August 25, 2002 Indicant.Net Weekly Update

Volume 8, Issue 4 ISSN 1526 6516 © The Indicant Stock Market Report

Why would the market go north now? The corporate dilettantes have been exposed for what they are. Nearly all CEO’s reported that their financial information is accurate. Former Enron voodoo bookkeeper, Andrew Fastow, has his assets frozen. Many executives are figuring out that “I don’t know” is not a good answer, especially when being paid the big bucks. Some voodoo managers are now in jail. This movement and direction of justice is fundamentally appealing for exerting some bullish momentum in the stock market.

Another reason for uplift in the stock market is low interest rates. The Consumer Price Index is hanging around its usual 4% or so. People are earning less than 2% in their money markets, CD’s, and saving accounts. That erosion in net worth is not acceptable. Where does one put their money to prevent this erosion in wealth? The stock market is one place.

People could put their money into real estate, commercial and otherwise, but most people prefer more liquidity than that.

People could put their money into precious metals, but that can be just as volatile as stocks. However, the value of precious metals is always known and not subject to voodoo bookkeeping. Nonetheless, most people feel more comfortable investing in the stock market.

Late last year and early this year pundits were predicting a great bull market for 2002 because there was about two trillion dollars setting on the sidelines. They reasoned that this would propel the market massively to the north since only $500 billion drove the 1998-1999 bubble to the north. They were wrong since their advice would have resulted in you losing another 20% to 40% of your investment dollar.

But that two trillion is still setting there. Many people now have a couple of years behind them on their earnings from their money markets, CD’s, and savings. Their dissatisfaction with that is building. About 25% of that two trillion should start entering the stock market soon. After awhile, the second set of 25% will enter. If the market shoots to the north with aggressive demeanor, the balance of 50% will enter. That is when the market will bubble and come crashing down again. Many people now distrust the stock market, but will not have the discipline to stay out. They will enter near the top and sell near the bottom. That is how others investors make money in the stock market and that is how most investors lose money in the stock market.

The two options for people is to invest in the stock market or watch their wealth erode due to the difference between the consumer price index and their earnings in low interest rates. The primary element standing in the way of the two trillion reentering the market is the threat of voodoo bookkeeping.

Another fundamental bullish signal is this mid-term election year. That phenomenon is perfect since the 1920’s. This is a mid-term election year when the markets always find a bottom. The bottom may not yet be behind us, but it is starting to appear that this mid-term election year phenomenon will repeat itself this year. It does not matter though, since the various Indicant models will verify this phenomenon is in fact performing as expected.

The market will not move to its previous highs anytime soon. Boardroom cronyism is not going away anytime soon. The parasitical elites are going to hang around for another generation or two. You will know boardroom cronyism is in place by studying the salaries of the executives. If they are hirelings and make over $100,000 per year, then you have boardroom cronyism. Cronyism and world class performance cannot coexist in one company.

If the officers of the company are founders, then they should make anything they want. But if the officers of a company are hirelings, that means they were at one time looking for a job. They simply wrote a resume and networked in high circles as opposed to putting in ten to twelve hour days like the rest of us, which moves the economy forward. And since they are pure overhead to any company, not one of them should receive a salary in excess of $100,000 per year. They should fly commercial and not set in first class. Watch the fundamentals of the company where you invest. See if they have a corporate jet. See if they use executive dining rooms. And if their salaries are more than six figures and they are hirelings, reconsider your investment position. Avoid companies who engage in board room cronyism. Such boards are not watching out for you.

The system, like most boards, is stupid. The system was built off old laws that go back to agreements with ancient royal families and the movement to individual freedom. It will take longer for those laws to expire than the thousand years it took to create them. Those laws were created to protect the offspring of royalty and have been expanded to protect the offspring of “old money” families and those with the propensity to gravitate their behavior to becoming a parasitical elite.

When you are doing your fundamental analyses of companies to invest in, try to gauge the degree of boardroom cronyism. Do the officers of the company control the board or does the board control the officers? Remember, no hireling is worth more than $100,000 per year. If the hirelings are paid exorbitant wages, then you have boardroom cronyism. Moreover, board members should have some background in what they are overseeing. Watch for the parasitical elites. Study their backgrounds. Try to determine what skills they bring to the success of your investment. If they are members of the parasitical elite class, their net worth is built at the expense of yours. That is why there are only a handful of the 1950 Fortune 500 companies around today. The parasitical elite tend to gravitate to what is available for their leeching behavior. If your company is big and in the second or older generation of management, the greater the chance of board room cronyism.

So much for fundamentals. Let’s take a look at the Indicant technical elements about the stock market.

As stated in the daily report to you on August 19, 2002 , the market quite often corrects after crossing above the bullish red curve for the first time in quite some time. The next day, the market indeed corrected. In normal markets, that correction to the south would have been considered a severe one. However, in relative terms, it was mild.

If the Quick-term Bear from April 23, 2002 to last Friday had not been so severe, the Quick-term Indicant would have signaled QT Bull in early August. The market again corrected back to the south last Friday. The move to the south was simply profit-taking and nothing more. That movement to the south stimulated the Quick-term Indicant to signal bull.

The market, at the very worst in the immediate future, should drift along a higher level on the charts. It can be bouncy as it is attempting to cross above the bullish red curve and develop a strong bullish posture. If the market corrects to the south with clarity of continuing that direction, the Quick-term Indicant will spot it and signal bear. However, do not be surprised if the movement around the bullish red curve will be volatile.

The Indicant technical indicators are favoring a bullish stance for the stock market.

1. The Mid-term Volatility Index has clearly peaked and will move to the south. This will prompt the market to move to the north. This is a Mid-term Indicant observation and its movement is less volatile than the Quick-term Volatility Index.

2. The Quick-term Volatility Index may have bottomed. If it has, the market will move to the south as the Quick-term Volatility Index adjusts to the north. However, the Mid-term Volatility Index is more forceful on general market behavior.  and will need to move back to the north. Do not be surprised with some dips in the market in the next few days. Keep in mind the general shift in the market is to the north at this time.

