August 31, 2003 Indicant.Net Weekly Update

Volume 08, Issue 5 ISSN 1526 6516 © The Indicant Stock Market Report

Bull or Bear? – Chapter 2

The various Indicant models continue to configure mixed attributes. Clarity of market intentions is absent, but the current slant favors bullish behavior. Your hold positions of more than three months are very safe. There are no catastrophic declines anywhere on the horizon.

An absence of clarity occurs from time to time. This is especially true when opposing bull/bear phenomena are battling their respective desires to influence the market. The overall market continues to be bullish. However, there are increasing probabilities of bearish behavior, although mild. None of the Indicant’s attributes reveals any severe bearish action at this time. Keep your eye on your email as the Quick-term attributes can change quickly.

The opposing bull/bear phenomena are the presidential pre-election year bullish phenomenon versus the six months of bearish seasonality phenomenon. There are only two months of bearish seasonality remaining. Bearish seasonality begins on May 1 and concludes on October 31. If you invested $10,000 in 1950 and held it in blue chips, you would have $8,285, as of the end of 2002. That same $10,000 would be $457,103 if you invested only from November through April. Coupling an Indicant strategy to seasonality that same investment would exceed $1,000,000.

As you can see, there are an obvious six months of bullishness and six months of bearishness. However, there are exceptions to the rule. Since 1950, there were 31 years with the market finishing higher during the six months of bearish seasonality. Those gains for the most part were small single digit gains. The loss years were obviously greater in magnitude than the years with gains.

Since 1950 and beginning in 1951, there have been thirteen presidential pre-election years. The last one was in 1999 until this year. The average performance of the Dow Jones Industrial Average during the May through October interval (Bearish Seasonality) was a mere 0.3% in those presidential pre-election years. During the November through April interval (Bullish Seasonality), the Dow increased 5.6% during the presidential pre-election years.

So far this year, the Dow is up 11.0% since April 30, 2003. What is more amazing is that we have not yet entered into the Six Month period of Bullish Seasonality, which begins on November 1. That bodes well for your hold positions. There is an ever increasing chance for most of your holdings to enjoy triple digit gains before 2005 when the market will definitely cool.

Here is the concern. The most bearish month of the year is September. It is the last month of decent weather. People can get in nine holes easily after work. Some can get in eighteen, depending on their position in their respective time zones. The kids are headed off the school. Vacations are ending. People are exhausted by their departure from their normal routines. In other words, people (investors) are distracted. The stock market is not an issue in September for most investors. Since 1950, the Dow lost 2,821.27 points in the month of September. Nineteen months the Dow was up. It was down thirty-four times. It is indeed the worse month of the year for those of you who desire bullish behavior.

Many of the Quick-term attributes are neutral. A few weeks ago, they were neutral to slightly bearish. That, coupled with August being the second worse month of the year, prompted the Quick-term Indicant to signal bear. August lost 1,548.37 points since 1950, although the Dow gained 182.02 points in August of this year. With all that, the Quick-term Indicant continues to signal bear. There will be more about the Quick-term attributes later in this report.

Weekly Summary

The Mid-term Indicant generated eight buy signals and no sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. After the bull weakened a few weeks ago, the market has rebounded. As stated last week, sucker plays are common on low volume, but many of buy signals of the past two weeks are up, although slightly.

This paragraph is unchanged from last week, as it is still appropriate. Do not aggressively buy at this time is repeated here. More aggressive buying should occur when the Quick-term Indicant signals Bull with the Indicant Volume Indicator expressing robust behavior. The market continues at an inflection point. It continues to struggle in its search for the appropriate cyclical direction. The conflict between the six-month cycle of bearish seasonality and the presidential pre-election year bullish phenomenon is arousing this lack of market commitment in one direction (up or down). The recent black out and curiosity of the causative factors will add to this state of confusion. Energy prices and precious metals continue to express a favored slant toward bullishness.

The Mid-term Indicant is avoiding 29 stocks and funds. The avoided stocks and funds are down an average of 8.3% since the Mid-term Indicant signaled sell an average of 10.5 weeks ago. Three weeks ago, the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier. As you can see the market’s rebound to the north has caused some of the avoided stocks to move up.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 69 stocks and funds. Those stocks and funds were down an average of 47.9% since their respective sell signals 25.0 weeks earlier. Bearish seasonality will eventually overcome other bullish phenomena. This is the time of year with the greatest probability of bearish behavior.

In addition to the buy signals, the Indicant is signaling hold for 259 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 48.2%. That annualizes to 92.4%, which is down from 124.1% twelve weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 259 stocks and funds for an average of 27.1 weeks. The stocks/funds with hold signals contrast from one year ago when the Indicant was signaling hold for 215 stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 7.1 weeks. They were up 6.3% (annualized at 45.7%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002.

This paragraph is a repeat from the past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish years on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5% while the Quick-term Bear lives. Bearish seasonality continues to attempt its influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves. There is a retreat in process, but the bullish behavior since March 2003 continues to express obstinacy. The battle is like a seesaw right now. Bearish seasonality should eventually overpower the presidential pre-election year bullish influences, but it will be short lived and mild. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

As stated last week, summer time doldrums are becoming dominant. Bullish obstinacy countered summer time doldrums again this past week. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? As stated the past few weeks, it appears to be the latter. The Quick-term Indicant does not care about magnitude. It only cares about direction.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality. At least that was the case last week, which conflicts with the current configurations of the Quick-term Indicant. The battle rages on.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

A high number of buy signals has followed the high numbers of sell signals a few weeks ago for the past three weeks. Many of those stocks are up, slightly. However, some of those recent sell signals continue receiving the “avoid” signal. You will notice they are configured with no bottom in sight. Although they may rebound in the near future, the position from the rebound origin can be much lower than where they are now.

Not all stocks plummet to the south when they fall below Green or Yellow. Nevertheless, a few do. That is why it is important to sell on the “sell” signal. It is better to miss a few performance points as opposed to holding on to a loser that drops a lot.

It is interesting that many of the recent sell signals were quickly followed by buy signals. However, it is noticeable that some of the Dow Blue Chips did not receive follow-up buy signals, like those in the other stock groups.

Dow #3, Johnson and Johnson, a true blue chip stock, is down 3.8% since the June 28, 2003 sell signal. It is certainly a stock to be avoided at this time. It is victimized by the bearish behavior in the health sector.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

Dow #8, Proctor and Gamble, is down 2.1% since the Mid-term Indicant signaled sell on June 28, 2003. Normally, the Mid-term Indicant will not signal sell when a stock is above its long-term Blue Curve. However, that rule is tossed out when a stock is trading in a tight trading range and at this time of year. Aggressive investing behavior is appropriate in tight trading ranges when the Quick-term Indicant has even the slightest bearish bias.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS02.htm#8

Dow #11, Coca Cola, is also down slightly since the Mid-term Indicant’s sell signal on July 12, 2003. Dow #12, SBC Communications, is also down since the Mid-term Indicant signaled sell on July 26, 2003.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS02.htm#11

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS02.htm#12

Dow #27, Merck, is down 7.2% since the Mid-term Indicant signaled sell on August 2, 2003. It is a victim of the poorly performing health sector.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS05.htm#27

Interestingly, the Drug sector is about to enter its period of bullish seasonality. As you can see from the below link, the Pharmaceutical sector is bearish. Bullish seasonality in this sector typically occurs from September through January. Keep your eye on this sector, as the average gain during its bullish seasonality according to Jon D. Markman, Managing Editor at CNBC on MSN Money.

Keep in mind that the phenomenon of commonality causes profound variance from normal expectations with gaining popularity in published models. If you hear or read about a phenomenon from a widely distributed source, the phenomenon works the opposite from what was conveyed. The market must have losers in the short-term and they must be in the majority. That is how the market works. However, if enough contrarians act to the opposite behavior, then the normal expectation will occur. That is why the Indicant was invented. You simply cannot believe history or widely published models will work without fail.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I01.htm#06

Dow #29, Eastman Kodak, is down 2.1% since the Mid-term Indicant sell signal on June 21, 2003. The company is just too big. Its greatness has already come and gone.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS05.htm#29

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/Buy-Sell%20Summary%20This%20Week.htm

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 your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The Quick-term Bear is not much of a bear. The general undercurrent is extraordinarily bullish as the market continues to move up. The Quick-term Indicant signaled Bear on August 5 without all of the indices falling below yellow, which would be a normal trigger. However, the slightest bearish bias will trigger bear in August – September, which are the most bearish months for the stock market. That keeps you more guarded, as opposed to when all signals are bullish and the market’s direction is 100% obvious.

