick-term Indicant, where there are several heuristics and some experienced human judgments. The Quick-term Indicant tries to help manage each of the seasonal corrections. Sometimes those seasonal corrections turn out to be outright nasty continuations of bull or bear cycles; even on a secular basis. The Quick-term Indicant, coupled with the Short-term Indicant helps us understand the underlying theme of the stock market; bull, bear, or mixed.

Two weeks ago we said, “Fundamentally, the market should not go up right now.” The economy remains weak. A serious disease, SARS, is spreading around the world. Terrorists are most likely riled up with U.S. troops hanging around the Middle East . The press is most likely going to try to connect Dick Cheney to favoring Halliburton in squelching Iraqi oil well fires. The travel sector of the economy is going to remain poor with SARS and the fear of terrorism. The Middle Easterner’s reaction to America ’s bullying in their homeland has yet to be seen.

Two weeks ago, this report stated even with all that, the market is not poised to nosedive. The Short-term Indicant’s Bull signal on April 22, 2003 adds credence to this prognosis. Some of you are probably disappointed the Short-term Indicant’s Bull lasted only three days. Do not despair. The fact that this was the first Bull signal in over three years is very encouraging for those of you who prefer bullish behavior.

Take a quick look at the Short-term Indicant Charts. It will help you put a few things in perspective.

http://www.indicant.net/Non-Members/ST%20Tour/ST-1995-2002.htm

During normal markets, the Short-term Indicant is a lot more active. Some of you who are new to the Indicant questioned the naming convention of the Short-term Indicant. Those of you who became members after March 2000 only saw the Short-term Indicant signal bear for the past three years. You saw that day in and day out for over one-thousand calendar days. Well, you are about to see a difference. The Short-term Indicant is typically very active. The NASDAQ’s Short-term Indicant Bear Market from March 2000 through April 2003 was abnormal. It was anything but typical. Even the Dow’s Short-term Bear Market from March 20, 2002 through March 22, 2003 was abnormal. That STI Bear market lasted 367 days. During that particular STI Bear market, the Dow fell by 1980 points or by 19.5%.

Look at the STI tables. The links are below for both the Dow and NASDAQ table of performance since 1995.

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20DJIA1995-2002.htm

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20NAS1995-2002.htm

You will notice the Short-term Indicant has outperformed buy and hold by more that two to one from 1995 through April 2003. That level of performance is also unusual. Between 1995 and 2003 the markets enjoyed record bull movements and record bearish movements. The Short-term Indicant is rather conservative. It is slow to signal Bull, but pretty quick to signal Bear. Because it is slow in signaling Bull, we developed the Quick-term Indicant.

If you compare the Dow’s Short-term Indicant in 1929-1933 to the NASDAQ’s Short-term Indicant in 2000-2003, you will notice they are nearly congruent. All dynamic bear markets look the same. They go down with periodic recoiling or technical corrections. A dynamic bear is one that goes down and causes you to become emotionally depressed if you are relying solely on the stock market for your quality of life.

Click the following link to the 1929 Dow Short-term Indicant:

http://www.indicant.net/Non-Members/ST%20Tour/ST-1929.htm

Click the following link to the 1995 - 2003 NASDAQ Short-term Indicant:

http://www.indicant.net/Non-Members/ST%20Tour/ST-1995-2002.htm

Here are some interesting statistics about the Short-term Indicant since 1995. The average gain between the Short-term Bull signal and the Short-term Bear signal is 3.4% and 3.6% for the Dow and NASDAQ, respectively. The average bull duration amounts to 40 and 34 days for the Dow and NASDAQ, respectively. The average bear duration is 36 days and 39 days. The average bearish points avoided amount to 118 and 38 or 1.3% and 0.5%, respectively.

The above statistics will not excite most people. They seem boring. The purpose of the Short-term Indicant is to support the other Indicant models and help an individual make decisions on a short-term basis, even when the strategy has been long-term and your sole source of information was the Long-term Indicant. Suppose you invested in the stock market in 1992. Suppose you had planned to sell out and retire in 2004. You may have decided to sell out in March 2000 with the Short-term Indicant Bear signal.

Many advisories promote their views of the stock market. The Indicant attempts to consider your view point, even though it does not know the details of your view point. It is important to recognize the stock market is only half of the story. The other half of the story is you.

As you can see, you are about to see a lot more active Short-term Indicant.

There have been several buy and sell signals the past few years. It has been a difficult time on the buying side, while the selling signals have benefited most of you. They have prevented the nightmarish losses endured by the buy/hold strategists.

Today’s investor is different from the investor in 1929 or even 1980. 401K’s have changed the nature of investing. If you were rolling over a set amount each month from 1995 through today, you would be down. But not as bad as some may think. Your 1995 through 1999 dollars did just fine. But those 1998-2003 dollars pretty much washed out the 1995-1999 dollars. There are many people in the investment industry whose livelihood depends on your losses. They made a bundle off the average investor from 1999 though 2003. They are selling while the average investor was still buying. Each dip in the market brought on many who thought the “great rebound” was around the corner.

The Short-term Indicant kept saying, “it ain’t so.” Although the Mid-term Indicant would signal buy from time to time, many of those bull signals were quickly followed by bear signals. However, if you noticed, a few buy signals held up very well indeed. That is why you never want to put all of your eggs in one basket. Spread your stock market investments around. If the Short-term Indicant is signaling bull and supported by the Quick-term attributes, then you can be aggressive in your investment strategy. The worse thing you can do is sign up in a 401K plan that is inflexible. When the Short-term Indicant is signaling bear and supported by the Quick-term Indicant, direct your dollars at contrarian funds or sectors, such as ProFunds Ultra Short or the energy services sector. Or just direct it toward cash.

More about the Short-term Indicant later.

The Quick-term Indicant Attributes

Although last week produced some mixed signals and emotion with the Short-term Indicant signaling Bull for the first time since March 30, 2000 for the NASDAQ, the market went down after that. However, the market was up for the week. More importantly, the Indicant Volume Indicator moved slightly to the north with the increasing market. That is bullish, but please read on. A link to the Indicant Volume Indicator is as follows:

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

As you can see from the Perspectives charts, the Dow has much more room to fall than the NASDAQ. As stated in the past, the NASDAQ has much more room to express bullish behavior. Money will rotate between the sectors inherent in these indexes. If both the market and volume rise during this rotation, enjoy your hold positions. The perspective charts are developed for intuition only. It helps you put things into perspective.

http://www.indicant.net/Members/Updates/STI-Mkts/QTP.htm

Force Vectors are eight dimensional and cannot be plotted. However, the numbers that define constraints against objectives are readable. The objective function is dynamic, as opposed to most LP models where the optimization is fixed against a constant objective. The Indicant objective function evolves around the seasonality but changes as variance from normal expectation is delivered each and every day. The numbers would not make sense to most of you. Since some of you are our competitors, who subscribe to our service, there is no way we will ever reveal the formulae. If we did, you would market it to the masses and water-down the current high degree of reliability. Remember, any time your purchase a successfully mass marketed stock trading method or read a best seller on the subject, the model will eventually fail you. We spend at least ten hours researching for each one hour of marketing, while most go the other way. There is a good reason why Coca Cola protects its formula. We have the same reason, plus the watering down effect.

