Apr 25, 2010 Indicant Weekly Stock Market Report

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

Self Interest and Lobbyist – The More the Merrier

Most Congressmen and Senators grew up in the United States. They developed friendships and professional relationships, just as you have done. They develop biases just like everyone else. They have the exact same Maslow needs as anyone else.

Some politicians understand the importance of the U.S. Constitution, while others do not, even though they take an oath to support it upon acceptance of their new job. Congressman Phil Hare recently said, “I don’t worry about the constitution…..” Biases are ever-changing and usually manifest inferior conclusions (sub-optimization) when one is not using their own money. Bias, friendships, connections, etc. are no different in Congress from anywhere else.

A sorority sister from years ago can contact their friend, who is a member of Congress, to bend or author a law to their benefit. That happens all the time. Is helping a friend corrupt? One can argue it is corruption if the Congressman also benefits. Most of the time, they do through the phoniness of campaign contributions. One could also argue on behalf of corruptive practices if only the friend benefits at the expense of the masses or even if just another person.

Most politicians by nature are corrupt. It seems the authors of the U.S. Constitution recognized this potential. They knew a lot about human nature and most likely one reason why they mandated personnel turnover in the U.S. House of Representatives every two years. Unfortunately, campaign contributions from beneficiaries fool the masses and they tend to re-elect their corrupt representatives.

Wikipedia states there were over 17,000 lobbyists in Washington D.C. in 2007. That is not enough. There are about 130,000,000 households in the U.S. The heads of those households have varying objectives, goals, productivity, honesty, etc. Some are purely no good. Some are good. Many, if not most, are in between, contrasting with the “greatest generation” where most were good. Imagine if all 130,000,000 heads of households petitioned Congress on the same day. Every crazy idea would be offset by an opposite crazy idea. Congress would be conflicted and get nothing accomplished. That would be bullish if the 130,000,000 returned to work the next day. If they stayed in Washington D.C., we would all starve.

Lobbyists influence Congress on a daily basis. Voters influence Congress only once every two years. With that, one can surmise that lobbyists have more influence on Congress than voters do. It does not require too much imagination to see that in these contemporary times.

The phenomenon of commonality would occur if lobbyists could increase their numbers to say 200,000 or more. A NRA lobbyist would offset every gun control lobbyist. The gun control lobbyist would enlist Congressional behavior supporting gun controls, while the NRA lobbyist would argue against it. The Congressman, like most, would agree with both in their eye-to-eye sessions. With that, there is a higher likelihood that nothing would get done. That is bullish.

Politicians blame lobbyist, as the source of evil in Washington D.C. Lobbyists, of course, cannot counter punch. They have to take it on the chin. Most are paid very well for that. Interestingly, most of the current president’s staff is former lobbyists. They surely have friends among the 17,000 lobbyists. Retaining desired friendship can be a source of wrongness and anti-constitutional behavior.

A much greater number of lobbyists would spread the friendships around. That would create greater magnitudes of disagreement. It would have somewhat of a stalemating effect relative to the coziness of just 17,000 folks engaging with Congressmen and their staffs. The current ratio is about ten lobbyist to every Congressman and their respective staffs. That is about the size of a nice dinner party at the finest restaurants and much of it on your dime in one way or another. If the ratio were expanded to say, 500 lobbyists per Congressman, then dinner and no telling what else would be more difficult. Attempting to avoid hurt feelings would become priority. Such distractions would add to the stalemating effect and that would be even more bullish for the stock market.

Not all of these lobbyists are bad people. Some of them must be there to ensure politicians do not add liability or subtract assets from their organization’s wealth. Of course, some lobbyist are in Washington D.C. to add assets and/or reduce liability for their clients or employers. When assets are reduced and/or liabilities expanded in an organization or economic sector, the opposite occurs in another organization or group of organizations. Many are understanding this and thus the growth of the lobbyist population. After all, if one’s competitor employs a lobbyist, one must do the same to maintain competitive equilibrium on the legislative battlegrounds.

Who are now electing politicians - lobbyist or voters? Lobbyist develop friendships with politicians. They direct their clients or employers to donate campaign funds to certain elected officials. Lobbyists learn which Congressman threatens their self-interest and those who do not. They also seek and identify weaknesses in certain politicians for the purpose of blackmail and possible coercion. Campaign contributions are then aligned accordingly. Voters are then influenced by the advertisements paid for by campaign donations. Therefore, one can argue that lobbyist influence the election of politicians.

Not all voters are good people. Many are not making their mortgage payments. Hundreds of thousands live in homes and not paying for that privilege. They are using their “extra money” to buy flat panel televisions, I-Pads, and other products. This is one reason why ETF#27-XLP-Consumer Staples and ETF#29-XLY-Consumer Discretionary did not receive a sell signal after the Greece scare this past February. XLP is up 31% since the Near-term Indicant signaled buy on April 2, 2009 and XLY is up by 42.4% since the July 30, 2009 buy signal.

The banks are not being paid by the free-loaders. Reducing the real estate principals could motivate the mortgagees to pay, but doing that would require a $500-billion write down. That earnings reduction would depress their stocks again from already depressed levels.

The Fed owns about two-trillion dollars of real estate. One can ask, “how can hard assets be worth two-trillion dollars with a non-paying squatter. An assets value requires some form of payment for it. Eventually, that two-trillion dollars will have to stated as much less and/or remove the non-paying squatters. Both are unpleasant but the lack of controls for an indefinite period will manifest yet more economic ugliness.

These people, who do not pay their mortgages, are buying consumer products. That does help some economic sectors. However, there will be long-term damage to other economic sectors.  Those people will breed and of course set a fine example of how to behave to their offspring, much like LBJ’s crack babies. The problem will only worsen. Governmental interjections into the free markets has the same effect as communism; massive resource reallocation with related inefficiencies. That is bearish.

These non-paying squatters can vote for Congressmen and other elected officials. They, for the most part, do not object to government bailouts of banks. That has facilitated their ability to practice their newly found non-paying squatters’ rights. Some of you probably recognize the politicians truly are “of the people…” Therein lies the problem. Just a handful of lobbyist and an increasing population enjoying economic leeching are electing politicians. Adding non paying squatters to low effort unions to SEC employees, who spend their time on the job looking at pornography on your dime, while Bernie Madoff rips you off is increasing the numbers of low character people who can vote. All organizations eventually fail and we can see some of the details on the “why.”

One may argue that more lobbyists are better than a few lobbyists. The phenomenon of commonality would be invoked with more. Banks would then fail. Their management would be walking the streets looking for a job as opposed to tax-payer’s bonus collections, of which a portion is returned to elected officials in the way of campaign funds and of course, dinner. Rest assured, politicians will not upset “money-churning” institutions, regardless of the political rhetoric suggesting otherwise.

This money churning process between bankers, Wall Street, and your elected politicians is representative of the resource allocation problem. That is why unemployment is remaining at high levels and will continue for many more years. Government intervened in the capital markets by imposing on Freddie Mac, Fannie Mae, and other financial institutions to get more people into fancy houses. It is a subtle form of communism and that is where the current economic problem originated. In other words, the gain in assets of one has been lost in another. This time the capitalists are running short, while the non-paying squatters have gained. When the unproductive are rewarded, resource reallocation occurs with more resources to those who are incapable of providing economic expansion. This always has and always will result in economic contraction.

It would be sad if bankers lost their jobs, as many of them would starve. Not too many organizations outside the banking industry find ex-bankers as viable potential employees. Barter trade may be the ultimate economic solution to the current problem. Such a solution would certainly shift the masses back into a mode of being productive every day, as opposed to pornographic surfing, or face the same fate as unemployed bankers.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated one buy signal and no sell signals.

The Mid-term Indicant is signaling hold for 227 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 38.3%. That annualizes to 46.9%. The Mid-term Indicant has been signaling hold for these 227-stocks and funds for an average of 42.5-weeks.

The Mid-term Indicant is avoiding 88-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 31.2% since the Mid-term Indicant signaled sell an average of 84.0-weeks ago.

One year ago, on Apr 24, 2009, the Mid-term Indicant was holding 21-stocks and funds out of 344 tracked for an average of 95.6-weeks. They were up by an average of 114.9% (annualized at 62.5%). There were 323-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 31.6% since their respective sell signals an average of 46.6-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 201-stocks and funds of the 345-tracked two years ago on Apr 25, 2008. They were up by an average of 129.9% (annualized at 53.8%) since their respective buy signals an average of 125.7-weeks earlier. The Mid-term Indicant was avoiding 140-stocks and funds at that time. They were down an average of 15.1% since their respective sell signals an average of 26.1-weeks earlier.

There were 283-stocks and funds with hold signals on Apr 20, 2007 since their buy signals an average of 102.8-weeks earlier. They were up by an average of 127.0% (annualized at 64.0%). There were 47-avoided stocks and funds at that time. They were down by an average of 7.3% from their respective sell signals an average of 17.5-weeks earlier.

On Apr 21, 2006, the Mid-term Indicant was signaling hold for 271-stocks and funds out of 345-tracked. They were up by an average of 138.4% (annualized at 64.3%) since their buy signals an average of 98.5-weeks earlier. The Mid-term Indicant was avoiding 63-stocks and funds at that time. They were down by an average of 6.6% since their sell signals an average of 20.1-weeks earlier.

Five years ago, on Apr 22, 2005, there were 205-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 94.7% (annualized at 57.6%) since their respective buy signals an average of 85.4-weeks earlier. There were 110-avoided stocks and funds then. They were down an average of 28.7% since their respective sell signals an average of 52.4-weeks earlier.

On Apr 23, 2004, there were 265-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 71.8%, annualizing at 75.1%, since their respective buy signals an average of 49.7-weeks earlier. There were 25-avoided stocks and funds then. They were down by an average of 26.5% since their sell signals an average of 39.3-weeks earlier.

There were 247-stocks and funds with hold signals on Apr 25, 2003. They were up by an average of 26.1%, annualizing at 87.7%, since their buy signals 15.5-weeks earlier. The 34-avoided stocks and funds were down an average of 26.4% since their respective sell signals an average of 28.2-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

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

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term, Mid-term, and Quick-term attributes have not yet succumbed to the stock market bear’s ambition. The Near-term cycle shifted in support of bearish inclinations in early Feb 2010, but quickly abandoned bearish bias in early March 2010. The Dow Utilities also shifted in favor of the bear on a Mid-term basis in early Feb 2010. It remains pathetically configured with respect to bullish ambition.

