August 2007 Indicant Weekly Stock Market Reports

August 26, 2007 Indicant Weekly Stock Market Report

Volume 08, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

The Bullish Bias Threatened – Part 5

Two weeks ago, several Quick-term Indicant attributes were no longer supporting the bullish bias. The market dropped significantly after the attribute shift from solid bullish support to minimal support. However, the market, as predicted, did not shift into deep and sustainable bearish behavior. The bull has since responded, albeit meekly.

Last week, several Quick-term Indicant attributes shifted back into bullish bias support mode. Unfortunately, that shift was and is not with convergent configurations. (You will later read that bullish convergence returned on a Mid-term Indicant basis). Several ETF’s retained Quick-term Indicant attributes with residual bearish support, while others are expressing bullish support. This divergent configuration suggests market indecisiveness, money rotation (sector positioning), and a potential inflection point.

Market indecisiveness occurs when Indicant attributes are not obviating the market’s directional intention. This is common when big-money traders shift their money from one sector to another sector in rapid fashion. That means they are having difficulty spotting microeconomic dynamics that influence financial gain in specific sectors. In essence, they have lost strategic direction and more or less panic into a flavor of the day mode. That suggests a lack of conviction in their models. Big money, when confused, influences fluttering and market divergence.

Market indecisiveness and sector rotation promulgate inflection points. An inflection point is when the underlying bias is about to shift cyclical or trend direction. The stock market’s underlying trend is bullish, but the cycle is bearish. The impending inflection point can influence future trend and certainly influence current cycle.

Inflection points can last for several weeks. This is especially true when big money traders are not coalescing their trading from strategic direction. When one is without strategic direction, they are subjected to emotional influence. The cold and calculating are usually victorious in any sort of exchange with one engaged in emotional trauma, so to speak.

The market’s near-term bearish cycle that began in late July invoked emotionalism. Although the fundamentals with sub-prime leading justified a perception of recessionary results, the market responded appropriately with a bearish onslaught to those weak fundamentals and a status quo Federal Reserve Board. However, that appropriate bearish response did not generate an excessive number of sell signals for healthy holdings. Sure, the bear attacked some “hold” positions, but many of them retained their double and triple digit growth performance since their buy signals.

The market is going to get jittery from time to time when confronted with economic and industrial stupidity. The market does not forgive upside thinking. It will react with solid bearish expressions every time. Sometimes this induces the stupid to straighten up and discontinue their stupidity. At other times, the stupid react too late and the bear’s tenacity continues its punishment to complete eradicate the stupid from participation.

Bearish spurts occur from time to time against an underlying bullish trends and cycles, just as bearish spurts occur from time to time against underlying bearish trends and cycles. The decision to participate is always a personal one; the Indicant attempts to differentiate spurts from trend/cyclical continuation when those spurts occur. It has done that successfully many times in the past. It identified bullish spurts in the face of the 2002-bear. It identified several fake Wall Street manipulations many times in the past.

The recent bearish spurt was anticipated by the Indicant and the use of a term, not preferred, had to be used. That unpleasant term was near-term, which identified the bearish spurt before it occurred in early August without the panic that is commonly associated with emotional reaction. Many hold signals were maintained, while the weaker configurations did endure sell signals.

Keep up with the Daily Stock Market Report, as weak Vector Pressure continues to threaten the underlying bullish bias.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

Although there were no sell signals, the Mid-term Indicant is avoiding 88-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 5.0% since the Mid-term Indicant signaled sell an average of 14.7-weeks ago.

There were 116-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 7.6% since their respective sell signals an average of 17.2-weeks earlier.

Two years ago, on Aug 26, 2005, the Mid-term Indicant was avoiding 90-stocks and funds that were down an average of 9.4% since their respective sell signals an average of 20.9-weeks earlier. Three years ago on Aug 27, 2004 there were 109-avoided stocks and funds. They were down by an average of 26.3% from their respective sell signals an average of 43.3-weeks earlier. On Aug 23, 2003, the Mid-term Indicant was avoiding only 36-stocks and funds out of 296-tracked at that time. They were down by an average of 8.4% since their sell signals an average of 9.8-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Aug 23, 2002, there were 69-avoided stocks and funds. They were down an average of 47.3% since their respective sell signals an average of 25.0-weeks earlier.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 257 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 145.5%. That annualizes to 62.2%. The Mid-term Indicant has been signaling hold for these 257-stocks and funds for an average of 121.7-weeks.

One year ago, on Aug 25, 2006, the Mid-term Indicant was holding 221-stocks and funds out of the 345 tracked for an average of 92.7-weeks. Those 221-stocks and funds were up by an average of 118.7% (annualized at 66.6%). The Mid-term Indicant was signaling hold for 225-stocks and funds of the 320-tracked two years ago on Aug 26, 2005. They were up by an average of 101.5% (annualized at 58.4%) since their respective buy signals an average of 90.3-weeks earlier. There were 176-stocks and funds with hold signals on Aug 27, 2004 since their buy signals an average of 59.7-weeks earlier. They were up by an average of 77.0% (annualized at 67.1%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Aug 23, 2003, the Mid-term Indicant was signaling hold for 231-stocks and funds out of 296-tracked. They were up by an average of 49.5% (annualized at 90.8%) since their buy signals an average of 28.3-weeks earlier. Five years ago, on Aug 23, 2002, there were 189-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 11.4% (annualized at 81.1%) since their respective buy signals an average of 7.3-weeks earlier.

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

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

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

All updated information can be found from a single page at Indicant.Net. Click the below link to that page. You will need your login ID and password.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is imbedded in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months.

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report. It is emailed each weekend, separately, so you can read it, either as a separate document, or in this document.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 83.6% since it secular low on October 9, 2002. The NASDAQ is up 131.3% and the S&P500 is up 90.5%. The small cap index, S&P600, is up 146.3%. The underlying bull that originated on October 9, 2002 remains a solid performer.

The NASDAQ is down 49.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 3.1% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but did not find comfort there. It has since pivoted back to the south off the new peak price. The Dow is up 14.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has had no timidity in roaming in the new peak area. The NASDAQ needs to climb another 95.5% to achieve a new record high.

The Dow is up 7.3% so far this year. The S&P500 is up 4.7% and the NASDAQ up 6.7%. At this time last year, the Dow was up 5.5%, with the S&P500 up 3.8% and the NASDAQ down 3.1%.

With the exception of 2003, the last presidential pre-election year, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 22.4%. It was down 29.2% through this week of 2002. It recovered with a gain of 32.2% by this weekend of 2003. It was again down 8.3% in 2004 on this weekend. At this time of year in 2005, it was down slightly by 2.1%. Last year at this time, it was again down 3.1%. This year, it is up 6.7%.

As you can see, the only years the NASDAQ has been up at this time of year has been the presidential pre-election years (2003 and 2007).

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 3.4% on this weekend in 2001. It was down more in 2002 by 11.5%, but with less severity than the NASDAQ’s 29.2% drop in 2002 on this weekend. In the last presidential election year of 2003, the NASDAQ’s 32.2% rise delivered more excitement than the Dow’s humble 12.1% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 3.2% as the market neared deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 2.2% for the year. On this weekend, the Dow was up 5.5% in 2006, which conflicted with historical standards and seasonal normalcy. So far, this year the Dow is up 7.3%, which is the second most bullish year-to-date performance this century. It is second only to the previous presidential election year of 2003.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 6.0%, while the NASDAQ is up 4.6% and the S&P500 is up by 2.9%. Even with recent bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality.

Where is the market headed for the remainder of this year? As stated the past several weeks, do not be surprised at meandering to bearish behavior for the next few weeks ahead of the heart and soul of bullish seasonality. The heart and soul of bullish seasonality can start within a few weeks, but configurations are suggesting late September or early October. The market still has to pass through deep bearish seasonality, which starts in a few days. Keep in mind, deep bearish seasonality did not inflict influence in 2006 and the last presidential pre-election year (2003). Please read on and keep up with the Daily Stock Market Report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Use a 10% trailing stop loss or the yellow or green values you will find on the tables for your longer-term hold positions. If your stock or fund is above the bearish 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 10% 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 10% trailing stop loss.

If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 20% 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 and excessive concerns about social issues. Those types are more interested in burning your money for their pleasures, as opposed to making you money. High performing companies remain focused on honoring the investments made by their shareholders.

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 with those “bearish” attributes. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. Use the Quick-term Indicant as a guide in your decision-making processes. If the stock price is falling in a Quick-term Bear market, it is not advisable to buy.

Do not short on stocks if they are up from an avoid signal. Stocks go up more often than they go down. Stocks have a tendency to march to their own drumbeat when rising. Some stocks rise and continue to rise in the most severe of bear markets. Short selling opens up an opportunity for the snakes on Wall Street to take everything you own. They can cause a stock to rise at their whim and without any regard to fundamental reason. It usually does not make sense to bet against the sweat and toil of hard-working people.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, they were included 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. The below table is public information and not updated on a frequent basis.

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The 3-Month T-Bill yield is plummeting. That is weakening the U.S. Dollar. The free markets loudly expressed displeasure at the Federal Reserve Board’s status quo policy with respect to interest rates. The Federal Reserve acquiesced and pumped more money.

The market can enjoy a bullish response to the Fed’s recent action of relaxing rates, but do not believe the market will keep a blind eye on commodity prices and other inflationary threats. A bullish stock market demands economic robustness, low interest rates, and low inflation. If anyone of those three dynamics gets out of line, the bear dominates and punishes for the irresponsibility that drives unfavorability in economy, borrowing cost, and inflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 322.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 50.0%. It moved to the north in 30 of the past 46-weeks. This fund was solidly bullish last week after five consecutive weeks of bearish behavior.

Fidelity Gold, Fund #28, is up 5.6% since the Mid-term Indicant signaled sell last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 274.6% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 53.9%.

Vanguard Energy #18, VGENX, is up 213.7% (annualized at 48.0%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 197.2% (annualized at 52.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 165.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 40.4%.

These energy related funds were solidly bullish last week.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times. Fundamentals appear to be shifting in favor of selling the above funds (09/10/06). Do not sell until the Mid-term Indicant signals sell. They continue to rebound and from time to time endure fluttering. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 52.0% since then. It is annualized at 24.9%. This ETF has been bearish in eight of the past fifteen weeks. It was solidly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 223.3% (annualized at 49.9%). This fund was also bullish last week.