Some of you who subscribe are responsible for huge numbers of shares. Some of you are mutual fund managers and some manage investments for major institutions. Although we prefer to market our services to the average investor, so far we have not seen any watering down effect by your membership. If we do, we will have to cancel your membership.

Now that is out of the way, what are the Force Vectors doing right now? They all started heading south last Thursday. However, they are still in bullish domains with an updraft. An updraft is that each Force Vector cycle is progressively higher than the last one. The Force Vectors moved dynamically and robustly to the north on April 4, 2001 . This originated with the NASDAQ was at 1638.80. The NASDAQ eventually peaked at 2282.02 on May 24, 2001 . Before peaking, the Force Vectors started plummeting with each cycle being lower than the previous cycle. The NASDAQ finally bottomed at 1460.71 on September 27, 2001 . That spring movement in 2001 occurred in the face of bearish seasonality. For those of you who were members in 2001 will recall the Indicant stating that Quick-term burst to the north was fake.

A similar situation occurred in April 2002, when one of the longest Quick-term Bear markets unfolded, lasting all the way to August of 2002. During that Quick-term Bear cycle, the NASDAQ had plummeted by over 50% at one point. The 300+ point gain on July 5, 2002 was phony and some of you recall the Indicant pointing that out.

Since the extremely poor first quarter’s performance and following the worst December since 1931, the Force Vectors are configuring an updraft. Each bottom is progressively higher than the prior bottom. The tops are not, though, and with that, there is guarded optimism. That optimism is even more guarded as we enter bearish seasonality on May 1, 2003 . However, the Quick-term Indicant and other models will be our guide; not the calendar.

Vector Pressure is still in bullish domains and we are safe from a catastrophic drop at this time, relative to the last Quick-term Bull signal.

The NASDAQ’s Short-term Indicant Bear Finally Died.

As stated the past several weeks, until recently, the longest period of time the Short-term Indicant went without a signal was between October 18, 1929 and August 24, 1932 for the Dow. During that period, it was a Short Term Indicant Bear. The Dow fell by 70.1% before getting a bull signal. That Short-term Indicant Bear lasted 1041 calendar days. The market found its secular bottom in 1932. That performance preceded the depths of the great depression. Ironically, one of the biggest bull markets in history followed that Short-term bear leg in 1929-1932.

http://www.indicant.net/Non-Members/ST%20Tour/ST-1929.htm

The NASDAQ’s Short-term Indicant finally signaled Bull on April 22, 2003 , after signaling Bear continuously since March 31, 2000 . That STI Bear market lasted 1,117 calendar days. That was longer than the Dow’s STI Bear from 1929 – 1932 by seventy-six days.

The NASDAQ’s Short-term Bear from March 31, 2000 through April 22, 2003 fell by 62.2% from Bear Signal to Bull Signal.

The ensuing Bull Market from April 22, 2003 through April 25, 2003 lasted only three days. Do not get concerned about this. It is not uncommon for the ghosts of powerful bulls and bears to wreak a little havoc on our comfort zones. It will be a little bouncy before the market gets enough commitment to move solidly to the north or the south.

You will notice that the NASDAQ’s Short-term Indicant gained 1,966 points since 1995, while the buy and hold strategy gained 688 points. During this period with extreme swings to the north and then to the south, the Short-term Indicant generated a 263.7% gain. This compares favorably to the 92.3% gain generated by the buy and hold strategy.

The Dow’s Short-term Indicant gained 9,077.94 points between 1995 and April 25, 2003 while buy and hold gained 4,467.85 points. The STI generated a gain of 236.5% against the buy and hold gain of 116.4%.

We do not recommend trading entirely on the Short-term Indicant, but if you prefer conservative investing and can find a Dow 30 Fund or simply trade all thirty of the stocks, then please do so. You will perform better than buy and hold and you will definitely avoid catastrophe. Your broker will like you as you will trade about once a month on average. The recent three year bear leg only happened once last century (1929-1932) and so far this century has only happened once. It is likely it will happen again this century a few more times with all the electronic processing. Investors have learned to funnel their emotions at the speed of light, so to speak.

http://www.indicant.net/Members/Updates/STI-Mkts/STI.htm

Stock and Fund Update

Click the following link to see specific performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them to the website.

http://www.indicant.net/Non-Members/Performance/Top-Bot.htm

Divergence versus Convergence

The market continues to express no divergent behavior. Energy stocks continue to hold up well. Halliburton gets to do about $7 Billion of the work over there, thanks to having a relationship with Dick Cheney. There is nothing wrong with that. Fear related securities are still holding up well. Although general equities took it on the nose toward the end of last week, their resiliency in the face of war continues to impress. General equities, fear related, and energy related cannot converge to the northeast on the charts for very long. One of these groups will slip hard in the next few weeks.

Economic Outlook

The cyclical pattern is south for gold, commodities, and other inflation/fear related issues still appear to be disembarking for their recent peak. If that cyclical behavior continues, then expect equities to move north. The recent surge in commodity prices is now stopped. This bodes well for bullish stock market behavior. The market will really zoom to the north in the event commodity prices plummet.

Take a few seconds and glance at the charts. The link is below.

http://www.indicant.net/Members/Updates/Economic/E03.htm

The same link above takes you to the CRB Bridge Futures. Look at all of the charts on that particular link. You may have to do scrolling. As stated five weeks ago, the stock market loves to see commodity prices crashing to the south. A link to all the economic data is below.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Econ.htm

Fear Metrics: Economic and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Forty-six weeks ago, it was up 66.1% since that buy signal. Thirty-nine weeks ago, it closed up 12.0% since that buy signal. Thirty weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001 . Last week it closed up 35.1%, which is down significantly from eight weeks ago when it was up 57.7%.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% forty-four weeks ago since the MTI buy signal in April 2001. Thirty-eight weeks ago, it closed up 27.8%. Last week it closed up 35.6%, which is down from 48.8% reported nine weeks ago.

Fear of terrorism, inflation, and a poor economy continues to provide a stimulus to these funds and related investments.

As stated in the past you can monitor the above two funds and options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

The Gold and Silver Index continues to hover around the long-term blue curve, but fell below the blue curve last week. After moving north for quite some time, it appears poised for a lengthy decline while the stock market moves north. The Mid-term Indicant will advise if this index decides to march north.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Quick-term and Short-term Indicant – Markets

The eight major indexes are up by an average of 3.7% since the March 17, 2003 Quick-term Bull Signal. That is an annualized gain of 34.7%. Many of the Quick-term attributes continue to favor bullish behavior. Check your email daily for the Quick-term Indicant updates.

