Aug 30, 2009 Indicant Weekly Stock Market Report

Volume 8, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report 

Economic Overhead Continues to Threaten the Bull

What do Henry Ford, Walter P. Chrysler, Bill Gates, Harvey Firestone, Thomas Edison, Michael Dell, Earl P. Halliburton, K.T. Norris, Larry Ellison, just to name a few, have in common? None graduated from college and they produced physical objects. The absence of a college degree of those great individuals did not prevent them from creating vast wealth. Pick any one of the aforementioned names. Just one! That one individual created more economic wealth than all the presidents, all members of Congress, and all government departments, combined, since the creation of the U.S. Constitution. Ironically, the U.S. Constitution facilitated those individuals to create the wealth from their efforts.

Not too many people know K.T. Norris. He started his business is Vernon, California in the early 1920’s building frying pans for the Boy Scouts of America. His business evolved into the manufacturing of large projectiles, such as the M483 and M509. By the early 1970’s Norris Industries manufactured the steel casing for the Multiple Launch Rocket System in addition to other military products. There are thousands of K.T. Norris types, who contributed significantly to military victories in the past.

The U.S. has been on the winning side of wars due to the productive efforts of the K.T. Norris types. Those who can produce the most number of weapons with the most destructive efficiency to their enemies win wars. Everyone living today should recognize their freedom is a function of the hard working efforts of the likes of K.T. Norris in addition to the soldiers on the battlefields who used those weapons.

The tolerance level on projectile dimensions is less than one-ten-thousandths of an inch and even tighter for more advanced products. It takes tremendous talent to achieve such precision. The copper band welds on the aforementioned projectiles from Norris Industries must be accomplished in the manufacturing process in such a way that the copper does not impregnate the alloy strips that it connects. If impregnation occurs, the product fails, quite often, exploding in the cannon’s chamber and killing all that are nearby. Precision and undeniable objective conclusions regarding product merit leave no room for argument. Either it works or it does not. It is very clear. Legislation in Congress is seldom clear.

Manufacturing abilities in any culture is the main ingredient to the survivability of that culture. It, along with extraction and agriculture, are the prime sources of wealth creation. All three of those activities lead to inarguable results as to the merit of their output.

One can read or hear two or more economists argue a single point. The thesis argument may be the correct one. The antithesis argument could be the correct one. Neither argument could be the correct one. The arguments are endless and with little meaning. There were many successful economies before there were economists.

Over the years, General Motors produced automobiles. So did Toyota. More and more people bought Toyotas, while fewer and fewer bought GM products in the last forty years. Product reliability between those two organizations was without argument. Toyota produced higher quality and thus won the market share wars in addition to making more money. The results of effort are undeniable. Arguments as to which is the better organization should not exist. The better is obvious.

People who argue abstract points, such as economists, are members of the economic overhead group. Economists are not the only members of this group. Anyone who is not engaged in manufacturing, agriculture, or extraction is in the economic overhead group. They are the ones who should pay all the taxes as they benefit only from money rotation. None creates wealth.

The most destructive members of the economic overhead group are politicians, royalty, and dictators. These folks live their lives two ways; controlling others and arguing issues where it is impossible to objectively conclude the winners of such arguments, quite unlike the arguments between General Motors and Toyota. Winners of abstract concepts in democracies are those who garnish the most votes. When the majority of a democracy are not well informed, they tend to vote for the loudest candidate, regardless of the abstract merits promoted by the candidate.

Economic overhead types of people prefer not being held to the tight standards of copper bands not impregnating alloy materials. They like the idea of never being proven wrong. That allows them to make plenty of noise, which facilitates additional noise by the lower IQ types with liberal arts backgrounds in the media industry.

Most of economic overhead members’ arguments are eventually proven wrong long after their death. It does not matter which argument it was; the thesis or antithesis one. They are both valueless, but that does not prevent the jibber-jabber. The noise level is increasing in spite of the absurdity of their proclamations. A noise level of chaos, bitterness, and disagreement when Congress reconvenes should be bullish. If the tone is one of solitude and agreement, the market should be bearish.

Lawyers argue cases in front of judges and/or juries. The verdict is eventually derived, but there is no clear and objective conclusion if the verdict was accurate or inaccurate. Lawyers and judges are in the economic overhead group. Wrong and right are seldom “really known.”

Bankers are also in the economic overhead group. Large bankers in the Northeast U.S. demonstrated their inaccuracies and related incompetence in recent years. The evidence became very clear last year, long after they started their incompetent spiral. Many of those bankers who started the nonsensical behavior are now retired or dead, but their offspring carried their torch of stupidity.