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

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

All ten major indices are bulls. They are up by an average of 28.4% since the Mid-term Indicant signaled bull an average of 110-weeks ago. That annualizes to 13.5%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

Dynamic bullish statistics were also eliminated due to the Dow Transports bear signal and a new bull signal on January 19, 2007. The Dow Transports enjoyed a 23.1% gain from its March 21, 2003 bull signal until its bear signal on March 19, 2004. It fluttered with a new bull signal one week later on March 26, 2004 and enjoyed an 80.0%-gain until a new bear signal on December 22, 2006.

The Dow Utilities increased by 104.4% from its October 25, 2002 bull signal to the March 21, 2006 bear signal. After some fluttering, it received a new bull signal on June 2, 2006. Interestingly, the Dow Utilities was the best performing index since the October 25, 2002 Mid-term Indicant bullish bias shift. Utility stocks have been consistent high performers since the bull market’s birth on October 25, 2002.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $40,527,804.

That beats buy and hold performance of $2,045,028 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $191,008. That beats buy and hold’s $144,908 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $215,594. That beats buy and hold’s $89,344 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the MTI-RYS model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by nearly 2,000% over the past 100+ years.

Click here to go to the current Mid-term Indicant assessment of the ten major indices.

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

Divergence versus Convergence

After four of five weeks of bearish convergence, the market responded soundly with bullish convergence last week. That is a tremendous relief for those desiring a bullish stock market.

As stated for several weeks, the underlying bullish bias is maintained.

However, near-term bearishness remains threatening.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 29.5% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 362.2% (annualized at 22.8%) since the Long-term Indicant signaled bull 825-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.htm

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty; only one non-contrarian red bull is required for bullish support. The increase last Thursday by one more red bull prevents the bull from complete withdrawal.

Quick-term Yellow Bears: Four; non-bearish support barely continues.

Quick-term Non-Bearishness: Improving slightly to minimal non-bearish support.

Short-term Non-Bearishness: Continues supporting non-bearish behavior by an improved differential from the prior day.

Force Vectors: The mature cycle that started shifting north six trading days ago stifled immediate bearish ambition. The next cycle, which is imminent, should obviate the markets’ intentions.

Vector Pressure: Only one in bullish domains; threatening bullish bias. Bull/bear battles tend to rage with this configuration. This remains a threat on behalf of the bear.

Long-term Hold Positions: Safe, but no longer solidly safe.

Immediate Tactics: Preserve Cash/Discontinue writing covered call options at this time due to threat of increased volatility (and/or bullish bounce) with rising Force Vectors, even though peaking.

Current Quick-term Bias: Bullish, but in a battle with the bear.

Overall (Long-term) Market Status: Bullish bias prevailing, but weakening.

Profit Potential from Naked Options: Increasing volatility is favorable.

Volume: Configurations mixed.

Comment from August 22, 2007

Several ETF Force Vectors are configuring in support of the bull, while others remain configured in support of the bear. The divergence suggests an indecisive market. However, the near-term bearish configurations, although still threatening, are not as committed to bearish expressions as they were in late July and early August.

Quick-term/Short-term Indicant Stock Market Report Details

The Short-term Indicant signaled bear on July 26, 2007 for both the Dow and NASDAQ. They are down 0.7% and down 0.9%, respectively, since then.

Please read on. Click here to see the Short-term Indicant’s history.

The NYSE Indicant Volume Indicator’s has quickly shifted into a lethargic cycle, while the NASDAQ’s robustness appears to have peaked. Friday’s aggressive bullish expression was accompanied with light volume, suggesting limited conviction in that bullishness. As stated last Monday, configurations are shaping up to support market stability. As stated last Wednesday, other attributes are mixed with a few favoring increased bullish bias. Please read on.

SQI Report Card (Consolidated Short/Quick), Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 25-ETF’s. They are up by an average of 65.0% (annualized at 26.6%) since their respective buy signals an average of 125.8-weeks ago. Although there were no sell signals, the SQI is avoiding five ETF’s. They are up by an average of 1.6% since their sell signals an average of 5.4-weeks ago.

The SQI model is the one that most of you will prefer for your trading decisions. It generates fewer signals than the other two models and represents consistencies in the Quick-term and Short-term outlooks for the specific ETF’s. It also beats buy and hold on a regular basis, although there is only eight years of proof. The quality of that proof is high since this period includes a powerful bull and bear. The model sours a little during meandering markets with an excessive number of signals from time to time. Research toward perfecting continues.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 28-ETF’s. They are up an average of 70.4% (annualized 33.2%) since the STI signaled, buy, an average of 109.0-weeks ago. Although there were no sell signals, there are two avoid signals. They are down by an average 1.3% since their sell signals an average of 9.2-weeks ago.

The Short-term Indicant is more active in buying/selling than the Consolidated model. The Quick-term Indicant, which follows, is even more active.

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. In addition to the buy signals, the Quick-term Indicant is signaling hold for 17-ETF’s. They are up by an average of 20.4% (annualized at 24.3%) since the QTI signaled buy an average of 43.1-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 13-ETF’s. They are up by an average of 2.2% since their sell signals an average of 3.4-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are thirteen conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. Although less harmonious in support of directional intensity, the Quick-term bias shift on August 15, 2006 remains in favor of the bull. As stated, yesterday, the near-term bearish bias is stabilizing. Watch for jittery behavior on the near-term horizon. Please read on.

Quick-term Indicant Bull/Bear Health Report

Four of the 30-ETF’s are below their bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by 5.3%. The indices are departing from the threatening bearish yellow configuration. After an absence of non-bearish support, this is again configuring in support of the market’s non-bearish posture. This attribute is not configured with support for sustainable bearish behavior at this time and the threat is subsiding.

Two of the ETF’s are above their respective bullish red curves. The increase from one last Wednesday is encouraging to those desiring bullish behavior. All thirty ETF average positions are 2.6% below their bullish red curves, which continues to show minimal bullish support.

Short-term Indicant Bull/Bear Health Report for ETF’s

The above heading is linked to the Short-term Indicant table. This paragraph is repeated daily as a reminder of accurately interpreting the charts. By clicking the charts on the table you can review potential contact with the breakdown lines (bearish) and potential contact with breakout lines (bullish). It is extremely bearish when several ETF’s are contacting their respective breakdown lines. The breakdown lines are the yellow lines (bearish). The breakout lines are the red ones (bullish). Close proximity to breakout implies an increased probability of an actual breakout occurring. It is certainly bullish and you will want to be in a hold position for those few days a year when the breakout occurs. Conversely, significant contact with yellow (breakdown) suggests “avoid” positions are best.

None of the thirty ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact since August 2006 was solidly bullish. This repeated contact supported the underlying bullish bias until the recent dry-spell. Non-contact with the breakout lines the past 22-consecutive trading-days fueled bearish confidence, which was expressed, but without gaining complete dominance.

The average distance from breakout contact is 6.8%. This remains in support of the quick-term bullish bias. This attribute is gaining support for the bullish bias after about four weeks of non-bullish support.

None of the ETF’s are contacting breakdown lines, providing non-bearish support.

The average distance from the price and breakdown is 19.4%. This configuration provides non-bearish support, which has been the case since March 2003.

Breakout/breakdown differential point variance is 12.8%, which is improving in favor of the bull and maintaining your longer-term holdings.

ETF Force Vector Configurations

You can scan the Quick-term Indicant for Exchange Traded Funds table and click on the charts to observe Force Vector configurations. Scroll down each of the charts, where a quick link has been added to take you to the next series of Quick-term ETF charts. Use you back arrow on your browser to return to the previous page.

Thirty of the thirty ETF Force Vectors continue toward bullish domains. As stated last Wednesday, some of the Force Vectors are shaping with bullish configurations for the first time in a few weeks, which suggest an inflection point is imminent. That does not necessarily mean bullish dominance is about to resume, but encouraging nonetheless. Please read on.

Force Vector cycles are extremely fast, seldom lasting more than six days.

As stated in last Wednesday’s daily stock market report, Force Vectors appear to be peaking. Several ETF Force Vectors are configured with longer-term bullish support, but not all of them. Some are configured with bearish support on the immediate horizon. This conflict should add to market stabilization, which also invites fluttering (jittery) behavior. Please read on.

To understand potential financial opportunities, click here to learn to identify Robust Force Vectors. They are visible on the Quick-term Indicant charts.

ETF Force Vectors/Vector Pressure Crossings/Option Signals

Remember, the links contained herein are more visible when reading this on the website.

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today for the fourth consecutive day. Stalked put options have a high probability of success with peaking Force Vectors with limited bullish support from Vector Pressure. Friday’s aggressive bullish behavior may have facilitated trades at deeply discounted prices.

Only one ETF Vector Pressure remains in bullish domains. This is exceedingly low and not offering bullish support. This attribute is very near bearish support. Force Vectors haven risen the past few days while Vector Pressure held constant. There is little reason to expect bullish dominance with peaking Force Vectors and negative (bearish) Vector Pressure.

It is common for bull/bear battles when Vector Pressure is being threatened from its support of the prevailing bias. This should enhance volatility, which is favorable for naked option plays.

The bull would face a major defeat if all Vector Pressure falls into bearish domains. The recently rising Force Vectors should elevate more Vector Pressure in the next few days, providing relief to the bull. It is common for increased volatility around inflection points, where the bull and bear battle. Recent Force Vector movement is encouraging to those desiring bullish behavior since they should enhance the volume of Vector Pressure in bullish domains. If that happens, there may be some bearish spurts but no sustainable bearish behavior.

On the other hand, Force Vectors appear to be peaking. As earlier stated, that configuration, coupled with mostly negative Vector Pressure, is fueling an increased probability of bearish behavior. It is possible for Force Vectors to decline without dragging the market down. That combination of attributes favors, at worse, market stability.

Make certain you sell naked options when the Force Vectors shift direction or within two days of the purchase, whichever occurs first. If you are unfamiliar with this, take the options tour.