The weakest bull is the NASDAQ100. It is up only 0.6% since the Quick-term Bull signal of March 17, 2003 . The strongest bull is the Dow Composite of Sixty-Five Stocks. It is up 5.7% driven primarily by the recent strong showing in the Utilities and Transport sectors. Interestingly, many of the transport companies are performing at their lowest profit levels in years, but the market anticipate that a while back. It is now anticipating the opposite to unfold.

Interestingly, the second strongest bull is the S&P600. It is up 5.6% since the March 17, 2003 QT Bull signal.

Remember, we have three phenomena working in favor of bull markets. The mid-term election year phenomenon has produced the bottom last year. The pre-election year phenomenon will produce favorable economic packages by government. The bull knows this or at very least believes economic stimulus will be provided. It will attempt to capitalize on it. Moreover, there are two weeks of bullish seasonality remaining.

The Dow Jones Industrial Average Short-term Indicant signaled bear last Friday. Do not let that bother you at this point. If it is still signaling bear when the next Quick-term Indicant signals bear, you can expect quite a few sell signals.

The NASDAQ’s Short-term Indicant also signaled Bear last Friday. That is just some ghosts from the most recent dynamic Short-term Bear that lasted over three years.

Additional Quick-term and Short-term Indicant information can be found at the following link.

http://www.indicant.net/Non-Members/Back%20Issues/A%20Reports.htm

Mid-term Indicant Positions - Major U.S. Market Indices

The Mid-term Indicant signaled bull for all eight major markets four weeks ago. The eight indexes are up an average of 0.9% for an annualized gain of 9.6%. The DJIA is down the most by 2.5% since the MTI Bull signal on March 22. The Dow Utilities is the strongest bull. It is up slightly by 5.2% since the MTI Bull signal on March 22, 2003 . Surprisingly, the second strongest bull is the Dow Jones Transports, which is up 3.9% since the MTI Bull signal. The NASDAQ100 was and still is the weakest bull. It remained unchanged from last week. It is down by 0.8% since the MTI Bull signal.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There was one new bull signal and two new bear signals.

In addition to the new bull signal, fifteen of the twenty-two foreign indexes tracked by the Indicant are Mid-term Bulls. They are up an average of 37.6% since the Mid-term Indicant signaled bull an average of 33.1 weeks ago for an annualized gain 59.1%.

In addition to the new bear signals, four markets have been bears for an average of 6.8 weeks. They are down by an average of 6.5%.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI%20Intl%20Mkts.htm

April 20, 2003 Indicant.Net Weekly Update

Volume 04, Issue 3 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members,

This Week’s Report

A Time to be Technical - Part 2

Last week we said, “Fundamentally, the market should not go up right now.” The economy remains weak. A serious disease, SARS, is spreading around the world. Terrorists are most likely riled up with U.S. troops hanging around the Middle East . The press is most likely going to try to connect Dick Cheney to favoring Halliburton in squelching Iraqi oil well fires. The travel sector of the economy is going to remain poor with SARS and the fear of terrorism. The Middle Easterner’s reaction to America ’s bullying in their homeland has yet to be seen.

Last week, this report stated even with all that, the market is not poised to nosedive. The market did very well last week. Its bullish behavior repositioned the mutual funds into positive gains from their respective buy signals with a few exceptions.

If the Dow stays flat for the rest of April, the bullish period from November 1 through April 30 would be out of line with normal expectations. The Dow is down by 0.7% since November 1, 2002 while the NASDAQ is up by 7.2%. The NASDAQ performed as expected during this period of bullish seasonality, while the Dow has not.

Although the Dow has fallen from its peak of 11723 on January 14, 2000 , it has not nosedived. It has more or less fallen in a pattern of lethargy, which contrasts with NASDAQ’s nosedive. It stands only to reason, the NASDAQ’s rebound is stronger than that of the Dow. That has been the case so far during this period of bullish seasonality.

However, with seasonal normalcy, the Dow should increase in the bullish period between November 1 and April 30. Since 1920, the Dow has gained an average of 1.8% in the first quarter. Since 1950, the average gain amounts to 2.8%. Between 1985 and 2002, the average gain for the first quarter Dow was a whopping 5.1%. The Dow tumbled 4.2% in the first quarter of 2003 whereas it climbed 3.8% in 2002. Last year’s first quarter was consistent with normal behavior, while this year has so far been abnormal. The Dow lost over 20% on the Short-term Indicant Bear leg in 2002 after its normal behavior in Quarter I, 2002.

The NASDAQ fell by 5.4% in the first quarter of 2002. It plummeted even worse than the Dow throughout much of 2002. The NASDAQ100 was down over 50% at one point during the Quick-term Indicant’s Bear leg from April through August 2002. The NASDAQ has performed fairly well during the current period of bullish seasonality. It is up 7.2% since November 1, 2002 , while the Dow is down 0.7%. However, the NASDAQ was up an infinitesimally at only 0.4% in the first quarter of 2003. Most of the growth in the NASDAQ bullish seasonal period occurred in the fourth quarter of 2002 at 13.9%. That is pretty good growth and as most of you know, your hold positions were much healthier before the worst December in 2002 since 1931.

Most of you recall the tremendous number of buy signals generated in mid and late October 2002. Bullish seasonality started a little ahead of schedule last year. Most of the current market’s position was delivered between mid October and the end of November of last year. After enduring the worse December since 1931, the market has been relatively flat this year. The Dow is down four points since the last day 2002, while the NASDAQ and S&P500 are up 6.7% and 1.6%, respectively, since then.

The Dow is down 29% since its all time closing peak of 11723. The NASDAQ is down 72% since its all time closing peak of 5048.62. The S&P500 is down 41% since its all time closing peak of 1527.46. As you can see, there is quite a spread in the three major indexes. Also, one can reason the NASDAQ’s rebound will be significantly more than that of the Dow. Even the Internet Indexes are performing well right now. Links to those two Internet Indexes, as tracked by the Mid-term Indicant are below this paragraph.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I02.htm#12

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I02.htm#08

As many of you know, the Quick-term Indicant signals bull or bear for all of the eight indexes it tracks. There are no individual signals for the respective indexes. Some of you recall, the S&P600 was very slow in turning bearish about this time last year. The Quick-term Indicant signaled bear on April 19, 2002 , which was within the period of bullish seasonality. As previously mentioned, the NASDAQ was down by over 50% at one time during that Quick-term Bear cycle.

The Quick-term Indicant’s attributes one year ago were solidly bearish. Right now, those same attributes are not solidly bearish. They currently have a bullish biasness. Bullish seasonality should play out at least through the end of April and may very well extend into May-June. The Quick-term Indicant will keep you posted, regardless of what the market decides to do.

The market traditionally moves north in pre-election years. At least that has been the case for over the last half century. The economy has been at a relative standstill for nearly three years. George W. Bush most likely does not want to be a single term president more than most of his predecessors, which includes his single term father. Although, he will not get as much tax cut that he wants, he will most likely get some. Even a small tax cut will add fuel to the economy. The tax cut he incorporated just after taking office did not offset the decline in stock prices. Now that the market is low, a small tax cut will offer some significant stimulants to the economy. The president can offer other economic stimulants. Remember, politicians can never create economy. All they can do is to undo their prior economic depressants. They typically do those sorts of things during the election years. The market anticipates that about six to nine months ahead of political favoritism.