Allies are needed once exposure of incompetence is identified and made clear to large groups of people. Bankers’ allies are politicians. After all, the comfort they find in the Hamptons is now being threatened and with that allied help is needed. Politicians also feel threatened. They bank on enough idiots to vote for them if they can garnish enough campaign funds and start “duping” their constituents by bombarding their consciousness with “vote for me” ads. Now, bankers receive bonuses, authorized by Congress, and some of that bonus money will plow right back into the hands of the Congress. The parasitical elites are rotating money that neither the politicians nor bankers earned.

Recently, there have been two abstract arguments regarding healthcare. The thesis argument is to allow the U.S. government more control over healthcare. The antithesis argument is that the U.S. government has proven to be a poor manager of anything. Of course, as always, when the thesis and antithesis are strong in position, a synthesis unfolds. The thesis argument gains when this occurs, while the antithesis simply slows down the momentum of the thesis. Rest assured, the antithesis does not kill it. This synthesizing is a form of devolution. What works for 150-million Americans does not work for 45-million Americans. The thesis suggests the 45-million need help. The antithesis argues the 150-million will lose their coverage in due time. Rest assured, elements of the thesis will start the process of degradation for all. Legislated devolution continues its wealth destruction even if the antithesis arguments prevail.

Cap and Trade is not garnishing as much antithesis argument as healthcare reform. That is too bad. Its passage will diminish what little manufacturing and extraction remains in the U.S. Foreign markets may do fine, but rest assured that profits garnished in the U.S. will diminish due to the politically induced chaos that Cap and Trade will cause. Global warming is an abstract concept, but corporate profitability or lack thereof will become noticeable by the reduction in the volume of physical objects the populace will be able to acquire. Increasing membership in the economic overhead group will cause that phenomenon. Inflation will follow. That will delight the bear.

Keep in mind there is no grand plot or conspiracy theory. Such an abstract assumes a high degree of intelligence and organization. That does not exist. The problem is that those who choose political careers take no personal financial risk in their decisions. Most are simple control freaks who think the rest of the world is a bunch of idiots needing their guidance.

The U.S. stock market will become profoundly bullish when and if incumbent politicians are never reelected. Until then, do not be surprised at an increased depth and breadth of bear markets for those sectors that rely on profits in the U.S. Politicians and their puppets in the media are making too much noise and that noise dupes the majority. That will lead to bearishness.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

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

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

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

In addition to the buy signals, the Mid-term Indicant is signaling hold for 137 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 22.6%. That annualizes to 60.1%. The Mid-term Indicant has been signaling hold for these 137-stocks and funds for an average of 19.5-weeks. The reason the statistics are quite a bit different is due to recent buy signals. Some are up by scant amounts since they have been held for only a few weeks and a few are down.

In addition to the sell signal, the Mid-term Indicant is avoiding 173-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 35.4% since the Mid-term Indicant signaled sell an average of 67.7-weeks ago.

Stocks and funds no longer traded are identified with the letters, NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

Dilettante run companies, such as GM, Eastman, and others will continue to be tracked as long as they are traded. We will move them from their former classifications, such as the Dow30, NAS100, etc., to the Indicant Select Stocks category. In a few instances, where there is little hope for a company to rebound, we will simply remove them from our tracking. This is difficult to do, as companies nearing the end, from time to time, are fortunate enough to hire a talented manager. Although rare, it does happen, and when it does, you would want to know about it. It is a lot easier fixing an existing company than starting one from scratch.

Unfortunately, highly talented managers are generally unemployable by existing companies. If existing companies were more efficient at firing dilettantes, who are despised by the talented, then they would have a better chance at attracting talent.

One year ago, on August 29, 2008, the Mid-term Indicant was holding 170-stocks and funds out of the 345 tracked for an average of 98.0-weeks. They were up by an average of 123.0% (annualized at 65.2%). There were 168-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 16.7% since their respective sell signals an average of 31.7-weeks earlier.

The Mid-term Indicant was signaling hold for 256-stocks and funds of the 345-tracked two years ago on Aug 31, 2007. They were up by an average of 146.6% (annualized at 62.0%) since their respective buy signals an average of 122.9-weeks earlier. The Mid-term Indicant was avoiding 87-stocks and funds at that time. They were down an average of 5.6% since their respective sell signals an average of 15.8-weeks earlier.