Remember options trading is risky. Never offer “market prices.” Always bid low in hopes of an intraday contrarian movement to the underlying assumption of directional behavior. Always place day-orders, only. That keeps the floor folks out of your pocketbook. Do not despair if your order does not take. There are plenty of opportunities throughout the course of the year. Remember, stalking is the key to success here. Although not necessary for stock market success, those of you who have a gambling instinct will enjoy this. For those of you with a longer-term perspective, it does not hurt to see what the short-term folks are thinking. The Indicant indicates both perspectives.

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias from early February 2006 until August 15, 2006. As stated the past several days, the Quick-term and Short-term Indicant models continue suggesting a bullish bias for longer term holdings. The micro-bearish spurt behavior in the face of the bullish bias remains threatening but several attributes are shifting their favor away from the bear, but not yet offering significant support to the bull. The market is wishy-washy, right now. Do not be surprised at fluttering behavior. If Force Vectors continue to rise, which is not likely, expect complete domination by the bull.

Vector Pressure is a major concern and that coupled with peaking Force Vectors suggests the market is battling through an inflection point. Inflection points occur when the market is directionally non-committal.

This paragraph is repeated from June 26, 2007 daily stock market report. Depth is a relative term. For those of you who bought several months ago, holding until bearish yellow is achieved will be accomplished with ease. For those of you who bought in the past few weeks may not prefer to wait for the victor of the bear/bull battle that typically occurs at the bearish yellow curve.

Message from August 21, 2007. It is recommended to discontinue writing covered call options due to rising Force Vectors. Although Vector Pressure supports that, the probability of increased market volatility warrants passivity.

The Quick-term Bull remains in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is not avoiding QQQQ, which does not support holding contrarian fund, ProFunds Ultra Short.

To familiarize yourself with viewing the market from an ETF perspective, click the following update links.

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

Consolidated Quick-term/Short-term Indicant for ETF’s

Click here to the report card, which is updated weekly, to link to related tours.

Links to the Short-term Indicant and Indicant Volume Indicator are below:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bullish convergence returned last week, after significant threats from bearish convergence in four of five weeks, preceding last week. This is significant and at worse, should stabilize the stock market. Last week’s bullishness should not be viewed as a bullish spurt against near-term bearishness

Force Vectors appear to be peaking, which could invite some bearishness, but their recent bullish cycle was robust. That suggests some bullish confidence.

Vector Pressure remains at its lowest in several months. This remains a concern. Rising Force Vectors should elevate Vector Pressure in the next day or two. This Quick-term Indicant attribute remains discerning to the underlying bullish bias. However, as long as one non-contrarian ETF remains a red-bull, sustainable bearish behavior is not possible.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/26/07

August 19, 2007 Indicant Weekly Stock Market Report

Volume 08, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Bullish Bias Threatened – Part 4

The remainder of this paragraph is repeated from last week’s report. Several Quick-term attributes are not supporting the Quick-term bullish bias. That contrasts to a similar bearish onslaught last March when red bulls maintained dominance and without yellow bears. None of the 30-ETF’s contacted their breakdown lines last March. There has been some recent contact with a few of them. Such contact increases the probability of bearish dominance.

Let us take a scientific view of the market. Eliminate any emotional bias you may have. Emotions, both positive and negative, mean nothing to the stock market. Your happiness or sadness is irrelevant to the stock market. Your emotions, both positive and negative, are counter productive when it comes to investing.

Before embarking on a scientific overview of the stock market, one must understand a few reality points. The stock market is driven by several factors; economy, corporate fundamentals, emotion, and some corruption.

What follows is not a complete scientific overview of the market. It addresses some pertinent elements that relate to some irrational commentary last week. Keep in mind that most journalists and press folks are not scientific. Most of them are out of their element when discussing the stock market. (I suspect most have journalism degrees where differential equations in not in the curriculum). Keep that in mind when the loud hype types are expressing themselves to the next commercial.

Secondly, recognize that management in any organization consists of dilettantes. They are fake; more than half lied on their resume to get the job they have. They submitted their resume to another “liar” who read it and hired them. Although not proven, many of you recognize those empty souls where you work and their absence of substance.

When an entire industry, such as the sub-prime lenders, gets into trouble, you are witnessing the dilettante influence. The dilettante never anticipates anything. They live in the “right now.” They quite often reason, “things are okay, right now.” They are incapable of anticipating what may go wrong. They merely react to what goes wrong when it goes wrong and their reaction is typically weak and non-substantive due to their inability to solve and prevent problems. That is because they are mere dilettantes. They have never done anything substantive in their working careers. Although many made good grades in school, all they have proven is an ability to recite what they have read or heard on examinations. That has nothing to do with problem solving and developing anticipatory skills. Those dilettantes are imbedded in some of the securities you own.

Former CEO of Intel, Andrew Grove, wrote an excellent book several years ago, entitled “Only the Paranoid Survive.” A minority of managers in large organizations are not dilettantes. Unfortunately, those with sophisticated political skills rise to the top of large organizations and many of them are dilettantes. They learned what was going on around them. They learn to elaborate, quite elegantly, about that and impress board types who know very little about the business and other dilettantes they work for. When it comes to making a difference in organizational results, they express their incapability, but sound good doing it. The real problem solvers are left in the organizational dungeons since they are “getting the job done” and most often go unrecognized by their corporate leaders.

Cost cutters are a classic example of dilettantes. Anyone can do that. It is easy. Just look at a process or organization and direct its elimination. Anyone who does that for a living should not be paid more than $50,000 per year. Unfortunately, those idiots are paid millions. So, there will be a few folks paid millions to cut costs in the sub-prime lending industry with their hand out to the government. Unfortunately, the damage was done by the dilettantes. Their ability to anticipate and tactically employ corrective actions is nil.

Relate this to your holdings with a clinical scientific perspective. This is not complicated science. It is simple. Click the following link.

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

Look at both charts. As you can see, the stock market seldom moves in a nice convenient direction to the northeast, as many would like. If it always did that, there would be no stock market, as it is. It would be like a bank, paying 2.0% interest. For those who cannot stomach the stock market for what it is should put their money in safe interest baring accounts.

The up/down movement is a scientific observation. In other words, it is a detection of what is real. That phenomenon will always exist for many reasons with the predominant emotional one.

Notice the NYSE on the top of the above link. Several weeks ago, this weekly report mentioned the upper band of the trading range was breeched. It was stated this is not an indicator of increasing bullish or bearish bias. It merely stated a new trading range may be developing. It was stated bearish influences would manifest if the perceived lower band of the trading range were breeched.

The older trading range remains constructed on the charts. As you can see, these two major indexes remain above the lower band of the old trading range after the bearish aggressions last week. You can also see that the NYSE got exceedingly close to the lower trading range before Friday’s bullish response.

There is no guarantee the stock market will crash if the older lower trading range limit is breeched. However, one should not remain blind to that, if it does happen. The bear will certainly be encouraged by breeching such an established trend. The bull may react to that, like it did last Friday when the NYSE was threatened with breeching. The Quick-term Indicant will identify if bullish responses are mere spurts or sustainable. As stated for several days in the daily stock market report, bullish expressions should be considered as bullish spurts in the face of near-term bearish bias, even though the underlying bullish bias is prevailing. In other words as long as the stock market remains in a northerly sloping trading range, the bias is bullish. But cyclical behavior will always exert supporting and contrarian movements. Few cycles cause a trend shift. It is the trend that identifies bias, while each cycle provides micro-bias.

Money is always flowing into the stock market. Investors who plowed money into the stock market four weeks ago are enduring negative emotions about that. On July 30, 2007, the daily stock market report added a heading, called “Immediate Tactic.” It said preserve cash. On August 3, 2007, the Daily Stock Market Report advised of shifting quick-term attributes favoring bearish behavior and recommended writing covered call options.

1991-investors with a long-term stock market interest are not concerned with this dip. They are up hundreds of percentage points. They slept through the October 1998 bear and did not flinch at the 2000-2002 Dow bear that lost 20%-age points. The mid-term investors, who for the most part bought on the March 2003 bull/buy signals, are also not concerned with recent bearish expressions. Their holdings are enjoying double and triple digit gains.

If you look at your April portfolio statements and compare them to today’s valuations you will find little difference. The Dow is where it was on April 30. May 1 is the first day of normal bearish seasonality. When the market is flat during normal bearish seasonality, one should not be too disappointed.

The bullish expressions in May and June catapulted your valuations to new highs with record setting achievements. Only the naïve expected May and June to continue on that northeasterly trek. If July and August did continue on that powerful bullish segment, the probability of deep bearish seasonality of wiping that out would be significant. Recent bearish expressions are not justification to suggest the bull is dead. It is not, even though the Daily Stock Market Report recommended cash preservation on July 30, 2007.

Okay, if you owned Home Depot at the end of April and still holding, you are disappointed that it is down more than the major indices. Certain sectors are getting hit worse than others. It is down 8.0% since the Mid-term Indicant signaled sell on August 3, 2007. The sub-prime dilettantes penetrate more than just their realm.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS02.htm#9

Look at the chart just to the left of Home Depot on above link. You will also notice that Boeing has also been victimized by recent bearish aggression. However, you should also notice that the 2003 buyer is not that concerned. It remains a bullish domains. The October 2003 buyer is up 167.7%. That buyer was up more than that a few weeks ago, but aware it is not always going to be constantly moving to the north. You will notice that Boeing dropped more precipitously in 2006 than what Home Depot dropped so far in this bearish cycle. Boeing’s drop was in bullish domains while Home Depot’s drop occurred from neutral domains. Underlying securities within bullish domains are above or very near bullish red curves. Neutral domains are between bullish red and bearish yellow.

Mutual funds sectored to the sub-prime fiasco are not immune to the bearish onslaught. As you can see, Fidelity’s Home Finance was victimized by overall bearish behavior and sectored targeting.

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF08.htm#45

You will notice it peaked in early 2005. It is down 15.9% since the Mid-term Indicant sell signal on January 26, 2007. This fund has been configured bearishly since early 2005, even though it expressed periodic bullish potential intermittently since early 2005.

Scrolling up, you will notice Fidelity’s Food and Agriculture has endured some minor recent bearishness, but from the relative safety offered by bullish domains. The holder of that fund is enjoying a modest 53.7% gain since the Mid-term Indicant signaled buy on August 30, 2003.