Big money institutions will favor the NASDAQ stocks more than the larger cap stocks. The Dow is incongruent with seasonal normalcy. That means it should continue its rebound at least for the next two weeks. The NASDAQ, which was higher in the first quarter and is congruent with seasonal normalcy, may provide fuel to the Dow in the immediate future. However, as profit taking rolls money out of the Dow stocks in May, the NASDAQ will benefit with bullish fervor. That rotation back and forth should contain more buying and less selling. If that occurs, the market will continue to display bullish patterns.

The longer the market holds its position and displays a discontinuance of this so-called secular bear, the more small investors will enter. Many of you, who are small investors, are already in the market. Some of you are big institutions and we have our eye on you. More and more small investors will continue to jump in as the market either holds its position or continues to increase. That added volume will stimulate bullish behavior. The final group of small investors will enter the market at near the peak. Unfortunately, they will hold on too long, which is always the case and lose money when the market renews its next major bear cycle. If history repeats, the next great bear cycle will commence in 2005 and last until 2007, the next pre-election year.

The market will most likely not achieve its historic peaks in the event we do enjoy a dynamic bull in this pre-election year. The democrats will attempt to stand in the way of stimulus packages to keep a lid on the economy. They know Americans vote their pocket books. If the economy is still sour in November 2004, then a democrat will become the next president. The only other strategy George W. could do to get reelected is to go to war with Syria . Americans generally do not remove the incumbent during war. So, expect dove behavior and anti-economic stimulant behavior from the democrats in the next twelve to eighteen months. Expect hawkish and economic stimulant behavior from George W and pals. Politicians do not care about you. They only care about being in power. Moreover, that power is a mere perception.

The market is appears to be betting that George W. will win on most economic stimulant packages. If we can remain void of voodoo bookkeeping and terrorism, George W. has a good chance of not becoming a single term president like his father. Not all voodoo bookkeepers and dilettante managers have been rooted from their roosts. Too bad one can still not read a financial report and know what is going on.

The market generally finds bottoms in mid-term election years. The market fell rather dramatically in 2002 before hitting bottom in September. The NASDAQ100 is up 25.7% since its 2002 bottom. The NASDAQ is up 21.8%. The S&P400 and S&P600 are up 11.8% and 11.4% since their respective 2002 lows. The remaining indexes tracked by the Indicant are between those two indexes.

The mid-term election year is holding true. The numerous buy signals last October are still being held, although the poor first quarter brought on many sell signals for mutual funds. However, many of the NASDAQ100 and Indicant Selected Stocks are still being held since those October 2002 buy signals. If the pre-election year phenomenon holds true to form, those stocks should rise even higher.

The problem is this. The markets are up significantly from their 2002 lows. That leaves them room to fall during bearish seasonality, which begins on May 1. For example, the NASDAQ can fall 20% and still be congruent with the mid-term election year phenomenon. However, such a fall would not congruent with the pre-election year phenomenon. But a fall of 20% and a rise of 21% or more before the end of the year will induce one to continue studying history and believing its meaning. A rise of 21% between November 1, 2003 and December 31, 2003 is very possible.

Such projections are meaningless. That is why the Quick-term Indicant attributes exist. If the market chooses not to honor historical phenomena and it certainly has demonstrated characteristics of surprising the masses, the Quick-term Indicant will sniff out its mischievous behavior and let you know. If the market decides to deliver a nasty bear cycle this year like it has the past three years, you will be the first to know.

The Quick-term Indicant Attributes

The Indicant Volume Indicator continues to project increasing lethargy. However, the recent slide in stock prices was not supported with as much volume as the recent increases in stock prices. That, at the very least, is non-bearish. A link to the Indicant Volume Indicator is as follows:

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

As you can see from the Perspectives charts, the Dow has much more room to fall than the NASDAQ. As earlier stated in this report, the NASDAQ has much more room to express bullish behavior. Money will rotate between the sectors inherent in these indexes. If both the market and volume rise during this rotation, enjoy your hold positions.

http://www.indicant.net/Members/Updates/STI-Mkts/QTP.htm

Force Vectors, which are eight dimensional and cannot be plotted, are again on the upswing. Their recent decline lowered Vector Pressure to neutrality. The Force Vectors reacted with an apparent desire to prevent Vector Pressure from entering bearish domains. This contrasts with last year’s configuration where the Force Vectors nosedived and the five-month long Quick-term Bear was born. The current Quick-term Indicant configurations are the exact opposite of last years. Your hold positions appear solid at this time.

The NASDAQ Short-term Indicant Bear’s Now Over Three Years Old

As stated the past several weeks, until recently, the longest period of time the Short-term Indicant went without a signal was between October 18, 1929 and August 24, 1932 for the Dow. During that period, it was a Short Term Indicant Bear. The Dow fell by 70.1% before getting a bull signal. That Short-term Indicant Bear lasted 1041 calendar days. The market found its secular bottom in 1932. That performance preceded the depths of the great depression. Ironically, one of the biggest bull markets in history followed that Short-term bear leg in 1929-1932.

http://www.indicant.net/Non-Members/ST%20Tour/ST-1929.htm

We are now enduring a new record length of a Short-term Indicant Bear Market. The current Short-term Indicant Bear is now 1114 calendar days old for the NASDAQ. It is seventy-three days older than the 1929-1932 Short-term Indicant Bear. The current Short-term Bear for the NASDAQ is down 66.2% since the bear signal on March 30, 2000 . The geometric configurations between the 1929-1932 bear leg and the current bear leg are in a near congruent configuration. If the current recoil configuration is congruent with that of 1933, we are in position to enjoy a huge bull move even with a weak economy. Just as the market was over-bought in March 2000, it could very well now be oversold. The configurations suggest the market does not want to fall further to the south.

http://www.indicant.net/Members/Updates/STI-Mkts/STI.htm

The Short-term Indicant signaled bull one year and one day after the Short-term Bear leg that began on March 20, 2002 for the Dow Jones Industrial Average Index. The Dow fell by over 20% during that STI Bear Leg. The new Short-term Indicant Bear for the Dow is up slightly by 1.5% since the bear signal on March 24, 2003 . The Short-term Indicant tends to lag bottoms, while on the other hand outperforms buy and hold by over two to one.

Stock and Fund Update

Click the following link to see specific performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them to the website.

http://www.indicant.net/Non-Members/Performance/Top-Bot.htm

Divergence versus Convergence

The market continues to express no divergent behavior. Energy stocks are holding up well even though the worse case scenario did not play out well in Iraq . Fear related securities, such as gold moved up last week. General equities also moved to the north last week. The market is confused right now, but the underlying Quick-term Indicant are biased for general bullish behavior.