There were 221-stocks and funds with hold signals on Aug 25, 2006 since their buy signals an average of 92.7-weeks earlier. They were up by an average of 118.7% (annualized at 66.6%). There were 116-avoided stocks and funds at that time. They were down by an average of 7.6% from their respective sell signals an average of 17.2-weeks earlier.

On Aug 26, 2005, the Mid-term Indicant was signaling hold for 225-stocks and funds out of 320-tracked. They were up by an average of 101.5% (annualized at 58.4%) since their buy signals an average of 90.3-weeks earlier. The Mid-term Indicant was avoiding 90-stocks and funds at that time. They were down by an average of 9.4% since their sell signals an average of 20.9-weeks earlier.

Five years ago, on Aug 27, 2004, there were 176-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 67.1% (annualized at 67.1%) since their respective buy signals an average of 59.7-weeks earlier. There were 109-avoided stocks and funds then. They were down an average of 26.3% since their respective sell signals an average of 43.3-weeks earlier.

On Aug 30, 2003, there were 259-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 48.2%, annualizing at 92.4%, since the buy signals an average of 27.1-weeks earlier. There were 29-avoided stocks and funds then. They were down by an average of 8.3% since their sell signals an average of 10.5-weeks earlier.

On Aug 30, 2002, there were 215-stocks and funds with hold signals. They were up 6.3%, since their buy signals 7.1-weeks earlier. They were annualizing at 45.7%. The 69-avoided stocks and funds were down an average of 47.9% since their respective sell signals an average of 25.0-weeks earlier.

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

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

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity. The key is to differentiate indecisiveness from impending bearish aggression. That is difficult to do.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

Many stocks and funds are very near the Mid-term Indicant’s bearish yellow curve. Several more are on the verge of receiving buy signals. The problem confronting those buy signals is a shortage of bullish synergy on a Mid-term Indicant basis. The primary depressants to the desired synergy are strong seasonal forces of a bearish nature and the impending return of Congress. If Congressional sessions demonstrate political disarray, confusion, and more or less a do-nothing government, bullish synergy will form. If that occurs, there will be a tremendous surge in buy signals in anticipation of continued bullish behavior. If anti-business legislative activity is accelerated, the bear will be delighted.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 31.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 82.1% and the S&P500 is up 32.5% since then. The small cap index, S&P600, is up 79.6% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics support 100% accuracy in the Reverse Tangential Projections will occur at some future point.

The Dow is down 32.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 29.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 31.1% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few weeks. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

However, if inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return to previous levels. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction. Wealth must be produced; not taken.

The NASDAQ is down 59.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 32.6% since its similar secular peak on March 23, 2000. The Dow is down by 18.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will continue reducing U.S. political power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 8.7% so far this year. The NASDAQ is up 28.6% and the S&P500 is up by 13.9%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time.

The NASDAQ year-to-date performance was bearish by 24.5% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 32.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 34.8%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 7.1% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.  It was down by 2.5% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 2.0% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 3.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 9.1% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year.

Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at what appears to be a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market at this time.

As stated nine weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. As anticipated, they softened the past two weeks.

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projected declining demand. Although oil prices have been erratic with mild bullish bias the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations.

A few weeks ago, commodities elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment.

Although the Near-term Indicant is observing some concerns regarding gold, it remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. That would signal expectations in deflation and related economic decline. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 48-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists and communists. If they back down and join the evil ones, then the paragraphs remain in tact.

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

As stated 44-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is two-thirds complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated in early September.

As stated last week, on a positive note, it appears enough of the populace are influencing their political representatives to put an end to the stupidity. If this happens, then bearish expectations of great magnitude will be muted.

The bear has been too passive. The bull has expressed behavior that correlates with the declining popularity of President Barack Obama. The market is sensing an increasing possibility that social programs will be delayed. That is bullish in the capital markets.

Rising Near-term Indicant Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 8.1% since that sell signal. It has been bearish in 17-of the last 34-weeks. It has been bullish in twelve of the last 20-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Fidelity Gold, Fund #28 received a sell signal on July 10, 2009 after disappointing from the previous buy signal in May 2009. Although gold prices should continue to increase, risks of continued holding of this fund are currently too great. Fidelity Gold has been inconsistent for several years now. Fidelity has been the target of lawsuits in recent years causing erratic price movement behavior.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 2.2%, annualizing at 28.2% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 17.9% since that sell signal. It has been bullish in 17-of the last 25-weeks, but also bearish in seven of the last 11-weeks.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 34.7% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 3.4% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 0.5% since then, annualizing at 7.2. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 16.4% since that buy signal, annualizing at 22.7%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 4.6% since the Near-term buy signal, annualizing at 13.2%. Gold, like oil prices, has been relatively static for several months.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 3.6% since that bull signal, annualizing at 187.6%. The 9-trillion dollars are chasing the bull upward and the Blue Dogs may be stalemating government.