3. The force vectors are maturing in deep bullish domains. That increases the likelihood of some near term corrections to the south. The salient point though is that such southerly movements will be “corrections.” The vector pressures are now slightly in bullish territory. This indicates the market is comfortable in its transformation to bullish status, but is primed for a few days of up and down volatility with a bias toward cyclical bullish behavior.

4. Although the indexes retreated from the bullish domain of the red curve, they did not express discomfort in that lofty position. As long as the market feels comfortable in or around bullish domains, then the bull is winning the battle.

5. The only un-cooperative Indicant attribute is the Indicant Volume Indicator. It continues moving to the south. Although, it is possible to enjoy the fruits of a bull market with decreasing volume, this illustrates a lack of certainty.

6. The crowd is always wrong. The phenomenon of commonality always prevails. High volume does not represent a high population of traders. One or two smart fund managers or a few mega billionaires, such as Warren Buffet, can move volume, while 90% of the investors remain on the sidelines. When the majority of potential investors decide to buy into the market, the various indicant models will be signaling sell.

7. This is a mid-term election year and the market always finds a bottom in such years. The current configurations of the Indicant attributes suggest the bottom has already passed. However, keep in mind the Quick-term Indicant has not yet signaled bull.

Divergence versus Convergence

The recent bullish behavior is complete with convergence. All sectors are moving to the north. Precious metals, energy services, some technology, pharmaceuticals, biotechnology, etc are all moving to the north. In a few weeks, there will be a separation and market divergence will kick in. At that point, there will be some additional sell signals

Smart investors are getting into the market now. They are uncertain which sectors will do well, so the investment strategy is aligned with a smorgasbord of all possibilities. It will not last. There will be a separation or divergent pattern developing within a few months.

Economic Outlook

There is not much different from last weeks report. Most of the commodities are in the inflationary domain, but ever so slightly. The dollar is still weak against most currencies. Both the yellow and red curves have shifted in direction. This implies the recent cyclical behavior has been converted to a trend.

Gold, oil, wheat, Dow Jones Spot, and CRB Bridge Futures remain in inflationary domains. Oil is surging aggressively to the north with what appears to be a shift from cyclical behavior to a well entrenched trend. If this pattern continues, the newly blessed Quick-term Bull will be short-lived.

The Freddie Mac and Freddie Mae mortgage rates continue plummeting to the south. There must be decreasing demand for long-term loans, which is not surprising in a weak economy. These rates are at unprecedented and historically low levels.

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

Fear Metrics: Economic and Terrorism

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Twelve weeks ago, it was up 66.1% since the Mid-term Indicant signaled buy. Five weeks ago it closed up 12.0% since the buy signal. Last week it closed up 30.4% since the MTI buy signal of December 7.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% twelve weeks ago since the MTI buy signal in April 2001. Four weeks ago, it closed up 27.8%. Last week it closed up 34.5%.

As you can see, they are rebounding, but vacillating within the MTI hold cycle. This typically indicates they have topped out.

As stated in the past you can monitor these two funds to help you gauge fear related investments. These two funds will need to have “avoid” signals for the market to embark upon a meaningful and lasting bull leg. Right now, they are still signaling “hold.”

Quick-term and Short-term Indicant - Markets

The Quick-term Indicant signaled bull this past weekend a little ahead of schedule. The stock market has demonstrated significant comfort near the bullish red curve. Three weeks ago, all eight indexes were down an average of 31.0% since the QT Bear signal of April 23, 2002 . The market maintained bullish position after recouping half of the loss in that Quick-term Bear.

The Dow is down 16.2% since the Short-term Indicant signaled bear on March 20, 2002 . The NASDAQ Composite is down 67.3% since the Short-term Indicant signaled bear over two years ago on March 30, 2000 . Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

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

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

Twenty-four weeks ago, all eight indexes were bulls with an annualized growth of 48.2%. The Mid-term Indicant signaled bull for six of the eight indexes last weekend and it signaled bull for the other two indexes this weekend.

In addition to the new bull signals the six indexes are up an average of 2.9% for an annualized growth rate of 106.8%. The high growth rate is due to the bulls being only one week old.

If the Quick-term Indicant maintains bullish position, then the market’s low point is behind us and the phenomenon of mid-term election year’s bottoming may be taking form.

For those of you who have not looked at the mid-term election year phenomenon, please click on the following link. It will take you directly to the charts with market behavior following mid-term election year behavior.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0090.htm

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The Mid-term Indicant is now signaling "bull" for fourteen of the twenty-two international markets it tracks.

The fourteen bulls are up 17.5% since the Mid-term Indicant signaled bull an average of 18.3 weeks ago for an annualized gain 49.7%. Seven of the fourteen bulls are only one week old.

The eight bear markets are down by an average of 8.4% since their respect bear signals. Twelve weeks ago, they were down 1.5%. Those eight markets have been bears for an average of 11.9 weeks. Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were thirteen buy signals and no sell signals.

In addition to the buy signals, the Indicant is signaling hold for 59 of the 76 mutual funds it tracks. You received an email earlier this weekend advising you of the specific buy and sell signals.

The fifty-nine funds with hold signals are up an average of 3.5%, which is down from two weeks ago at 26.2%. Remember there were thirty-four buy signals two weeks ago and twenty-one buy signals last week. Consequently, the hold signals are only one to two weeks old. That is the reason for the decline in the average growth rate. The average period with Indicant holds signals is 4.5 weeks, which is down from 34.0 weeks two weeks ago. The 3.5% average gain annualizes to 41.8%, which is up from 40.0% two weeks ago.

The four funds the Indicant recommends avoiding are down 27.3% since the Indicant "sell" signals. Thirteen weeks ago the “avoided” funds were down only 0.5%. The Indicant has been avoiding these bearish funds for an average of 17.3 weeks.

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

Always 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.