Economic Outlook

Oil prices, gold, and other underlying fear and inflation-oriented commodities rebounded last week, but the cyclical pattern is south. If that cyclical behavior continues, then expect equities to move north. The recent surge in commodity prices is now stopped. This bodes well for bullish behavior. The market will really zoom to the north in the event commodity prices plummet.

Take a few seconds and glance at the charts. The link is below.

http://www.indicant.net/Members/Updates/Economic/E03.htm

The same link above takes you to the CRB Bridge Futures. Look at all of the charts on that particular link. You may have to do scrolling. As stated four weeks ago, the stock market loves to see commodity prices crashing to the south. A link to all the economic data is below.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Econ.htm

Fear Metrics: Economic and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Forty-five weeks ago, it was up 66.1% since that buy signal. Thirty-eight weeks ago, it closed up 12.0% since that buy signal. Twenty-nine weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001 . Last week it closed up 38.8%, which is down significantly from seven weeks ago when it was up 57.7%.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% forty-three weeks ago since the MTI buy signal in April 2001. Thirty-seven weeks ago, it closed up 27.8%. Last week it closed up 37.1%, which is down from 48.8% reported eight weeks ago.

As stated in the past you can monitor the above two funds and options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

The Gold and Silver Index continues to hover around the long-term blue curve. After moving north for quite some time, it appears poised for a lengthy decline while the stock market moves north. The Mid-term Indicant will advise if this index decides to march north.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Quick-term and Short-term Indicant – Markets

You received details about this yesterday. The eight major indexes are up by an average of 3.2% since the March 17, 2003 Quick-term Bull Signal. Many of the Quick-term attributes are favoring bullish behavior. Check your email daily for the Quick-term Indicant updates.

Remember, we have three phenomena working in favor of bull markets. The mid-term election year phenomenon has produced the bottom last year. The pre-election year phenomenon will produce favorable economic packages by government. The bull knows this or at very least believes economic stimulus will be provided. It will attempt to capitalize on it. Moreover, there are two weeks of bullish seasonality remaining.

The Dow Jones Industrial Average is up 1.5% since the Short-term Indicant signaled bear a couple of weeks ago.

The NASDAQ Composite is down 66.2% since the Short-term Indicant signaled bear over three years ago on March 30, 2000 . The Quick-term daily updates will keep you posted on this.

The Indicant Volume Indicator continues expressing lethargy. The market can increase with lethargic behavior, but will need increasing volume to support a sustaining and long lasting bull market.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

http://www.indicant.net/Non-Members/Back%20Issues/A%20Reports.htm

Mid-term Indicant Positions - Major U.S. Market Indices

The Mid-term Indicant signaled bull for all eight major markets four weeks ago. The eight indexes are up an average of 0.3% for an annualized gain of 3.9%. The DJIA is down the most by 2.2% since the MTI Bull signal on March 22. The Dow Utilities is the strongest bull, although up slightly by 3.2% since the MTI Bull signal on March 22, 2003 . Surprisingly, the second strongest bull is the Dow Jones Transports, which is up 2.8% since the MTI Bull signal. Last week, the NASDAQ100 was the weakest, but recovered this past week. It is down by only 0.8% since the MTI Bull signal.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There was one new bull signal and one new bear signal.

In addition to the new bull signal, sixteen of the twenty-two foreign indexes tracked by the Indicant are Mid-term Bulls. They are up an average of 34.5% since the Mid-term Indicant signaled bull an average of 30.9 weeks ago for an annualized gain 58.0%.

In addition to the new bear signal, four markets have been bears for an average of 8.6 weeks. They are down by an average of 4.2%.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI%20Intl%20Mkts.htm

April 13, 2003 Indicant.Net Weekly Update

Volume 04, Issue 2 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

A Time to be Technical

Fundamentally, the market should not go up right now. The economy remains weak. A serious disease, SARS, is spreading around the world. Terrorists are most likely riled up with U.S. troops hanging around the Middle East . The press is most likely going to try to connect Dick Cheney to favoring Halliburton in squelching Iraqi oil well fires. The travel sector of the economy is going to remain poor with SARS and the fear of terrorism. The Middle Easterner’s reaction to America ’s bullying in their homeland has yet to be seen. The strategists will figure they will conform to our demands, while others will say it will make even more of them fanatically radical.

Even with all that, the market is not poised to nosedive.

The bottom line is that the U.S. is going to get the oil. It will either pay for it or take it. There is no need for soft-handed intellectualism. Even the local protestors to the war say, “It is all about oil.” Then after protesting they get in their cars and drive somewhere else, using oil to do it. It is pretty hypocritical, isn’t it? Sure, it is about oil, including the oil those aging hippies use every time they drive somewhere, adjust their thermostats, or even visit the hospital where moving parts need lubrication. It is about oil. There is no need to worry about Korea . They do not have oil.

The market never went down in the face of war. Markets have generally fallen in the early stages of war. This did not happen this time. The war simply dampened the bull spurt. At least it appears that way. So, it is time to get technical. We need to figure this out. No, we’re not going to forecast. It would be wrong. They always are. When one gets it right, it is luck and watch out because they will not get it right a second time.

Before getting technical, it is interesting that a very fine company is having severe problems with cash flow. I2 Technologies’ corporate credit rating has been downgraded by S&P from B to CCC+. The company apparently has had difficulty getting in front of the demand curve. When a company gets behind the demand curve, they are too slow adjusting their capacity to spend. Consequently, their losses accelerate beyond what they should. When demonstrated capacity lags the demand curve for that capacity, there is an obvious ability to spend cash exceeding the inflow of cash.

Some management teams get too emotional with their headcount and have difficulty implementing the required adjustments as a function of demand for their products and services. That emotion and corresponding management delays ultimately harm the company and many times that harm is fatal to the organization. I2 Technologies offers a tremendous product and service to Corporate America. I2 Tech has been guilty of academic credentialism and managing their business behind the demand curve. The stock price reflects that inability. A recent history of buy and sell signals by the Mid-term Indicant for I2 Technologies is below:

Buy Date    Buy Price   Sell Date     Sell Price   Profit/Loss Avoided Loss

02/12/99      $7.563       04/16/99      $6.375       -    15.7%   -   27.0%

05/21/99      $8.094       11/24/00      $56.500     + 598.1%    +  65.1%

04/13/01      $19.740     06/29/01      $19.800     +     0.3%    +  77.3%

10/19/01      $4.500       02/08/02      $6.060       +   34.7%    -   15.8%

03/08/02      $7.020       03/29/02      $5.060       -    27.9%   +  81.4%

11/02/02      $0.940       01/31/03      $1.000       +     6.4%    +100.0%

Current       $0.0001, I2 Tech has not traded officially for a couple of weeks, but some sources peg the stock at fractions of a penny.

When a company brags about a backlog for their products and services, they are admitting they are behind the demand curve. When the backlog increases by vast amounts, Wall Street gives them great reviews and the stock price goes up. Conversely, when the demand curve decreases, Wall Street will give them bad reviews and the stock price goes down.