With the exception of the DJU, most prices and major indices remain solidly above their respective bearish yellow curves. Bear and sell signals will not occur on these slower moving models until price interactions with bearish yellow.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a common bouncing point so a stop loss a percentage below its value could be considered. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once Yellow passes above your buy price, you may want to set the stop loss at the Yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 53.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 127.1% and the S&P500 is up 56.7% since then. The small cap index, S&P600, is up 131.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 49.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 20.3% since its similar secular peak on March 23, 2000. The Dow is down by 4.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be known in Nov 2010.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 16.6% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 11.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 9.8%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 2.3% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 11.2% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 6.2% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 9.3% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 4.8% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 9.3% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 20.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 11.5% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 11.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The next Near-term Bear cycle may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 71.1% since March 9, 2009. The NASDAQ is up 99.4% and the S&P500 is up 79.9% since then. The S&P600, Small Cap Index, is up a whopping 117.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is inching up. It is no longer a yellow bear.  These sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of boring repeatability. At some future point they will change and influence drama. Monitoring them regularly is important to anticipate those magical moments.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold. Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Greece. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse.

Some short-term rates have been nudging north the past few weeks. This should be monitored. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed will take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate several weeks ago.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran, and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices are rising, but that is against the trend for the time being. The increased commodity prices will pressure rates more to the north. That will be non-bullish.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat.

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama. Union labor management does not understand this phenomenon. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large block of votes, but those large blocks will continue to shrivel. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Recently softening gold prices is mere profit taking and a strengthening dollar. Gold has been relatively bearish the past few days.  The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The meandering forecast is holding steady at $1000. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 82-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

The heart and soul of bullish seasonality concluded a bit earlier this year. The pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality near the end of January 2010 with the president’s state of the union address. Bearishness typically follows those speeches and there was no exception this year. However, the capitalistic system rebounded very well as the capital markets surged a few weeks later in early March and continued doing so.

The above and below paragraphs may become obsolete, based upon the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets. Recently, a new group of economic leeches is evolving; hundreds of thousands are not making their mortgage payments. They are using mortgage money to buy flat panel televisions and I-Pods, I-Pads, and whatnot. The population of economic leeches is over 50%. Their lack of discipline, though, keeps a fraction of them away from the voting booths. For those of you who have a sense of reality should hope that fractional amount reduces their voting powers to less than 50% of the populace.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gained, do not be surprised at a 1,000 Dow by 2010.” The bear was passive between March 2009 and January 2010. It has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs disappointed in the recent healthcare vote. The lower character elements of society rise to the top of the political elite. That is bearish.

As stated the past 34-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the bull leg now underway.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 9.5% since then, annualizing at 18.1%. It has been bearish in five out of the last 14-weeks, but solidly bullish in six of the last eight weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 7.1% since then, annualizing at 11.0%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 18.8%, annualizing at 25.5% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 15.4% since that buy signal, annualizing at 25.6%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is up 9.7% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was also solidly bullish last week.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 8.2% since its buy signal on Sep 11, 2009, annualizing at 25.5%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 20.8% since then, annualizing at 28.4%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is up 8.2% since then, annualizing at 57.9%

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 40.3% since that buy signal, annualizing at 28.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 2.0% since that buy signal, annualizing at 13.5%.

Most commodities were bullish last week and were not contrarian to the overall stock market, other than being significantly more bullish.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 6.2% since that bear signal. The DJU was mildly bearish last week.

The nine remaining major indices retaining bull signals are up by an average of 27.2% since there respective bull signals an average of 38.0-weeks ago. That annualizes at 37.2%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the overall stock market peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence.

The Mid-term Indicant Dow Jones Industrial Average performance is at $32,179,816. That beats buy and hold performance of $1,704,592 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $158,350. That beats buy and hold’s $119,236 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $230,569. That beats buy and hold’s $87,731 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 64.4% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 287.1% (annualized at 15.5%) since the Long-term Indicant signaled bull 964-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Focal points remain with prices, relative to the NTI Green curve, and Vector Pressure. As long as the former increases on the charts and the latter remains in bullish domains, the bear cannot find success. QTI Red Bulls are offering additive assurances against dynamic bearish potential. Currently all three attributes remain supportive of bullish ambition.

ETF#10-IBB NTI Blue Curve collapsed on April 23, 2010, but configured as a profit-taking dive at this time. It is the first non-contrarian to indicate potential trouble for the bull. Its price is below Green, but Pressure remains in bullish domains. Therefore, there is no sell signal.

ETF#03-XLE-Energy was explosively bullish today. This was technically expected earlier this past week. Fundamentally, Iranian militancy, Asian demand, excessive government spending, and anti-energy political pressure should add inflationary pressures, which is bullish for the energy sector. Interestingly, ETF#11-GLD-Gold was nearly as bullish today.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The Near-term Indicant is signaling bull for 10-major indices. They are up 10.4% since their bull signals on Mar 3, 2010, annualizing at 74.3%.  There are two indices enduring bear signals. They are down by an average of 4.6% since their respective bear signals an average of 9.6-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 35.9%, annualizing at 41.3%, since their bull signals an average of 45.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are down by an average of 2.8% since their respective bear signals an average of 8.9-weeks ago.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      Quick-term Attributes (This is a longer cycle than Near-term cycles)

      QTI-Red Bull Count; Eleven non-contrarian; solid bullish support.

      QTI-Bullish Red Curve Trend; Eleven non-contrarians; solid bullish support.

      QIT-Yellow Bear Count; None of the non-contrarians is inflicted with this attribute and thus non-bearish. Longer-term holders should focus on this attribute; especially if you enjoy the fundamentals of your holdings and have accumulated significant gains.

      QTI-Bearish Yellow Curve Trend; Non-bearish majority with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

The Quick-term Indicant remains supportive of the QTI Bull.

      Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

      NTI-Blue Bull Count; Eleven non-contrarians; solid bullish support.

      NTI-Bullish Blue Curve Trend; Eleven non-contrarian; bullish support.

      NTI-Bearish Green Curve Trend; Eleven non-contrarian moving north; non-bearish. Ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

      Short-term Force Vectors and Pressure Attributes

      STI-Force Vector Domain Position; Eleven non-contrarians in bullish domain, supporting bull.

      STI-Force Vector Position Relative to Vector Pressure; Ten non-contrarians above Pressure. Prior mild bearish threat is subsiding, but it still exists, as Force Vectors are not bullishly aggressive.

      STI-Force Vector Direction; Eight non-contrarian moving north; bullish support improved.

      STI-Vector Pressure Trend; Seven non-contrarians are moving bullishly; bullish support.

      STI-Vector Pressure Position; All non-contrarians are in bullish domains; bullish support.

      Short-term Market Summary

      Short-term attributes continue configuring in support of the bull. This is a low volume bull and once it run its course, the next bear cycle has a higher probability of configuring with more breadth and depth. However, if this Near-term Bull gets a volume nudge, it can enjoy significant additional longevity. One could argue that low volume is bullish since demand for stocks has a potential to increase and thus elevating their prices.

-Tangential Protection – The Dow Composite, Dow Transports, NASDAQ, NAS100, S&P400, and S&P600 have tangential protection. Tangential protection, once formed, helps avoid the pitfalls of fluttering behavior.

-Political Climate – Political disharmony continues and bullish. Legal battles between the Federal and State governments offers bullish inspiration. Although the passage of healthcare has a long-term bearish projection, the market remains bullish. Therefore, in spite of this longer-term prognosis of bearishness, the Near-term and Quick-term bull/hold signals will remain in tact until attributes deteriorate and supportive of the stock market bear. The stock market bull continues a prognosis of political discourse, but with possible political harmony on income tax simplification and reductions. 

-Reverse Tangential Bearish Detection – We will have to wait for the next Near-term bear cycle to monitor this tangential phenomenon. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness in this cycle will be high. The Dow Utilities moved toward supporting this phenomenon several days ago. Recent bullish bounces continues with little challenge this theme.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the Mid-term bull will continue dominance.

Click the Short-term Indicant to see the combined table of the Near-term Indicant, Quick-term, and Short-term Indicant. The table has links to charts for each. Each chart contains all three models and there are two separate buy and sell signals for the Near-term and/or Quick-term Indicant.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators  

Volume indicators are now leveling at relatively high levels. Recent meandering behavior is not likely to continue. Although this is a classical sucker rally configuration, there is little justification for not holding and participating in this rally. (Recent chronological observations are expressed below in reverse order).

Apr 23, 2010-Fri-Volume on both indices was within recent norms. That coupled with meandering behavior continues suggesting prevailing bullish bias. NYSE remaining at supply/demand equilibrium. The next few weeks will be interesting from a volume perspective.

Apr 22, 2010-Thu-Big board volume was relatively aggressive. Interestingly, its Indicant Volume Indicator is leveling out at supply/demand equilibrium. If it falls, that will suggest negative demand or positive supply (E.g., the supply of big board stocks exceeds demand). That is not bullish. It also is a configuration that can dampen bearish enthusiasm. The NASDAQ volume was mildly aggressive today. It continues configuring with negative supply or positive demand. In other words, the demand for NASDAQ stocks (mostly Apple) exceeds the supply available for sale. That is a bullish configuration. However, it is flattening out, suggesting reducing enthusiasm

Apr 21, 2010-Wed-Big board volume continues settling, but at a relatively high level. NASDAQ volume remains relatively flat. This parallels meandering behavior the past two days, suggesting short-term trader confusion. Such confusion does not change prevailing bullish bias.

Apr 20, 2010-Tue-Volume settled down today on flat stock market behavior, offering no evidence of a shift away from bullish bias. (Last Friday’s high volume possibly relates to Apple’s favorable profit report to expectations. Do not be surprised at bullish behavior tomorrow with follow-on).

Apr 19, 2010-Mon-Although somewhat muted relative to last Friday, volume was again aggressive, but on flat stock market behavior, as opposed to bearish aggression last Friday. The high volume remains as a concern, but bullish bias has not yet been disrupted.

Apr 16, 2010-Fri-Aggressive volume on bearish aggression is ominous. However, NTI Blue Bulls and QTI Red Bulls remain unthreatened. Such a configuration without the protection of these Short-term bulls would be discerning. That is not the case right now.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 10.8%, annualizing at 54.8%, since their buy signals an average of 10.3-weeks ago.

The NTI is avoiding two-ETF’s. They are down by an average of 10.1% since their sell signals an average of 7.4-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 39.9% since their buy signals an average of 46.4-weeks ago. Those with hold signals are annualizing at 44.7%.

The Quick-term Indicant is avoiding two ETF’s. They are down by an average of 33.8% since their sell signals an average of 31.6-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; 23-bullish support; majority support for Near-term Bull cycle.

NTI Blue Curve Trend; 29-non-contrarians sloping north; bullish support.

NTI Green Bear Count; zero non-contrarians and solidly non-bearish.

NTI Green Curve Trend; majority of 29-sloping north; non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 28-non-contrarian; solid bullish support.