Click this sentence to view a summary of their performance.

 The Mid-term Indicant Dow Jones Industrial Average performance is at $27,411,899. That beats buy and hold performance of $1,452,031 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,849. That beats buy and hold’s $100,787 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $184,879. That beats buy and hold’s $70,346 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 39.9% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 229.7% (annualized at 12.8%) since the Long-term Indicant signaled bull 930-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Overall configurations continue suggesting the bear cannot dominate at this time. There are some minor indications of bullish fatigue. One could easily surmise the bull is wary that the Congressional recess is about to conclude with a return of the anti-capitalists to work on their nonsensical legislation.

The early warnings of the next bearish threat rests with the Near-term Bullish Blue Curve. As long as it moves north, there is nothing to fear. Even when it collapses, Force Vector position will be telling on the seriousness of any bearish threat. Right now, neither of those two attributes are near in support of the bear. ETF#13-EWH-may be the first to collapse when it occurs. This fund has been below NTI Blue Curve for several days with declining Vector Pressure. Its bullish blue curve flattened out last Wednesday.  ETF#28-EWT also endured a flattening of NTI Bullish Blue last Thursday. However, until NTI Blue collapses, those threatening attributes are insignificant with respect to bullish bias.

The Near-term Bull is 25-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. This bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. So far, the bear has been silent to bullish expressions. Current configurations are offering very little encouragement to the bear.

Bullishness the past several weeks appeared to be emotionally-based, as the so-called improving fundamentals are not justification for the magnitude of the bull’s wrath. However, as usual, the market can move with sustainability against reasoned fundamentals. This may turn out to be a Blue Dog Bull with the help of 9-trillion dollars chasing the bull north. Cap and Trade and Healthcare Reform, if stopped, will be bullish for the stock market. Tyranny by the majority, in this case, is the correct tyranny, when desiring bullish stock markets.

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

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

The eleven existing bulls are up 16.6%, annualizing at 72.0%, since the NTI signaled bull an average of 12.0-weeks ago.

The NTI is signaling bear for one major index (contrarian VIX). It is down 1.4% since the bear signal 6.4-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 10.8%, annualizing at 49.8%, since their bull signals an average of 11.3-weeks ago.

The lone bear, VIX, is down 31.1% since its bear signal 19.1-weeks ago. 

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day, unless they are also dated.

QTI Red Bull Status-Jul 27, 2009-Bullish bias. Eleven of 11-non-contrarian red bulls discourage bear.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. There are no non-contrarian yellow bears. VIX is a yellow bear.

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven of eleven non-contrarians are directionally bullish.

-NTI Green Bear Direction – Jul 30, 2009-Non-bearish bias. Eleven of eleven non-contrarian are directionally non-bearish.

-STI Force Vector Position- Aug 25, 2009-Bullish bias. Aug 28, 2009-Fri-Ten of eleven non-contrarian in bullish domains. Lost one today, but trivial at this point.

-STI Force Vector Direction – Jul 30, 2009-Bullish bias; All directionally bullish.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Eleven of eleven non-contrarian reside in bullish domains.

-Vector Pressure Direction- Jul 9, 2009-Bullish bias. Eleven of eleven non-contrarian are directionally bullish. Aug 20, 2009-VIX also moving north with minor threat to bull.

Short-term Trend Sensitive Attributes

      QTI-Bullish Red Curve-11 of 11 Non-contrarian indices in bullish trend

      QTI-Bearish Yellow Curve-11 of 11 Non-contrarian indices in bullish trend

      NTI-Bullish Blue Curve-11 of 11 Non-contrarian indices in bullish trend; Contrarian VIX also in bullish trend.

      NTI-Bearish Green Curve-11 of 11 Non-contrarian indices in bullish trend; Contrarian VIX also in bullish trend.

      STI-Vector Pressure-11 of 11 Non-contrarian indices in bullish trend; Contrarian VIX also in bullish trend.

-Near-term Directional Intensity - Jul 30, 2009-Bullish unanimity remains with all NTI Bullish Blue and Bearish Green Rising.

-Tangential Protection - None of the 11-major indices possess this attribute.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

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

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

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

As stated for several days, the NYSE and NASDAQ Indicant Volume Indicators  are no longer configuring with potential robustness. That suggests little dynamic interest in either bearish or bullish ambition. Therefore, the current bullish bias should prevail as long as other configurations are supportive. It may be more descriptive to refer to current configurations as non-bearish bias, as opposed to bullish bias.