The key point is for the company to stay ahead of the demand curve. When a company falls behind the demand curve that is going up and lets everyone know, all that company is doing is inviting competition. Then, when the industry pinnacles and starts turning south, that company must share that shriveling market with more.

Fundamentally, you should view companies that boast increasing backlogs as being incompetent, regardless of Wall Street proclamations. Besides, the Wall Street Analysts are wrong more than they are right. It is amazing so many investors fall for the hype. You do not need them. All you need is an honest and informative income statement, balance sheet, and cash flow statement. Click the following link to see Wall Street Analysts’ abilities.

http://www.indicant.net/Non-Members/OrderPageGraphicsLinks.htm#Reason%20#2.%20Indicant%20outperforms%20high%20priced%20security%20analysts.

Now let us review some technical stuff.

The Indicant Volume Indictor is beginning to express increasing apathy. The good news is that this configuration has been expressed in a downward moving market. The bad news is that increasing and robust volume is needed for a dynamic bull market. Actually, the market is not going down, but remaining frustratingly flat. It is down 0.1% since the Quick-term Bull signal. More will be said about that later.

Before clicking the below link you should notice the 2002 low is still the low point on the two charts. The Quick-term Bear, which was unseasonably induced in January 2003 never fell to the October 2002 low point. The inability of that Quick-term Bear lends support to the mid-term election year phenomenon.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

Now that you have looked at that chart, you will notice the NASDAQ’s Indicant Volume Indicator is continuing to show an interest in attempting a robust pattern. If it generates robustness, then watch what the market does when that occurs. If the market is going down on increasing robustness, you will need to express your behavior consistent with that of a bear market. We will help you do that.

Look at the perspective charts. You will notice the same thing. The market has not hit the current annual 52-week lows, which occurred in October 2002.

http://www.indicant.net/Members/Updates/STI-Mkts/QTP.htm

You will notice the S&P600, Small Caps came close to hitting the 52-week low in the January-February Quick-term Bear. Some of you may recall the S&P600 was a tremendous bull market in late 2001 and early 2002. It was a very obstinate bull. On April 19, 2002 it dropped slightly and the Quick-term Indicant signaled bear that lasted all the way until August 2002. At one point during that bear cycle, the NASDAQ100 was down by over 50%. It was a very long-lasting Quick-term Bear.

We do not expect that to be the case this year. President Bush’s popularity is very high based on his military endeavors. So far, he is on the same schedule as his father, who was also very popular after Desert Storm. However, on Election Day, 2002, George H. Bush was removed from office due to economic recession.

George W. Bush is trying to get a $126 billion tax bill through Congress to stimulate the economy. Congress is not going to let him have that. There will be a tax bill, but not that much. The Democrats know that a weak economy in November 2004 will remove George W. Bush from office. They are not going to do one thing to help the economy along. That is the nature of politicians. They do not care about their constituents. They only care about themselves. They will do whatever it takes to regain power, regardless of the hardships on their constituents.

George W. Bush will implement any policies, where he can, to reinvigorate the economy as much as he can. All presidents do this in pre election years, which is what 2003 is all about. The stock market knows that additional funds will worm its way into the hand of capitalists who will apply blood, sweat, and tears to make even more money. The Democrats will do all possible to mitigate that so they can regain the White House. Either way, the stock market will go up and not down in anticipation of more money going to capitalists and consumers. Remember, the only thing a politician can do positively to the economy is to undo their past stupidity. It is you and me that provides substance to the economy; not politicians who epitomize economic leeches.

The market goes up during pre-election years. It does not go up based on contemporary economic behavior. It goes up in anticipation of economic behavior around November of the election year. By the time November 2004 arrives, the market will be looking ahead to 2005. The stock market has little influence on the outcome of elections. The economy has everything to do on the outcome of elections. It is possible for the country to be enjoying a robust economy in November 2004 and a depressed stock market. In other words the market can increase between now and sometimes next year and be depressed on Election Day 2004. The Indicant is not forecasting a crash in late 2004, as it does not forecast. However, the phenomenon of pre-election year bull markets should not be ignored. The various Indicant models will keep you in synch with the reality of the market’s inclinations and direction.

Politicians understand these phenomena. Those out of power will do all possible to continue to depress the economy, while those in power will do all possible to improve the economy. Politicians manipulate their prior damaging economic policies to remain in power, while others are destructive to gain power. Interestingly, if those out of power have their way, they will win the election. In other words, those responsible for economic damage are politically rewarded for their efforts. The only solution is to require everyone to pass Economics 101 prior to being able to register to vote. That is not going to happen. Politicians desire ignorance from the populace. You can see they have been successful in that endeavor from the public school system in the past fifty years. An ignorant populace actually believes politicians are important people.

We are now within two weeks from bearish seasonality, which occurs from May through October for the blue chips. Even if the lows of 2002 are not breached, it is highly likely the market will stay flat during this time. You can review the six-month seasonality phenomenon on the following link.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0030.htm

If history repeats, and there are no guarantees, the market will be up this year in spite of the worst December since 1931. Actually, the fact that December 2002 was the worst since 1931 helps that prognosis. It would not be surprising to see a lethargic market between May and October of this year, while at the same time not breaching 2002 lows.

The current Quick-term Bull is vacillating around the bullish red curve. The bearish yellow curve is inclining which bodes well for bullish expectations. The market did not serge ahead on good news from Iraq as expected. However, we still have two weeks remaining until April 30. The Quick-term Configurations are incongruent from last years, when a long lasting and deep Quick-term Bear started.

Unlike last year, there is little to worry about at this time with respect to any potential major bear. Unfortunately, the Quick-term Configurations are weakening somewhat. If there is no major rebound in the immediate future, the Quick-term Configurations may shift to bearish mode. Read your email and routinely check the web site.

The NASDAQ Short-term Indicant Bear’s Now Over Three Years Old

As stated the past several weeks, until recently, the longest period of time the Short-term Indicant went without a signal was between October 18, 1929 and August 24, 1932 for the Dow. During that period, it was a Short Term Indicant Bear. The Dow fell by 70.1% before getting a bull signal. That Short-term Indicant Bear lasted 1041 calendar days. The market found its secular bottom in 1932. That performance preceded the depths of the great depression. Ironically, one of the biggest bull markets in history followed that Short-term bear leg in 1929-1932.

http://www.indicant.net/Non-Members/ST%20Tour/ST-1929.htm

We are now enduring a new record length of a Short-term Indicant Bear Market. The current Short-term Indicant Bear is now 1107 calendar days old for the NASDAQ. It is sixty-six days older than the 1929-1932 Short-term Indicant Bear. The current Short-term Bear for the NASDAQ is down 67.8% since the bear signal on March 30, 2000 . The geometric configurations between the 1929-1932 bear leg and the current bear leg are in a near congruent configuration. If the current recoil configuration is congruent with that of 1933, we are in position to enjoy a huge bull move even with a weak economy. Just as the market was over-bought in March 2000, it could very well be oversold in March 2003. The configurations suggest the market does not want to fall further to the south.

http://www.indicant.net/Members/Updates/STI-Mkts/STI.htm

The Short-term Indicant signaled bull one year and one day after the Short-term Bear leg that began on March 20, 2002 for the Dow Jones Industrial Average Index. The Dow fell by over 20% during that STI Bear Leg. The new Short-term Indicant Bear for the Dow is down slightly by 0.1% since the bear signal on March 24, 2003 .