QTI Bullish Red Curve Trend; majority of 29-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction: nine-moving bullishly; the expected bullish behavior occurred the last three days after the last bearish cycle.

STI Force Vector Position; 17-populating bullish domains; 17-greater than Pressure; bullish support.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; bullish support. This attribute is a focal point since Pressure is near zero.

Vector Pressure Trend; 13-moving north; no longer with majority bullish support. Not yet threatening.

Short-term Summary: Most attributes continue supporting the Short-term Bull.

Contrarian Funds

ETF#03-Natural Resources is up 8.2% since the Near-term Indicant signaled buy on Mar 3, 2010, annualizing at 57.9%. The Quick-term Indicant signaled buy on August 3, 2009. It is up 20.9% since that buy signal, annualizing at 28.4%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

As stated the past few days, this remains as a solid NTI Blue Bull and QTI Red Bull and is configuring for more bullish expressions. As long as Iran continues threatening, oil prices and related energy companies should remain bullish.

ETF#11-Gold and Precious Metals  is up 40.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $101.33 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 2.0% since that buy signal, annualizing at 13.5%.

Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government  is down 0.8% since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 1.1% since that sell signal.

Pressure remains in bearish domains, offering support to the TLT bear. Force appears ready to turn back to the south, offering the TLT bull little inspiration. Force has been wavering the past few days, suggesting indecisiveness in directional intensity. Pressure dictates and remains bearish.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 19.4% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 66.5% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $22.28 and still falling.

Major ETF Events

Apr 23, 2010-Fri-ETF#03-Energy was aggressively bullish today. This was technically expected early this past week. Fundamentally, Iranian militancy, Asian demand, and excessive government spending should add inflationary fuel, which is bullish for the energy related sector.

Apr 22, 2010-Thu-Big Board volume approached positive demand, but appears to find that uncomfortable. In essence this timidity, at least for the moment, suggests supply of stocks for sale exceed the demand. Although not necessarily bearish, this attribute is not fomenting additional bullish energy.

Apr 21, 2010-Wed-Flat market behavior the day after Apple’s extraordinarily favorable earnings report suggests the market was already priced at the magnitude of that favorability. The stock market is not focusing on the now, which is more common than not.

Apr 20, 2010-Tue-Several attributes are at minor inflections suggesting impending dynamic behavior. Since bias remains in favor of the bull, do not be surprised at more bullishness. Fundamentally, Apple earnings support this, in addition to other value adding organizations.

Apr 19, 2010-Mon-Several attributes are losing bullish steam, but not yet threatening to bullish bias. Iceland’s Volcano is contributing to this.

Apr 16, 2010-Fri-Aggressive volume on bearish aggression is ominous. The NTI Blue Bull and QTI Red Bull population remain as a majority and offers resistance to follow-on bearish aggression. Until they expired, the Short-term Bull remains in tact.

Current Strategy-Short-term Indicant- Apr 23, 2010-Fri-Same as yesterday. This segment of the NTI Blue Bull is the strongest segment since the bear originated in March 2009. Apr 22, 2010-Thu-Longer-term holding remains safe. NTI Blue Bulls remain solid. Until they start collapsing, there are no substantive bearish concerns. ETF#10-IBB NTI Blue Curve collapsed today, but configured as a profit-taking dive at this time. Apr 21, 2010-Wed-Apple’s earnings were already priced into the market. However, configurations remain positioned for bullish potential. If this potential does not manifest, configurations are not supportive of bearish sustainability. Apr 20, 2010-Tue-Apple earnings offer rebuttal to yesterday’s “fundamental” bearish comment. Capitalists continue to impress in spite of bearish political noise. Do not be surprised a bullish aggression the next few days. Apr 19, 2010-Mon-Fundamentals are souring. Goldman is under attack by politicians. Rest assured any political action will be the antithesis of optimum. Even though fundamental threats are increasing, bullish bias remains. Apr 16, 2010-Fri-To protect recent gains on recent buys, be prepared to sell if bearish behavior continues with increasing volume. Gains from QTI buy signals are well protected. If you are enjoying those gains wait for contact with bearish yellow. Friday’s bearish aggression appears technical at this point.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

Short-term Indicant Tables for the Dow Jones Industrial Average Index

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market endured bullish convergence last week. Seven of the last eleven weeks have enjoyed a combined bullish divergence and convergence. Bearish convergence was endured for four consecutive weeks ending eleven weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence, but lingers since short-term attributes are having difficulty escaping a converging configuration.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks.

As stated the past twenty-eight weeks, low interest rates offer narrowed alternative investment opportunities. The expiration of the Near-term Bull suggested this was increasingly an irrelevant observation, relative to more worldly dynamics, which appeared to have been leaning in favor of the bear until nine weeks ago. Since then, the capital markets crushed the early February threat by the bear. One can argue political discourse in the U.S. has more bullish weight than China’s credit tightening. Political discourse is generally bullish, as one evil group checks down another one.

There is a strategic view unfolding that China may tighten credit too much. Some logic suggests that large caps may leave China. That leads to a heightened concern regarding interest rates and/or deflation or inflation. This also could lead to reduced revenue volumes for larger cap companies and other business interest in China.

Trade tensions can mount. Such behavior will invoke a repeat of the 1930’s. Any legislation or behavior leading to restrictions on free trade will unleash a bear that will make the 1930’s bear look like a teddy bear. The economy is more intensely international than in the 1930’s. It is better for domestic unions to fall apart than international trade wars.

The stock market bull enjoyed additive magnitude with the additional number of capitalists in China since the early 1990’s. Chinese government leaders consist of the exact same psychological profile as any other politicians, where control freak, egotistical self-aggrandizement, and lying are common attributes. Forces far away from Washington D.C. can shake the world’s economy. The small country of Greece is a new threat, but for the time being is promoting austerity in their government. That is bullish, but only to the extent of execution. Greece cried for help last week. Government leaders are merely people, looking for votes and not using their own money, are incapable to doing what is right.

Short-term Force Vectors continue moving south. So far, this movement is non-threatening to the bull. Their southerly movement is lazy with periodic spurts to the north, which as the case the past three weeks. That is a bullish configuration. The problem is that Pressure has remained in a near-converging pattern for several weeks, suggesting the bear remains somewhat inspired by Greece, new governmental legislation, and other non-value-adding activities by the economic overhead group.

Keep up with the daily stock market report as the Quick-term and Near-term attributes can shift quickly.

Do not get lazy and set those stop losses for those stocks and funds that continue to enjoy hold signals.

The daily updates are on the following link.

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

Hyperlinks

To access all major markets, stocks, funds, economic data, charts, statuses, etc, click the following hyperlink:

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

Once you are inside the website, click on "members update" or simply log in. It is on the top of every page in the web site so you can always find your way back.

Happy Investing,

www.indicant.net

04/25/2010

Apr 18, 2010 Indicant Weekly Stock Market Report

Volume 04, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

“I Think”

Many expressions begin with those two words. Most contemporary media commentators initiate their opinions with those two words. One has to wonder why they are media commentators. Everyone thinks, while yet, not everyone is a media commentator. Why would a human being want to listen to another human being about what they think? The listener already has thoughts. Why clutter one’s brain with the thoughts of another?

Why does the media industry employ people only to express opinions? Phrases originating with the words, “I think” generally conclude with an opinion. All contemporary media commentators are normal human beings. Although their physical features vary, most appear configured with three and a half brains. From what some commentators say, one can easily detect some brains are emptier or more contaminated than others.

Did Albert Einstein say, “I think’ energy is equal to mass times the speed of light squared?”  Contrasting greatness with dilettante infested media commentators, Einstein offered proof, albeit with a few minor errors here and there. Those errors in most applications are so miniscule, that after 100-years of his hard working effort, his theory continues supporting practical application.

Liberal artsy types, who constitute the mass of media commentators, do not take the effort to prove anything. It would not be surprising to find that most would not know where to begin in “proving” any assertion. Most originate their arguments with the phrase “I think.” Once they conclude their assertion, they tend to rest on it as fact, regardless of the level of abstractness and irrelevance. One has to wonder why anyone cares what another thinks without offering validations or integrity in their expressions. Personal opinions add no value to any cause.

Wall Street Week, hosted by the late Louis Rukeyser in the 1970-2002, enjoyed an annual tradition each year. Mr. Rukeyser asked guest commentators to predict where the Dow would close out next year. Those commentators and stock market experts were never correct. All they proved was that all forecast endure error.

From time to time, other media would hold similar contests with an unlimited number of contestants. These contestants would be asked the same question; “where will the Dow close out the year?” Sometimes one person predicted the Dow’s annual close with absolute perfection. However, there were no repeat winners from year to year, again proving all forecasts endure error. When there is no error, the forecaster is lucky.

The ones who won simply guessed and were lucky enough to win. Most confessed to simply being lucky. Some winners were asked, how did you know where the Dow would close out the year? For the most part, the quest for the secret formula simply confirmed, “lucky guess.”

When one uses “I think” as an introduction to their assertion of some projected phenomena, it is usually appropriate to ignore their input. Albert Einstein did not take a podium and tell the world what he thought. He worked hard on his thoughts by working through every excruciating detail and published his assertion with evidence of his claim.

Radio, television, bloggers, politicians, etc. are plummeting society with volumes of assertions. These assertions are merely opinions sourced by swirling imaginations confined to the mass contained in their skulls. The preamble to those assertions is “I think.” It does not matter what the subject is or who the speaker is. If the preamble to those assertions is “I think,” one has to pity the poor souls listening to that sort of noise.

In the 1930’s, FDR dominated the radio waves, contrary to VP Joseph Biden’s assertion that FDR was on television. FDR had little competition in the opinion-expression industry. Although FDR was exceedingly incompetent in most subjects he discussed, many people still listened to him. FDR may not have used the words, “I think” at the beginning of his assertions. He offered no proof of his assertions. Any offerings of self-proclaimed proof by FDR would have allowed many the opportunities to detect errors in his assertions. The result of his efforts was an extension of the economic depression, which contributed to factors contributing to World War II.

Some liberal artsy types are smart enough to know that many tune out when the first words are, “I think.” Sometimes, the phrase, I think, are not preemptive to their assertion, but it only takes a second or two to figure out that we are hearing only what a swirling three and a half pound brain is pounding out through their vocal chords.

Contemporary political leadership claims the 2008 recession would have been much worse if they had not “heroically” authorized economic stimulus funds. Some political leadership on the fringe even said, “Capitalism failed” even in the face of four-hundred years of profound success. Communism showed its merit with three generations living in poverty while a handful lived like kings. Even with that, politicians by their basic nature, tend to favor a socialistic bias. They are more influential in socialistic settings.