The eight major indexes are up 6.2% since the Quick-term Indicant Bear signal of August 5, 2003. Several of the indices bounced off yellow a few weeks ago, which is a common bullish attribute. Although many of the Quick-term Indicators quickly changed two weeks ago in favor of this bullish behavior, they remain configured for a short-lived movement to the north. As previously stated, the Quick-term Indicant is influenced by bearish seasonality.

Force Vectors were wavering with a slight edge to support a gentle bear a few weeks ago, but rebounded with the explosive bounce off the bearish yellow curve. Vector Pressure remained in bullish domains with the exception of the NASDAQ and NASDAQ100. Force Vectors are again heading south, but from a lofty position. It appears this southerly movement will be protracted and with that, one can expect mild bearish behavior once the bearish cycle kicks in.

Vector Pressure escaped neutrality a few weeks ago. It is now nestled slightly into bullish domains. However, each cyclical movement since August 5 has been at a lower level than the prior cyclical movement. This clearly indicates a tiring Quick-term Bull, although the Mid-term Bull cycles are solid.

Seven of the eight major indexes are red bulls. Overall, the eight indexes are above the bullish red curve by 1.5%. That suggests your more mature holdings are safe. The recent buys are at the most risk.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

Last week, the Indicant Volume Indicator appeared to be nearing an end to its lethargic cycle. However, lethargic behavior has again inserted itself into the configuration. It is always possible for the market to go up on declining volume. The market’s intentions are not as obvious on declining volume.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are up by an average of 4.7% (annualized at 94.7%) since their respective bull signals. The Dow is up 2.2% (annualized at 2.2%). The NASDAQ is up 7.3% (annualized at 157.1%). It would be surprising if this Short-term Bull lasted through September.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

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

A link to the NASDAQ’s Short-term Indicant table is as follows:

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

Perspectives

The daily indexes continue to engage the breakout curves. That is a clear indication the great bear market from March 2000 through October 2002 has now ended. One can expect bullish behavior through most of 2004 on the basis of the presidential pre-election year phenomenon.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

In late July, the Quick-term Force Vector for the Volatility Index moved robustly to the north. This paralleled the overall market’s fall from red bulls to near yellow bulls. It was configured for normal summer-time doldrums. The Force Vectors are again moving north, but without robust behavior. The cyclical behavior of the Force Vectors has been mixed since late July. Once the configurations center on an obvious direction, the various Indicant models will resume consistent descriptions of the markets intentions.

The Quick-term Force Vectors for the Volatility Index are in extreme bearish domains, which is bullish for the overall market. They are pointing north (bullish). This index should move north in September and early October. That will pull the market down.

Divergence versus Convergence

Pharmaceuticals are extremely bearish. However, as stated earlier in this report, bullish seasonality will for the DRG (Pharmaceutical Index) should resume. Energy and precious metals began their rebound a few weeks ago, but appear to be flattening. Overall, there is a general convergence movement to the northeast on the charts. Convergence is bullishly favorable. As you have seen in this report, some stocks are moving south, which is not a common characteristic with solid bulls. Although this bull has been solid, it is a dangerous time of year for bulls.

Economic Outlook

The U.S. Dollar continues cyclically weak, but continues to rebound against world currencies. A continuing rebound in the current economic environment favors bullish sentiment. As stated last week, further erosion in the greenback will accelerate an interest in increasing interest rates. The market will not like that. For those of you, who like bull markets, root for a stronger dollar. Of course, the presidential pre-election year phenomenon will also influence that sort of behavior. Click the following link to view the dollars positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices for the raw materials. The higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

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

Interest rates are remaining at historically low levels. However, the three-month T-Bill has been inching upward, along with CD’s. Keep your eyes on that.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-four weeks ago, it was up 66.1% since that buy signal. Fifty-seven weeks ago, it closed up 12.0% since that buy signal. Forty-eight weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 78.5, which is significantly higher than 47.1% reported six weeks ago. The current annualized growth rate is 44.8%, which is up from 28.8% reported six weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-two weeks ago since the MTI buy signal in April 2001. Fifty-five weeks ago, it closed up 30.1%. Last week it closed up 83.7%, which is higher the 75.9% reported two weeks ago. The current annualized growth rate since the April 13, 2001 buy signal is 34.7%, which is higher than 23.1% six weeks ago.

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

Links to both of the above funds are as follows:

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

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

Eighteen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 34.7%, which is up significant from 18.8% reported five weeks ago. The annualized growth rate is 105.0%, which doubles the 50.7% reported six weeks ago, but lower than 142.5% reported ten weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

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

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

The Mid-term Indicant signaled bull for the S&P500 and S&P100. Those two indexes contain the higher probability of dilettante management and voodoo bookkeeping. Do not be surprised they receive a bear signal in the next very few weeks.

In addition to the bull signals, six indexes are bulls. They are up an average of 12.2% for an annualized gain of 40.1%, since the MTI Bull signals an average of 15.8 weeks ago. The annualized growth rate is down from 47.9% reported ten weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA is up 10.5% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 27.4% since the March 22, 2003 MTI Bull signal. That annualizes to 101.7%, which is up from 80.9% reported five weeks ago.

None of the eight major indices are now bears, but expect a reversal sometimes in September.

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 53.4% since the Mid-term Indicant signaled bull an average of 41.0 weeks ago for an annualized gain of 67.7%, which is down from 72.9% reported ten weeks ago. As you can see, the international bulls are also taking a breather but nowhere near expressing a state of confusion of the U.S. Indices.

The lone bear market, China – SSEC, is down 3.8% since the Mid-term Indicant signaled bear 5.0 weeks ago.

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

August 24, 2003 Indicant.Net Weekly Update

Volume 08, Issue 4 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bull or Bear?

The various Indicant models are mixed. The Quick-term Indicant continues to signal bear, while the Short-term Indicant signals bull. The Short-term Indicant is entirely mechanical while the Quick-term Indicant is qualitative. The market’s intended direction is obvious when all the models are signaling the same thing. Periodically, throughout the year, these mixed signal phenomena occur. During August 2002 similar mixed signaling occurred. A Quick-term Bull spurt lasted only a few days. Then the Quick-term Bear resumed its position. This year the opposite is occurring, but many of the other Quick-term Indicators are mixed.

The Mid-term Indicant is mixed for the eight major indices, while the option indexes have more bulls than bears. The market moved up last week, while several of the Quick-term attributes suggest weakness. The Bull and Bear markets are robust and highly predictable when all the Indicant models are expressing the same status.

This mixed signaling is just as valuable as when all the signals are congruent. An inflection point is occurring during these periods of mixed signaling. Market inflection points suggest the market is not committed to one direction or the other. A few days ago, the NASDAQ and NASDAQ100 Vector Pressure turned negative, while the other indexes were in neutral zones. The Quick-term Indicant immediately signaled Bear although it could have remained with the Bull signal. This coupled with a lethargic Indicant Volume Indicator suggested it is time to advise members to be guarded. This is especially prudent during the months of August and September, where the market tends to be flat to down. Vector Pressure is now positive (bullish), but is cycling through decreasing maximum pressure positions.

The struggle between the bullishness in the presidential pre-election year phenomenon continues with the phenomenon of bearish seasonality, which officially began on May 1, 2003. However, the presidential pre-election year phenomenon defeated normal bearish seasonality with a solid Quick-term Bull. Many underlying attributes suggest bearish seasonality should dominate in the next few weeks. For example, the Indicant Volume Indicator continues to reveal lethargic market behavior. Many of the Quick-term attributes demonstrated a bullish fervor about ten days ago, but their movement was not robust. However, as long as Vector Pressure remains positive, your hold positions are safe. On the other hand, as long as the Quick-term Indicant signals bear, be guarded and ready to sell.

Later in this report, you will see how a few stocks are demonstrating outright bearish behavior. None of the stocks expressed that sort of behavior during the Quick-term Bull market that lasted from last March to early August. There are some early signs of an increasing probability of a correction to the south. As has been stated, such a correction will be mild. That prognosis can change quickly. Watch your daily email messages.

The indexes fell quickly to bearish yellow on the Quick-term scale a few weeks ago. This contributed to the QT Bear signal. After hitting yellow, they bounced back to the north and even surpassed the bullish red curve. A few found discomfort above the bullish red curve and have since retreated slightly. The Quick-term Indicant seldom maintains a losing position for more than a week, but this time it persists in signaling bear.

The Mid-term Indicant signaled bear for the ProFunds Ultra Short this past weekend. That fund has a high probability of increasing between now and early October. Unfortunately, the market’s conditions are not ripe for a high degree of predictability and profitable magnitude. The market may be too volatile for a seamless connection to profitability on that fund during this presidential pre-election year. The next high probability of success with that fund may not be until after the ’04 election.