Stock and Fund Update

Click the following link to see specific performance of stocks and funds with hold/avoid signals.

http://www.indicant.net/Non-Members/Performance/Top-Bot.htm

Divergence versus Convergence

The market is expressing no divergence behavior. Also, there is no convergence in either direction. Energy related securities are hanging around waiting to see if oil prices will zoom north, while the general markets are weary of poor performance during the last six months of bullish seasonality. Either energy or general equities will move north. Both groups will not move north in sustained fashion at the same time.

Economic Outlook

Oil prices, gold, and other underlying fear and inflation-oriented commodities continue to fall. If that cyclical behavior continues, then expect equities to move north. You will notice commodity prices moved to the north over the past few months for speculative reasons. The speculative prognosis was for a worse case scenario in the Middle East , whereby oil fields would be permanently destroyed. That has not happened and thus the reason for declining commodity prices. That should bode well for those of you who desire bullish behavior.

Take a few seconds and glance at the charts. The link is below.

http://www.indicant.net/Members/Updates/Economic/E03.htm

The same link above takes you to the CRB Bridge Futures. Look at all of the charts on that particular link. You may have to do scrolling. As stated four weeks ago, the stock market loves to see commodity prices crashing to the south. A link to all the economic data is below.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Econ.htm

Fear Metrics: Economic and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Forty-four weeks ago, it was up 66.1% since that buy signal. Thirty-seven weeks ago, it closed up 12.0% since that buy signal. Twenty-eight weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001 . Last week it closed up 34.4%, which is down significantly from six weeks ago when it was up 57.7%.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% forty-two weeks ago since the MTI buy signal in April 2001. Thirty-six weeks ago, it closed up 27.8%. Last week it closed up 36.8%, which is down from 48.8% reported seven weeks ago.

Both of these funds were up slightly last week, even though victory was close at hand in Iraq , which on the surface conflicts with the news. Always remember, if you read about it in the news, it is too late to make money on that news.

As stated in the past you can monitor the above two funds and options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

The Gold and Silver Index continues to hover around the long-term blue curve. After moving north for quite some time, it appears poised for a lengthy decline while the stock market moves north. The Mid-term Indicant will advise if this index decides to march north.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Quick-term and Short-term Indicant – Markets

You received details about this yesterday. The eight major indexes are down by an average of 0.1% since the March 17, 2003 Quick-term Bull Signal. Many of the Quick-term attributes are favoring bullish behavior. Check your email daily for the Quick-term Indicant updates.

Remember, we have three phenomena working in favor of bull markets. The mid-term election year phenomenon has produced the bottom last year. The pre-election year phenomenon will produce favorable economic packages by government. The bull knows this or at very least believes economic stimulus will be provided. It will attempt to capitalize on it. Moreover, we are still in the period of bullish seasonality.

The Dow Jones Industrial Average is down 0.1% since the Short-term Indicant signaled bear a few days ago.

The NASDAQ Composite is down 67.8% since the Short-term Indicant signaled bear over three years ago on March 30, 2000 . The Quick-term daily updates will keep you posted on this.

The Indicant Volume Indicator is showing signs of increasing lethargy. As earlier stated this is good because it occurred during a declining market. This is bad, as robust volume will be required for an enduring bull. It is not required for a short-spurt bull.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

http://www.indicant.net/Non-Members/Back%20Issues/A%20Reports.htm

Mid-term Indicant Positions - Major U.S. Market Indices

The Mid-term Indicant signaled bull for all eight major markets three weeks ago. Even though the eight indexes are down since that bull signal, they are configured to express bullish behavior. The Mid-term Indicant typically does not tolerate more than two weeks of losses, but the weights influenced by the Quick-term Configurations have delayed a switch to bear. This is bullish. The NASDAQ100 is down the most by 6.1% since the MT Bull signal on March 22. The NASDAQ100 is the most volatile and can make that up in a day or two. Surprisingly, the Dow Utilities is the strongest bull, although up slightly by 0.1% since the MT Bull signal on March 22, 2003 .

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There were four new bull signals and no new bear signals last week.

In addition to the new bull signal, thirteen of the twenty-two foreign indexes tracked by The Indicant are Mid-term Bulls. They are up an average of 36.9% since the Mid-term Indicant signaled bull an average of 36.9 weeks ago for an annualized gain 52.0%.

Five markets have been bears for an average of 7.9 weeks. They are down by an average of 4.3%.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI%20Intl%20Mkts.htm

April 6, 2003 Indicant.Net Weekly Update

Volume 04, Issue 1 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Stupidity

We have witnessed some of history’s greatest acts of stupidity so far this century. Shortly after radicals flew planes into buildings over two years ago, voodoo bookkeeping and dilettante management were introduced. Enron was the first big story of voodoo bookkeeping. After that story broke, many other companies were also revealed as not being honest. Most corporations were viewed with suspicion by potential investors. No matter how much those dilettante managers grabbed camera time on CNBC, stocks continued drifting to the southeast.

Metromedia Fiber with a reported seven billion in assets fell by 99% as its managers paid them hefty salaries while they reported false earnings and overstated book values. Lying was interpreted as an accepted practice as demonstrated by Slick Willy Clinton. Corporate America ’s leaders were cut from the same mold, as Slick Willy.

What causes stupidity? Acting in a way that defies reality is the cause. Dilettante managers thought they could groom themselves up enough for their time on CNBC and market their company to viewers in the face of a bear market. Their accountants would cook up the books so the groomed could share good news to the viewing public. Although the news was good, who would believe it? Why is this guy talking on CNBC and not work putting in a solid fourteen hour day like the rest of us?

Although the crowd is always wrong, the crowd is needed during the middle stages of a bull leg. The crowd is usually late getting into the market. Their mad rush to get into the market helps the cause of supply and demand. The early entrants to a bull leg will hold their stocks, thus depressing the supply of stocks, while the crowd invokes more and more demand on the stocks. Consequently, stock prices rise and the bull leg continues moving to the north.

When the market gets ahead of itself, which it does from time to time, it peaks. The early sellers convert their shares to cash or counter cyclical investments, while the crowd is still happy they are in the market. After the market turns into a nasty bear, the crowd starts selling. That increases the supply of stocks while demand is simply not there. The early sellers at or just after the peak are not yet buying. The supply of stocks exceed the demand for stocks. Consequently, stock prices fall. Reality exerts itself.

Now, we see more images of stupidity and lying from Iraq . Even though allied forces have captured the airport and moved into Baghdad , Iraqi leadership is calling that fiction. Some Iraqi’s are charging Abram Tanks and Bradley Fighting Vehicles is their search for martyrdom. Now, that is stupid. If that sort of stupidity keeps up, the market will gain confidence in the ultimate victory in Iraq . The market knows that honesty generally prevails. Reality is not positive or negative. It is so blatantly honest, that honesty always prevails.