There is nothing heroic about using other people’s money to engage some activity. However, politicians actually think they are heroic for their efforts. When computing political efforts in terms of calories expended, most accomplishments equate to a single piece of bread. Compare calories burned by politicians to anyone that contributed significantly to economic robustness, such as Henry Ford. Henry and his wife, Abigail, worked late into the evenings many times producing the early automobiles. Therein lays the proof of the assertion.

The next time a political leaders says, “the economy would have been much worse off it we had not unleashed economic stimulus, saved banks, GM, Chrysler, and others…,” the interviewer should ask that politician, claiming significant wisdom and economic precision skills, “where will the Dow close out this year?” Rest assured, most contemporary political leaders would not answer that question. If they did, that would be one good “gotcha” question. We would all then clearly see the level of stupidity in political circles. Many already know the level of stupidity, but those among the less alert would also know it. The less alert group of people needs to shrink or the United States will devolve to where “less alert” is the standard. That is not good.

If one offers proof of their assertion, the listener will enjoy verifying the proof and the newly acquired knowledge. Some will gain even more enjoyment by disproving the claimed proof of one’s assertion.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated no buy signals and no sell signals.

The Mid-term Indicant is signaling hold for 227 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 35.0%. That annualizes to 43.9%. The Mid-term Indicant has been signaling hold for these 227-stocks and funds for an average of 41.5-weeks.

The Mid-term Indicant is avoiding 89-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 34.1% since the Mid-term Indicant signaled sell an average of 83.0-weeks ago.

One year ago, on Apr 17, 2009, the Mid-term Indicant was holding 21-stocks and funds out of 344 tracked for an average of 94.4-weeks. They were up by an average of 117.4% (annualized at 64.3%). There were 323-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 31.7% since their respective sell signals an average of 45.6-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 203-stocks and funds of the 345-tracked two years ago on Apr 18, 2008. They were up by an average of 145.0% (annualized at 60.9%) since their respective buy signals an average of 123.8-weeks earlier. The Mid-term Indicant was avoiding 141-stocks and funds at that time. They were down an average of 16.2% since their respective sell signals an average of 26.1-weeks earlier.

There were 281-stocks and funds with hold signals on Apr 13, 2007 since their buy signals an average of 102.2-weeks earlier. They were up by an average of 124.0% (annualized at 63.1%). There were 62-avoided stocks and funds at that time. They were down by an average of 5.4% from their respective sell signals an average of 14.2-weeks earlier.

On Apr 14, 2006, the Mid-term Indicant was signaling hold for 279-stocks and funds out of 345-tracked. They were up by an average of 130.5% (annualized at 69.7%) since their buy signals an average of 97.3-weeks earlier. The Mid-term Indicant was avoiding 63-stocks and funds at that time. They were down by an average of 7.6% since their sell signals an average of 20.7-weeks earlier.

Five years ago, on Apr 8, 2005, there were 209-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 88.6% (annualized at 55.5%) since their respective buy signals an average of 83.0-weeks earlier. There were 87-avoided stocks and funds then. They were down an average of 31.5% since their respective sell signals an average of 53.0-weeks earlier.

On Apr 16, 2004, there were 266-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 69.6%, annualizing at 74.0%, since their respective buy signals an average of 48.9-weeks earlier. There were 19-avoided stocks and funds then. They were down by an average of 28.7% since their sell signals an average of 42.5-weeks earlier.

There were 226-stocks and funds with hold signals on Apr 18, 2003. They were up by an average of 25.5%, annualizing at 84.1%, since their buy signals 15.8-weeks earlier. The 42-avoided stocks and funds were down an average of 26.6% since their respective sell signals an average of 15.8-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

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

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term, Mid-term, and Quick-term attributes have not yet succumbed to the stock market bear’s ambition. The Near-term cycle shifted in support of bearish inclinations in early Feb 2010, but quickly abandoned bearish bias in early March 2010. The Dow Utilities also shifted in favor of the bear on a Mid-term basis in early Feb 2010. It remains pathetically configured with respect to bullish ambition.

With the exception of the DJU, most prices and major indices remain solidly above their respective bearish yellow curves. Bear and sell signals will not occur on these slower moving models until price interactions with bearish yellow.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a common bouncing point so a stop loss a percentage below its value could be considered. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once Yellow passes above your buy price, you may want to set the stop loss at the Yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 51.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 122.7% and the S&P500 is up 53.5% since then. The small cap index, S&P600, is up 121.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 50.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 22.0% since its similar secular peak on March 23, 2000. The Dow is down by 6.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be known in Nov 2010.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 22.7% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 6.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 4.4%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 0.4% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 12.3% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 5.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.3% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 11.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 5.9% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 7.4% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 22.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 13.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 14.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The next Near-term Bear cycle may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 68.3% since March 9, 2009. The NASDAQ is up 95.6% and the S&P500 is up 76.2% since then. The S&P600, Small Cap Index, is up a whopping 108.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” will eventually be recognized, as closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is inching up. It is no longer a yellow bear.  These sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of boring repeatability. At some future point they will change and influence drama. Monitoring them regularly is important to anticipate those magical moments.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold. Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Greece. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse.

Some short-term rates have been nudging north the past few weeks. This should be monitored. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed will take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate a few weeks ago.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran, and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat.

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama. Union labor management does not understand this phenomenon. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large block of votes, but those large blocks will continue to shrivel. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Recently softening gold prices is mere profit taking and a strengthening dollar. Gold has been relatively bearish the past few days.  The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The meandering forecast is holding steady at $1000. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 81-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

The heart and soul of bullish seasonality concluded a bit earlier this year. The pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality near the end of January 2010 with the president’s state of the union address. Bearishness typically follows those speeches and there was no exception this year. However, the capitalistic system rebounded very well as the capital markets surged a few weeks later in early March and continued doing so.

The above and below paragraph may become obsolete, based upon the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gained, do not be surprised at a 1,000 Dow by 2010.” The bear was passive between March 2009 and January 2010. It has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs disappointed in the recent healthcare vote. The lower character elements of society rise to the top of the political elite. That is bearish.

As stated the past 33-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 8.9% since then, annualizing at 17.5%. It has been bearish in five out of the last 13-weeks, but solidly bullish in five of the last seven weeks. It was harshly bearish last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 4.0% since then, annualizing at 6.5%. It was solidly bearish last week.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 14.8%, annualizing at 20.6% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 6.1% since that buy signal, annualizing at 10.4%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is up 5.1% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was also solidly bearish last week.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 10.1% since its buy signal on Sep 11, 2009, annualizing at 16.7%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 15.3% since then, annualizing at 21.6%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is up 3.3% since then, annualizing at 27.4%

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 37.9% since that buy signal, annualizing at 27.8%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 0.2% since that buy signal, annualizing at 1.6%.

Most commodities were bullish last week and were not contrarian to the overall stock market, other than being significantly more bullish.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 4.1% since that bear signal. The DJU was mildly bearish last week.

The nine remaining major indices retaining bull signals are up by an average of 24.2% since there respective bull signals an average of 37.0-weeks ago. That annualizes at 34.1%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the overall stock market peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,646,696. That beats buy and hold performance of $1,676,352 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $155,078. That beats buy and hold’s $116,772 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226,114. That beats buy and hold’s $86,035 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 62.9% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 280.6% (annualized at 15.2%) since the Long-term Indicant signaled bull 963-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Focal points remain with prices, relative to the NTI Green curve, and Vector Pressure. As long as the former increases on the charts and the latter remains in bullish domains, the bear cannot find success. QTI Red Bulls are offering additive assurances against dynamic bearish potential. So far, any bearish expressions should be considered as mere bearish spurts.

Friday’s bearish aggression on very aggressive volume is ominous, but not yet threatening to Short-term attributes. It more than raised an eyebrow, though.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The Near-term Indicant is signaling bull for 10-major indices. They are up 7.9% since their bull signals on Mar 3, 2010, annualizing at 65.6%.  There are two indices enduring bear signals. They are down by an average of 1.1% since their respective bear signals an average of 8.6-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 32.8%, annualizing at 38.5%, since their bull signals an average of 44.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are up by an average of 0.5% since their respective bear signals an average of 7.9-weeks ago.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      Quick-term Attributes (This is a longer cycle than Near-term cycles)

      QTI-Red Bull Count; Ten non-contrarian; solid bullish support.

      QTI-Bullish Red Curve Trend; Eleven non-contrarians; solid bullish support.

      QIT-Yellow Bear Count; None of the non-contrarians is inflicted with this attribute and thus non-bearish. Longer-term holders should focus on this attribute; especially if you enjoy the fundamentals of your holdings and have accumulated significant gains.

      QTI-Bearish Yellow Curve Trend; Non-bearish majority with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

The Quick-term Indicant remains supportive of the QTI Bull.

      Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

      NTI-Blue Bull Count; Ten non-contrarians and arguing with them is not profitable.

      NTI-Bullish Blue Curve Trend; Eleven non-contrarian; bullish support.

      NTI-Bearish Green Curve Trend; Eleven non-contrarian moving north; non-bearish. Ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

      Short-term Force Vectors and Pressure Attributes

      STI-Force Vector Domain Position; Ten non-contrarians in bullish domain, supporting bull.

      STI-Force Vector Position Relative to Vector Pressure; Eleven non-contrarians above Pressure. Prior mild bearish threat is subsiding, but it still exists, as Force Vectors are not bullishly aggressive.

      STI-Force Vector Direction; Eight moving north; bullish support.

      STI-Vector Pressure Trend; Ten non-contrarians are moving bullishly; bullish support.

      STI-Vector Pressure Position; All non-contrarians are in bullish domains.

      Short-term Market Summary

      Short-term attributes continue configuring in support of the bull. This is a low volume bull and once it run its course, the next bear cycle has a higher probability of configuring with more breadth and depth. However, if this Near-term Bull gets a volume nudge, it can enjoy significant additional longevity. One could argue that low volume is bullish since demand for stocks has a potential to increase and thus elevating their prices.

-Tangential Protection – The Dow Composite, Dow Transports, NASDAQ, NAS100, S&P400, and S&P600 have tangential protection. Tangential protection, once formed, helps avoid the pitfalls of fluttering behavior.

-Political Climate – Political disharmony continues and bullish. Legal battles between the Federal and State governments offers bullish inspiration. Although the passage of healthcare has a long-term bearish projection, the market remains bullish. Therefore, in spite of this longer-term prognosis of bearishness, the Near-term and Quick-term bull/hold signals will remain in tact until attributes deteriorate and supportive of the stock market bear. The stock market bull continues a prognosis of political discourse, but with possible political harmony on income tax simplification and reductions. 

-Reverse Tangential Bearish Detection – We will have to wait for the next Near-term bear cycle to monitor this tangential phenomenon. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness in this cycle will be high. The Dow Utilities moved toward supporting this phenomenon several days ago. Recent bullish bounces continues with little challenge this theme.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the Mid-term bull will continue dominance.