Weekly Summary

The Mid-term Indicant generated twenty-eight buy signals and one sell signal for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. The buy signals were stimulated by rebounding from last week’s sell signals. After the bull weakened a few weeks ago, the market has rebounded. Sucker plays are common on low volume, but many of last week’s buys are up this week. The stocks with buy signals this week may be down next week, coupled with a new sell signal. The Indicant is aggressive in signaling buy and sell.

About this time a year ago, the market produced a similar environment except with inverse conditions. The August ‘02 Quick-term Bull did not live too long and followed by a Quick-term Bear. The Mid-term Indicant was signaling hold for 189 stocks and funds a year ago with 35 buy signals. Two weeks later, the Mid-term Indicant signaled sell for 29 stocks and funds. By September 27, 2002 the Mid-term Indicant was signaling hold for only 61 stocks and funds and avoiding 213. In the next four-week period, the Mid-term Indicant signaled buy for over 150 stocks and funds. You are still holding some of them.

Do not aggressively buy at this time is repeated here. More aggressive buying should occur when the Quick-term Indicant signals Bull with the Indicant Volume Indicator expressing robust behavior. The market continues at an inflection point. It continues to struggle in its search for the appropriate cyclical direction. The conflict between the six-month cycle of bearish seasonality and the presidential pre-election year phenomenon is arousing this lack of market commitment in one direction (up or down). The recent black out and curiosity of the causative factors will add to this state of confusion. Energy prices and precious metals continue to express a favored slant toward bullishness.

In addition to the lone sell signal, the Mid-term Indicant is avoiding 36 stocks and funds. The avoided stocks and funds are down an average of 8.4% since the Mid-term Indicant signaled sell an average of 9.6 weeks ago. Two weeks ago, the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier. As you can see the market’s rebound to the north has caused some of the avoided stocks to move up.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 69 stocks and funds. Those stocks and funds were down an average of 47.3% since their respective sell signals 25.0 weeks earlier. There were 35 buy signals at this time one year ago and were quickly followed by many sell signals the very next week. Do not be surprised with a repeat this year. Bearish seasonality will eventually overcome other bullish phenomena. This is the time of year with the greatest probability of bearish behavior. The Quick-term attributes are configured with a slight bias toward bearish behavior.

In addition to the buy signals, the Indicant is signaling hold for 231 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 49.5%. That annualizes to 90.8%, which is down from 124.1% eleven weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 231 stocks and funds for an average of 28.3 weeks. The stocks/funds with hold signals contrast slightly from one year ago when the Indicant was signaling hold for 125 stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 7.0 weeks. They were up 11.4% (annualized at 81.1%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002.

This paragraph is a repeat from past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish years on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5% while the Quick-term Bear lives. Bearish seasonality is attempting to stimulate influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves. There is a retreat in process, but the bullish behavior since March 2003 is expressing obstinacy. The battle is like a seesaw right now. Bearish seasonality should eventually overpower the presidential pre-election year bullish influences, but it will be short lived and mild. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

As stated last week, summer time doldrums are becoming dominant. Bullish obstinacy countered summer time doldrums again this past week. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? As stated the past few weeks, it appears to be the latter. The Quick-term Indicant does not care about magnitude. It only cares about direction.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality. At least that was the case last week, which conflicts with the current configurations of the Quick-term Indicant. The battle rages on.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

A high number of buy signals has followed the high numbers of sell signals a few weeks ago the past two weeks. Many of those stocks are up slightly. However, some of those recent sell signals continue receiving the “avoid” signal. You will notice they are configured with no bottom in sight. Although they may rebound in the near future, the position from the rebound origin can be much lower than where they are now. You will also notice these fallen stocks cross different industry groups, but the majority are in the pharmaceutical sector.

Not all stocks plummet to the south when they fall below Green or Yellow. Nevertheless, a few do. That is why it is important to sell on the sell signal. It is better to miss a few performance points as opposed to holding on to a loser that drops a lot.

Indicant Select Stock #66, McDermott (MDR), is down 19.6% since the Mid-term Indicant signaled sell on August 9, 2003. As you can see from the chart, it appears to be heading to zero. Many of the other stocks in McDermott’s sector have hold signals; many of which are performing at double-digit levels since the Mid-term Indicant signaled buy.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S11.htm#66

Indicant Select Stock #11, Ariba (ARBA), is down 16.4% since the Mid-term Indicant signaled sell on July 19, 2003. Even though it rebounded last week and eighteen cents above its yellow price, the stock is not configured for a buy signal. Continue to avoid until you see the buy signal.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S02.htm##11

Indicant Select Stock #6, Level Three Comm (LVLT), is down 13.9% since the Mid-term Indicant signaled sell on July 19, 2003. Some of you recall Warren Buffet very publicly announced his purchase of this a few months ago and very quietly sold those shares a few weeks ago. Mr. Buffet is now more of a trader than investor. That is appropriate behavior until the current bull market shows more sustainability. As you can see, Level 3 is plummeting in a southerly direction. You should definitely not be holding this stock.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S01.htm##6

Indicant Select Stock #29, Pfizer (PFE), is also taking it on the chin. It is down 10.4% since the Mid-term Indicant signaled sell on August 9, 2003. Again, where is the bottom?

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#29

Dow #27 Merck (MRK) is down 7.3% since the Mid-term Indicant signaled sell on August 2, 2003. It is setting on bearish yellow. If the market weakens, this stock will drop further.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS05.htm#27

Take a quick look at a good blue chip company, #3 Johnson and Johnson (JNJ). You can instinctively see that you should not be holding that stock.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

Even some of the Dow Utilities are hurting, even though, they have a fundamentally bright future with the recent blackout and capital gains incentives. First Energy (FE), DJU #16) is down 9.1% since the Mid-term Indicant’s August 9, 2003 sell signal.

http://www.indicant.net/Members/Updates/MTI-Stks-DJU/DJU-03.htm#16

You never know when Dilettante Management will come along. There are more and more dilettantes out there in the larger companies. That is why the S&P600 will outperform the S&P100 for years to come.

Not to incite fear or negative emotion, one should take a look at Enron every now and then. The idea is to not forget what dilettantes can do to you. The Enron dilettantes were more blatant. Most are more subtle, such as what occurred at Micro Media. Those dilettantes quickly and quietly raided the cookie jar. Keep your eyes on your management team in your fundamental investments. Watch what they say and how they say it. Keep in mind many of contemporary CEO’s and pals take acting lessons, as opposed to putting in solid fourteen hour days making you rich. Watch for “form” versus “substance.” The Mid-term Indicant signaled sell at $70 on February 23, 2001. It is now selling at less than a nickel. It was one of the Dow Utility stocks, which supposedly must maintain pristine honesty and robust control over assets.

http://www.indicant.net/Members/Updates/MTI-Stks-DJU/DJU-02.htm#10

Not all things are bad. Some stocks are up tremendously. For example, Amazon (NAS100 #41 – AMZN) is up 535% since the Mid-term Indicant signaled buy on November 9, 2001.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#41

Indicant Select Stock #26, Nortel (NT), is up 412.7% since the Mid-term Indicant signaled buy on October 18, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#26

Nortel was one of many buy signals last October. Some stocks performed well while others did not. McDermott was one of several sell signals earlier this month and late last month. Some stocks rebounded while others, such as this one plummeted to the south. The idea here is to never put all the eggs in our basket.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/Buy-Sell%20Summary%20This%20Week.htm

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 your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The March 17, 2003 Quick-term Bull perished on August 5, 2003. The eight major indexes increased an average of 15.3% during that time. The annualized gain amounted to 39.5%. The S&P600 increased the most at 22.1%. The NASDAQ Composites was the second strongest at 20.2%, while the Dow 30 was the weakest bull with a mere 11.0% increase.

The eight major indexes are up 4.4% since the Quick-term Indicant Bear signal of August 5, 2003. This is not much of a bear. The market rebounded the past two weeks with some gusto. Although many of the Quick-term Indicators quickly changed early last week in favor of this bullish behavior, they were configured for a short-lived movement to the north. The Quick-term Indicant is being influenced by bearish seasonality.

Last week’s Force Vectors were wavering with a slight edge to support a gentle bear. This past week, the Force Vectors moved in support of continuing bullishness. However, that movement was not robust and is now maturing on its upslope. Vector Pressure has shifted and now supports bullish behavior. The Quick-term Indicant continues signaling bear, but it may have to signal a bull that most likely would have a very short life.