The Mid-term Indicant endures some scientific related constraints on funds. That is because classical funds do not allow excessive trading, as opposed to the freedom of trade in Exchange Traded Funds. You will notice the Quick-term Indicant started selling ETF’s in late June. On July 1, it was signaling hold for 28 out of 30. Red bulls had declined to 20 on that date, which still offered significant bullish bias. By July 26, red bulls became the minority and non-bearish support was reported as being threatened.

On August 9, 2007, the Quick-term red bull attributes stated this attribute no longer supported bullish bias. Since then, the bear has dominated the market with a mild interruption two weeks ago.

Now, let’s return to a broader perspective, which is where we started.

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

Keep your eye on the lower band of the older trading range limits. That is the blue line. This has been demonstrated as a floor to the more aggressive bearish expressions since 2004. If the market falls below this lower band of the trading range, even the longer-term and mid-term investor should consider selling. Notice the word, consider. It is possible for the market to pass through the lower trading range limit and then rebound. That depends on several other Quick-term attributes. Vector Pressure can rise during such a bearish expression. Force Vectors and Vector Pressure are eight dimensional algorithms and quite often recognize fake market behavior. Friday’s bullish bounce appears to be fake, as Force Vectors declined on that bounce. In other words, the near-term bias still favors the bear.

It is important to anticipate what you may or may not do before doing it. A professional golfer practices before playing and while playing thinks about what he is about to do before striking the ball. Weekend duffers are like the emotional-based stock market trader. They swing without proper preparation with random results. Without anticipation, your execution will most likely be emotionally-biased. That invites irrational perspectives and inconsistent results.

Keep your eye on the Daily Stock Market Report. It will keep you informed of the underlying bias relative to the near-term, quick-term, and short-term horizons. The near term only has a four to seven day horizon. The Quick-term Indicant is influenced by the age of the hold signal and its profit position in addition to Force Vectors and Vector Pressure. The Short-term Indicant is significantly more patient and seldom signals sell with a high double digit gain position. The combined Short-term and Quick-term Consolidate Indicant requires same signaling from both the Quick-term and Short-term models.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated one buy signal and six-sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding 82-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 7.3% since the Mid-term Indicant signaled sell an average of 14.5-weeks ago.

There were 124-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 6.2% since their respective sell signals an average of 16.0-weeks earlier.

Two years ago, on Aug 19, 2005, the Mid-term Indicant was avoiding 87-stocks and funds that were down an average of 8.3% since their respective sell signals an average of 20.6-weeks earlier. Three years ago on Aug 20, 2004 there were 120-avoided stocks and funds. They were down by an average of 26.3% from their respective sell signals an average of 42.2-weeks earlier. On Aug 16, 2003, the Mid-term Indicant was avoiding 60-stocks and funds out of 296-tracked at that time. They were down by an average of 7.1% since their sell signals an average of 8.6-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Aug 16, 2002, there were 102-avoided stocks and funds. They were down an average of 42.9% since their respective sell signals an average of 18.7-weeks earlier.

In addition to the buy signal, the Mid-term Indicant is signaling hold for 256 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 137.7%. That annualizes to 59.2%. The Mid-term Indicant has been signaling hold for these 256-stocks and funds for an average of 121.0-weeks.

One year ago, on Aug 18, 2006, the Mid-term Indicant was holding 175-stocks and funds out of the 345 tracked for an average of 113.9-weeks. Those 175-stocks and funds were up by an average of 149.1% (annualized at 68.1%). The Mid-term Indicant was signaling hold for 227-stocks and funds of the 320-tracked two years ago on Aug 19, 2005. They were up by an average of 102.3% (annualized at 58.7%) since their respective buy signals an average of 90.6-weeks earlier. There were 157-stocks and funds with hold signals on Aug 20, 2004 since their buy signals an average of 65.4-weeks earlier. They were up by an average of 83.0% (annualized at 66.0%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Aug 16, 2003, the Mid-term Indicant was signaling hold for 197-stocks and funds out of 296-tracked. They were up by an average of 52.6% (annualized at 88.2%) since their buy signals an average of 31.0-weeks earlier. Five years ago, on Aug 16, 2002, there were only 66-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 14.4% (annualized at 84.6%) since their respective buy signals an average of 8.9-weeks earlier.

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

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

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

All updated information can be found from a single page at Indicant.Net. Click the below link to that page. You will need your login ID and password.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 79.5% since it secular low on October 9, 2002. The NASDAQ is up 124.8% and S&P500 up 86.2%. The small cap index, S&P600, is up 141.5%. The underlying bull that originated on October 9, 2002 remains a solid performer.

The NASDAQ is down 50.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 5.3% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but did not find comfort there. It has since pivoted back to the south off the new peak price. The Dow is up 11.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has had no timidity in roaming around the new peak area. The NASDAQ needs to climb another 101.5% to achieve a new record high.

The Dow is up 4.9% so far this year. The S&P500 is up 1.9% and the NASDAQ up 3.7%. At this time last year, the Dow was up 5.8%, with the S&P500 up 3.9% and the NASDAQ down 2.2%. Even with recent bearish behavior, the major indices are performing slightly worse this year than last year. The market will never deliver a straight line to desired results.

With the exception of 2003, the last presidential pre-election year, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 24.4%. It was down a whopping 30.2% through this week of 2002. It recovered by 27.4% by this weekend of 2003. It was again down 10.4% in 2004 on this weekend. At this time of year in 2005, it was down slightly by 1.4%. Last year at this time, it was again down 2.2%. This year, it is up 3.7%.

As you can see, the only years the NASDAQ has been up at this time of year has been the presidential pre-election years (2003 and 2007).

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 5.1% on this weekend in 2001. It was down significantly in 2002 by 12.4%, but with less severity than the NASDAQ’s 30.2% drop in 2002 on this weekend. In the last presidential election year of 2003, the NASDAQ’s 27.4% rise delivered more excitement than the Dow’s humble 11.7% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 4.6% as the market neared deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 2.2% for the year. On this weekend, the Dow was up 5.5% in 2006, which conflicted with historical standards and seasonal normalcy. So far, this year the Dow is up 4.9%, which is the second most bullish year-to-date performance this century. It is second only to the previous presidential election year of 2003.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 3.6%, while the NASDAQ is up 1.7% and the S&P500 is up by 0.5%. Even with recent bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality.

Where is the market headed for the remainder of this year? As stated the past several weeks, do not be surprised at meandering to bearish behavior for the next few weeks ahead of the heart and soul of bullish seasonality. The heart and soul of bullish seasonality can start within a few weeks, but configurations are suggesting late September or early October. The market still has to pass through deep bearish seasonality, which starts in a few days. Please read on and keep up with the Daily Stock Market Report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The 3-Month T-Bill held flat last week, even though the Federal Reserve Board recognized their excessive focus on status quo and relaxed rates in the face of bearish expressions.

Commodity prices continued softening last week. As stated last week, that supports recessionary perceptions. Historical standards suggest that presidential pre-election years suggest recessions are not preferred in presidential pre-election years. The Federal Reserve Board reacted to recessionary threats with some gusto after aggressive bearish stock market behavior last week.

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

Overall, hard economic indicators are not performing to desired intentions for those who favor bullish stock market behavior. However, you can look forward to the heart and soul of bullish seasonality, which should start late third quarter or early fourth quarter this year. The bullish expression then should be dynamic, given bearish behavior the past few weeks.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 298.5% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 46.4%. It moved to the north in 29 of the past 45-weeks. This fund was solidly bearish last week. That is five consecutive weeks of bearish behavior.

The Mid-term Indicant signaled sell for Fidelity Gold, Fund #28, last week. This fund was bought on August 26, 2005 and sold this weekend for a pre-commission gain of 26.9%.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 262.8% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 51.8%.

Vanguard Energy #18, VGENX, is up 202.0% (annualized at 45.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 180.2% (annualized at 48.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 155.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.3%.

These energy related funds were solidly bearish last week.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 49.3% since then. It is annualized at 23.9%. This ETF has been bearish in eight of the past fourteen weeks. It was solidly bearish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 214.0% (annualized at 48.0%). This fund was also bearish last week.

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

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

All ten major indices are bulls. They are up by an average of 25.1% since the Mid-term Indicant signaled bull an average of 109-weeks ago. That annualizes to 12.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $39,619,819.

That beats buy and hold performance of $1,999,819 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $186,691. That beats buy and hold’s $141,634 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,598. That beats buy and hold’s $86,860 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

Click here to go to the current Mid-term Indicant assessment of the ten major indices.

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

Divergence versus Convergence

Bearish convergence returned last week. That is four weeks out of the last five weeks with bearish convergence. The model holds that four consecutive weeks of bearish convergence is predecessor to a sustainable bear. The prior week’s bullish divergence disrupted that configuration, but the intensity of these bearish convergent configurations should be considered in your anticipation of protecting your portfolio.

As stated last week, the underlying bullish bias is maintained even though the near-term outlook favors bearish influence.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 29.3% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 351.8% (annualized at 22.2%) since the Long-term Indicant signaled bull 824-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.htm

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: None of thirty; this attribute no longer supports bullish bias.

Quick-term Yellow Bears: Six; non-bearish support barely continues.

Quick-term Non-Bearishness: No longer configured in support of non-bearish expressions

Short-term Non-Bearishness: Continues supporting non-bearish behavior by a small differential.

Force Vectors: Southerly (bearish support) resumed on Friday, August 17, 2007.

Vector Pressure: Only two in bullish domains; threatening bullish bias. Bull/bear battles tend to rage with this configuration.

Long-term Hold Positions: Safe, but no longer solidly safe.

Immediate Tactics: Preserve Cash and Write Covered Call Options

Current Quick-term Bias: Bullish, but in a battle with the bear.

Overall (Long-term) Market Status: Bullish bias prevailing, but weakening.

Profit Potential from Naked Options: Increasing volatility is favorable.

Volume: Configurations mixed with a slight edge favoring bearish behavior.

Comment from August 3, 2007

As stated since late July 2007, several configurations shifted in favor of near-term bearishness even though the Quick-term bullish bias remains.