Click the Short-term Indicant to see the combined table of the Near-term Indicant, Quick-term, and Short-term Indicant. The table has links to charts for each. Each chart contains all three models and there are two separate buy and sell signals for the Near-term and/or Quick-term Indicant.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators  

Both major indices are enjoying relatively mild volume, suggesting little interest in shifting bias away from the bull. Although this is a classical sucker rally configuration, there is little justification for not holding and participating in this rally. (Recent chronological observations are expressed below in reverse order).

Apr 16, 2010-Fri-Aggressive volume on bearish aggression is ominous. However, NTI Blue Bulls and QTI Red Bulls remain unthreatened. Such a configuration without the protection of these Short-term bulls would be discerning. That is not the case right now.

Apr 15, 2010-Thu-Big board volume was relatively high on mild bearishness. NASDAQ volume was relatively flat on mild bullishness. There are no obviations of shifts in directional intensity from volume observations. Therefore, bullish bias prevails.

Apr 14, 2010-Wed-Increased volume on bullish aggression suggests add punch to the bull’s vigor.

Apr 13, 2010-Tue-Increased volume on flat market behavior continues status quo; bullish bias.

Apr 12, 2010-Mon-Same as last Friday.

Apr 9, 2010-Fri-Again mild volume and mild bullishness continues supporting prevailing bullish bias.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 8.5%, annualizing at 47.6%, since their buy signals an average of 9.3-weeks ago.

The NTI is avoiding two-ETF’s. They are down by an average of 8.7% since their sell signals an average of 6.4-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 37.0% since their buy signals an average of 45.4-weeks ago. Those with hold signals are annualizing at 42.3%.

The Quick-term Indicant is avoiding two ETF’s. They are down by an average of 33.3% since their sell signals an average of 30.6-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; 19-bullish support; several lost on Friday’s bearish aggression, but still a majority.

NTI Blue Curve Trend; 29-non-contrarians sloping north; bullish support.

NTI Green Bear Count; zero non-contrarians and solidly non-bearish.

NTI Green Curve Trend; majority of 29-sloping north; non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 27-non-contrarian; bullish support.

QTI Bullish Red Curve Trend; majority of 29-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction: 15-moving bullishly; eight shifted back to the south today.

STI Force Vector Position; 21-populating bullish domains; 21-greater than Pressure; bullish support, but six lost on Friday in both categories.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; bullish support. This attribute is a focal point since Pressure is near zero.

Vector Pressure Trend; 26-moving north; bullish support; two shifted direction on Friday to the south.

Short-term Summary: Most attributes continue supporting the Short-term Bull. Recent bullish behavior has elevated Pressure, which is bullish. Some were attacked by the bear today, but remains configured in support of the bull.

Contrarian Funds

ETF#03-Natural Resources is up 3.3% since the Near-term Indicant signaled buy on Mar 3, 2010, annualizing at 27.4%. The Quick-term Indicant signaled buy on August 3, 2009. It is up 15.3% since that buy signal, annualizing at 21.6%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

This is again a solid NTI Blue Bull and QTI Red Bull.

ETF#11-Gold and Precious Metals  is up 37.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 27.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $100.93 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 0.2% since that buy signal, annualizing at 1.6%. Recent bearish threats had diminished but still pestering the gold bull.

Interestingly, Force and Pressure microscopically entered bullish domains on Mar 31-Wed, offering a bit more support for the golden bull. Since then, GLD has moved solidly to the north, but attacked by the gold bear on Friday.

Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government  is down 1.1% since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 1.4% since that sell signal.

Force and Pressure remain in bearish domains, offering support to the TLT bear.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 16.2% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 65.2% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $22.63 and still falling.

Major ETF Events

Apr 16, 2010-Fri-Aggressive volume on bearish aggression is ominous. The NTI Blue Bull and QTI Red Bull population remain as a majority and offers resistance to follow-on bearish aggression. Until they expired, the Short-term Bull remains in tact.

Apr 15, 2010-Thu-There were no major events.

Apr 14, 2010-Wed-Although today’s bullish behavior was impressive, Utilities did not participate. This suggests rotational trading behavior and thus lacking desired breadth. However, volume was aggressive adding spice to bullish desires. Somewhat of a conflicting message, which suggests continued caution.

Apr 13, 2010-Tue-Several Force Vectors shifted south today, but not yet threatening.

Apr 12, 2010-Mon-No major events.

Current Strategy-Short-term Indicant- Apr 16, 2010-To protect recent gains on recent buys, be prepared to sell if bearish behavior continues with increasing volume. Gains from QTI buy signals are well protected. If you are enjoying those gains wait for contact with bearish yellow. Friday’s bearish aggression appears technical at this point. Apr 15, 2010-Thu-Holding remains safe. Apr 14, 2010-Wed-Aggressive volume accompanied bullish behavior. If this relationship continues in the next few days, conditions will be favorable for additional buying. Keep in mind, volume surges sometime precede directional reversals. Apr 13, 2010-Tue-Same as yesterday. Apr 12, 2010-Mon-Holding remains safe; new buying not strong; need more volume.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

Short-term Indicant Tables for the Dow Jones Industrial Average Index

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market endured bearish divergence last week, albeit mildly so. Six of the last ten weeks have enjoyed a combined bullish divergence and convergence. Bearish convergence was endured for four consecutive weeks ending ten weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence, but lingers since short-term attributes are having difficulty escaping a converging configuration.

Indicant Conclusion

As stated the past twenty-seven weeks, low interest rates offer narrowed alternative investment opportunities. The expiration of the Near-term Bull suggested this was increasingly an irrelevant observation, relative to more worldly dynamics, which appeared to have been leaning in favor of the bear until eight weeks ago. Since then, the capital markets crushed the early February threat by the bear. One can argue political discourse in the U.S. has more bullish weight than China’s credit tightening. Political discourse is generally bullish, as one evil group checks down another one.

There is a strategic view unfolding that China may tighten credit too much. Some logic suggests that large caps may leave China. That leads to a heightened concern regarding interest rates and/or deflation or inflation. This also could lead to reduced revenue volumes for larger cap companies and other business interest in China.

Trade tensions can mount. Such behavior will invoke a repeat of the 1930’s. Any legislation or behavior leading to restrictions on free trade will unleash a bear that will make the 1930’s bear look like a teddy bear. The economy is more intensely international than in the 1930’s. It is better for domestic unions to fall apart than international trade wars.

The stock market bull enjoyed additive magnitude with the additional number of capitalists in China since the early 1990’s. Chinese government leaders consist of the exact same psychological profile as any other politicians, where control freak, egotistical self-aggrandizement, and lying are common attributes. Forces far away from Washington D.C. can shake the world’s economy. The small country of Greece is a new threat, but for the time being is promoting austerity in their government. That is bullish, but only to the extent of execution.

Short-term Force Vectors continue moving south. So far, this movement is non-threatening to the bull. Their southerly movement is lazy with periodic spurts to the north, which as the case the past two weeks. That is a bullish configuration. The problem is that Pressure has remained in a near-converging pattern for several weeks, suggesting the bear is concerned about Greece, new governmental legislation, and other non-value-adding activities by the economic overhead group.

Keep up with the daily stock market report as the Quick-term and Near-term attributes can shift quickly.

Do not get lazy and set those stop losses for those stocks and funds that continue to enjoy hold signals.

The daily updates are on the following link.

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

Hyperlinks

To access all major markets, stocks, funds, economic data, charts, statuses, etc, click the following hyperlink:

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

Once you are inside the website, click on "members update" or simply log in. It is on the top of every page in the web site so you can always find your way back.

Happy Investing,

www.indicant.net

04/18/2010

Apr 11, 2010 Indicant Weekly Stock Market Report

Volume 04, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

Sam Walton versus the U.S. Government – Sam Wins

Sam Walton’s resume was impressive, depending on the reader. It is impressive that he was Missouri’s youngest Eagle Scout. Becoming an Eagle Scout is not that easy. One has to focus and work hard at it. He went to college, earning a degree in economics at the University of Missouri, but as most of you know, he did not become an economist. He must have been inspired to be productive as a member of society. He never attended an Ivy League school. He, in fact, became the richest man in the world. If he were still alive, he would be the richest man in the world.

His legacy continues, like that of many great “private sector” people, such as Henry Ford, Thomas Edison, Michael Dell, Bill Gates, Earle P. Halliburton, K.T. Norris, just to name a few. One cannot point to one public sector person in the history of all public sectors and find greatness or any provisions of products or services of value. There are some exceptions to this when pointing at Thomas Jefferson, Ben Franklin, John Adams and many others who revolted against the King of England and authored the U.S. Constitution. However, those great individuals were not “professional politicians.”

Americans spend approximately $36,000,000 at Walmart every hour each day. That yields an average of $20,000 profit every minute during economic normalcy. Most Wal-Mart employees speak English, which is a requirement at stores that sell to English speaking customers.

Wal-Mart, headquartered in Bentonville, Arkansas, has consistently defeated their competition since its inception. Sam Walton wiped out Gibson Discount Stores immediately. His stores nearly wiped out K-Mart in the late 1980’s. Sears is a fraction of what it once was as a direct result of Sam Walton’s managerial talents. Sears, K-Mart, and others obviously employed a high content of dilettante management.

Wal-Mart’s revenue exceeds that of Target, Home Depot, Sears, Costco, and K-Mart combined. Walmart in fifteen short years sold more food than Kroger and Safeway combined.

Walmart is the world’s largest employer with over one million people on the payroll. No other private sector company has ever employed that many people. Indirectly, Wal-Mart has contributed significantly to the payrolls of their suppliers by offering 24-hour coverage and low prices.

Sam drove an old truck even after garnishing a net worth in excess of $50-billion. He lived a common life-style even though he was the richest person in the world before his death. Some argue that his employees do not get rich, but at least they have a job. Retailing products does not contribute to real economic wealth. Consequently, working in retail cannot create thousands of millionaires from the rank and file workforce.

Sam Walton did not manufacture products, produce agriculture, or extract raw materials. Therefore, he created zero economic wealth. However, his efforts helped streamline supply chains to the benefit of customers and those that create real economic wealth. In essence, Sam Walton was a facilitator of economic wealth creation. As a result of his hard-working efforts, he was rewarded appropriately.

Wal-Mart knows how to expand its markets and does so very efficiently. In the past five years, it opened over 1,000 new stores. There will be 7.2-billion retail transactions at Wal-Mart this year. That is more than one transaction for every man, woman, and child on planet Earth.

Now, let’s take a look at some of the achievements of the United States Federal Government. Using the word, achievement, is misleading. That is because there are no achievements. Here are the blunders, though.