Current Strategy-Short-term Indicant- Aug 28, 2009-Fri-Same as yesterday. Aug 27, 2009-Thu-The bear will remain uninvolved as long as the NTI and QTI continue expressing bullish unanimity. Aug 26, 2009-Wed-Same! Aug 25, 2009-Tue-Nothing new! Aug 24, 2009-Mon-Same as last Monday. The bear cannot dominate until several conditions are met; prices below QTI bullish red curve; NTI bullish blue collapses, Force Vectors in bearish domains, Vector Pressure vacates bullish domains, and prices below NTI bearish green curve. None of these conditions are present.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.1%, annualizing at 67.4%, since their buy signals an average of 9.3-weeks ago. Although there were no sell signals, the NTI is avoiding one ETF; contrarian QID. It is down by 6.1% since its sell signal 5.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 15.0% since their buy signals an average of 13.0-weeks ago. Those with hold signals are annualizing at 59.7%. Although there were no sell signals, the lone avoided ETF, QID, is down by 44.1% since its sell signal on Mar 26, 2009.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 34-trading days ago to 29-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are 23-ETF’s with this bullish and non-bearish configuration. There remains no dynamic bearish threat with sustainable duration at this time. Vector Pressure protection against the bear is deteriorating slightly, but still significantly non-bearish.

Force Vectors are configuring with normalcy. Favorable probabilities of bearish aggression have shifted from late August to mid September after Congress returns and with enough lead time to legislate continuing stupidity. If Congress behaves like communists, the bear will be aroused. Even with that, though, no sell signals will occur until prices interact with NTI green curves, which are moving north.

With current configurations, the Quick-term Bull is no where near extinction.

Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update. You will notice buy signals the past few weeks for the first time in several months.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 6.1% since that sell signal.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 44.1% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $36.66 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 0.5% since those buy signals, annualizing at 7.2%. The declining Force Vector is no longer discerning as it has shifted back to the north. The consolidating configuration appeared to have been in favor of its bull, as mildly anticipated a few days ago. Unfortunately, these recent bullish expressions have been severely muted.

ETF#11-Gold and Precious Metals  is up 16.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 22.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $86.54 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 4.6% since then, annualizing at 13.2%.

The gold bull has been lazy the past several weeks, but a survivor, so far. Keep your eye on the NTI Bullish Blue Curve. The first indication of gold’s vulnerability to major bear attacks will be a collapse of the bullish blue curve. Another tangential projection line is now in play. If and when it falls to NTI Green and below tangential protection, bearish interest will be elevated. It will either bounce north off of it or succumb to bearish influences. It will unlikely continue meandering like it has been once it contacts the NTI Green Curve.

Gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

Commodities, including Gold, are again approaching a bearish threat. Notice how GLD is driving toward the NTI Green Curve. It will be interesting to see how it reacts to NTI green. Once contact with green is made, buying call options the next morning if gold is down should be profitable.

Gold has been boring for a fairly long period. It is flat to mid-May prices. It will not stay that way. Once inflation or deflation kicks in, it will again become exciting to track.

ETF#14-TLT-Long Government  received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. By rule, its price moved above NTI Blue and Green and QTI Yellow with Force Vectors penetrating bullish domains. It is up 1.9% since that buy signal, annualizing at 61.5%. It will be difficult for this hold to produce profitability as long as the market is bullish. However, a small stock market bearish spurt could help it along. It was again contrarian today, as it should be, with the market moving with TLT expressing bullishness.

Major ETF Events

Aug 28, 2009-Fri-There were a few lost Red Bulls, but the population of them remains a strong and dominant majority.

Aug 27, 2009-Thu-ETF#28-EWT regained Red Bull status today. Its NTI Bullish Blue Curve flattened out today, joining ETF#13-EWH with a non-rising NTI Blue. This threat, however, remains mild. So far, just a money rotation. Several more Vector Pressures shifted slope back to the north, favoring continued bullish to non-bearish dominance.

Aug 26, 2009-Wed-Lost one Red Bull, ETF#28-EWT. ETF#13-EWH NTI Bullish Blue Curve flattened out today, but it has not yet collapsed. Rising Force Vectors influenced Vector Pressure to rise from only three yesterday to ten today. Overall, though, configurations remain in support of the NTI and QTI Bulls. There are just a few indications of bullish fatigue.

Aug 25, 2009-Tue-TLT was not contrarian today. Five Force Vectors crossed above their Vector Pressure, which remains high and thus with bullish support.