Six of the seven major indexes are red bulls. Overall, the eight indexes are above the bullish red curve by 0.4%. That suggests your holdings are safe.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator appears to be bottoming. Although there is not enough evidence to determine volume’s influence on the market, we do not want to see increasing volume on a decreasing market. The recent bottoming of the Indicant Volume Indicator suggests some early signs of influential market behavior. Watch your email daily.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are down by an average of 3.0% (annualized at 99.3%) since their respective bull signals. The Dow is up 1.4%. The NASDAQ is up 4.6%. This Short-term Bull’s life span is expected to be short-lived.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

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

A link to the NASDAQ’s Short-term Indicant table is as follows:

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

Perspectives

After a few weeks of the major indexes backing off from the breakout lines, they are now engaging the breakout lines. The fact that they breeched to breakout lines for the first time since 1999 testifies to the legitimacy of the dying bear market. The fact that they are re-engaging their respective breakout lines testifies to bullish intentions with sustainability.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Force Vectors for the Volatility Index are in extreme bearish domains, which is bullish for the overall market. They are pointing north (bullish). This index should move north in September and early October. That will pull the market down.

Divergence versus Convergence

Pharmaceuticals are extremely bearish. Energy and precious metals are rebounding. Overall, there is a general convergence movement to the northeast on the charts. Convergence is bullishly favorable. As you can see, there are some stocks that are crashing, which is not a common characteristic with solid bulls.

Economic Outlook

The U.S. Dollar continues cyclically weak, but rebounding against world currencies. A continuing rebound in the current economic environment favors bullish sentiment. Further erosion will accelerate an interest in increasing interest rates. The market will not like that. For those of you, who like bull markets, root for a stronger dollar. Of course, the presidential pre-election year phenomenon will also influence that sort of behavior. Click the following link to view the dollars positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices. Also, the higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

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

Interest rates are remaining at historically low levels. That will provide fuel to a sustaining bull market.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-three weeks ago, it was up 66.1% since that buy signal. Fifty-six weeks ago, it closed up 12.0% since that buy signal. Forty-seven weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 72.7%, which is significantly higher than 47.1% reported five weeks ago, but down slightly from a week earlier. The current annualized growth rate is 42.0%, which is up from 28.8% reported five weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-one weeks ago since the MTI buy signal in April 2001. Fifty-four weeks ago, it closed up 30.1%. Last week it closed up 79.2%, which is higher than the previous week’s 75.9%. The current annualized growth rate since the April 13, 2001 buy signal is 33.1%, which is higher than 23.1% five weeks ago.

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

Links to both of the above funds are as follows:

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

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

Seventeen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 28.5%, which is down slightly from the previous week’s 29.7%. However, it is up significantly from 18.8% reported three weeks ago. The annualized growth rate is 91.5%. That is up from 50.7% reported five weeks ago, but lower than 142.5% reported nine weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

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

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

The Mid-term Indicant signaled bull for the NASDAQ100.

In addition to the bull signal, six indexes are bulls. They are up an average of 12.4% for an annualized gain of 36.2%, since the MTI Bull signals an average of 17.8 weeks ago. The annualized growth rate is down from 47.9% reported nine weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA is up 9.7% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 24.2% since the March 22, 2003 MTI Bull signal. That annualizes to 89.9%, which is up from 80.9% reported four weeks ago.

The three bears are up an average of 1.2% since their respective Mid-term Bear signals an average of 2.0 weeks ago. As you can see, the market is confused about the cyclical directions with some Indicant models suggesting bulls while others are suggesting bears. There is little clarity right now about the market’s intended cyclical direction. That happens about three to four times a year. The bias favors slight bearish behavior.

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 52.2% since the Mid-term Indicant signaled bull an average of 40.0 weeks ago for an annualized gain of 67.9%, which is down from 72.9% reported nine weeks ago. As you can see, the international bulls are also taking a breather but nowhere near expressing a state of confusion of the U.S. Indices.

The lone bear market is down 2.6% since the Mid-term Indicant signaled bear 4.0 weeks ago.

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

August 17, 2003 Indicant.Net Weekly Update

Volume 08, Issue 3 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Conflicting Strategies

Fundamentally, the market is struggling between inflationary influences, robust economic growth, and the presidential pre-election year phenomenon. Energy costs and inflation are first cousins. Without energy, nothing happens as many of our friends in the Northeast sector of the U.S. and Canada experienced last weekend. Common sense and the stock market are not first cousins, but on first cut, one would expect the energy outage and all the discomforts associated with it would stimulate a greater investment appeal in the energy sector.

It is sometimes amazing how market data configures movement congruent to what would be expected of a tragic event before the tragic event occurs. The OSX (Oilfield Services Sector) bounced to the north after receiving a Mid-term Bear signal. Interestingly, the bounce to the north occurred prior to the black out at 4:11 PM last Thursday. The first up move by the OSX occurred one week earlier on August 7, 2003. There is no speculation about insider knowledge about the impending black out, as this index bounced off yellow to the north. That is a very common technical phenomenon. Click the below link to view the chart.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I03.htm#18

Talk radio pointed out that it was 9:11 PM in London when the black out occurred. It is amazing how people can find relationships among things. Since Britain was a participant in the raid on Iraq, there are some who link the black out to terrorism and timed it to a 911 number.

Politicians and other “authorities,” for the most part, stated they did not know what caused the blackout. Yet, in the same breath, they excluded terrorism. The question is how can one exclude causative factors when one does not know the causative factors of failure? Oh well, we all know the nature and character of politicians.

At any rate, the initial expectation of the energy outage is for a rise in energy related securities. This will contribute to an already confused stock market. The market is well entrenched in the six months of normal bearish seasonality. The bullish nature of this stock market has been impressive. It is led by the phenomenon of the presidential pre-election year. Gold/precious metals and oil/energy are rebounding on a Quick-term basis. They typically move inversely to the market. There is a definite conflict in the market’s intended cyclical direction.

Last week the market was configured to turn bearish. Mild bearish behavior was predicted at that time. The Quick-term attributes still portray that outlook. There will be more about that later in this report.

Weekly Summary

The Mid-term Indicant generated thirty-five buy signals and four sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. The buy signals were stimulated by rebounding from last week’s sell signals. The number of buy signals this week are about half of last week’s sell signals, which adds a slight tinge of bearish biasness.

Do not aggressively buy at this time is repeated here. More aggressive buying should occur when the Quick-term Indicant signals Bull with the Indicant Volume Indicator expressing robust behavior. Right now, the market is at an inflection point. It is struggling to find the appropriate cyclical direction. The conflict between the six-month cycle of bearish seasonality and the presidential pre-election year phenomenon is arousing this state of market confusion. The recent black out and curiosity of the causative factors will add to this state of confusion. Energy prices and precious metals are favored right now, while the marginally performing stocks and funds are bouncy and configured to provide some added wealth to your stockbrokers and fund manager’s commission fees. It is better to pay them on herky-jerky behavior than hold through a double-digit loss position.

In addition to the sell signals, the Mid-term Indicant is avoiding sixty stocks and funds. The avoided stocks and funds are down an average of 7.1% since the Mid-term Indicant signaled sell an average of 8.6 weeks ago. Last week the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier. Several sell signals were generated last week and many of the stocks are in the early stages of decline, while some expressed obstinate bounces back to the north. That triggered additional buy signals. Many stocks bounced off yellow after finding discomfort above their respective bullish red curves. They are now teetering, indecisively, as to the appropriate course of direction. The double digit and triple digit hold signals remain solid. However, a few sell signals were generated this week for some of the higher performing hold positions. Please read on.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 102 stocks and funds. Those stocks and funds were down an average of 42.9% since their respective sell signals 18.7 weeks earlier. There were sixty six buy signals at this time one year ago and were quickly followed by sell signals the very next week. Do not be surprised with a repeat this year. Bearish seasonality will eventually overcome other bullish phenomena. This is the time of year with the greatest probability of bearish behavior. The Quick-term attributes are configured with a slight bias toward bearish behavior.

In addition to the buy signals, the Indicant is signaling hold for 197 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.6%. That annualizes to 88.2%, which is down from 124.1% ten weeks ago, but up from 50.2% reported twenty-seven weeks ago. The Mid-term Indicant has been signaling hold for these stocks and funds for an average of 31.0 weeks. The stocks/funds with hold signals contrast significantly from one year ago when the Indicant was signaling hold for 125 stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 18.7 weeks. They were up 14.4% (annualized at 84.6%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002.