Mid-term Indicant Positions - Indicant Selected Stocks

08-25-02

August 18, 2002 Indicant.Net Weekly Update

Volume 8, Issue 3 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

As stated the past few weeks, it is time for a more technical focus on the stock market. You will notice there were several buy signals for stocks and funds and Mid-term Indicant bull signals. The Mid-term Bull signals were delayed one week because it is August. If it were November, the Mid-term Bull signals would have been generated last week. We are still in a period of unfavorable seasonality. We are within six weeks of the first day of October. And October is a month to approach with caution.

The Mid-term Volatility Index is positioning itself to be non-supportive of continuing bearish behavior. It is actually lending itself to support bullish behavior. The Quick-term Volatility Index is also expressing support for bullish behavior.

The force vectors are still bouncy but they are vacillating in a non-bearish domain. But, they have not yet demonstrated clarity in their support for bullish behavior. The force vectors are not contained with huge amounts of imposing bearish vector pressures. The pressure is still negative, but very light. A few weeks ago, the pressure was significant, likening itself to about 10,000 feet below sea level with unbelievable bearish pressures. Now, the pressure is much closer to the surface. In other words the market is free to make some choices with one option now available to move to the north. A few weeks ago, the pressure was so great, the market had no option other than southerly movements.

The Indicant Volume Indicant is expressing a certain degree of apathy. However, if you take a look at the charts, the volume is in a higher region whereby there is potential for bullish energy. This may sound confusing, so a few more comments are in order.

The reason we knew the 300-point increase in the Dow and near 100-point gain in the NASDAQ on July 5 was a fake rally, designed to sucker you in, was because the Indicant Volume Indicator provided absolute clarity that the market was committed to the directorship of the Bear. A rising market with a rising Indicant Volume Indicator provides absolute clarity of its bullish intentions. This is referred to as bullish robustness. A declining market with a rising Indicant Volume Indicator provides absolute clarity of its bearish intentions. This is referred to as bearish robustness.

The other two coincidental configurations about volume do not provide absolute clarity. A decreasing market with a declining Indicant Volume Indicator does not always provide absolute clarity. However, if the Indicant Volume Indicator is positioned in an energetic region on the charts, then there is a higher probability the market will continue that bearish cycle. An energetic region is easily detected when the Indicant Volume Indicator is cycling northeast of its previous cycle on the charts.

The other coincidental configuration is the one we are faced with now. The market is in a region of high energy. But, the Indicant Volume Indicator is cycling to the southeast. It is non-robust. The fact that it is in an energetic region favors slight bullish behavior but without bullish robustness. A bull market will be short-lived without robust support from the Indicant Volume Indicator. The fact that it is cycling to the southeast means the market has not fired the Bear as the leader, but it is pandering to the Bull in the wings. Nonetheless, the combination of the current lethargic cycle of the Indicant Volume Indicator in a region of energy and an increasing market supports the recent buy signals. However, this is without absolute clarity.

It is extremely important that we monitor these attributes for absolute clarity. It is only a matter of time before we get absolute clarity. If we get absolute clarity, we will loosen the stop loss signals, provided the Indicant Volume Indicator generates bullish robustness. Bullish robustness is when the market and the Indicant Volume Indicator are both moving north. Bearish robustness is when the market is heading south while the Indicant Volume Indicator is moving north. The latter configuration is what we had during the Quick-term Bear market from April 23, 2002 to date. With absolute clarity, there is no doubt of the markets’ intentions.

Now, we do not have absolute clarity from the Indicant Volume Indicator. However, the attributes from the Volatility Indexes, the Force Vectors, Vector Pressures, and other Quick-term attributes are signaling an increasing possibility of a bull market in the offing. What we now want to see is absolute clarity.

There are two conflicting characteristics to made at this point. This is a mid-term election year. Historically, political leadership adjusts policies that are friendlier for business and the economy. People vote their pocket books. Politicians know this and the incumbent leadership must adjust policies so they can keep their jobs. George H.W. Bush did not execute this well with his tax increase and cronyism with democratic leadership in 1990. Consequently, he was routed out of the presidency in 1992 as the economy was in the remnants of his politically induced recession. His son, George W. Bush, is campaigning very diligently to promote a climate friendly to the economy.

Of course, there was no climate as friendly to capitalism as it was during the Clinton presidency. Clinton had nothing to do with it, except he and Hillary were promoting social programs. The Republican controlled Congress would not go along with it. What we had was a stalemated government. That is the best prescription for the stock market and the economy.

Regardless, the record of accomplishment of market bottoms in mid-term election years is not to be ignored.

The problem is that we are in a period that is seasonally unfavorable for a bullish stock market. Favorable seasonality for bullish behavior typically originates in November with an occasional upward swing in October. Also, October is notorious for wiping out significant bull legs in a day or two. This is why there was some hesitation in signaling bull and buy.

However, the bullish attributes speak for themselves but without the desired support from the seasonal issues and the Indicant Volume Indicator. Lets keep our eyes open to that support.

The markets and many of the stocks and funds may elevate above their respective green curves. This is a likely scenario in the next few weeks. The behavior around the green curves will be telling. The Mid-term Indicant will most likely generate some pausing at that point for indexes, stocks, and funds. If the pause is mild and they do not fall below the green curve with downward velocity, then the mid-term election year bull will take shape.

If more countries around the world continue with their movement toward capitalism, you can expect continuing secular bull markets. U.S. , European, and Far East productivity must continue to soar though. The combination of productivity growth and a “do-nothing” government could propel the markets to new highs.

Two other scenarios need to be executed. Executives who have practiced voodoo bookkeeping must go to jail, lose their fortunes, and spend the rest of their lives in significantly less quality than those they stole from! In addition, religious fanaticism and the corresponding hatred must be placed back into individual privatization. Individual freedom and happiness is the goal and with that, economic prosperity is around the corner.

Divergence versus Convergence

The recent bullish behavior is complete with convergence. All sectors are moving to the north. Precious metals rebounded. Energy services moved aggressively to the north. Biotech and Pharmaceuticals are moving to the north. Some techs are moving to the north. Large Caps, Mid-caps, and Small Caps are moving to the north. This is very similar to the QT Bull cycle late last year.