Aug 24, 2009-Mon-VIX Vector Pressure crawled out of bearish domains into the neutral zone. Twenty ETF Force Vectors climbed back into bullish domains today. Eighteen Force Vectors climbed above their Vector Pressure. Since all but two ETF Vector Pressures are losing pressure, it will be interesting to see if the bear has enough energy to show some response to this.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Last week was mixed with mild bullishness in some sectors and mild bearishness in other sectors. Combined bullish convergence/divergence in the five of the seven prior weeks remains bullish, but somewhat weakened.  Bearish convergence occurred in four of the past ten weeks, which is non-threatening to the bull. Eighteen of the past twenty-four weeks enjoyed combined bullish convergence/divergence. This suggests this Near-term Bull will not expire with the efficiency desired by the bear. This suggests the current Near-term Bull’s expiration will be extended to September/October and possibly beyond that. Political influences can cause its expiration. Capitalist are the only influence on its continuation.

Indicant Conclusion

The Mid-term Indicant is increasingly supportive of the Near-term and Quick-term bulls that are currently in progress. The high number of buy signals the past few weekends are supportive of this. Political discourse is bullish. Keep your eye on the government. If Congress gets along and teamwork manifests between the legislative and executive branches of government, the bear will regain composure and dominate the stock market. Keep your eyes open to dilettante management, their cozy relationships with the government, and voodoo bookkeeping. If it persists, the bear will be delighted.

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 

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

08/30/09

Aug 23, 2009 Indicant Weekly Stock Market Report

Volume 8, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Takers and Congressional Disarray

If we find Congress in disarray, confusion, and heated debate among its members, the nine-trillion will continue chasing the bull. That would be bullish for the stock market. With nine-trillion chasing it, the bull will run to the north.

If Congress returns with a unified voice favoring their communistic overtures of healthcare reform, cap and trade, and other elements enhancing the “take,” the 9-trillion will move to under mattresses and backyard corn stalks and the bear will manifest its glory. With nothing chasing the bull, the bear will run to the south.

As government expands and uses its advertising dominance, capital markets will shrink in appeal, delighting the bear. The purpose of the advertising is convincing at least 51% of the populace they are “without” and the “takers” can provide. The only way a taker can provide should be obvious. In case it is not, the concept is simple. Takers must take from others to provide to others.

Taking is not new. It has been around since the beginning. To understand taking, flip on the television, find a show about nature, and observe the nature of hyenas. There is little difference between hyenas and politicians. The latter is quite a bit sneakier, but the results are the same.

If the world consisted of two broad groups of people, those that have and those that do not have, a natural phenomenon of nature unfolds. The have-nots will take from those that have once the numbers facilitate that possibility. Unfortunately, the have-nots are in that group for a very good reason; they are incompetent.

That incompetence is a derivative of several attributes, such as incapability, limited ambition, outright laziness, etc. Upon the receipt of the assets from those that have, the have-nots will rapidly accelerate the depreciation of those unearned accumulations of assets. All one has to do is observe run down cities and government housing projects. Very rapid asset depreciation is clearly visible. LBJ enlightened that consequence from his failed attempt at The Great Society efforts in the 1960’s. Rapid inflation followed that. Rapid asset depreciation always delights the bear. And here we go again; one generation of takers has passed and unfortunately replaced by another generation of takers. They are always lurking among us.

Congress and other governmental bodies around the globe are in the business of taking. That is all they can do. After all, governments do not produce anything, but tend to maintain significant possessions of assets. Governmental buildings that house their bureaucrats and politicians are typically the largest and most expansive in most countries, states, counties, cities, villages, etc. The only way those buildings (assets) were constructed was by taking possessions from others.

That taking afforded profound comfort for bureaucrats and politicians. Since they remain alive and well, the spiral of “taking” continues. Being a capitalist is not easy. One has to work very hard to be a capitalist. Working hard is natural and healthy for the mind and body. Taking from others is not hard work and is not healthy for the mind and body. That lack of fulfillment tends to lead to more taking. The sickness runs deep and in an attempt to feel good about ones-self, taking is the demonstrated cure by those with their mental illnesses.

The process of taking in a democracy requires advertising. The takers must create a populace with at least 51% in the have-not group; real or perceived. That empowers the takers. The takers egotistical needs become even more satisfying when they can parcel out what was taken from the 49% and give it to the 51%. Many must desire to be Santa Clause, but without the hard working effort of Santa. They simply enlist helpers that would prefer to not be a helper. The enlistment process is really sneaky. Most of you are enlisted helpers and do not even know it. Some could argue that it is involuntary servitude.