This paragraph is a repeat from past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish years on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5% while the Quick-term Bear lives. Bearish seasonality is attempting to stimulate influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves. There is a retreat in process, but the bullish behavior since March 2003 is expressing obstinacy. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

As stated last week, summer time doldrums are becoming dominant. Bullish obstinacy countered summer time doldrums this past week. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? As stated the past few weeks, it appears to be the latter. The Quick-term Indicant does not care about magnitude. It only cares about direction.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality. At least that was the case last week, which conflicts with the current configurations of the Quick-term Indicant. The battle rages on.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

You will notice quite a few buy signals. Many of those signals are reversals from last week’s high number of sell signals. Many stocks were on yellow last week. That configuration supports an increased likelihood of rapid declines in prices. This is especially true of the margin performers. Continue to hold those stocks performing at the high end of double digits and even triple digit levels. However, the cheaper stocks can plummet and quickly wipe out triple digit gains. That is the reason for taking some profits on some of the high performers.

The Mid-term Indicant signaled sell for Indicant Select Stock #40, Alpharma. The price is below the blue curve and resting on yellow. The Indicant recommends taking your 91.1% profit on that stock. The Indicant signaled buy on November 2, 2002 at $9.97. The Indicant is now signaling sell at $19.05. If you are more fundamentally oriented, you may not want to sell. The weakening pharmaceutical sector is influencing the Mid-term Indicant’s recommendation here. A link to Alpharma is below.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S07.htm#40

One of the star performers during the great bear market from 2000 to October 2002 is enduring some rough times. Indicant Select Stock #44, Chattem, produced triple digit gains from 2000 through 2003. As you can see from the following chart, it is fading fast.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S08.htm#44

Indicant Select Stock #48, Forest Labs also appears to be heading for trouble. Its price is resting on yellow and below the blue curve. Normally, that configuration would prompt a sell signal. The stock is up 251.0% since the Mid-term Buy signal on November 19, 1999. It is typical for a stock to recoil to the north after breeching the blue curve. If you prefer other forms of investments, you may want to sell. If the stock drops further, the Mid-term Indicant will signal sell. You will notice the stock recoiled north the last time it breeched the blue curve.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S08.htm#48

Interestingly, Indicant Select Stock #49, Genetech, is holding up very well. It is up 125.9% since the Mid-term Indicant signaled buy on October 18, 2002. You will notice the stock is safely configured to maintain the hold position. The price is above all relevant curves. The probability of a stock collapsing from that configuration is less than 1%.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S09.htm#49

As you can see, the pharmaceutical/biotechnology sector is a mixed story right now with a slight bias toward bearishness. The pharmaceutical and biotechnology sector charts are highlighted later in this report.

The blue chips are also expressing conflicting outlooks. The Mid-term Indicant signaled sell for Johnson and Johnson (Dow #3) on June 28, 2003. It is now down 1.0% since that sell signal. However, it was up 2.3% on July 19, 2003 from that sell signal. Meandering stocks, which is the case for many, are difficult to time. Johnson and Johnson is a good company and fundamentally strong. As you can see, the configuration supports a high probability of a steep price decline. It is bouncing off yellow each week, but then follows with steeper declines.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

Dow #23, Altria (formerly Phillip Morris) received a Mid-term Indicant sell signal for a 19.7% profit. That sell signal was stimulated in part due to impending bearish seasonality for blue chips. As you can see, the stock fell below blue and is now on yellow, which has recently expressed a bias toward bullish behavior. The price is below blue and green. The Mid-term Indicant signaled buy on May 17, 2003 at $33.30. The sell signal occurred at $39.85.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS04.htm#23

Many investors follow Warren Buffet’s movements. Mr. Buffet takes his position quietly. A few weeks after taking his position, his press relations machine goes to work. Stories are printed in the press about how he possesses hold positions on a certain stock. He bought Indicant Select Stock #6, Level 3 Communications, during mid 2002 at around $2.50. It appears he sold at around $5.00 in late May for a nice 100% gain or so. The stock is down 10.4% since the Mid-term Indicant signaled sell on July 19, 2003. Unfortunately, many people bought the stock at its peak, which occurred shortly after the Buffet Press release machinery took over. He does not announce his sells immediately. So, some keep on buying and then are burned by following the demand curve.

Remember, the phenomenon of commonality has always prevailed. Big money people understand this and add fuel to the process with their press machinery. They gain and the readers lose. It is a subtle form of price manipulation. It uses the simple laws of demand over supply.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S01.htm##6

About this time last year, the market expressed some significant volatility with a Quick-term Bull signal followed very closely with a Quick-term Bear signal. That flip flop occurred after one of the longest Quick-term Bear cycles ever. It lasted from April through most of August 2002. At one point during that cycle, the NASDAQ100 was down over 50%. This year the market is again behaving mischievously, but in opposite directions. The Quick-term attributes continue to configure themselves with a slight bias toward bearish behavior.

The “slightness” of that bias has not favored a profound gain in ProFunds Ultra Short. The market moved up last week against this slight bias of bearish expectations. This fund is now down 7.1% since last week’s buy signal. If you followed the stop loss advice, you held your loss to 5.0%. The Mid-term Indicant continues to signal hold this week. As always, when you see a hold signal and the price is down, then it is recommended that you buy. Also, as previously stated, the expected price behavior of this fund is not as obvious as it was last year. It is a higher risk buy based on a “slight” bias of bearish expectations. If you elect to buy, make certain you establish the recommended stop loss and sell when you see the Quick-term Indicant signal bull. Remember, this fund moves inversely to the stock market by a factor of two times the movement of the NASDAQ100. For example, if the NASDAQ100 moves up one point, this fund will move down two points and vice versa. Last week, the NASDAQ100 moved up 3.8% and thus the loss position of 7.4% on the Profunds Utra Short fund. A link to the chart is available later in this report.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/Buy-Sell%20Summary%20This%20Week.htm

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 your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The March 17, 2003 Quick-term Bull perished on August 5, 2003. The eight major indexes increased an average of 15.3% during that time. The annualized gain amounted to 39.5%. The S&P600 increased the most at 22.1%. The NASDAQ Composites was the second strongest at 20.2%, while the Dow 30 was the weakest bull with a mere 11.0% increase.

The eight major indexes are up 2.7% since the Quick-term Indicant Bear signal of August 5, 2003. It is a very young bear. It should revert to a negative position in the next few days. Three of the indexes moved above the bullish red curve this past week. However, the average position of all eight indexes is 0.7% below bullish red. The eight indexes are above the bearish yellow curve by 3.1%, which is significantly higher than last weeks mere 0.7%.The NASDAQ and NASDAQ100 are now above the bearish yellow curve by 3.3% and 3.2%, respectively, which contrasts significantly with 0.4% and 0.9% last week. Those two indexes are the strongest bears.

Force Vectors are wavering with a slight edge that supports a gentle bear. The Dow and Dow Composites Vector Pressure are still in bullish domains, while the NASDAQ and NASDAQ100 have nestled into shallow bearish domains. The current Force Vector cycle is mature to the north. You can expect a reversal this coming week.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator continues express lethargic behavior. That is somewhat non bearish, but the degree of lethargy is now influenced by the light trading that occurred last Friday during the black out in the Northeast U.S. and most of Ontario Canada. The current QTI Bear should be mild as long as the Indicant Volume Indicator is lethargic.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are down by an average of 1.0% since their respective bull signals. The Dow is up 1.1%. The NASDAQ is up 0.9%. This Short-term Bull is expected to be short-lived.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

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

A link to the NASDAQ’s Short-term Indicant table is as follows:

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

Perspectives

The major indexes are backing off from the breakout lines. However, the fact that they breeched to breakout lines for the first time since 1999 testifies to the legitimacy of the dying bear market.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Force Vectors for the Volatility Index retreated last week after a quick burst to the north two weeks ago. However, the retreating configuration is not robust. It is configured for a rebound, which will move the market to the south. The Mid-term Volatility Index is down since its bear signal. The chart and additional commentary about that is later in this report.

Divergence versus Convergence

As stated the past two weeks, gold and precious metals are popular. Many stocks and funds rebounded last week as the bullish fervor is obstinately resisting bearish influences. All other sectors are lethargically drifting to the southeast. Some fundamentally strong blue chips are holding up well. The oil field services sector is mixed with some stocks moving north while others are drifting south/southeast.

Economic Outlook

The data here will be updated next week, as changes are still in progress.

http://www.indicant.net/Members/Updates/Economic/E01.htm

To view commodities, click the following link. More will be updated next week.

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

Interest rates are on the following link and will be updated next week.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is on the following link. Updates will be resumed next week.

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-two weeks ago, it was up 66.1% since that buy signal. Fifty-five weeks ago, it closed up 12.0% since that buy signal. Forty-six weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 75.9%, which is significantly higher than 47.1% reported four weeks ago. The current annualized growth rate is 42.6%, which is up from 28.8% reported four weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty weeks ago since the MTI buy signal in April 2001. Fifty-three weeks ago, it closed up 30.1%. Last week it closed up 75.9%. The current annualized growth rate since the April 13, 2001 buy signal is 32.0%, which is higher than 23.1% four weeks ago.