All things that are dishonest ultimately perish. Dictatorships, kingdoms, and other repressing forms of society fly in the face of reality. The people of the world have steadily been ridding themselves of those who repress. Each movement in that direction invites an impetus for the stock market to move north. If everyone in the world had been free the last one-hundred years, there would have been fifty Henry Fords, fifty Thomas Edisons, fifty Bill Gates, etc. Those industrialists are the ones who move the economies of the world to the north and excite stock market behavior. Politicians of the world have absolutely nothing to do with it, except an ability to depress economies and the stock market. The only reason politicians are perceived as needed is because other societies allow dictatorship, kingdoms, etc. So, we need ours to conquer theirs.

Commerce only needs two people; a buyer and a seller. So, where do politicians come into play? After Saddam Hussein, there will be others. Since September 11, 2001 , the world will never be the same. It is actually going to get better. Repressors are going to evaporate at an accelerating rate. More and more people are going to be born in a free society. A minority of them will become hoodlums. Another minority will become great industrialists. The great industrialist’s ability to create will more than offset the hoodlum’s ability to destroy. The average person will side with the industrialists, which will influence the rapid destruction of the hoodlum.

Consequently, the bull market that began in the 1950’s will resume its path to the north.

Yeah, that all sounds great, but what about the market in the immediate future? Right now, Force Vectors, Vector Pressure, the Indicant Volume Indicator, and the various Mid-term Indicant models suggest the market is gearing up for a nice bull run. In the event those parameters change, you will be the first to know.

The NASDAQ Short-term Indicant Bear’s Now Over Three Years Old

As stated the past several weeks, until recently, the longest period of time the Short-term Indicant went without a signal was between October 18, 1929 and August 24, 1932 for the Dow. During that period, it was a Short Term Indicant Bear. The Dow fell by 70.1% before getting a bull signal. That Short-term Indicant Bear lasted 1041 calendar days. The market found its secular bottom in 1932. That performance preceded the depths of the great depression. Ironically, one of the biggest bull markets in history followed that Short-term bear leg in 1929-1932.

http://www.indicant.net/Non-Members/ST%20Tour/ST-1929.htm

We are now enduring a new record length of a Short-term Indicant Bear Market. The current Short-term Indicant Bear is now 1100 calendar days old for the NASDAQ. It is fifty-nine days older than the 1929-1932 Short-term Indicant Bear. The current Short-term Bear for the NASDAQ is down 67.2% since the bear signal on March 30, 2000 . The geometric configurations between the 1929-1932 bear leg and the current bear leg are in near congruent configuration. If the current recoil configuration is congruent with that of 1933, we are in position to enjoy a huge bull move even with a weak economy. Just as the market was over bought in March 2000, it could very well be oversold in March 2003. The configurations suggest the market does not want to fall further to the south.

http://www.indicant.net/Members/Updates/STI-Mkts/STI.htm

The Short-term Indicant signaled bull one year and one day after the Short-term Bear leg that began on March 20, 2002 for the Dow Jones Industrial Average Index. The Dow fell by over 20% during that STI Bear Leg. The new Short-term Indicant Bear for the Dow is up slightly by 0.8% since the bear signal on March 24, 2003 .

Stock and Fund Update

Click the following link to see specific performance of stocks and funds with hold/avoid signals.

http://www.indicant.net/Non-Members/Performance/Top-Bot.htm

Divergence versus Convergence

There is little divergence right now. Energy stocks and funds rebounded slightly last week. General equities rebounded on positive news from Iraq . There is a slight edge in favor of general equities, including technology.

Economic Outlook

Oil prices, gold, and other underlying fear and inflation-oriented commodities continue to fall. If that cyclical behavior continues, then expect the market to move north. Allied forces have apparently mitigated Saddam Hussein’s ability to wreak significant damage to Middle Eastern oilfields. If that constraint continues, the market will view as favorable.

Take a few seconds and glance at the charts. The link is below.

http://www.indicant.net/Members/Updates/Economic/E03.htm

The same link above takes you to the CRB Bridge Futures. Look at all of the charts on that particular link. You may have to do scrolling. As stated three weeks ago, the stock market loves to see commodity prices crashing to the south. A link to all the economic data is below.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Econ.htm

Fear Metrics: Economic and Terrorism

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Forty-three weeks ago, it was up 66.1% since that buy signal. Thirty-six weeks ago, it closed up 12.0% since that buy signal. Twenty-seven weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001 . Last week it closed up 30.3%, which is down significantly from five weeks ago when it was up 57.7%.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% forty-one weeks ago since the MTI buy signal in April 2001. Thirty-five weeks ago, it closed up 27.8%. Last week it closed up 34.5%, which is down from 48.8% reported six weeks ago.

As stated in the past you can monitor the above two funds and options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

The Gold and Silver Index continues to hover around the long-term blue curve. After moving north for quite some time, it appears poised for a lengthy decline while the stock market moves north. The Mid-term Indicant will advise if this index decides to march north.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Quick-term and Short-term Indicant – Markets

You received details about this yesterday. The eight major indexes are up by an average of 1.1% since the March 17, 2003 Quick-term Bull Signal. That annualizes to 23.0%. Many of the Quick-term attributes are favoring bullish behavior. Check your email daily for the Quick-term Indicant updates.

Remember, we have three phenomena working in favor of bull markets. The mid-term election year phenomenon has produced the bottom last year. The pre-election year phenomenon will produce favorable economic packages by government. The bull knows this. It will attempt to capitalize on it. Moreover, we are still in the period of bullish seasonality. The market was depressed during much of this period of bullish seasonality and may make up lost ground at the conclusion of the conflict with Iraq .

The Dow Jones Industrial Average is up 0.8% since the Short-term Indicant signaled bear a few days ago.

The NASDAQ Composite is down 67.2% since the Short-term Indicant signaled bear over three years ago on March 30, 2000 . The Quick-term daily updates will keep you posted on this.

The Indicant Volume Indicator is showing signs of resuming a robust cycle to the north. If this behavior accompanies a northerly moving stock market, then expect continued bullish behavior by the stock market.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

http://www.indicant.net/Non-Members/Back%20Issues/A%20Reports.htm

Mid-term Indicant Positions - Major U.S. Market Indices

The Mid-term Indicant signaled bull for all eight major markets three weeks ago. Even though the eight indexes are down since that bull signal, they are configured to express bullish behavior.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There was one new bull signal and no new bear signals last week.

In addition to the new bull signal, twelve of the twenty-two foreign indexes tracked by The Indicant are Mid-term Bulls. They are up an average of 38.4% since the Mid-term Indicant signaled bull an average of 38.9 weeks ago for an annualized gain 51.4%.

Nine markets have been bears for an average of 7.1 weeks. They are down by an average of 3.5%.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI%20Intl%20Mkts.htm