Taking can be stopped if the 51% of have-nots drop to less than 50%. That phenomenon results in the dismissal of the current group of takers. That would be bullish. Most of the takers will relinquish their desire to take more if their comfortable and low effort live style is threatened. That is always a top priority among the takers.

The current Congress, prior to a public revolt regarding healthcare reform, miscalculated. Prior to the Congressional recess, the takers figured they had at least 51% in the bag. Now they are wondering if the number is less than 51%. They are number crunching as this is being written. The takers are now encountering a major dilemma. If they charge ahead and pass legislation in spite of not having 51% incompetence in their respective constituents, they fear losing the comfort of their easy life and one that appears powerful.

That appearance of power is very important for those that can only take. This is one of those psychological problems confronting all societies. Takers eventually the kill their host and along the way, societies are usually left in shambles.

Takers are parasitical. Without taking, they starve. However, if they back off on taking, they can still maintain their easy lifestyles and convey that phony image of power. After all, they can still fly around in fancy jets, dine in the finest restaurants, and even acquire a girl friend in South America and fly down periodically to visit her. The takers do not have any problems being among the jet set group even if millions of their constituents are unemployed with bleak opportunities for a rosy future. None of the takers miss sleep, meals, or romantic rendezvous, as a function of the misery they have invoked on their “stupid” constituents.

A phony image of power is not threatening to the bull. The bull recognizes the phoniness and marches to its own glory, snickering all the way to the top of whatever hill it is climbing. The bull does this with as much pizzazz and gusto as the bear does when dilettantes post phony profits.

Congress and government bureaucrats can maintain their lavish lifestyles while in disarray and confusion. They already are drunk with the excessive taking as it currently is. The threat to them is taking yet more on top of their already excessive taking. Let’s hope that the current Congress becomes complacent with the current “taking” levels and will not add more to the heaps of take.

If taking stabilizes, capitalists can make up the difference very quickly. That would be bullish. If taking accelerates, the lead-time for capitalistic corrections to the deficits will stretch out. That would be bearish for the stock market.

If Congressional action leads to more taking in September/October, rest assured the bear will rejoice and the bull will die. The bull’s death will be sharp, crisp, steep, and beyond doubt. That is one reason why the Mid-term Indicant is a bit more passive on signaling buy right now.

The law of conservation has yet to be violated; that is, “energy can neither be created nor destroyed.” In essence, energy is finite. The deficit accumulation of energy by those with limited expressions of energy (the takers), will encourage the bear to demonstrate stock market lows that could very quickly wipe out the last fifty years of gains.

If you desire a bullish stock market, vote for Congressional disarray, confusion, and outright hatred among its members; that would be bullish. The bull does not like Congressional teamwork and especially so when compliant to the desires of the executive branch of government.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

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

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

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

Although there were no buy signals, the Mid-term Indicant is signaling hold for 138 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 22.1%. That annualizes to 62.1%. The Mid-term Indicant has been signaling hold for these 138-stocks and funds for an average of 18.5-weeks. The reason the statistics are quite a bit different is due to recent buy signals. Some are up by scant amounts since they have been held for only a few weeks and a few are down.

Although there were no sell signals, the Mid-term Indicant is avoiding 179-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 35.0% since the Mid-term Indicant signaled sell an average of 66.7-weeks ago.

Stocks and funds no longer traded are identified with the letters, NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

Dilettante run companies, such as GM, Eastman, and others will continue to be tracked as long as they are traded. We will move them from their former classifications, such as the Dow30, NAS100, etc., to the Indicant Select Stocks category. In a few instances, where there is little hope for a company to rebound, we will simply remove them from our tracking. This is difficult to do, as companies nearing the end, from time to time, are fortunate enough to hire a talented manager. Although rare, it does happen, and when it does, you would want to know about it.

One year ago, on August 22, 2008, the Mid-term Indicant was holding 174-stocks and funds out of the 345 tracked for an average of 108.7-weeks. They were up by an average of 144.2% (annualized at 69.0%). There were 168-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 18.4% since their respective sell signals an average of 30.7-weeks earlier.

The Mid-term Indicant was signaling hold for 257-stocks and funds of the 345-tracked two years ago on Aug 24, 2007. They were up by an average of 145.5% (annualized at 62.2%) since their respective buy signals an average of 121.7-weeks earlier. The Mid-term Indicant was avoiding 88-stocks and funds at that time. They were down an average of 5.0% since their respective sell signals an average of 14.7-weeks earlier.