As you can see, gold and precious metals continue to rebound. As stated last week, it is due to money rotations from equities to precious metals. There is also some significant money believing inflationary cycles will kick in prior to an interest rate increase by the Fed Chief due to the political cycle. The recent power outage will influence these funds to maintain/increase in price.

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

Links to both of the above funds are as follows:

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

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

Sixteen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 29.7%, which is up significantly from 18.8% reported two weeks ago. The annualized growth rate is 101.7%. That is up from 50.7% reported four weeks ago, but lower than 142.5% reported eight weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

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

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

The Mid-term Indicant signaled bull for the Dow Jones Utilities. Its bear lasted one week.

In addition to the bull signal, five indexes are bulls. They are up an average of 14.2% for an annualized gain of 35.1%, since the MTI Bull signals an average of 21.0 weeks ago. The annualized growth rate is down from 47.9% reported eight weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA remains the weakest bull. It is up 9.4% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 19.8% since the March 22, 2003 MTI Bull signal. That annualizes to 73.4%, which is down from 80.9% reported three weeks ago.

The three bears are up an average of 2.0% since their respective Mid-term Bear signals an average of 1.0 weeks ago. As you can see, the market is confused about the cyclical directions with some Indicant models suggesting bulls while others are suggesting bears. There is little clarity right now about the market’s intended cyclical direction. That happens about three to four times a year. The bias favors slight bearish behavior.

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 49.9% since the Mid-term Indicant signaled bull an average of 39.0 weeks ago for an annualized gain of 66.5%, which is down from 72.9% reported eight weeks ago. As you can see, the international bulls are also taking a breather but nowhere near expressing a state of confusion of the U.S. Indices.

The lone bear market is down 1.9% since the Mid-term Indicant signaled bear 3.0 weeks ago.

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

August 10, 2003 Indicant.Net Weekly Update

Volume 08, Issue 2 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Major Events

As you browse through the charts, you will notice several stocks and funds broke through their respective bullish red curves in the past few months. That is the first time that has occurred since early 2000. It took nearly three years and a significantly depressed red curve for this event. Notice the current retreat. With a few exceptions stocks and funds find such lofty positions uncomfortable.

Let’s review where we have been and where we are going. In late 2002, the stock market found a secular bottom, which is typical for mid-term election years. The October 2002 Quick-term Bull was born right on cue, but disappointed us with the worst December since 1931. The October 2002 QT Bull only rose 0.5% from October 15, 2002 to January 24, 2003. That bull started out rather dramatically and demonstrated early robust behavior. It fizzled in late November and all of December, but never fell below the October 15, 2002 Quick-term Bull signal.

The March 2003 Quick-term Bull was not robust or dramatic, but it was steady. It lived until early August, which penetrated three of the six months of bearish seasonality.

The presidential pre-election year phenomenon influenced the March 2003 Quick-term Bull. That Quick-term Bull rose 15.3% from March 17, 2003 to August 5, 2003. The S&P600 was the biggest gainer. It rose 22.1% in that QT Bull. The weakest was the Dow Jones Industrial Average, which increased 11.0% during that QT Bull. The NASDAQ100 never did lead that QT Bull as it had been expected. Conventional pundits suggest the stock market will rise somewhere between 6-8% in 2003. You have already enjoyed a 15.3% gain this year and many of you are enjoying some triple digit gains from some of the October 2002 and March 2003buy signals.

You received the August Quick-term Bear signal on August 5, 2003. The Short-term Indicant also signaled Bear on August 5, 2003. There will be more about why the Quick-term Indicant signaled bear later in this report.

The Mid-term Indicant signaled buy for #22 ProFunds Ultra Short this past weekend. Be conservative with this fund if you decide to buy it. Sell it the same day you see the Quick-term Indicant signal Bull in the near future. Last year this fund produced double digit profits during the April 2002 Quick-term Bear. It also produced some losses as the market wobbled up and down through August. Rest assured this is an extremely short-term buy. It is difficult to make money with this fund during bull markets. Even though the Quick-term Indicant and Short-term Indicant signaled bear, the Mid-term Indicant is sending mixed signals. Be prepared to sell this fund very quickly. The market is going to be volatile during the next few weeks. The ProFunds Ultra Short moves inversely, disproportionately, and more dramatically than the stock market. A small increase in the stock market will produce a larger decrease in this fund. Remember, if you decide to buy this fund, be prepared to sell it quickly.

For those of you who have a lot of high risk money available, you may want to write some uncovered call options. Remember though the market will not move conveniently or consistently one way or the other. However, as has been stated for several weeks, the market is moving in a gentle drift to the southeast. That is an attribute to a correcting bull, as opposed to an outright bear market.

Weekly Summary

The Mid-term Indicant generated two buy signals and sixty-two sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. Many of your hold positions are now being converted to cash. Sell signals were up this past week.

In addition to the sell signals, the Mid-term Indicant is avoiding thirty-three stocks and funds. The avoided stocks and funds are down an average of 11.0% since the Mid-term Indicant signaled sell an average of 15.0 weeks ago. The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 168 stocks and funds. Those stocks and funds were down an average of 37.2% since their respective sell signals. The market was enduring one of the longest Quick-term Bears on record at this time one year ago.

In addition to the buy signals, the Indicant is signaling hold for 199 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 48.9%. That annualizes to 82.9%, which is down from 124.1% nine weeks ago, but up from 50.2% reported twenty-six weeks ago. Again, the summer-time doldrums and bearish seasonality are gaining influence. This is not the time of year for aggressive buying. The Mid-term Indicant has been signaling hold for these stocks and funds for an average of 30.6 weeks. The stocks/funds with hold signals contrast significantly from one year ago when the Indicant was signaling hold for only fifty-one stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 19.6 weeks. They were up 26.7% (annualized at 71.0%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002.

This paragraph is a repeat from past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish years on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5% while the Quick-term Bear lives. Bearish seasonality has gained influence. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

Summer time doldrums are becoming dominant. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? So far, it appears to be the latter. The Quick-term Indicant does not care about magnitude. It only cares about direction.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

Last week, NAS100 #22 COSTCO, fell from $36.67 to $29.22. That was a 20% decline in price in just one week. If your stop loss of 5% was executed, then you would have sold at $34.84. The buy price was $30.52 on March 1, 2003. If the stop loss order with your broker was executed, you would have made 12.0%. If you did not submit a stop loss, then you would be down 4.3%.

The link to COSTCO chart is below:

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS04.htm#22

Although NAS100 #33, Applied Micro, was up by double digits since the Mid-term Indicant buy signal, it received a sell signal. The stock never made it to the bullish red curve. The high end double digit stocks are still receiving hold signals. This stock was sold at a 34.7% profit due to its underlying fundamental weaknesses. You will notice some stocks and funds breeched their respective bullish red curves, while others did not in the recent Quick-term Bull. A link follows:

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS06.htm#33

NAS100 #38, Citrix Systems, was not sold, even though its price is on yellow. This is because the stock is up by triple digit amounts. The stock was bought on October 25, 2002 and is up 133.8%. You will notice that it also crossed above the bullish red curve a few weeks ago, but has since retreated. Apply the stop loss rules you read earlier in this report. A link to Citrix is below:

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#38

On the other hand, NAS100 #51 - MLNM, possesses similar attributes to the above, but it was not on the high end of double digit performers. It breeched both red and blue, but its discomfort at that position is obvious. It is quickly retreating. It received a sell signal this past week for a profit of 27.9%. A link follows:

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS09.htm#51

All of the bad news about the diet of fast foods has not disrupted the recent surge in McDonalds stock price. It is the Dow’s #15. It is up 63.1% since the March 22, 2003 Mid-term Indicant buy signal. In the face of a declining market, McDonalds continued to rise.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS03.htm#15

The Dow Utilities have performed well since the March QT Bull signal. DJU #5, AES, is up 239.3% since the November 23, 2003 buy signal. The stock is on the bearish yellow curve and it is also below the bullish red curve. That configuration would normally trigger a sell signal. The triple digit gain is the reason for not selling. A link follows:

http://www.indicant.net/Members/Updates/MTI-Stks-DJU/DJU-01.htm#5

As you can see, triple digit and high end double digit gainers are continuing to receive hold signals regardless of the configuration on the charts. Utility stocks are nicer to hold due to healthy dividends.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

In the past, we have included the stocks and funds with buy and sell signals in the preliminary report. To maintain appropriate security, you can now see the Mid-term Indicant "buy/sell" signals for stocks and funds by clicking the following link. It is in the member’s only section.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/Buy-Sell%20Summary%20This%20Week.htm

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 your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The March 17, 2003 Quick-term Bull perished on August 5, 2003. The eight major indexes increased an average of 15.3% during that time. The annualized gain amounted to 39.5%. The S&P600 increased the most at 22.1%. The NASDAQ Composites was the second strongest at 20.2%, while the Dow 30 was the weakest bull with a mere 11.0% increase.