The United States Postal Service was created in 1775. There was no competition during the first 150-years. Even with such a powerful monopoly, the U.S. Postal Service did not create profit for the Federal Government. It is broke. The public sector has had 235-years to get it right.

Even though the public sector has a long history of failure, Social Security was established in 1935. Seventy-four years later, it is also broke. It is the most massive Ponzi scheme ever. Those who promote social causes through the Federal Government are not good at math. Those who promote the expansion of abortion are the biggest enemy to their cherished Ponzi scheme. If these so-called liberals have their way, the Ponzi elements will fall complete apart about twenty-five years from now as a direct function of there desire to expand abortions. Ponzi requires an increasing number of contributors.

The problem with intellectuals is simple. They are seldom good at math and logic. They tend to focus on only one subject at a time without regard to related subjects and impacts thereof. They tend to read a lot and actually believe what they read, as opposed to figuring things out for themselves. Most writers write for self-gain; seldom for the betterment of humankind. (I am writing for self-gain right and absolutely no other reason). This is one article, though, that should be believed. Karl Marx writings should not be believed. This article can be verified. Karl Marx simply wanted to be a king, but he did not have to courage to take it like kings of old. He simply fooled a bunch of idiots. None of this teachings could be proactively verified. However, post implementation of Marx concepts proved it was utter nonsense. All the grandkids of Marx believers lived and died in poverty. None escaped it.

Fannie Mae was created in 1938 as one of FDR’s New Deal programs. After four years of floundering behavior, FDR kept on demonstrating OPM disease. OPM is using other people’s money without regard to payback. FDR kept piling stupid ideas on top of stupid ideas. Fannie Mae was just another one. After 71-years, Fannie Mae is a loser and will always be a loser.  Public Sector management has still not gotten it right even though it started before Sam Walton started Wal-Mart.

The War on Poverty started in 1964. Poverty had been one of the United States best sources of greatness. Many great people were born into poverty. Some worked hard to escape its wrath and in doing so created vast amounts of wealth. Why would one want to destroy a seed of greatness? Actually, funding poverty lowers the numbers of those that escape it. Breeding more offspring than normal in the poverty group expands the numbers of those stricken by poverty. In essence the War on Poverty has embellished yet more poverty. Government programs worsen the problems intended for correction and most often create yet more problems.

Sam Walton’s young life bordered poverty-like conditions. If the War on Poverty had existed during Sam Walton’s young life, we probably would have never heard of Sam Walton. We would not have a place to go buy a variety of low cost products.

After many years of the War on Poverty failing attempts of transferring wealth and now transferring one-trillion or so dollars to the poor, those poor folks are still poor. Yawning Federal bureaucrats will never get it right. For those who are not skimming are simple yawning more.

The U.S. Federal Government created Medicare and Medicaid. They are broke, incompetent, and an excellent source of income for skimmers and massive corruption. After 44-years of yet more stupidity, it is a system that doctors do not wish to serve anymore and getting worse.

U.S. politicians figured Fannie Mae would perform better if they created Freddie Mac, as a competitor. It did not work, as Freddie Mac went broke also. It was backed by the U.S. Government. Rest assured that General Motors and Chrysler will follow the same fate. This is Chrysler’s second time around of taxpayer babysitting. Being backed by the Federal Government reduces required hard working performance and thus the prime reason for their failures. However, politicians want the power of influence regardless of the evidence of their failing efforts. Some could read this little expose of their failures and immediately give a speech to thousands of ignoramuses about how the Federal Government will take care of them. The conclusion threatens the species, but most do not recognize this.

In 1977, politicians created the Department of Energy, which has grown to 16,000-employees and a budget in excess of $24-billion a year. U.S. politicians created this to reduce dependency on foreign oil. None of the 16,000-employees explore, drill, or produce energy products. Most yawn through their days of low effort results with manicured nails. None have any calluses or crushed digits that one gets when working in the oilfields. We continue importing plenty of foreign oil. Sam Walton would fire them and abolish the Department of Energy. That would save $24-billion each year. If government outsourced its management to Walmart, that $24-billion would indeed be bullish.

After decades of abysmal failure, the egotistical, self-aggrandizing U.S. politicians in their phony glorified world and expressed stupidity are now taking over the healthcare industry. Although healthcare, other than the manufacturing, extraction, and agricultural components, does not create economic wealth, it is indeed a facilitator. Its ability to facilitate is under great threat by politicians and federal bureaucrats.

After decades of provable incompetence, corruption, and contributions to moral and productive decay, the Federal Government plans to take over the healthcare industry. That will be bearish and those fools who vote for those empty souls in Washington D.C. will deserve what they get; no healthcare. Eventually, Steven Jobs, who provides quality products and a major source of pleasure for many, may die while waiting in line behind a bunch of hypochondriacs for healthcare the next time around. That would be bearish.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated one buy signal and no sell signals.

The Mid-term Indicant is signaling hold for 226 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 35.0%. That annualizes to 44.9%. The Mid-term Indicant has been signaling hold for these 226-stocks and funds for an average of 40.5-weeks.

The Mid-term Indicant is avoiding 89-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 33.6% since the Mid-term Indicant signaled sell an average of 82.0-weeks ago.

One year ago, on Apr 10, 2009, the Mid-term Indicant was holding 21-stocks and funds out of 344 tracked for an average of 94.4-weeks. They were up by an average of 116.8% (annualized at 64.4%). There were 323-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 32.7% since their respective sell signals an average of 44.6-weeks earlier.

The Mid-term Indicant was signaling hold for 203-stocks and funds of the 345-tracked two years ago on Apr 11, 2008. They were up by an average of 130.7% (annualized at 56.2%) since their respective buy signals an average of 121.0-weeks earlier. The Mid-term Indicant was avoiding 137-stocks and funds at that time. They were down an average of 20.3% since their respective sell signals an average of 26.3-weeks earlier.

There were 273-stocks and funds with hold signals on Apr 6, 2007 since their buy signals an average of 103.7-weeks earlier. They were up by an average of 125.8% (annualized at 63.1%). There were 62-avoided stocks and funds at that time. They were down by an average of 5.9% from their respective sell signals an average of 13.4-weeks earlier.

On Apr 7, 2006, the Mid-term Indicant was signaling hold for 281-stocks and funds out of 345-tracked. They were up by an average of 127.9% (annualized at 66.9%) since their buy signals an average of 99.4-weeks earlier. The Mid-term Indicant was avoiding 61-stocks and funds at that time. They were down by an average of 7.7% since their sell signals an average of 21.6-weeks earlier.

Five years ago, on Apr 8, 2005, there were 230-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 88.8% (annualized at 59.6%) since their respective buy signals an average of 77.5-weeks earlier. There were 88-avoided stocks and funds then. They were down an average of 28.8% since their respective sell signals an average of 52.8-weeks earlier.

On Apr 9, 2004, there were 275-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 71.0%, annualizing at 78.4%, since their respective buy signals an average of 47.1-weeks earlier. There were 21-avoided stocks and funds then. They were down by an average of 28.0% since their sell signals an average of 41.3-weeks earlier.

There were 222-stocks and funds with hold signals on Apr 11, 2003. They were up by an average of 21.4%, annualizing at 74.3%, since their buy signals 15.0-weeks earlier. The 49-avoided stocks and funds were down an average of 17.5% since their respective sell signals an average of 16.0-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

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

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term, Mid-term, and Quick-term attributes have not yet succumbed to the stock market bear’s ambition. The Near-term cycle shifted in support of bearish inclinations in early Feb 2010, but quickly abandoned bearish bias in early March 2010. The Dow Utilities also shifted in favor of the bear on a Mid-term basis in early Feb 2010. It remains pathetically configured with respect to bullish ambition.

With the exception of the DJU, most prices and major indices remain solidly above their respective bearish yellow curves. Bear and sell signals will not occur on these slower moving models until price interactions with bearish yellow.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a common bouncing point so a stop loss a percentage below its value could be considered. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 50.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 120.3% and the S&P500 is up 53.8% since then. The small cap index, S&P600, is up 118.1% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 51.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 21.8% since its similar secular peak on March 23, 2000. The Dow is down by 6.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be known in Nov 2010.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 29.3% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 10.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 1.6%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 2.5% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 8.1% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 6.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 2.2% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 12.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 4.8% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 7.9% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post election bullishness.

The Dow is down 22.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 14.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 16.3% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The next Near-term Bear cycle may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 68.0% since March 9, 2009. The NASDAQ is up 93.4% and the S&P500 is up 76.5% since then. The S&P600, Small Cap Index, is up a whopping 104.9% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” will eventually be recognized, as closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates are holding relatively constant. The discount rate is inching up. It is no longer a yellow bear.  These sinusoidal waves suggests interest rates are anxious to start rising again. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of boring repeatability. At some future point they will change and influence drama. Monitoring them regularly is important to anticipate those magical moments.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold. Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Greece. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive.

Some short-term rates have been nudging north the past few weeks. This should be monitored. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed will take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate a few weeks ago.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran, and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

Although bearish the past several days, gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat.

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama. Union labor management does not understand this phenomenon. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large block of votes, but those large blocks will continue to shrivel. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Recently softening gold prices is mere profit taking and a strengthening dollar. Gold has been relatively bearish the past few days.  The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The meandering forecast is holding steady at $1000. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 80-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

The heart and soul of bullish seasonality concluded a bit earlier this year. The pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality near the end of January 2010 with the president’s state of the union address. Bearishness typically follows those speeches and there was no exception this year.

The above and below paragraph may become obsolete, based upon the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gained, do not be surprised at a 1,000 Dow by 2010.” The bear was passive between March 2009 and January 2010. It has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs disappointed in the recent healthcare vote. The lower character elements of society rise to the top of the political elite. That is bearish.

As stated the past 32-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 12.4% since then, annualizing at 25.6%. It has been bearish in four out of the last twelve weeks, but solidly bullish in five of the last six weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 8.2% since then, annualizing at 13.6%. It was also solidly bullish the last two weeks, which was consistent with similar funds.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 16.5%, annualizing at 23.6% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 6.5% since that buy signal, annualizing at 11.6%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is up 7.6% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was bullish the past two weeks, following two consecutive weeks of bearish aggression.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 12.2% since its buy signal on Sep 11, 2009, annualizing at 20.8%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 16.4% since then, annualizing at 23.7%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is up 4.3% since then, annualizing at 41.5%

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 40.9% since that buy signal, annualizing at 30.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 2.4% since that buy signal, annualizing at 22.4%.

Most commodities were bullish last week and were not contrarian to the overall stock market, other than being significantly more bullish.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 5.6% since that bear signal. The DJU was bullish the past two weeks along with other major indices.