For the first time in over three years, the only red bulls on Friday August 3, 2007 were contrarian ones. Negative Vector Pressure, along with the absolute absence of strong non-contrarian bullish configurations, enhances bearish opportunities. That enhancement suggests an increased probability of sustainable bearish behavior.

The Quick-term bullish bias has not expired since the majority of the 30-ETF’s are not yellow bears, while the near-term suggests increasing bearish dominance.

Quick-term/Short-term Indicant Stock Market Report Details

The Short-term Indicant signaled bear on July 26, 2007 for both the Dow and NASDAQ. They are down 2.9% and down 3.6%, respectively, since then.

Please read on. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicator’s are nearing the completion of their respective robust cycles. However, as stated the past several days, the robustness favors bearish behavior.

Comment from August 16, 2007-Thursday Repeated: Bearish aggressions this week crashed below the newly forming floor of the lower trading limit last Wednesday. It is now obsolete as a floor. The new floor is yet to be determined. The old floor of the lower trading limit, which is still displayed on the charts, is the next major milestone. If the major indices fall below that floor, it is very likely the Quick-term Indicant will signal sell for your longer term holdings.

August 17, 2007 - Friday’s bullish expression was not accompanied with higher volume. It was significantly less than volume related to bearish aggressions the prior two days. This suggests Friday’s bullish response was orchestrated and/or emotionally based.

SQI Report Card (Consolidated Short/Quick), Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 26-ETF’s. They are up 60.2% (annualized at 24.1%) since their respective buy signals an average of 128.3-weeks ago. Although there were no sell signals, the SQI is avoiding four ETF’s. They are down by an average of 0.5% since their sell signals an average of 5.6-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 26-ETF’s. They are up an average of 71.0% (annualized 29.3%) since the STI signaled, buy, an average of 124.5-weeks ago. Although there were no sell signals, there are four avoid signals. They are down by an average 0.5% since their sell signals an average of 5.5-weeks ago.

The Short-term Indicant is more active in buying/selling than the Consolidated model. The Quick-term Indicant, which follows, is even more active.

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 13-ETF’s. They are up by an average of 21.1% (annualized at 19.6%) since the QTI signaled buy an average of 55.3-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 17-ETF’s. They are up by an average of 0.2% since their sell signals an average of 2.2-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are fifteen conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. Although less harmonious in support of directional intensity, the Quick-term bias shift on August 15, 2006 remains in favor of the bull. As stated, though the past few weeks, there is an increasing bearish bias on the immediate horizon.

Quick-term Indicant Bull/Bear Health Report

Six of the 30-ETF’s are below their bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by 1.8%. This is no longer configured in support of the market’s non-bearish posture. There is no longer minimal support for sustainable bearish assertions. However, this attribute is not configured with support for sustainable bearish behavior at this time, but the threat is increasing.

None of the ETF’s are above their respective bullish red curves. As originated last Friday, this configuration no longer supports underlying bullish bias. This bullish bias loss is most likely temporary, but as of this writing the red bull status is no longer supporting the underlying bullish bias. All thirty ETF average positions are 5.9% below their bullish red curves.

The next major Quick-term Indicant milestone is the population of yellow bears. If this becomes the majority, sustainable bearish behavior will become increasingly probable. Notice exactly one-half of the ETF’s are below bearish yellow.

Short-term Indicant Bull/Bear Health Report for ETF’s

None of the thirty ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact since August 2006 was solidly bullish. This repeated contact solidly supported the underlying bullish bias until the recent dry-spell started. Non-contact with the breakout lines the past 17-consecutive trading-days fuels bearish confidence.

As stated the past several days, the bear has the edge on the immediate horizon.

The average distance from breakout contact is 9.7%. This remains in support of the bullish bias, but weakening.

None of the ETF’s is contacting its breakdown line, providing some non-bearish support.

The average distance from the price and breakdown is 15.7%. This configuration provides non-bearish support, which has been the case since March 2003.

Breakout/breakdown differential are closing with a mere 4.0%-age point variance. Bearish ambition can accelerate if the breakdown differential exceeds the breakout differential.

As stated the past several days, consider bullish bounces as spurts against the near-term bearish bias.

ETF Force Vector Configurations

Only one of the thirty ETF Force Vectors continue toward bullish domains. As stated a few days ago, if they continue drifting south the next few days, the near-term contains a bearish advantage. The market responded with deep bearish aggressions earlier this past week. There was a slight shift to the north after Thursday’s close, but they again shifted south after Friday’s close. The bear again has an edge over the bull with this shift.

Force Vector cycles are extremely fast, seldom lasting more than six days. If this “bearish cycle” continues through the norm, expect bearish expressions throughout that cycle. Keep your eye on this attribute.

To understand potential financial opportunities, click here to learn to identify Robust Force Vectors. They are visible on the Quick-term Indicant charts.

ETF Force Vectors/Vector Pressure Crossings/Option Signals

Remember, the links contained herein are more visible when reading this on the website.

Click this sentence for Vector Pressure Option Signals. There was one call option buy signal after Friday’s close, following 15-put option buy signals from last Friday, August 9, through Wednesday night. The preferred intra-day contrarian movement against the underlying cycle on the day after the signal was not sufficient for the put option to transact into a buy. That contrarian movement facilitates your discounted offer price. Although aggressive bearish behavior was favorable for put options throughout this past week, the market did not provide the desired contrarian expressions to the underlying near-term bearish cycle.

Only two ETF Vector Pressures are in bullish domains. This is exceedingly low and not offering bullish support. As stated the past few days, the current configurations remain in support the Quick-term bullish bias shift from August 15, 2006, although favoring increasing bearish spurt activity against this underlying bullish bias. As stated the past several days, several Quick-term and Short-term attributes have weakened in favor of bearish behavior on the near-term horizon.

It is common for bull/bear battles when Vector Pressure is being threatened from its support of the prevailing bias. This should enhance volatility, which is favorable for naked option plays.

Make certain you sell naked options when the Force Vectors shift direction or within two days of the purchase, whichever occurs first. If you are unfamiliar with this, take the options tour.

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias from early February 2006 until August 15, 2006. As stated the past few days, the Quick-term and Short-term Indicant models continue suggesting a bullish bias for longer term holdings, even though a micro-bearish cycle (bearish spurt) is underway.

Writing covered call options from the August 3, 2007 signal to do so remains safe, but keep your eye on Force Vectors. If they shift back to the north in the next few days, discontinue writing covered call options.

Although there was a bullish bounce on Friday, August 17, 2007, it remains configured as a bullish spurt against near-term bearish bias.

The Quick-term Bull remains in tact.

To familiarize yourself with viewing the market from an ETF perspective, click the following update links.

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

Consolidated Quick-term/Short-term Indicant for ETF’s

Click here to the report card, which is updated weekly, to link to related tours.

Links to the Short-term Indicant and Indicant Volume Indicator are below:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bearish convergence has occurred in four of the past five weeks. There were not four consecutive weeks of bearish convergence, but four out of the last five weeks is somewhat ominous.

Force Vectors dipped back to the south on last Friday’s bullish aggressions, which suggests a near-term bearish bias. Keep in mind, the Force Vector cycles are fast with only a three to seven day cycle on average.

Vector Pressure is at its lowest in several months favoring bearish behavior on a near-term cycle.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/19/07

August 12, 2007 Indicant Weekly Stock Market Report

Volume 08, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Bullish Bias Threatened – Part 3

After three consecutive weeks of bearish convergence, the market rebounded last week. That configured with bullish divergence, which suggests the underlying bullish bias remains in tact. Those of you desiring bullish behavior are pleased with last week’s bullish divergence, even though the bullish bounce was mild and included significant volatility.

Although the market was volatile last week with significant bearish influence, the bull countered just enough to maintain its underlying dominance. The Mid-term Indicant did not generate any bear signals for the major indices. Unfortunately, the bullish bounce was extremely mild and without conviction.

The primary concern now is the configuration of Force Vectors. They shifted back to the north last week and helped the market fend off severe bearish influences. A similar configuration occurred last March. Rather than shifting back to the south last March, Force Vectors configured robustly to the north. That fueled additional bullish behavior and a continuation of the underlying bullish bias. Will this happen in the next few days?

Several Quick-term attributes are not supporting the Quick-term bullish bias. That contrasts to a similar bearish onslaught last March when red bulls maintained dominance and without yellow bears. None of the 30-ETF’s contacted their breakdown lines last March. There has been some recent contact with a few of them. Such contact increases the probability of bearish dominance.

Recent economic reports suggests the sub-prime debt and related problems should not produce significant economic impact if defaults accelerate, as expected. Keep in mind this is a presidential pre-election year, which is the most bullish on the four-year cycle. Corporate earnings continue to increase, which should offer Mid-term market bullishness. The problem is the Quick-term, Short-term and Near-term influences. Right now, the Near-term bias favors the bear.

The market has to endure deep bearish seasonality, which did not occur last year. That omission has a tendency to offer payback. So, do not be surprised at deep bearish seasonality's influence in a few days/weeks. However, the heart and soul of bullish seasonality is the immediate successor to the phenomenon of deep bearish seasonality. In this presidential post election year, do not be surprised if the heart and soul of bullish seasonality more than offsets the punishment dished out by the bear.

Keep your eye on Force Vectors and other Quick-term attributes. The daily stock market report will keep you posted.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

In addition to the sell signals, the Mid-term Indicant is avoiding 79-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 6.0% since the Mid-term Indicant signaled sell an average of 14.0-weeks ago.

There were 168-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 5.7% since their respective sell signals an average of 16.7-weeks earlier.

Two years ago, on Aug 12, 2005, the Mid-term Indicant was avoiding 86-stocks and funds that were down an average of 17.3% since their respective sell signals an average of 20.9-weeks earlier. Three years ago on Aug 13, 2004 there were 133-avoided stocks and funds. They were down by an average of 29.1% from their respective sell signals an average of 41.4-weeks earlier. On Aug 9, 2003, the Mid-term Indicant was avoiding only 33-stocks and funds out of 296-tracked at that time. They were down by an average of 11.0% since their sell signals an average of 15.0-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Aug 9, 2002, there were 168-avoided stocks and funds. They were down an average of 37.2% since their respective sell signals an average of 15.5-weeks earlier.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 262 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 139.4%. That annualizes to 60.8%. The Mid-term Indicant has been signaling hold for these 262-stocks and funds for an average of 119.2-weeks.