The eight major indexes are up 0.3% since the Quick-term Indicant Bear signal of August 5, 2003. It is a very young bear. None of the major indexes are above the bullish red curve. The eight indexes are above the bearish yellow curve by a mere 0.7%.The NASDAQ and NASDAQ100 are below the bearish yellow curve by 0.4% and 0.9% respectively.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator continues express lethargic behavior. That is somewhat non bearish. The current QT Bear should be mild as long as the Indicant Volume Indicator is lethargic. We should not experience more than a 10% drop in the current Quick-term Bear.

As stated last week, the decreasing Indicant Volume Indicator is nothing more than a reflection of summer time doldrums and distractions. Industry and people take it easy in the summer time, which is also true for the stock market.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant also signaled bear on August 5, 2003. Currently, the two major indexes are down by an average of -0.1%. The Dow is actually up 1.7%, while the NASDAQ is down 1.8%. The current duration of this STI Bear is 4.0 days for both indexes.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

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

A link to the NASDAQ’s Short-term Indicant table is as follows:

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

Perspectives

The major indexes are backing off from the breakout lines. However, the fact that they breeched to breakout lines for the first time since 1999 testifies to the legitimacy of the current bull market. Now, they are breaking south of the breakout line, but nowhere near their respective breakdown lines. Notice how the Dow and the S&P600 did not incur the severity of the bear market that the NASDAQ endured from 2000 through 2003.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Force Vectors for the Volatility Index are moving robustly to the north. The Mid-term Indicant signaled bull for the Volatility Index two weeks ago. As stated last week, those two combinations signaled the current Quick-term Bull is nearing the end of its cycle, which occurred on August 5.

Divergence versus Convergence

As stated last week, only gold and precious metals are popular. All other sectors are lethargically drifting to the southeast. Some fundamentally strong blue chips are holding up well. The oil field services sector is mixed with some stocks moving north while others are drifting south/southeast.

Economic Outlook

The U.S. Dollar continues to display rebounds from cyclical weaknesses. Exporters should be doing fine with the current positions, while imported products are more costly.

http://www.indicant.net/Members/Updates/Economic/E01.htm

Commodity prices continue to threaten inflation. However, they also appear to be at cyclical peaks. Commodity charts are on the following link.

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

As you can see from the below link to charts, interest rates remain low. The 3-Month T Bill moved up slightly, but still very depressed. At some future point, the reduced interest rates and high commodity prices will influence the Fed Chief in a manner unfavorable to the stock market. That will likely occur after the 2004 elections, unless inflation exerts itself before then.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is on the following link.

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-one weeks ago, it was up 66.1% since that buy signal. Fifty-four weeks ago, it closed up 12.0% since that buy signal. Forty-five weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 69.2%, which is significantly higher than 47.1% reported three weeks ago. The current annualized growth rate is 40.9%, which is up from 28.8% reported three weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% fifty-nine weeks ago since the MTI buy signal in April 2001. Fifty-two weeks ago, it closed up 30.1%. Last week it closed up 72.3%. The current annualized growth rate since the April 13, 2001 buy signal is 30.7%, which is higher than 23.1% three weeks ago.

As you can see, Gold is on the rebound. As stated last week, it is due to money rotations from equities to precious metals. There is also some significant money believing inflationary cycles will kick in prior to an interest rate increase by the Fed Chief due to the political cycle.

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

Links to both of the above funds are as follows:

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

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

Fifteen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 28.0%, which is up significantly from last weeks 18.8%. The annualized growth rate is 102.7%. That is up from 50.7% reported three weeks ago, but lower than 142.5% reported seven weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

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

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

The Mid-term Indicant signaled bull for all eight major markets on March 22, 2003. This past weekend the Mid-term Indicant signaled Bear for four of the eight major indexes. The new bears are the S&P500, S&P100, NASDAQ100, and Dow Utilities. For the most part, the bigger companies are the first to fall out of favor. They have a higher propensity to practice voodoo bookkeeping and employ dilettante management.

The four bull indexes are up an average of 11.9% for an annualized gain of 30.9%, since the MTI Bull signals an average of 20.0 weeks ago. The annualized growth rate is down from 47.9% reported seven weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA remains the weakest bull. It is up 7.9% since the MTI Bull signal on March 22. Two weeks ago it was up 9.0%. The NASDAQ Composite is the strongest Mid-term Bull. It is up 15.7% since the March 22 MT Bull signal, which is down from last weeks 20.7%. That annualizes to 58.2%, which is down from 80.9% that was reported two week ago. The Dow Utility Stocks was the strongest bull five weeks ago. It is now a bear, but you should continue to hold your triple digit performers and remain locked into some healthy dividend checks for the next eighteen months.

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 45.9% since the Mid-term Indicant signaled bull an average of 38.0 weeks ago for an annualized gain of 62.8%, which is down from 72.9% reported seven weeks ago. As you can see, the international bulls are also taking a breather.

The lone bear market is down 0.4% since the Mid-term Indicant signaled bear 2.0 weeks ago.

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

August 03, 2003 Indicant.Net Weekly Update

Volume 08, Issue 1 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Major Events

The Mid-term Indicant signaled Bull for the Volatility Index this past week. It fell by 41.2% since the Bear signal on March 29, 2003. This is an early indication that the summer time doldrums are gaining influence. Remember, the Volatility Index moves inversely to the stock market. There will be more about this later in this report.

In addition, you will notice many stocks are setting on their yellow curves. In a bear market, that would prompt immediate sell signals. If the Quick-term Indicant signals bear this coming week, you should sell those stocks. The Mid-term Indicant will signal sell next weekend in the event the Quick-term Indicant signals bear. However, keep in mind we are enjoying a bull market due to the presidential pre-election year phenomenon.

Finally, the Mid-term Indicant is generating more sell signals for stocks and funds. The ProFunds Ultra Short Mutual Fund is open. It requires a minimum investment of $15,000. It made us money last year during the bear market, as it also moves inversely to the stock market. You may want to contemplate allocating resources to purchase this fund when the Quick-term Indicant signals bear. This fund is mentioned with link later in this report.

Weekly Summary

The Mid-term Indicant generated one buy signal and eight sell signals for stocks and funds. As stated last week, it is not the time for aggressive buying, but your hold positions are okay. They will weaken as the summer time doldrums wear on, but continue to hold until you see the sell signal, when and if triggered.

As has been stated for the past several weeks, the market is and has been in a gentle drift to the southeast without discriminating among the sectors. Nearly all forms of investments are not popular except for gold and precious metals. Seasonal bearish pressures are invoking their phenomenon.

In addition to the sell signals, the Mid-term Indicant is now avoiding twenty-seven stocks and funds. The avoided stocks and funds are down an average of 23.3% since the Mid-term Indicant signaled sell an average of 28.0 weeks ago. The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 241 stocks and funds. Those stocks and funds were down an average of 32.0% since their respective sell signals. The market was enduring on the longest Quick-term Bears on record at this time one year ago.

The Indicant is signaling hold for 260 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 44.9%. That annualizes to 85.9%, which is down from 124.1% eight weeks ago, but up from 50.2% reported twenty-five weeks ago. Again, the summer-time doldrums and bearish seasonality is influencing. The Mid-term Indicant has been signaling hold for these stocks and funds for an average of 27.1 weeks. The stocks/funds with hold signals contrast significantly from one year ago when the Indicant was signaling hold for only twenty-one stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 50.6 weeks. They were up 63.1% (annualized at 64.8%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002.

This paragraph is a repeat from past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which are the most bullish years on the presidential election cycle, continues taking hold this year. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know.

As stated last week, last Friday marked the end of the third month of bullish behavior in the six-month period of bearish seasonality. There are now only three months remaining until bullish seasonality begins. As stated the past few weeks, there are several Quick-term attributes leaning toward bearish behavior. Keep your eye on the Quick-term Indicant and Short-term Indicant. There will be more about that later.

Stop Loss Management

Tighten your stop losses to 5% since this Quick-term Bull, as bearish seasonality appears to be gaining influence. It is just as important to contact your broker and enter stop losses as it is in buying and selling. Remember, it is sometimes the little things that one does that separates success from failure.

As stated the past few weeks, summer time doldrums are about to kick in. Now they are kicking in. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? So far, it appears to be the latter. The Quick-term Indicant does not care about magnitude. It only cares about direction. A bear is a bear whether it be a 0.5% drop or a 50% drop. Fortunetellers try to predict the magnitude. The Indicant is not a fortuneteller.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality.