As always, convergence to the north will not be lasting. It is absolutely impossible for the energy related sector to be bullish with all other sectors over a long period of time. The petroleum sub-sector is most likely moving north in anticipation of a military engagement in the Middle East . Strategists currently believe that such an involvement will induce higher oil prices. Such a scenario, if played out over a long period of time, will lead to higher inflation and subsequently higher interest rates. The rest of the stock market will not like that and rest assured it will turn bearish.

Since this is a mid-term election year, George W. will most likely initiate the military actions near the elections, much like that of Bill Clinton in 1994. That always increases the chances of capturing more seats in Congress. George W. Bush has a difficult problem. If there is economic fallout from such a military conflict that carried over in 2004, then you will see Hillary in the Whitehouse, just as George H.W. Bush put Bill Clinton in there in 1992. The political and military precision of George W. Bush must be executed with absolute perfection and efficiency to keep from being a one-term president like his father.

This requirement of perfection and efficiency could be friendly for those of you interested in sector investing. Energy related stocks will soar north and then fall back after the conflict. During the petro-sector’s bearish cycle, the other sectors will soar to the north.

One must admit that George W. Bush has a team around him that is more apt to pulling off this required perfection. At the first military strike, the likes of Halliburton, Schlumberger, Smith International, etc. will zoom to the north. After Saddam is killed or arrested and provided the Muslims of the world accept his defeat with a capitalistic demeanor, those stocks will crash and the likes of Dell, Apple, and others will zoom to the north.

Economic Outlook

Interestingly, the markets fall a few days ago was attributed to Greenspan not decreasing interest rates. A few days later, the market must have forgotten about Greenspan altogether and moved to the north.

All interest rates continue to remain in bullish domains and some are even moving more to the south. The economy continues to weaken and this increases the likelihood of additional cuts in interest rates, so long as inflation remains in check. The market pouted only a couple of days due to Greenspan remaining neutral.

Greenspan cannot cut interest rates with rising oil prices. Oil moved above the inflationary red curve this past week. The Dow Jones Futures moved from disinflation to a bias for anticipated inflation last week. The move from neutral to biased inflationary cycling was the CRB Bridge Futures. It is now at 215. About this time a year ago, there were significant concerns about deflation as it had fallen to 185.

As previously stated the Fed Chief will do anything to fight inflation. He will put a higher priority on preventing inflation over that of unemployment. Their legacy is built on how well they fight inflation. The economist hold Chairman Volker in high regard as he took interest rates to double digit amounts while driving unemployment to record highs in the early 1980’s. As long as these commodity prices are rising, do not expect additional cuts in interest rates.

An elimination of the double taxation on capital gains tax is what you should be voting for in elections. It is very simple. A dollar in the hand of a producer has a much better chance of stimulating economic growth than that of money in the hands of the non-productive government. Oh well, dream on……

The U.S. Dollar continues to display some resiliency against its cyclical decline against more major world currencies. That is a favorable event but the current Mid-term cycle is forming a base whereby the dollar will continue to weaken in the next six months if Greenspan does not hike interest rates. These new and evolving cycles with the weakening greenback do not bode well for any additional cuts in interest rates by Greenspan.

A weaker dollar will help exporters, but that is inflationary. Large multinational corporations will benefit from the weaker dollar, provided you can believe their earnings reports.

The Freddie Mac and Freddie Mae mortgage rates are again plummeting to the south. There must be decreasing demand for long-term loans, which is not surprising in a weak economy. These rates are at unprecedented and historically low levels.

The low levels of interest rates should help the economy move to the north, but one has to wonder how a debt-ridden economy can be influenced by low interest rates. Who can borrow?

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

Fear Metrics: Economic and Terrorism

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Eleven weeks ago, it was up 66.1% since the Mid-term Indicant signaled buy. Four weeks ago it closed up 12.0%. Last week it closed up 34.9% since the MTI buy signal of December 7.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% eleven weeks ago since the MTI buy signal in April 2001. Three weeks ago it closed up 27.8%. Last week it closed up 36.3%.

As you can see, they are rebounding within the MTI hold cycle. The Indicant maintained the hold signal throughout this cycle. That is the nature of investing. There is no such thing as a straight line up.

As stated in the past you can monitor these two funds to help you gauge fear related investments. These two funds will need to have “avoid” signals for the market to embark upon a meaningful and lasting bull leg. Right now, they are still signaling “hold.”

Quick-term and Short-term Indicant - Markets

All eight indexes are down an average of 21.7% since the Quick-term Indicant signaled bear on April 23, 2002 . That is an improvement from two weeks ago when all eight indexes were down an average of 31.0%. The Dow is down 17.1% since the Short-term Indicant signaled bear on March 20, 2002 . The NASDAQ Composite is down 67.8% since the Short-term Indicant signaled bear over two years ago on March 30, 2000 . Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

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

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

Twenty-three weeks ago, all eight indexes were bulls with an annualized growth of 48.2%. The Mid-term Indicant signaled bull for six of the eight indexes. If the markets move up this coming week, it is highly likely the Mid-term Indicant will signal bull for the NASDAQ and NASDAQ100, which are down an average of 19.3% since their respective bear signals 16.0 weeks ago.

The Mid-term Indicant’s bull signal suggests the market bottom is now behind us in this mid-term election year. However, please keep a close eye on your email and especially the Indicant Volume Indicator.

For those of you who have not looked at the mid-term election year phenomenon, please click on the following link. It will take you directly to the charts with market behavior following mid-term election year behavior.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0090.htm

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

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

Mid-term Indicant Positions - International Markets

There were seven new bull signals and no bear signals. In addition to the bull signals, the Mid-term Indicant is now signaling "bull" for seven of the twenty-two international markets it tracks.