One year ago, on Aug 11, 2006, the Mid-term Indicant was holding 175-stocks and funds out of the 345 tracked for an average of 112.9-weeks. Those 175-stocks and funds were up by an average of 141.8% (annualized at 65.3%). The Mid-term Indicant was signaling hold for 230-stocks and funds of the 320-tracked two years ago on Aug 12, 2005. They were up by an average of 102.4% (annualized at 60.4%) since their respective buy signals an average of 88.2-weeks earlier. There were 155-stocks and funds with hold signals on Aug 13, 2004 since their buy signals an average of 65.1-weeks earlier. They were up by an average of 77.0% (annualized at 61.5%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Aug 9, 2003, the Mid-term Indicant was signaling hold for 199-stocks and funds out of 296-tracked. They were up by an average of 48.9% (annualized at 82.9%) since their buy signals an average of 30.6-weeks earlier. Five years ago, on Aug 9, 2002, there were only 51-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 26.7% (annualized at 71.0%) since their respective buy signals an average of 19.6-weeks earlier.

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

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

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

All updated information can be found from a single page at Indicant.Net. Click the below link to that page. You will need your login ID and password.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 81.7% since it secular low on October 9, 2002. The NASDAQ is up 128.4% and S&P500 up 87.1%. The small cap index, S&P600, is up 142.1%. So, the underlying bull that originated on October 9, 2002 remains as a solid performer.

The NASDAQ is down 49.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 4.8% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but did not find comfort there. It has since pivoted back to the south off the new peak price. The Dow is up 12.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has had no timidity is roaming in the new peak area. The NASDAQ needs to climb another 98.4% to achieve a new record high.

The Dow is up 6.2% so far this year. The S&P500 is up 2.5% and the NASDAQ up 5.4%. At this time last year, the Dow was up 3.8%, with the S&P500 up 1.9% and the NASDAQ down 6.1%. Even with recent bearish behavior, the major indices are performing better this year than last year. The market will never deliver a straight line to desired results.

With the exception of 2003, the last presidential pre-election year, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 20.8%. It was down a whopping 33.0% through this week of 2002. It recovered by 23.1% by this weekend of 2003. It was again down 9.7% in 2004 on this weekend. At this time of year in 2005, it was down slightly by 0.8%. Last year at this time, it was again down 6.1%. This year, it is up 5.0%.

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 3.4% on this weekend in 2001. It was down significantly in 2002 by 12.7%, but with less severity than the NASDAQ’s 33.0% drop in 2002 on this weekend. In the last presidential election year of 2003, the NASDAQ’s 23.1% rise delivered more excitement than the Dow’s humble 10.2% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 4.9% as the market neared deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 1.7% for the year. On this weekend, the Dow was up 3.8% in 2006, which conflicted with historical standards and seasonal normalcy. So far, this year the Dow is up 6.2%, which is the second most bullish year-to-date performance this century. It is second only to the previous presidential election year of 2003.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 4.9%, while the NASDAQ is up 3.3% and the S&P500 is up by 1.1%. Even with recent bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality.

Where is the market headed for the remainder of this year? As stated the past few weeks, do not be surprised at meandering to bearish behavior for the next few weeks ahead of the heart and soul of bullish seasonality. The heart and soul of bullish seasonality can start within a few weeks, but configurations are suggesting late September or early October. The market still has to pass through deep bearish seasonality, which starts in a few days. Please read on and keep up with the Daily Stock Market Report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The 3-Month T-Bill rebounded to the north last week succeeding two consecutive weeks of bearish behavior. Interest rates remain amazingly flat. The Fed is biased with status quo, while the stock market obviously supports a reduction in interest rates.

Commodity prices softened last week supporting recessionary perceptions. However, they continue hovering at or near new record highs. Even though a presidential pre-election year is not a favorite time to induce economic slowness, the Federal Reserve will bias in favor of fending off inflation. You saw that last week and the gap is growing between the free market’s views and policy makers.

As stated the past twelve weeks, the Fed is “maintaining” prevailing rates. The problem is a tough one. Rising capitalism should invoke rising productivity. Will this productivity potential offset the inflationary threats of rising commodity prices?

Oil prices plummeted the past few days, offering additional recessionary perceptions.

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

As stated the past three weeks, the CRB Bridge Futures is configuring similarly to oil. That configuration continues to threaten the bullish stock market bias. The Fed keeps a close eye on this barometer. Its chart is on the same link. Just scroll down a little to view it.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 325.2% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 50.7%. It moved to the north in 29 of the past 44-weeks. This fund was mildly bearish last week, after expressing solid bearishness in the previous three weeks. That is four consecutive weeks of bearish behavior.

Fidelity Gold, Fund #28, is up 42.2% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 21.3%. This fund was again slightly bullish last week. That is two consecutive weeks of bullish behavior, which is an inconsistent configuration with its cousin, Vanguard Gold and Precious Metals fund. Vanguard traditionally outperforms Fidelity, but that has not been the case the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 283.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 56.2%.

Vanguard Energy #18, VGENX, is up 210.3% (annualized at 47.7%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 191.2% (annualized at 51.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 163.3% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 40.4%.

These energy related funds were solidly bullish last week with the exception of State Street. That is a reversal from last week’s solid bearish expression for all these energy related funds.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 53.0% since then. It is annualized at 25.9%. This ETF has been bearish in seven of the past thirteen weeks. It was mildly bearish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 215.2% (annualized at 48.5%). This fund was also solidly bullish last week.

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

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

All ten major indices are bulls. They are up by an average of 26.8% since the Mid-term Indicant signaled bull an average of 108-weeks ago. That annualizes to 13.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $40,105,740.

That beats buy and hold performance of $2,024,231 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $187,685. That beats buy and hold’s $142,388 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $212,933. That beats buy and hold’s $88,242 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

Click here to go to the current Mid-term Indicant assessment of the ten major indices.

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

Divergence versus Convergence

After three consecutive weeks of bearish convergence, several indices rebounded last week. Remember, four consecutive weeks of bearish convergence is a typical predecessor to bearish sustainability. Last week was volatile with a slight bullish divergence configuration. That suggests a continuation of the underlying bullish bias even though the near-term outlook favors bearish influence.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 357.4% (annualized at 22.6%) since the Long-term Indicant signaled bull 823-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.htm

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: None of thirty; this attribute no longer supports bullish bias.

Quick-term Yellow Bears: Six; non-bearish support continues, but diminishing.

Short-term/Quick-term Non-Bearishness: Countering sustainable bearish ambition.

Force Vectors: Appears to have pinnacled and shifting back to the south favoring near-term bearishness.

Vector Pressure: Only five in bullish domains; threatening bullish bias.

Long-term Hold Positions: Safe, but no longer solidly safe.

Immediate Tactics: Preserve Cash and Write Covered Call Options

Current Quick-term Bias: Bullish, but in a battle with the bear.

Overall Market Status: Bullish bias prevailing, but weakening.

Profit Potential from Naked Options: Increasing volatility is favorable.

Volume: Configurations mixed with a slight edge favoring bearish behavior.

Comment from August 3, 2007

As stated last week (late July 2007), several configurations were shifting in favor of near-term bearishness even though the Quick-term bullish bias remains.

The Quick-term bullish bias has not expired since the majority of the 30-ETF’s are not yellow bears, while the near-term suggests increasing bearish dominance.

Quick-term/Short-term Indicant Stock Market Report Details

The Short-term Indicant signaled bear on July 26, 2007 for both the Dow and NASDAQ. They are down 1.7% and down 2.1%, respectively, since then.

Please read on. Click here to see the Short-term Indicant’s history.

The message is the same, as the past several days. Both Indicant Volume Indicator’s are configuring robustly, favoring near-term bearishness.

SQI Report Card (Consolidated Short/Quick), Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 26-ETF’s. They are up 64.7% (annualized at 25.2%) since their respective buy signals an average of 127.3-weeks ago. Although there were no sell signals, the SQI is avoiding four ETF’s. They are down by an average of 1.8% since their sell signals an average of 4.6-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 26-ETF’s. They are up an average of 76.5% (annualized 31.9%) since the STI signaled, buy, an average of 123.5-weeks ago. Although there were no sell signals, there are four avoid signals. They are down by an average 1.8% since their sell signals an average of 4.5-weeks ago.

The Short-term Indicant is more active in buying/selling than the Consolidated model. The Quick-term Indicant, which follows, is even more active.

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 19-ETF’s. They are up by an average of 21.8% (annualized at 21.0%) since the QTI signaled buy an average of 53.3-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding eleven ETF’s. They are down by an average of 0.8% since their sell signals an average of 2.2-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are nine conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. Although less harmonious in support of directional intensity, the Quick-term bias shift on August 15, 2006 remains in favor of the bull, while there is an increasing bearish bias on the immediate horizon.

Quick-term Indicant Bull/Bear Health Report

Six of the 30-ETF’s are below their bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by a mere 3.5%. This remains configured in support of the market’s non-bearish posture, but losing intensity for that support. There is no longer minimal support for sustainable bearish assertions. However, this attribute is not configured with support for sustainable bearish behavior at this time, but the threat is increasing.

None of the ETF’s are above their respective bullish red curves. This configuration no longer supports underlying bullish bias. This bullish bias loss is most likely temporary, but as of this writing the red bull status is no longer supporting the underlying bullish bias. All thirty ETF average positions are 4.5% below their bullish red curves.

The next major Quick-term Indicant milestone is the population of yellow bears. If this becomes the majority, sustainable bearish behavior will become increasingly probable.

Short-term Indicant Bull/Bear Health Report for ETF’s

None of the thirty ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact since August 2006 was solidly bullish. This repeated contact solidly supported the underlying bullish bias. Non-contact with the breakout lines the past thirteen consecutive trading-days fuels bearish confidence..

As stated the past several days, the bear has the edge on the immediate horizon.

The average distance from breakout contact is 8.3%. This remains in support of the bullish bias, but weakening.

None of the ETF’s are contacting their respective breakdown lines providing some non-bearish support.