Many stocks are setting on yellow, while some are up by double digit amounts. It is recommended you sell them when the Quick-term Indicant signals bear. It is unlikely they will not go down very much. Some will become volatile and drive you crazy. Some will go down quite a bit, while others will immediately bounce back to the north and continue their bullish pattern.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

In the past, we have included the stocks and funds with buy and sell signals in the preliminary report. To maintain appropriate security, you can now see the Mid-term Indicant "buy/sell" signals for stocks and funds by clicking the following link. It is in the member’s only section.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/Buy-Sell%20Summary%20This%20Week.htm

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 your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The eight major indexes are up an average of 17.4% since the Quick-term Bull signal on March 17, 2003. That annualizes to 45.9%, which is down from 61.2% six weeks ago when the summer time doldrums began their influence. The Dow30 is the weakest Quick-term Bull. It is up 12.4% since the QT Bull signal on March 17, 2003. The strongest bull remains the S&P600. It is up 24.3% since the Quick-term Bull signal on March 17, 2003. That annualizes to 64.0%, which is down from 80.7% reported on July 12, 2003.

None of the eight indexes is above the bullish red curve. They are below the bullish red curve by an average of 1.7%. There is now no solid buffer against a crash. The likelihood of an imminent crash is minimal at this time.

The eight major indexes are above the yellow curve by an average of 2.4%, which is down from 5.8% three weeks ago.

The current Quick-term Bull is well over four months old. At this time last year, the Quick-term Indicant Bear was down over 20% since the April 19, 2002 QT Bear signal. The NASDAQ100 was down over 50% since that QT Bear signal of April 19, 2002. The reverse condition so far in 2003 continues to prevail. The staying power of the current Quick-term Bull is impressive. It was never dynamic. It just consistently, almost lethargically, kept going up.

The Indicant did not believe the current Quick-term Bull would live to see August. Well, it has. As stated last week, if this Quick-term Bull lasts through August, then the likelihood of a deep and quick crash in September or October would not be surprising. However, and as usual, we will wait until the Quick-term Indicant signals bear. There is no need to forecast.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator continues to cool off. The NASDAQ’s Indicant Volume Indicator robust cycle that began with the current Quick-term Bull last March is the most robust cycles since the huge sell off in 2000 and around September 11, 2001. The increasing market during this robust cycle is a testament of the strength of this underlying bull. Many of the stocks you bought last October/November and again in March 2003 should continue maintaining hold positions throughout this year and next. Depending on the magnitude and duration of this bull, some of your stocks should enjoy some splits along the way and propel prices to new heights.

The sell signals and avoided stocks continue to increase, which is a testament to a tiring bull. It is okay for a bull to be tired so long as it does not perish. So far, it is still alive, but death is near.

The decreasing Indicant Volume Indicator is nothing more than a reflection of summer time doldrums and distractions. Industry and people take it easy in the summer time, which is also true for the stock market.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant Bulls are up by an average of 10.6%, which annualizes to 52.5%. That is down from the annualized gain of 99.5%, reported six weeks ago. As previously stated the current Short-term Bulls should be short-lived. The summer time doldrums will most likely convert them to bears in the near future. Remember; do not worry about a volatile Short-term Indicant over the next few months, as it will have difficulty escaping the ghosts of the dynamic and historic bear leg the past three years. However, the current duration of the current Short-term Bull is impressive.

The Dow’s Short-term Bull is up 7.5%, annualized at 37.4%, which is down from 94.6% reported six weeks ago. The NASDAQ’s Short-term Bull is up 13.8%, annualizing at 70.0%, which is down from 110.7% six weeks ago. As you can see, the summer-time doldrums continue to influence the market.

The Dow30 and NASDAQ Short-term Bulls are 73 and 72 days old, respectively. The average bull/bear cycle for the Dow30 and NASDAQ are 38 and 33 days, respectively. The longest NASDAQ Bear on record is 1,117 days, which lasted from March 31, 2000 through March 22, 2003. The longest Short-term Dow30 Bear lasted from October 18, 1929 to August 24, 1932 or 1041 days. Short-term Bull signals seldom last more than 120 days for either bull or bear market, but a few have lasted more than a year.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

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

A link to the NASDAQ’s Short-term Indicant table is as follows:

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

The major indexes are backing off from the breakout lines. However, the fact that they breeched to breakout lines for the first time since 1999 testifies to the legitimacy of the current bull market.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Force Vectors for the Volatility Index are moving robustly to the north. The Mid-term Indicant signaled bull for the Volatility Index. Those two combinations are signaling the current Quick-term Bull is nearing the end of its cycle. The Quick-term Vector Pressure still resides in Bearish domains, but nearing neutrality and appears on a course to bullishness. Remember, the Volatility Index is counter cyclical to the stock market.

Divergence versus Convergence

Only gold and precious metals are popular. All other sectors are lethargically drifting to the southeast.

This paragraph is unchanged from last week, since conditions are the same. Overall, many counter-cyclical indexes are moving in a synchronous direction, which is south-southeast on the charts. That is unusual. Big money is not interested in plowing cash into any sector at this time. The market is in a convergent pattern to the southeast for nearly all types of investments. So far, the movement to the southeast favors a gentle pattern as opposed to a sharp drop off the cliff. However, your hold positions are solid within the confines of impending buy/sell and bull/bear signals and the Quick-term Indicant’s bear signal.

Economic Outlook

We are making a few changes to the economic model. The following link was not updated last weekend. It will be updated next weekend.

http://www.indicant.net/Members/Updates/Economic/E01.htm

Commodity charts are on the following link.

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

Interest rate charts are on the following link.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is on the following link.

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty weeks ago, it was up 66.1% since that buy signal. Fifty-three weeks ago, it closed up 12.0% since that buy signal. Forty-four weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 59.9%, which is significantly higher than 47.1% reported two weeks ago. The current annualized growth rate is 35.8%, which is up from 28.8% reported two weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% fifty-eight weeks ago since the MTI buy signal in April 2001. Fifty-one weeks ago, it closed up 30.1%. Last week it closed up 62.7%, which is down from 67.9% last week. The current annualized growth rate since the April 13, 2001 buy signal is 26.9%, which is higher than 23.1% two weeks ago.

As you can see, Gold is on the rebound. It is due to money rotations from equities to precious metals.

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

Links to both of the above funds are as follows:

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

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

Fourteen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 18.8%, which is down from last weeks 24.8%. The annualized growth rate is 74.3%, which is up from 50.7% two weeks ago, but lower than 142.5% reported six weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

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

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

The Mid-term Indicant signaled bull for all eight major markets on March 22, 2003.

The eight indexes are up an average of 12.2% for an annualized gain of 33.3%, since the MTI Bull signals an average of 19.0 weeks ago. The annualized growth rate is down from 47.9% reported six weeks ago. This is down due to summer time doldrums.

The DJIA remains the weakest bull. It is up 7.4% since the MTI Bull signal on March 22. Last week it was up 9.0%. The NASDAQ Composite is the strongest Mid-term Bull. It is up 20.7% since the March 22 MT Bull signal. That annualizes to 77.0%, which is down from last weeks 80.9%. The Dow Utility Stocks was the strongest bull four weeks ago. It is now in the middle of the pack as traders have rotated their money out of that group of stocks after the euphoric rise due to capital gains tax hype. It is now up 11.4% (annualized at 42.3%) since the MTI Bull signal on March 22, 2003. The annualized rate for Dow Utilities is down from 68.8% reported four weeks ago.

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

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

Mid-term Indicant Positions - International Markets

There were no new bull signals and one new bear signal. The International community continues maintaining a bullish posture, but softening much like the U.S markets.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 45.7% since the Mid-term Indicant signaled bull an average of 37.0 weeks ago for an annualized gain of 64.2%, which is down from 72.9% reported six weeks ago. As you can see, the international bulls are also taking a breather.

The lone bear market was flat one week after receiving the Mid-term Indicant Bear signal.

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

©All material contained in this Web site is copyright protected. Any redistribution of any information in this Web site is expressly prohibited unless written authorization is granted by the publisher  of Indicant.Net.

Additional Hyperlinks - Just click on any of the below to get where you want to go.

Become a Member | DJIA History Since 1900 | Back Issues | Mutual Fund Listing | Contact Us | Historical Performance Metric | Performance Summary for Stocks and Funds | Current Performance Report Card | Sector Funds That Did Well in Bear Market of 2000-2001 | ETF Tour| Option Stalking |Stocks | Ezine | Stocks in Spotlight | Indicant Volume Indicator | Perspectives | Seasonality

- **** -    -*****-