The seven bulls are up 33.7% since the Mid-term Indicant signaled bull an average of 34.6 weeks ago. That is an annualized gain of 50.8%, which is down from 63.0% nine weeks ago. Many of the bulls are very new. The eight bear markets are down by an average of 10.0% since their respect bear signals. Eleven weeks ago, they were down 1.5%. Those eight markets have been bears for an average of 10.9 weeks. Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were twenty buy signals and no sell signals.

In addition to the buy signals, the Indicant is signaling hold for 39 of the 76 mutual funds it tracks. You received an email earlier this weekend advising you of the specific buy and sell signals.

The thirty-nine funds with hold signals are up an average of 4.5%, which is down from last weeks 26.2%. Remember there were thirty-four buy signals last week. Consequently, their hold signals are only one week old. That is the reason for the decline in the average growth rate. The average period with Indicant holds signals is 5.4 weeks, which is down from last weeks 34.0 week holding period. Again this is because several of the funds have been held for only one week. The 4.5% average gain annualizes to 43.4%, which is up from last week’s 40.0%.

The seventeen funds the Indicant recommends avoiding are down 17.4% since the Indicant "sell" signals. Twelve weeks ago the “avoided” funds were down only 0.5%. The Indicant has been avoiding these bearish funds for an average of 12.1 weeks.

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

Always 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.

Mid-term Indicant Positions - Indicant Selected Stocks

08-18-02

August 11, 2002 Indicant.Net Weekly Update

Volume 8, Issue 2 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Last week’s report stated it is time to get technical about the stock market and less concerned about fundamentals. The market is now centered on its expectations in Quarters I and II, 2003 with its usual short-term variations.

Last week the market rebounded somewhat on the belief that Greenspan will be cutting interest rates this coming week. The economy is cooling off. The market never reacts to the news unless it gets surprised. If Greenspan were to hike rates, the market would crash. If he does nothing, it most likely would go down. If he reduces interest rates, the market will be thinking about something else, as it has already gone up on that notion.

It is always hard to generate buy signals in the late summer, knowing that October is around the corner. But the Mid-term Indicant said buy on several stocks and funds. The concern about October is that is the month the market usually crashes. There are many walls of worry for the stock market to climb. Terrorism, threat of war, protectionists policies by the Whitehouse, but most of all, voodoo bookkeeping.

The Quick-term Indicant is treating the recent increases in stock prices as a technical rebound and not a sustainable bull market. However, this technical rebound contains some bullish indicators, which has not been the case since last April. The market’s surge on Wednesday, July 24 was accompanied by an upswing in volume. The gains that day almost offset the prior two days of losses on even higher volume. All of the prior technical rebounds since the Quick-term Indicant signaled bear in April 2002 were obvious fake rallies designed to sucker you in. But, the rebound on Wednesday July 24 was somewhat genuine, but not enough to signal Quick-term Bull.

The Mid-term Volatility Index has peaked and it appears to be readying for a decline. That bodes well for bullish sentiment. The Volatility Index moves counter cyclical to the markets.

The Quick-term Volatility Index rebounded last week and thus contributed to the delay in signaling a Quick-term Bull market.

The Indicant Volume Indicator is losing steam. It is not yet supportive of a Quick-term Bull market just yet.

The Short-term and Mid-term Indicants have not yet signaled “bull.” Of course, the Quick-term Indicant will be the first to signal bull. It may do so within a few days.

It is bullish that the Mid-term Indicant has experienced back-to-back weeks in generating buy signals for stocks and funds. Last week the health and biotech sectors received the majority of the buy signals. The energy services stocks dominated the buy signals this past weekend. The NASDAQ100 did not receive that many buy signals. The biggest group of buy signals was mutual funds and several of them crossed various sectors.

The energy services stock’s bullish behavior is somewhat surprising. Fundamentally, those companies encounter reduced earnings in the first two calendar quarters. Their business is highly seasonal. So, why are those stocks increasing?

There are only two possible reasons for this. There is an increasing sentiment of military expansions into Iraq . Although President Bush announced there are no plans for an imminent attack, the market may be expecting one within six months. The stock market does not care about military conflict and war. It can easily go up during wars. What it does not like is the threat of inflation. The market is reasoning that a military conflict in the Middle East will push oil prices north, which will drive inflation in the same direction. But the energy services stocks would do well with higher oil prices.

George may have announced privately to his friends of the potential for a military strike. Remember, George and Dick have ties to the petroleum industry, where the executive leadership would love to see $80 oil. George and Dick use to be a member of that group.

George and Dick will not be reelected with high inflation, which was the case with Jimmy Carter. Therefore, the political timing of a strike in Iraq would be just before or after the upcoming mid-term elections. The Republicans would not want to see $50 oil before this November. It would not be surprising for the attack on Iraq just before the elections so the Republicans can claim a greater need for unity. This would minimize their losses in the House and Senate. Also, that would give them two years to undo the economic damage that would fallout with increasing oil prices.

The market smells this scenario. Energy related stocks are rebounding in anticipation of higher energy costs in the first two quarters of next year. That will give George and Dick about a year to gain control of Iraq and then put the lid on rising energy costs in time for their re-election bid in 2004.

The energy stocks were the strongest performers late last year and early this year. If you recall, the Indicant advised you that it is impossible for this group of stocks and the general stock market to express bullish behavior over a long period of time. Quite often, high performing stocks enjoy technical rebounds after extraordinary bullish cycles. This could be another reason for their recent bullish behavior.

The market always finds a bottom in mid-term election years. The scenario could be unfolding as the administration will shift policies favorable for business, which will be good for the stock market.

If the market believes that corporations are not practicing voodoo bookkeeping and the published earnings estimates are not fictional, then it is possible that history will repeat itself with the typical mid-term election year bull.

Divergence versus Convergence

The pharmaceutical and biotech sectors are continuing their rebound. Gold and precious metals also rebounded last week. Energy services stocks are on the rebound. And the stock market may be on the rebound. The convergence pattern may be in the beginning stages. It will be interesting to see which one shakes down first.