The average distance from the price and breakdown remains a healthy 19.2%. This configuration provides non-bearish support, which has been the case since March 2003. Consider bullish bounces as spurts against the near-term bearish bias.

ETF Force Vector Configurations

Twenty-nine of the thirty ETF Force Vectors continue toward bullish domains. Force Vectors have been moving bullishly the past few days, but that cycle is mature. A shift back to the south would invigorate the bear to express yet more dominance. As stated last Wednesday, a reversal back to the south in the next day or two will trigger either non-bullish behavior or bearish behavior. You saw that with Thursday’s dynamic bearish expression. Also, as stated last Wednesday, if they drop and then pivot back to the north like last March’s configuration, then expect this bull to regain dominance. The edge right now favors the bear with the maturing of the current cycle.

To understand potential financial opportunities, click here to learn to identify Robust Force Vectors. They are visible on the Quick-term Indicant charts.

ETF Force Vectors/Vector Pressure Crossings/Option Signals

Remember, the links contained herein are more visible when reading this on the website.

Click this sentence for Vector Pressure Option Signals. There was one put option signal after Friday’s close. Last Wednesday’s bullish spurt performed nicely for last Tuesday’s put option buy signal. Dynamic bearish behavior Thursday produced a nice profit on that put option.

Friday’s market did not express the desired contrarian (bullish behavior) to depress the prices on Thursday’s seven put option signals. The late Friday bullish surge may have allowed some discounted offers to take. Unfortunately, the market finished with a bearish conclusion and thus elevated put option prices. Although the market behaved in accordance to the desired expectations of put option buyers with its bearish expression, it was not friendly to the discounted prices you offered. It is better to be patience and enjoy those few days a year where contrarian behavior allows discounted prices to be transacted from your stalked option candidates.

Only five ETF Vector Pressures are in bullish domains, which is a reduction by one from last Thursday. As stated the past few days, the current configurations remain in support the Quick-term bullish bias shift from August 15, 2006, although favoring increasing bearish spurt activity against this underlying bullish bias. As stated the past few days, several Quick-term and Short-term attributes have weakened in favor of bearish behavior on the near-term horizon.

It is common for bull/bear battles when Vector Pressure is being threatened from its support of the prevailing bias.

Make certain you sell naked options when the Force Vectors shift direction or within two days of the purchase, whichever occurs first. If you are unfamiliar with this, take the options tour.

Quick-term and Short-term Indicant Summary

Writing covered call options from the August 3, 2007 signal is again safe, but keep your eye on Force Vectors. If they shift back to the north in the next few days, discontinue writing covered call options.

The Quick-term Bull remains in tact.

To familiarize yourself with viewing the market from an ETF perspective, click the following update links.

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

Consolidated Quick-term/Short-term Indicant for ETF’s

Click here to the report card, which is updated weekly, to link to related tours.

Links to the Short-term Indicant and Indicant Volume Indicator are below:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bearish convergence did not occur last week, which suggests a continuation of the underlying bullish bias. Keep in mind the Quick-term Indicant suggests near-term bearishness on the immediate horizon. Much depends on Force Vector behavior, which has been rising. If it starts to turn south again, do not be surprised at bearish expressions on the immediate horizon. The Quick-term Indicant has very few attributes supporting bullish behavior on the immediate horizon.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/12/07

August 5, 2007 Indicant Weekly Stock Market Report

This Week’s Report

The Bullish Bias Threatened – Part 2

The stock market has now endured three consecutive weeks of bearish convergence. As stated the past few weeks, fundamental problems in the home mortgage industry are contributing to this bearish behavior.

Technically, we are within a few weeks of entering deep bearish seasonality, which is an annual phenomenon. The bearish period is the annual predecessor to the heart and soul of bullish seasonality. The market’s most aggressive bullish expressions typically occur from early autumn through late January. That phenomenon is due to the immediate predecessor’s deep bearish seasonality. In other words, the market moves dynamically to the north due, for the most part, to the deep bearish period that occurs immediately before. What goes down must come up; and that generally occurs sometimes during the fourth calendar quarter.

There are some fundamentals supporting seasonal normalcy this year. As earlier stated the sub-prime lending institutions are facing an uphill battle. With the so-called housing bubble, the stock market is sensing a reduction in cash flows to buy stocks. Those two dynamics are prime contributors to recent bearish expressions.

However, another economic fundamental is shaping up to support the heart and soul of bullish seasonality later this year. Rising unemployment is typically a bullish stimulant. The markets reason that the Federal Reserve will soften interest rates with a weakening economy. Southerly moving interest rates are the favorite fuel of bulls.

Unemployment was reported to have worsened last week. Rather than responding bullishly, the market continued its bearish behavior. The connection here is that the rising unemployed will default on their mortgages. The increasing supply of houses will dampen the pricing and thus the lending institutions may be faced with re-possessing negative home equities. That coupled with the perception of reduced cash infusions into the stock market is sound fundamental thinking in support of continuing bearish behavior.

On the other hand, corporate profits continue to increase. That is the second favorite fuel of the bull. As long as the general economy does not falter too deeply, corporate profits should not become an additional issue in support of the bear. However, if the unemployment continues to rise in the face of rising commodity prices and other inflationary elements, the stock market will most definitely turn deeply to the south.

The bull refuses to co-exist with inflation. It refuses to coexist with recessions. It refuses to coexist with deflation, which is has not been an issue since late 1999 and early 2000. It refuses to coexist with high interest rates. It refuses to coexist with declining corporate profits.

However, the bullish elements are rising corporate profits and rising unemployment. A soft economy with rising unemployment should support normalcy for the upcoming heart and soul of bullish seasonality in a few weeks. However, it may be necessary to first endure deep bearish seasonality, which is due to start in about two weeks.

Keep you eye on the daily stock market report, as the Quick-term Indicant and Short-term Indicant will detect major bias shifts.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated three buy signals and 20-sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding 59-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 11.5% since the Mid-term Indicant signaled sell an average of 17.7-weeks ago.

There were 165-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 4.7% since their respective sell signals an average of 15.9-weeks earlier.

Two years ago, on Aug 5, 2005, the Mid-term Indicant was avoiding 87-stocks and funds that were down an average of 17.2% since their respective sell signals an average of 19.9-weeks earlier. Three years ago on Aug 6, 2004 there were 130-avoided stocks and funds. They were down by an average of 27.8% from their respective sell signals an average of 40.5-weeks earlier. On Aug 2, 2003, the Mid-term Indicant was avoiding only 27-stocks and funds out of 296-tracked at that time. They were down by an average of 23.3% since their sell signals an average of 28.0-weeks earlier. Five years ago on Aug 2, 2002, there were 241-avoided stocks and funds. They were down an average of 32.0% since their respective sell signals an average of 9.3-weeks earlier.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 266 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 138.7%. That annualizes to 67.7%. The Mid-term Indicant has been signaling hold for these 266-stocks and funds for an average of 118.2-weeks.

One year ago, on Aug 4, 2006, the Mid-term Indicant was holding 173-stocks and funds out of the 345 tracked for an average of 114.8-weeks. Those 173-stocks and funds were up by an average of 149.5% (annualized at 67.7%). The Mid-term Indicant was signaling hold for 229-stocks and funds of the 320-tracked two years ago on Aug 5, 2005. They were up by an average of 102.6% (annualized at 60.2%) since their respective buy signals an average of 88.7-weeks earlier. There were 160-stocks and funds with hold signals on Aug 6, 2004 since their buy signals an average of 64.5-weeks earlier. They were up by an average of 75.8% (annualized at 61.1%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Aug 2, 2003, the Mid-term Indicant was signaling hold for 260-stocks and funds out of 296-tracked. They were up by an average of 44.8% (annualized at 85.9%) since their buy signals an average of 27.1-weeks earlier. Five years ago, on Aug 2, 2002, there were only 24-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 63.1% (annualized at 64.8%) since their respective buy signals an average of 50.6-weeks earlier.

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

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

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

All updated information can be found from a single page at Indicant.Net. Click the below link to that page. You will need your login ID and password.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 80.9% since its secular low on October 9, 2002. The NASDAQ is up 125.4% and S&P500 up 84.5%. The small cap index, S&P600, is up 134.5%. The NASDAQ is down 50.3% since it last weekly secular peak on March 9, 2000. The S&P500 is down 6.2% since it last weekly secular peak on March 23, 2000, while the Dow is up 12.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. The NASDAQ needs to climb another 101.0% to achieve a new record high.

The Dow is up 5.8% so far this year. The S&P500 is up 1.0% and the NASDAQ up 4.0%. At this time last year, the Dow was up 4.9% for 2006, with the S&P500 up 2.6% and the NASDAQ down 5.1%. Even with bearish behavior the past two weeks, the major indices are performing better this year than last year.

With the exception of 2003, the last presidential pre-election year, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 16.4%. It was down a whopping 36.0% through this week of 2002. It recovered by 28.5% by this weekend of 2003. It was again down 7.2% in 2004 on this weekend. At this time of year in 2005, it was up slightly by 1.9%. Last year at this time, it was again down 5.1%. This year, it is up 4.0%.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 4.4%, while the NASDAQ is up 1.9% and the S&P500 is down by 0.4%. Even with last week’s bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality.

Where is the market headed for the remainder of this year? Do not be surprised at meandering to bearish behavior for the next few weeks ahead of the heart and soul of bullish seasonality. The heart and soul of bullish seasonality can start within a few weeks, but configurations are suggesting late September or early October. Please read on and keep up with the Daily Stock Market Report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The 3-Month T-Bill has now moved south for two consecutive weeks. The six-month certificate of deposit moved into neutrality after being in stock market bearish domains for quite some time.

Unfortunately, commodity prices continue expressing new record highs. Even though a presidential pre-election year is not a favorite time to induce economic slowness, the Federal Reserve will bias in favor of fending off inflation.

As stated the past eleven weeks, the Fed is “maintaining” prevailing rates. The problem is a tough one. Commodity prices continue to rise and the inflation battle is underway. Rising capitalism should invoke rising productivity. Will this productivity potential offset the inflationary threats of rising commodity prices?