The nine remaining major indices retaining bull signals are up by an average of 23.1% since there respective bull signals an average of 36.0-weeks ago. That annualizes at 33.4%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the overall stock market peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,585,492. That beats buy and hold performance of $1,673,110 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $155,370. That beats buy and hold’s $116,992 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $223,634. That beats buy and hold’s $85,092 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 62.2% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 279.9% (annualized at 15.1%) since the Long-term Indicant signaled bull 962-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Focal points remain with prices, relative to the NTI Green curve, and Vector Pressure. As long as the former increases on the charts and the latter remains in bullish domains, the bear cannot find success. QTI Red Bulls are offering additive assurances against dynamic bearish potential. So far, any bearish expressions should be considered as mere bearish spurts.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The Near-term Indicant is signaling bull for 10-major indices. They are up 7.1% since their bull signals on Mar 3, 2010, annualizing at 69.9%.  There are two indices enduring bear signals. They are down by an average of 6.3% since their respective bear signals an average of 7.6-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 31.7%, annualizing at 38.1%, since their bull signals an average of 43.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are down by an average of 4.5% since their respective bear signals an average of 6.9-weeks ago.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      Quick-term Attributes (This is a longer cycle than Near-term cycles)

      QTI-Red Bull Count; Ten non-contrarian; solid bullish support.

      QTI-Bullish Red Curve Trend; Eleven non-contrarians; solid bullish support.

      QIT-Yellow Bear Count; None of the non-contrarians is inflicted with this attribute and thus non-bearish. Longer-term holders should focus on this attribute; especially if you enjoy the fundamentals of your holdings and have accumulated significant gains.

      QTI-Bearish Yellow Curve Trend; Non-bearish majority with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

The Quick-term Indicant remains supportive of the QTI Bull.

      Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

      NTI-Blue Bull Count; Eleven non-contrarians and arguing with them is not profitable.

      NTI-Bullish Blue Curve Trend; Eleven non-contrarian; bullish support.

      NTI-Bearish Green Curve Trend; Eleven non-contrarian moving north; non-bearish. Ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

      Short-term Force Vectors and Pressure Attributes

      STI-Force Vector Domain Position; Eleven non-contrarians in bullish domain, supporting bull.

      STI-Force Vector Position Relative to Vector Pressure; Ten non-contrarians above Pressure. Prior mild bearish threat is subsiding, but it still exists, as Force Vectors are not bullishly aggressive.

      STI-Force Vector Direction; Ten moving north, bullish support.

      STI-Vector Pressure Trend; Ten non-contrarians are moving bullishly; bullish support.

      STI-Vector Pressure Position; All non-contrarians are in bullish domains.

      Short-term Market Summary

      Short-term attributes continue configuring in support of the bull. This is a low volume bull and once it run its course, the next bear cycle has a higher probability of configuring with more breadth and depth. However, if this Near-term Bull gets a volume nudge, it can enjoy significant longevity. One could argue that low volume is bullish since demand for stocks has a potential to increase and thus elevating their prices.

-Tangential Protection – The Dow Composite, Dow Transports, NASDAQ, NAS100, S&P400, and S&P600 have tangential protection. Tangential protection, once formed, helps avoid the pitfalls of fluttering behavior.

-Political Climate – Political disharmony continues and bullish. There is increasing intra-party bickering, which is even more bullish. Legal battles between the Federal and State governments offers bullish inspiration. Although the passage of healthcare has a long-term bearish projection, the market remains bullish. Therefore, in spite of this longer-term prognosis of bearishness, the Near-term and Quick-term bull/hold signals will remain in tact until attributes deteriorate and supportive of the stock market bear.

-Reverse Tangential Bearish Detection – We will have to wait for the next Near-term bear cycle to monitor this tangential phenomenon. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness on this cycle will be high. The Dow Utilities moved toward supporting this phenomenon several days ago. Recent bullish bounces did nothing to challenge this theme.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the Mid-term bull will continue dominance.

Click the Short-term Indicant to see the combined table of the Near-term Indicant, Quick-term, and Short-term Indicant. The table has links to charts for each. Each chart contains all three models and there are two separate buy and sell signals for the Near-term and/or Quick-term Indicant.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators  

Both major indices are enjoying relatively mild volume, suggesting little interest in shifting bias away from the bull. Although this is a classical sucker rally configuration, there is little justification for not holding and participating in this rally. (Recent chronological observations are expressed below in reverse order).

Apr 9, 2010-Fri-Again mild volume and mild bullishness continues supporting prevailing bullish bias.

Apr 8, 2010-Thu-Mild volume with mild bullishness offers nothing suspicious. The bull remains in tact.

Apr 7, 2010-Wed-Aggressive volume on mild bearish behavior raised an eye-brow, but not yet indicative of bias change; remains bullish.

Apr 6, 2010-Tue-There was a bit more volume today, remaining supportive of current bullish bias.

Apr 5, 2010-Mon-Volume remains weak. Again, nothing is suggesting a change from bullish bias.

Apr 1, 2010-Thu-Weak holiday volume on flat market behavior offers no new revelations; thus bullish bias prevails.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 8.8%, annualizing at 55.6%, since their buy signals an average of 8.3-weeks ago.

The NTI is avoiding two-ETF’s. They are down by an average of 8.1% since their sell signals an average of 5.4-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 37.5% since their buy signals an average of 44.4-weeks ago. Those with hold signals are annualizing at 43.9%.

The Quick-term Indicant is avoiding two ETF’s. They are down by an average of 33.4% since their sell signals an average of 29.6-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; 27-bullish support; lost bullish solidity, but remains bullish.

NTI Blue Curve Trend; 29-non-contrarians sloping north; bullish support.

NTI Green Bear Count; zero non-contrarians and solidly non-bearish.

NTI Green Curve Trend; majority of 28-sloping north; non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 28-non-contrarian; bullish support.

QTI Bullish Red Curve Trend; majority of 28-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction: 26-moving bullishly.

STI Force Vector Position; five populating bullish domains; 25-greater than Pressure; bullish support.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; bullish support. This attribute is a focal point since Pressure is near zero.

Vector Pressure Trend; Twenty-seven moving north; bullish support.

Short-term Summary: Most attributes continue supporting the Short-term Bull. Pressure has yet to escape convergence/inflection points and thus offers the bear some encouragement to make a move.

Contrarian Funds

ETF#03-Natural Resources is up 4.3% since the Near-term Indicant signaled buy on Mar 3, 2010, annualizing at 41.5%. The Quick-term Indicant signaled buy on August 3, 2009. It is up 16.4% since that buy signal, annualizing at 23.7%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

This is again a solid NTI Blue Bull.

ETF#11-Gold and Precious Metals  is up 40.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 30.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $100.63 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 2.4% since that buy signal, annualizing at 22.4%. Pressure is still converging. This convergence is a bit threatening. Force was moving north and thus supportive of the gold bull. NTI-Green continues offering resistance to bearish ambition, but configuration suggests GLD is vulnerable to the gold bear on a near-term basis.

Interestingly, Force and Pressure microscopically entered bullish domains on Mar 31-Wed, offering a bit more support for the golden bull. Since then, GLD has moved solidly to the north.

Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government  is down 2.1% since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 2.4% since that sell signal.

Force and Pressure remain in bearish domains, offering support to the TLT bear. Today’s TLT bullish behavior did not elevate price above NTI Green, which is non-bullish.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 14.2% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 64.4% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $22.99 and still falling.

Major ETF Events

Apr 09, 2010-Fri-No major events; just steady bullish to non-bearish behavior.

Apr 08, 2010-Thu-No major events.

Apr 07, 2010-Wed-Aggressive volume on mild bearishness, but with solid breadth, is a somewhat discerning, but prices remain above NTI Blue and QTI Red.

Apr 06, 2010-Tue-None

Apr 05, 2010-Mon-TLT is a solid NTI Green Bear.

Current Strategy-Short-term Indicant- April 9, 2010-Fri-Holding remains safe. April 8, 2010-Thu-The bear continues demonstrating an inability to overcome the bull, in spite of the bull’s lackadaisical behavior the past few days. Apr 7, 2010-Wed-The bear was meek in response to the assertion of its incompetence. NTI Blue Bulls remain in the way of the bear’s desire to be dominant. Apr 6, 2010-The bear continues demonstrating incompetence. Apr 5, 2010-Mon-Behavior the past two days has strengthened bull. Most short-term attributes are not threatening and continued buying should be relatively safe.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

Short-term Indicant Tables for the Dow Jones Industrial Average Index

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market again enjoyed bullish divergence last week, albeit mildly so. Six of the last nine weeks enjoyed a combined bullish divergence and convergence. Bearish convergence was endured for four consecutive weeks ending nine weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence, but lingers since short-term attributes are having difficulty escaping a converging configuration.

Indicant Conclusion

As stated the past twenty-six weeks, low interest rates offer narrowed alternative investment opportunities. The expiration of the Near-term Bull suggested this was increasingly an irrelevant observation, relative to more worldly dynamics, which appeared to have been leaning in favor of the bear until seven weeks ago. Since then, the capital markets crushed the early February threat by the bear. One can argue political discourse in the U.S. has more bullish weight than China’s credit tightening. Political discourse is generally bullish, as one evil group checks down another one.

There is a strategic view unfolding that China may tighten credit too much. Some logic suggests that large caps may leave China. That leads to a heightened concern regarding interest rates and/or deflation or inflation. This also could lead to reduced revenue volumes for larger cap companies and other business interest in China.

Trade tensions can mount. Such behavior will invoke a repeat of the 1930’s. Any legislation or behavior leading to restrictions on free trade will unleash a bear that will make the 1930’s bear look like a teddy bear. The economy is more intensely international than in the 1930’s. It is better for domestic unions to fall apart than international trade wars.

The stock market bull enjoyed additive magnitude with the additional number of capitalists in China since the early 1990’s. Chinese government leaders consist of the exact same psychological profile as any other politicians, where control freak, egotistical self-aggrandizement, and lying are common attributes. Forces far away from Washington D.C. can shake the world’s economy. The small country of Greece is a new threat, but for the time being is promoting austerity in their government. That is bullish, but only to the extent of execution.

Short-term Force Vectors continue moving south. So far, this movement is non-threatening to the bull. Their southerly movement is lazy with periodic spurts to the north, which as the case this past week. That is a bullish configuration. The problem is that Pressure has remained in a near-converging pattern for several weeks, suggesting the bear is concerned about Greece, new governmental legislation, and other non-value-adding activities by the economic overhead group.

Keep up with the daily stock market report as the Quick-term and Near-term attributes can shift quickly.

Do not get lazy and set those stop losses for those stocks and funds that continue to enjoy hold signals.

The daily updates are on the following link.