Economic Outlook

All interest rates continue to remain in bullish domains and some are even moving more to the south. The economy continues to weaken and this increases the likelihood of additional cuts in interest rates, so long as inflation remains in check. As previously stated, the stock market has already assumed the Federal Reserve Board will cut interest rates this coming week. If rates are not caught, you can expect the market to pout.

The Dow Jones Spot prices fell from inflationary to neutral domain. Gold rebounded from neutral to the “inflationary/fear” domain. Since other commodities are in decline, the element of fear could be driving gold back to the north. The CRB Bridge futures remain in the inflationary domain, but it is now the only commodity residing there. These movements are sending mixed messages with respect to impacts on the stock market.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Ten weeks ago, it was up 66.1% since the Mid-term Indicant signaled buy. Four weeks ago, it closed up 50.7%. Three weeks ago it closed up 12.0%. Two weeks ago, it was up 26.4%. Last week it closed up 32.4% since the MTI buy signal of December 7.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% ten weeks ago since the MTI buy signal in April 2001. Three weeks ago, it closed up 46.3%. Two weeks ago it closed up 27.8%. Last week it closed up 35.3%.

As you can see, they are rebounding within the MTI hold cycle. The Indicant maintained the hold signal throughout this cycle.

The U.S. Dollar continues to display some resiliency against its cyclical decline against more major world currencies. That is a favorable event but the current Mid-term cycle is forming a base whereby the dollar will continue to weaken in the next six months if Greenspan does not hike interest rates.

A weaker dollar will help exporters, but that is inflationary. Large multinational corporations will benefit from the weaker dollar, provided you can believe their earnings reports.

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

Quick-term and Short-term Indicant - Markets

All eight indexes are down an average of 24.9% since the Quick-term Indicant signaled bear on April 23, 2002 . That is an improvement from last week when all eight indexes were down an average of 31.0%. The Dow is down 17.4% since the Short-term Indicant signaled bear on March 20, 2002 . The NASDAQ Composite is down 69.1% since the Short-term Indicant signaled bear over two years ago on March 30, 2000 . This is the longest running Short-term Indicant Bear market in over 100 years. Additional Quick-term and Short-term Indicant information was in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

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

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

Twenty-two weeks ago, all eight indexes were bulls with an annualized growth of 48.2%. Now all eight indexes are bears and are down an average of 15.7% since their respective bear signals and average of 13.6 weeks ago. The Mid-term Indicant did not generate any bull signals this past weekend.

Until this mid-term election year lapses, we will continue to focus on the market finding a bottom. We really do not care where the bottom is. All we care about is “when” it will occur. The bottom may already be behind us, but more Quick-term information is required for confirmation.

For those of you who have not looked at the mid-term election year phenomenon, please click on the following link. It will take you directly to the charts with market behavior following mid-term election year behavior.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0090.htm

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

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

Mid-term Indicant Positions - International Markets

There were two new bull signals and no bear signals. In addition to the buy signals, the Mid-term Indicant is now signaling "bull" for only five of the twenty-two international markets it tracks.

The five bulls are up 44.3% since the Mid-term Indicant signaled bull an average of 47.0 weeks ago. That is an annualized gain of 49.0%, which is down from 63.0% eight weeks ago. The fifteen bear markets are down by an average of 9.7% since their respect bear signals. Ten weeks ago, they were down 1.5%. Those fifteen markets have been bears for an average of 9.0 weeks. Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were thirty-four buy signals and no sell signals. That is the highest number of buy signals in nearly six months.

In addition to the buy signals, the Indicant is signaling hold for 5 of the 76 mutual funds it tracks. You received an email earlier this weekend advising you of the specific buy and sell signals.

The five funds with hold signals are up an average of 26.2%. The average period with Indicant holds signals is 34.0 weeks. The 26.2% average gain annualizes to 40.0%, which is down slightly from 46.9% twenty weeks ago when nearly all of the funds were in a hold position. The thirty-seven funds the Indicant recommends avoiding are down 15.8% since the Indicant "sell" signals. Eleven weeks ago the “avoided” funds were down only 0.5%. The Indicant has been avoiding these bearish funds for an average of 10.0 weeks.

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

Always 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.

Mid-term Indicant Positions - Indicant Selected Stocks

08-11-02

August 4, 2002 Indicant.Net Weekly Update

Volume 8, Issue 1 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Much of the dialog the past few months has been of a fundamental nature. The economy, corporate governance, management, etc. are fundamental issues. It is now time to get technical.

Why? Because the direction of the market never cares about contemporary fundamentals. How many times have you seen a stock’s price go down on an increase in earnings of over 20%? It happens all the time. If your investment decisions are based on contemporary fundamentals, you will be behind the curve. We have seen plenty of curves the past five years. Being behind any of them is not fun.

In the 1990’s fundamentals were place to support a bull market, even though much of the reported earnings during that era were bogus. The dollar was strengthening. Oil and commodity prices were heading south. Consequently, there was no threat of inflation. Productivity was growing at historically high rates. The executive and legislative branches of government were in constant gridlock. Corporate earnings were growing at double-digit rates, albeit some were bogus. Product quality was improving across many industries.

Now, the fundamentals do not look good. Keep in mind the market does not care about contemporary fundamentals. It is always looking out by six or more months. The market tries to forecast. All forecasts are wrong. Even the market’s forecast is wrong. That is why its movement resembles that of a nervous snake.

The market did not like Greenspan’s “irrational exuberance” commentary in early 2000. It was March 2000 when the Short-term Indicant signaled “Bear” for the NASDAQ. If Greenspan only knew how relevant his comment was. The irrationality was not investors, who he was chiding, but the voodoo bookkeeping that attracted continuing inflows of capital into the equity markets. The market could smell some honey for the bear, but it was only hearing Greenspan at the time.

Greenspan decided to take matters into his own hands and started raising interest rates. This cooled the economy that ultimately led to the current recession. By the way, we encountered three down quarters of GDP last year after a year of speculation. Our friends say they heard several commentators on various financial shows over the past several months argue if we were ever in a recession at all.