As stated the past five weeks, the oil’s bearish yellow curve has shifted back to the north. Although its recent northerly cycle has not produced the same dramatic bearishness of the 1970’s, it consumed bullish energy from the stock market. If it resumes another cyclical rise, the result should be unfavorable to the stock market bull. Two bad results will manifest. Either inflation becomes more than a nuisance or interest rates rise or both. The bull will be weakened in the event either unfolds. Click the below link to view the oil charts.

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

As stated the past two weeks, the CRB Bridge Futures is configuring similarly to oil. That configuration continues to threaten the bullish stock market bias. The Fed keeps a close eye on this barometer. Its chart is on the same link. Just scroll down a little to view it.

All in all, hard economic indicators are not performing to desired intentions for those who favor bullish stock market behavior. However, you can look forward to the heart and soul of bullish seasonality, which should start late third quarter or early fourth quarter this year.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 326.4% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 51.0%. It moved to the north in 29 of the past 43-weeks. This fund has been solidly bearish the last three weeks.

Fidelity Gold, Fund #28, is up 40.1% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 20.9%. This fund was slightly bullish last week after aggressive bearishness in the prior week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 287.6% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 57.1%.

Vanguard Energy #18, VGENX, is up 206.1% (annualized at 46.9%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 180.7% (annualized at 48.7%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 153.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.2%.

These energy related funds were solidly bearish last week, following bearishness in the previous week.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 53.6% since then. It is annualized at 26.4%. This ETF has been bearish in six of the past twelve weeks. It was mildly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 208.3% (annualized at 47.1%). This fund was also solidly bearish last week.

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

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

All ten major indices are bulls. They are up by an average of 24.9% since the Mid-term Indicant signaled bull an average of 107-weeks ago. That annualizes to 12.2%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $39,921,165.

That beats buy and hold performance of $2,015,463 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $185,028. That beats buy and hold’s $140,372 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $210,118. That beats buy and hold’s $87,075 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

Click here to go to the current Mid-term Indicant assessment of the ten major indices.

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

Divergence versus Convergence

Bearish convergence occurred for three consecutive weeks. Nearly all sectors moved bearishly to the south. As stated last week, this is somewhat ominous for the stock market. Four consecutive weeks of bearish convergence, quite often, is predecessor to dynamic bearish behavior. Keep your eye on the daily stock market report.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 26.2% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

Click here for Mid-term Indicant Table of Mutual Funds.

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 355.4% (annualized at 22.5%) since the Long-term Indicant signaled bull 822-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.htm

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty; this offers no support for bullish bias since both are contrarian funds.

Quick-term Yellow Bears: Ten; non-bearish support continues, but diminishing.

Short-term/Quick-term Non-Bearishness: Countering sustainable bearish ambition.

Force Vectors: Now shifting north, but from deep inside bearish domains. Although this should dampen bearish enthusiasm, bullish responses are vulnerable to bearish influence.

Vector Pressure: Nine in bullish domains; threatening bullish bias.

Long-term Hold Positions: Safe, but no longer solidly safe.

Immediate Tactics: Preserve Cash and Write Covered Call Options

Current Quick-term Bias: Bullish, but in a battle with the bear.

Overall Market Status: Bullish bias prevailing, but weakening.

Profit Potential from Naked Options: Increasing volatility is favorable.

Volume: Configurations mixed with a slight edge favor bearish behavior.

Comment from August 3, 2007

As stated last week (late July 2007), several configurations were shifting in favor of near-term bearishness even though the Quick-term bullish bias remained.

The Quick-term bullish bias has not expired since the majority of the 30-ETF’s are not yellow bears, while the near-term suggests increasing bearish dominance.

Quick-term/Short-term Indicant Stock Market Report Details

The Short-term Indicant signaled bear on July 26, 2007 for both the Dow and NASDAQ. They are down 2.2% and 3.4%, respectively since then.

Please read on. Click here to see the Short-term Indicant’s history.

This attribute is the same as the past three days. Both Indicant Volume Indicator’s are configuring robustly, which continues to support underlying bullish bias, while at the same time near-term bearishness is favored. Friday’s bearish aggression substantiated this prognosis. Please read on.

SQI Report Card (Consolidated Short/Quick), Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 26-ETF’s. They are up 63.1% (annualized at 25.7%) since their respective buy signals an average of 126.3-weeks ago. Although there were no sell signals, the SQI is avoiding four ETF’s. They are down an average of 3.6% since their sell signals an average of 3.6-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 26-ETF’s. They are up an average of 74.9% (annualized 31.5%) since the STI signaled, buy, an average of 122.5-weeks ago. Although there were no sell signals, there are four avoid signals. They are down 3.6% since their sell signals an average of 3.6-weeks ago.

The Short-term Indicant is more active in buying/selling than the Consolidated model. The Quick-term Indicant, which follows, is even more active.

Quick-term Report Card, Status, and Charts

There were no buy signals and one sell signal. Although there were no buy signals, the Quick-term Indicant is signaling hold for 20-ETF’s. They are up by an average of 20.5% (annualized at 19.3%) since the QTI signaled buy an average of 54.6-weeks ago. In addition to the sell signal, the Quick-term Indicant is avoiding nine ETF’s. They are down by an average of 3.9% since their sell signals an average of 2.9-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are six conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. Although weakened recently, the bias shift on August 15, 2006 remains in favor of the bull.

Quick-term Indicant Bull/Bear Health Report

Ten of the 30-ETF’s are below their bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by 2.3%. This remains configured in support of the market’s non-bearish posture. There is no longer minimal support for sustainable bearish assertions. However, this attribute is not configured with support for sustainable bearish behavior at this time, but the threat is increasing.

Only two ETF’s are above their respective bullish red curves. That is the lowest number of red bulls since mid-2004. This configuration supports the underlying bullish bias, although weakened. All thirty ETF average positions are 5.5% below their bullish red curves.

The two red bulls are contrarian ETF’s. There are no non-contrarian red bulls, leaving the bull severely weakened.

The next major Quick-term Indicant milestone is the population of yellow bears. If this becomes the majority sustainable bearish behavior will become increasingly probable.

Short-term Indicant Bull/Bear Health Report for ETF’s

None of the thirty ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact since last August is solidly bullish. This repeated contact solidly supports the underlying bullish bias. Contact in sixty of the last eighty-five trading days remains supportive of bullish bias. Non-contact with the breakout lines the past eight trading-days provides increasing bearish confidence..

As stated the past few days, the bear has the edge on the immediate horizon.

The average distance from breakout contact is 9.5%. This remains in support of the bullish bias.

Two of the ETF’s are contacting their respective breakdown lines. That is the first time in over two years with two making breakdown contact.

The average distance from the price and breakdown remains a healthy 17.7%. This configuration provides non-bearish support, which has been the case since March 2003. Consider bullish bounces as spurts against the near-term bearish bias.

ETF Force Vector Configurations

Twenty-one of the thirty ETF Force Vectors continue toward bullish domains. As stated eleven trading days ago, Force Vectors are now decreasing, which suggests a pause in bullish expressions. The bearish Force Vector cycle has now matured and has begun a cycle to the north, which should dampen bearish enthusiasm, but not eliminate it. Most of these Force Vectors are deep into bearish domains, making them vulnerable to bearish influence. Even with the current configuration, the underlying bias remains bullish. However, do not be surprised at bearish expressions on the immediate horizon. Bullish bounces should be considered as a bullish spurt in the face of near-term bearish dominance.

Force Vectors moved back to the north on Friday, but that movement is nearly irrelevant due to the depth of their position and the robustness of their recent bearish cycle.

To understand potential financial opportunities, click here to learn to identify Robust Force Vectors. They are visible on the Quick-term Indicant charts.

ETF Force Vectors/Vector Pressure Crossings/Option Signals

Remember, the links contained herein are more visible when reading this on the website.

Click this sentence for Vector Pressure Option Signals. There was one put option buy signal. Last Wednesday’s put option buy signals should have yielded you tremendous profits on Thursday’s mild bullish expression, followed with Friday’s aggressive bearish expression. That was the perfect configuration for making money in options.

As stated the past several days, with Force Vectors and Vector Pressure moving south, consider bullish expressions as bullish spurts against a micro-bearish bias. As stated early last week, Force Vectors are moving robustly to the south favoring a bearish bias on a near term basis. Plummeting Force Vectors appear to be reversing the bearish cycle. If the newly evolving cycle to the north does not cross into bullish domains, expect bearish dominance to resume. Although the theme continues with a bullish bias, there is no conflict. Long-term hold positions should be maintained while new money should remain in cash.

Only nine ETF Vector Pressures are in bullish domains. As stated the past few days, the current configurations remain in support the Quick-term bullish bias shift from August 15, 2006, although favoring increasing bearish spurt activity. As stated the past few days, several Quick-term and Short-term attributes have weakened in favor of bearish behavior.

It is common for bull/bear battles when Vector Pressure is being threatened from its support of the prevailing bias.

Make certain you sell naked options when the Force Vectors shift direction or within two days of the purchase, whichever occurs first. If you are unfamiliar with this, take the options tour.

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias from early February 2006 until August 15, 2006. The Quick-term and Short-term Indicant models continue suggesting a bullish bias for longer term holdings, even though a micro-bearish cycle is underway at this time.

It is okay to write covered call options at this time since Vector Pressure is waning with the absence of Red Bulls.

The Quick-term Bull remains in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is no longer avoiding QQQQ, which no longer supports holding contrarian fund, ProFunds Ultra Short.

To familiarize yourself with viewing the market from an ETF perspective, click the following update links.

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

Consolidated Quick-term/Short-term Indicant for ETF’s

Click here to the report card, which is updated weekly, to link to related tours.

Links to the Short-term Indicant and Indicant Volume Indicator are below:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

The market’s bearish behavior last week is most likely unsettling for quite a few of you. Some are asking, is this another bearish spurt or is this the beginning of a sustainable bearish cycle? The Quick-term Indicant remains configured with bullish attributes, although they are weakened.

Vector Pressure continues to support the bullish bias. It has been doing that since August 15, 2006. However, Vector Pressure is down quite a bit. Force Vectors have shifted robustly in favor of bearish support.

There are only 9-Red Bulls on a Quick-term basis, while there are seven ETF’s below the bearish yellow curve.

The Short-term Indicant signaled bear last week. This could be a sustainable bear until late September/early October.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/05/07