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

Hyperlinks

To access all major markets, stocks, funds, economic data, charts, statuses, etc, click the following hyperlink:

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

Once you are inside the website, click on "members update" or simply log in. It is on the top of every page in the web site so you can always find your way back.

Happy Investing,

www.indicant.net

04/11/2010

Apr 4, 2010 Indicant Weekly Stock Market Report

Volume 04, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

When Will the Serious Chaos Begin?

Clicking this sentence will take you to an interesting chart. It shows U.S. debt per capita will exceed $46,000 by the end of this year. An extrapolation of history since 1800 concludes with a projected U.S. debt per capita in excess of $100,000 before the year 2040. Not shown on the chart is an extrapolation to $100,000 by 2018 with a starting point in 1980. Please note the exponential rise since the late 1970’s. It is unsustainable. Congress must be reigned in or the greatest bubble of them all will pop!

Much of the recent debt since the late 1950’s has been not directed to the three wealth building economic sectors; manufacturing, agriculture, and extraction. Most of it is increasingly directed at entitlement programs for U.S. residences. In essence, there is no value that will be returned from this increasing debt. Building submarines and F22’s generate an economic return for shareholders. Paying doctor bills offers miniscule returns only to the extent of the medical professions purchase of product that requires manufacturing, agriculture, and extractions, such as a cell phone and a few yachts by the more successful surgeons.

Some economic idiots point to historical debt as a percentage of GNP, successfully identifying past periods where it was higher than contemporary relationships. Such a period was in the 1940’s. During World War II, much of the debt was directed at manufacturing weapons. That was manufacturing and thus a wealth creator. Providing drugs and medical access to people is not significant wealth building, as drug manufacturing is somewhat puny and most are mere placebos anyway. Snake oil has become somewhat of a sophisticated industry.

Entitlement programs remove money from one’s pocketbook to another’s pocket book with some corrupting skimming in between the transfer. That is not wealth building. For the most part, this process transfers resources from the productive to the non-productive. The facilitator of this is coercion by politicians, who hide behind the U.S. Government. They do not even collect the money. They employ thug types to do it for them and some of those thugs retain, via natural corruption from such organizations, collections for themselves, as opposed to depositing in the government coffers.

The framers of the U.S. Constitution did not recognize one evolving dynamic. During their era, most people were hard working and honest. Most of the economy was driven by wealth creating sectors; manufacturing, agriculture, and extraction. They assumed their successors would be equally honest and hard-working and with the same economic base, as opposed to bending the rules for self-gain and egotistical stroking.

Although an opinion, it seems that an increasing number of votes are being garnished from the lazy folks in the U.S. Consequently, politicians are increasingly catering to the low to completely non-productive people, as their masses are gaining in numbers. They use the word, give, in their rhetoric without equally using the word, take. They cannot give without first taking.

In essence, we may be approaching a period that was unfathomable by our founding forefathers, whereby “most” people are joining the ranks of economic leeches. Leeches always kill their host. Since there would be no other hosts after its expiration, the homosapien species is at risk; at least in the volumes now enjoyed by the capital markets.

Reigning in Congress will require a stricter criterion for voting rights. If one receives money from the government or pays no taxes, their right to vote should be revoked, much like that of a prisoner. That includes all government employees, including politicians. In essence, anyone receiving funds from the government, whether salary or entitlement, cannot vote. Once that is passed, all non-government union members can have just one-half of a vote since they tend to use their numbers in a disdainful manner against their employer.

An unhappy person of good character will leave an institution and start his or her own company, as opposed to becoming tribalistic against their employer. Walter P. Chrysler left General Motors, as opposed to joining the tribe of hate and threat. The constitutional amendment to restrict voting only to the productive would curtail entitlement spending by substantial amounts and the normal course of love and charity would resume what it once was. Those who are productive would receive a tax cut immediately and the stock market bull would prance in delight. A 100,000 Dow in a few short years would not be out of line by virtue of the massive gains in productivity. The world would be more peaceful, as resources and cause would be much simpler. Hate would be replaced by good old fashion competitiveness, charity, and helping those who need it from the heart.

U.S. citizens are marching against the political parasitical elite. So far, they have been relatively peaceful. This group of people is called the Tea Party. These are not 1960-hippie dizzies. They appear to be high on nothing other than pure emotional anger. They are angry with the political establishment. Their primary point of concern is government getting too big and with that, the debt per capita. It is refreshing that a serious evolving thruster group recognizes that the grandest leech of them all, the U.S. government, is sucking too much life from them.

As much of the exponentially rising debt is not directed at wealth creation, one has to ask; at what point, does the quality of life start the inevitable turn to the south? This leads to other questions, such as when do the Tea Party protestors become more militant in their anger toward their own government? Civil unrest in the U.S. would delight the stock market bear. If that indeed happens, a 1,000-Dow in short order would not be out of line. It is all about magnitude; high levels of chaos results in a dynamic stock market bear.

The stock market bear will not wait for obvious reductions in the quality of life for U.S. citizens. The U.S. culture was still enjoying the roaring twenties when the stock market began a major bear leg in October 1929. The reduced quality of life began shortly thereafter with the Dirty Thirties and concluded with the death of millions around the world. Government attempted to intervene but the conclusion was a clear demonstration of OPM disease. (OPM means other people’s money).

OPM disease is inflicted on those who use other people’s money for their livelihoods (all politicians and government employees). OPM disease is incurable. It is impossible for the little three and a half brain to adequately process all of the proper information for a good conclusion as to how to best use “other people’s money.” FDR was Harvard educated, but his brain was still only about three and a half pounds. He learned very little about wealth building at Harvard and a tremendous amount about economic leeching. He demonstrated very clearly how OPM disease inflicted economic damage around the world. His policies and those of his cronies directly contributed to the factors leading up to World War II. That was serious chaos.

When will the next serious chaos ensue? The stock market will sniff it before it happens. Right now, the stock market remains configured in support of the idea that recent legislation and related spending will be repealed. Political popularity in the executive and legislative branches of government continues to fall and that is bullish. The stock market is primed to propel upward on the belief there will be civil uprising and the wrongs will be righted.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated no buy signals and one sell signal.

The Mid-term Indicant is signaling hold for 226 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 33.1%. That annualizes to 43.5%. The Mid-term Indicant has been signaling hold for these 226-stocks and funds for an average of 39.5-weeks.

The Mid-term Indicant is avoiding 90-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 34.9% since the Mid-term Indicant signaled sell an average of 81.0-weeks ago.

One year ago, on Apr 3, 2009, the Mid-term Indicant was holding 21-stocks and funds out of 344 tracked for an average of 93.8-weeks. They were up by an average of 115.4% (annualized at 64.0%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 33.4% since their respective sell signals an average of 43.7-weeks earlier.

The Mid-term Indicant was signaling hold for 202-stocks and funds of the 345-tracked two years ago on Apr 4, 2008. They were up by an average of 138.4% (annualized at 59.0%) since their respective buy signals an average of 121.9-weeks earlier. The Mid-term Indicant was avoiding 138-stocks and funds at that time. They were down an average of 18.1% since their respective sell signals an average of 25.2-weeks earlier.

There were 273-stocks and funds with hold signals on Mar 30, 2007 since their buy signals an average of 103.4-weeks earlier. They were up by an average of 121.9% (annualized at 61.3%). There were 70-avoided stocks and funds at that time. They were down by an average of 5.6% from their respective sell signals an average of 12.0-weeks earlier.

On Mar 31, 2006, the Mid-term Indicant was signaling hold for 282-stocks and funds out of 345-tracked. They were up by an average of 129.4% (annualized at 68.3%) since their buy signals an average of 98.6-weeks earlier. The Mid-term Indicant was avoiding 56-stocks and funds at that time. They were down by an average of 9.0% since their sell signals an average of 24.3-weeks earlier.

Five years ago, on Apr 1, 2005, there were 230-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 87.2% (annualized at 59.3%) since their respective buy signals an average of 76.5-weeks earlier. There were 87-avoided stocks and funds then. They were down an average of 29.1% since their respective sell signals an average of 52.3-weeks earlier.

On Apr 2, 2004, there were 252-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 77.9%, annualizing at 82.2%, since their respective buy signals an average of 49.3-weeks earlier. There were 21-avoided stocks and funds then. They were down by an average of 27.8% since their sell signals an average of 40.5-weeks earlier.

There were 233-stocks and funds with hold signals on Apr 4, 2003. They were up by an average of 21.8%, annualizing at 81.3%, since their buy signals 13.9-weeks earlier. The 45-avoided stocks and funds were down an average of 26.3% since their respective sell signals an average of 26.5-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

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

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term, Mid-term, and Quick-term attributes have not yet succumbed to the stock market bear’s ambition. The Near-term cycle shifted in support of bearish inclinations in early Feb 2010, but quickly abandoned bearish bias in early March 2010. The Dow Utilities also shifted in favor of the bear on a Mid-term basis in early Feb 2010. It remains pathetically configured with respect to bullish ambition.

With the exception of the DJU, most prices and major indices remain solidly above their respective bearish yellow curves. Bear and sell signals will not occur on these slower moving models until price interactions with bearish yellow.

The bull attacked the Near-term Indicant bearish attributes several weeks ago. This prevented additional sell signals by the Mid-term Indicant and has steadied the turbulence of the Near-term Indicant.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a common bouncing point so a stop loss a percentage below its value could be considered.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 50.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 115.7% and the S&P500 is up 51.7% since then. The small cap index, S&P600, is up 112.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 52.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 22.9% since its similar secular peak on March 23, 2000. The Dow is down by 6.8% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be known in Nov 2010.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 27.8% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 7.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 4.6%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 2.7% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 8.8% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 6.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 0.3% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 11.0% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 1.6% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 9.1% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post election bullishness.

The Dow is down 22.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 16.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 18.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The next Near-term Bear cycle may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 66.9% since March 9, 2009. The NASDAQ is up 89.4% and the S&P500 is up 74.1% since then. The S&P600, Small Cap Index, is up a whopping 99.9% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” will eventually be recognized, as closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates are holding relatively constant. The discount rate is inching up. It is no longer a yellow bear.  These sinusoidal waves suggests interest rates are anxious to start rising again. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of boring repeatability. At some future point they will change and influence drama. Monitoring them regularly is important to anticipate those magical moments.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold. Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Greece. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive.

Some short-term rates have been nudging north the past few weeks. This should be monitored. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed will take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate a few weeks ago.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran, and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

Although bearish the past several days, gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat.

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama if this continues. Union labor management does not understand this phenomenon. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large block of votes, but those large blocks will continue to shrivel. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Recently softening gold prices is mere profit taking and a strengthening dollar. Gold has been relatively bearish the past few days.  The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The meandering forecast is holding steady at $1000. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 79-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

The heart and