So, Greenspan decided to put the breaks on the economy. Then normal business cycles kicked in and slowed it down even more. Then the unimaginable happened on September 11. A few months after that, voodoo bookkeeping at Enron and public auditing firms was exposed.

The inhabitants of this planet will screw up the economy from time to time without any help. That is the problem with the parasitical elite. They are the ones who have high profile jobs, such as Greenspan, but they are not competing or having to live to a budget. It is impossible their thinking and action is not sharp. Why do we need them in the first place?

The best time to buy is just after a catastrophe. That is when stocks get cheap. You saw that phenomenon after September 11. The first Quick-term Bull was triggered on October 4, 2001 . It was accompanied with robust volume. The market was anticipating an economic rebound from all that was wrong. The Indicant signaled another Quick-term Bull in late winter.

But two major events occurred. Enron was not the only culprit involved in voodoo bookkeeping. Scores of other companies have been exposed to the practice of voodoo bookkeeping. It has been boiling up to the point where financial fundamental analyses is not possible. So when one discusses the Price Earnings Ratio, what is the denominator? The market is not trading at about fourteen times earnings is what we hear right now. The question is, how does anyone know that?

The second major fundamental depressant on the market was the U.S. ’s imposition of tariffs on imported steel. This produced a horrendous affect on the market. The market and the entire spectrum of capitalism will never tolerate any form of protectionism. It will punish those who practice it. Just take a look around the world and see for yourself. Protectionists practices are the worst form of economic evil.

Near the time of the announced tariff tax on imported steel, the Quick-term Indicant signaled bear. The Indicant, nor you, nor I can predict the magnitude of the markets movement. The Indicant only tries to understand the direction and when the basic direction will change.

Voodoo bookkeeping by Corporate America dominated the news the past few months. Rest assured the market did not like the tariff tax. Neither did foreign investors, as their capital left the U.S. markets in droves as the dollar weakened. Just when the market was about to turn to the north last March, the combination of tariff taxes and voodoo bookkeeping polished that young bull off like that of a world class bull-fighter. Although this report last winter suggested that voodoo bookkeeping could bring this market down, the Mid-term Indicant was buying or holding 97 of the NASDAQ100 stocks by mid March. Everything looked rosy, except for the fundamentals. The NASDAQ had already collapsed by over 60% at that time and seemed poised for a rebound. Then enter the parasitical elite; voodoo bookkeeping, and tariff taxes.

Now, Corporate America is going to be more truthful about their earnings. But the cost of raw material is going to increase and compress margins in the manufacturing sector. Keep in mind economic wealth is delivered in only three ways; manufacturing, extraction, and agriculture. All other forms of economic existence live off those three things.

Capitalism is in complete harmony with nature, which includes the requirement to struggle and the requirement of extinction for the weak. But the tariff tax said, “you do not need to struggle. Uncle Sam is going to protect you even though you are no longer competitive. We are going to keep the weak alive. We are going to protect our parasitical elite brethren.” With that, we all pay the price with that nasty, hidden form of collectivism.

The stock market’s first cousin is capitalism. Any behavior on the part of government or any ruling body that is disruptive to the laws of nature will result is a bear stock market. It is will be difficult for it to go up if these two fundamental events do not change.

George W. Bush has been granting tariff tax immunity to some countries. After the election and all the steel votes are counted, he will most likely repeal that tariff tax so he get reelected in 2004. If his economic advisors do not know that the stock market and capitalism are first cousins, then he will be a one-term president. People always vote their pocket book. Economic expansion is not possible in a country that supports and practices protectionist policies.

So, why all the prior discussion about fundamentals? The shear number of companies practicing voodoo bookkeeping was amazing. The depth and length of this Quick-term Bear is astounding. It very closely resembles that of the 1930’s. There was an overwhelming sense of responsibility to document the core causes for this collapse. There is also a hope that these events will do more to help society see through the façade of the parasitical elite class; governmental leaders, boards of directors, and many of Corporate Americas’ executives.

It should be noted that voodoo bookkeeping is practiced by the minority of corporate executives. At least we hope so. If it is the majority, then this bear market is still young. Most executives in most American Corporations are honest hard-working people. At this time, we’re just not sure if it is 51% or 85%, but we do know it is not 99%.

Capitalism 101 and Board of Directors.

Leroy owns a sawmill. He buys his wood from Elroy, who is a lumberjack. Leroy asked Elroy if he would be interested in sharing their business plans and corporate objectives. Leroy knew that for his business to grow, Elroy’s business would also have to grow. They decided to call their new agreement a board of directors to formalize when they would meet. They typically worked twelve hour days. This arrangement helped Leroy and Elroy grow their business. One day, Queen Mary directed that Prince Jim set on the board or face higher taxes. The board meetings prior to Prince Jim were always at 6 AM on Sundays. Prince Jim was a member of the “get up at noon crowd” and they had to schedule their board meetings at the busiest time of their day. After a few sessions with Prince Jim, Leroy and Elroy decided to pay the higher taxes.

Eight generations and thousands of tax laws later, Leroy VIII and Elroy VIII have Prince Jim VIII on the board so they can use him to negotiate with Queen Mary VIII on tax law XIMIIIIXMMMXXVII, section xiiiviiix, paragraph iv). In other words, the board has nothing to do with processing wood for profit, which was the case with the original Elroy and Leroy. As a matter of fact, their company is bordering bankruptcy. But they do not care, as all three of them are frat brothers and they can play golf together in their early retirement. Oh well, Brazilian wood is not that bad. Besides, Prince Jim’s first cousin, Al Gore, wanted to save the spotted owl anyway. People’s economic livelihoods are not as important as saving that spotted owl. Too bad Al was not around when the Tyrannosaurs were. He could have saved them too! Just stop the extinction.

Why was Senator Phil Gram’s wife on Enron’s board of directors? If she ever helped lay a pipeline or climbed the pole to repair a transformer, then fine.

Parasitical elite CEO’s want a board that knows nothing about the business. He or she controls everything that way, including corporate governance. They never encounter competitive or combative commentary in their board meetings.

Even the honest CEO’s are forced to have Prince Jim VIII on their boards. More and more of them want or have to have connections to Washington DC , which is what the laws from Washington DC have designed into their practicing model. That is you cannot exist, as a significant business, without my knowledge in Washington DC . And it has nothing to do about processing wood for profit.

Many contemporary CEO’s know absolutely nothing about processing wood for profit. But, they fully understand the life and times of Prince Jim VIII. They are pals and cut from the same mold. The wood is no longer processed at a profit, but they feel they have some sort of birthright to take. They with all their bogus intellectual capacity, invent voodoo bookkeeping.

The next few weeks will be tricky. It will be important to focus on the technical aspects of the market. Last Monday the market was bullishly energetic. That bullish energy had some merit, as the volume on that particular day was robust. However, the ensuing days after last Monday’s rally were not supported with robust volume. Then when the market got disappointed last Friday on economic news, it apparently does not think too much of next year, which is the market’s current focal point.

Divergence versus Convergence

After a few weeks with all sectors in decline, the pharmaceutical and biotech sectors rebounded. Gold and precious metals continue to soften at an increasingly rapid clip. The element of fear is nearly gone from the investment community. The threat of OPEC militancy is relaxing.

Economic Outlook

All interest rates continue to remain in bullish domains. Southerly moving interest rates the past few years have done nothing to inspire the stock market to move north. Rest assured, northerly moving interest rates definitely will inspire the bear market to continue as is. There will be political pressure on Greenspan to minimize interest rate hikes in this mid-term election year. Right now, the economy continues to weaken and this increases the likelihood of additional cuts in interest rates, so long as inflation remains in check.f

Rueter UK commodities fell significantly last week to market bullish territory. Gold fell from market bearish to neutral. However, the Dow Jones Spot and CRB Bridge futures remain in the domain that ultimately would influence market bearishness.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001 . Nine weeks ago, it was up 66.1% since the Mid-term Indicant signaled buy. Three weeks ago, it closed up 50.7%. Two weeks ago it closed up 12.0%. Last week it rebounded some and closed up 26.4% since the MTI buy signal.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% nine weeks ago since the MTI buy signal in April 2001. Two weeks ago, it closed up 46.3%. Last week it closed up 27.8% since the MTI buy signal of over a year ago.

As you can see, there was a rebound. This is most likely technical as the prices of Gold fell sharply last week.

The energy sector is also winding down. Most of the oil field service stocks are in decline. The market is now looking at their first quarter in 2003. That is that sectors worst quarter.

This stayed the same from last week. The U.S. Dollar is showing some resiliency against its cyclical decline against more major world currencies. That is a favorable event but the current Mid-term cycle is currently forming a base whereby the dollar will continue to weaken in the next six months if Greenspan does not hike interest rates.

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

Quick-term and Short-term Indicant - Markets

All eight indexes are down an average of 31.1% since the Quick-term Indicant signaled bear on April 23, 2002 . Two week all eight indexes were down an average of 30.0%. As you can see, even with strong rebounds the last two weeks, the indexes still fell by an additional percentage point. The Dow is down 21.5% since the Short-term Indicant signaled bear on March 20, 2002 . The NASDAQ Composite is down 70.5% since the Short-term Indicant signaled bear over two years ago on March 30, 2000 . This is the longest running Short-term Indicant Bear market in over 100 years. Additional Quick-term and Short-term Indicant information was updated in the preliminary report you received earlier this weekend. If you already deleted it from your email inbox, you can find it and all other back issues at the following link.

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

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

Twenty-one weeks ago, all eight indexes were bulls with an annualized growth of 48.2%. Now all eight indexes are bears and are down 20.1% since their respective bear signals and average of 12.6 weeks ago. The strongest index is the Dow Jones Industrial Average. It is down 13.3% since the Mid-term Indicant signaled bear for that index on June 7, 2002 . The weakest index is the now the NASDAQ100. It is down 28.7% since the Mid-term Indicant signaled bear on April 26, 2002 . The NASDAQ Composite is down 25.0% since the Mid-term Indicant signaled bear on April 26, 2002 .

Until this mid-term election year lapses, we will continue to focus on the market finding a bottom. We really do not care where the bottom is. All we care about is “when” it will occur. The lower the market goes, the greater the buying opportunities.

For those of you, who have not looked at the mid-term election year phenomenon, please click on the following link. It will take you directly to the charts with market behavior following mid-term election year behavior.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0090.htm

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

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

Mid-term Indicant Positions - International Markets

There was one new bear signal and no bull signals this past week. The Mid-term Indicant is now signaling "bull" for only five of the twenty-two international markets it tracks.

The five bulls are up 44.4% since the Mid-term Indicant signaled bull an average of 46.0 weeks ago. That is an annualized gain of 50.2%, which is down slightly from 63.0% seven weeks ago. In addition to the new bear, the sixteen bear markets are down by an average of 11.3% since their respect bear signals. Nine weeks ago, they were down 1.5%. Those sixteen markets have been bears for an average of 8.5 weeks. Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There was one sell signal and no buy signals.

The Indicant continues to signal hold for only 5 of the 76 mutual funds it tracks. You received an email earlier this weekend advising you of the specific buy and sell signals.

The five funds with hold signals are up an average of 26.3%. The average period with Indicant holds signals is 33.0 weeks. The 26.3% average gain annualizes to 41.5%, which is down slightly from 46.9% nineteen weeks ago when nearly all of the funds were in a hold position. The seventy funds the Indicant recommends avoiding are down 14.9% since the Indicant "sell" signals. Ten weeks ago the “avoided” funds were down only 0.5%. The Indicant has been avoiding these bearish funds for an average of 8.7 weeks.

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

Always 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.

Mid-term Indicant Positions - Indicant Selected Stocks

08-04-02

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