There were 175-stocks and funds with hold signals on Aug 18, 2006 since their buy signals an average of 113.9-weeks earlier. They were up by an average of 149.1% (annualized at 68.1%). There were 124-avoided stocks and funds at that time. They were down by an average of 6.2% from their respective sell signals an average of 16.0-weeks earlier.

On Aug 19, 2005, the Mid-term Indicant was signaling hold for 227-stocks and funds out of 320-tracked. They were up by an average of 102.3% (annualized at 58.7%) since their buy signals an average of 90.6-weeks earlier. The Mid-term Indicant was avoiding 87-stocks and funds at that time. They were down by an average of 8.3% since their sell signals an average of 20.6-weeks earlier.

Five years ago, on Aug 20, 2004, there were 157-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 83.0% (annualized at 66.0%) since their respective buy signals an average of 65.4-weeks earlier. There were 120-avoided stocks and funds then. They were down an average of 26.3% since their respective sell signals an average of 42.2-weeks earlier.

On Aug 23, 2003, there were 231-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 49.5%, annualizing at 90.8%, since the buy signals an average of 28.3-weeks earlier. There were 36-avoided stocks and funds then. They were down by an average of 8.4% since their sell signals an average of 9.6-weeks earlier.

On Aug 23, 2002, there were 125-stocks and funds with hold signals. They were up 11.4%, since their buy signals 7.3-weeks earlier. They were annualizing at 81.1%. The 69-avoided stocks and funds were down an average of 47.3% since sell signals an average of 25.0-weeks earlier. There were 35-buy signals on Aug 23, 2002, following several similar buy signals in the two prior weeks on August 9 and August 16, 2002.

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.

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

Many stocks and funds are very near the Mid-term Indicant’s bearish yellow curve. Several more are on the verge of receiving buy signals. The problem confronting those buy signals is a shortage of bullish synergy on a Mid-term Indicant basis. The primary depressants to the desired synergy of strong seasonal forces and the impending return of Congress. If Congressional sessions demonstrate political disarray, confusion, and more or less a do-nothing government, bullish synergy will form. If that occurs, there will be a tremendous surge in buy signals in anticipation of continued bullish behavior.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 30.5% since its secular weekly low on October 9, 2002. The NASDAQ is up 81.4% and the S&P500 is up 32.1% since then. The small cap index, S&P600, is up 80.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics support 100% accuracy in the Reverse Tangential Projections will occur at some future point.

The Dow is down 32.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 29.3% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 34.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few weeks. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

However, if inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return to previous levels. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction. Wealth must be produced; not taken.

The NASDAQ is down 60.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 32.8% since its similar secular peak on March 23, 2000. The Dow is down by 18.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will continue reducing U.S. political power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 8.3% so far this year. The NASDAQ is up 28.1%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time.

The NASDAQ year-to-date performance was bearish by 25.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 27.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 33.1%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 8.3% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.  It was down by 1.8% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 2.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.4% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 10.3% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish. Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at what appears to be a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market at this time.

As stated eight weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. As anticipated, they softened last week.

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projections of declining demand. Although oil prices have been “softening” the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations.

A few weeks ago, commodities elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment.

Although the Near-term Indicant is observing some concerns regarding gold, it remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. That would signal expectations in deflation and related economic decline. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 47-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists and communists. If they back down and join the evil ones, then the paragraphs remain in tact.

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

As stated 43-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is over one-half complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated in early September.

As stated last week, on a positive note, it appears enough of the populace are influencing their political representatives to put an end to the stupidity. If this happens, then bearish expectations of great magnitude will be muted.

The bear has been too passive. The bull has expressed behavior that correlates with the declining popularity of Barack Obama. The market is sensing an increasing possibility that social programs will be delayed. That is bullish in the capital markets.

The Near-term Indicant is the prime attribute to monitor. Rising Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 8.4% since that sell signal. It has been bearish in 16-of the last 33-weeks. It has been bullish in twelve of the last 19-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Fidelity Gold, Fund #28 received a sell signal on July 10, 2009 after disappointing from the previous buy signal in May 2009. Although gold prices should continue to increase, risks of continued holding of this fund are currently too great. Fidelity Gold has been inconsistent for several years now.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 3.3%, annualizing at 56.3% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 17.3% since that sell signal. It has been bullish in 17-of the last 24-weeks, but also solidly bearish in six of the last 10-weeks.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 33.1% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 1.8% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 0.8% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 16.1% since that buy signal, annualizing at 22.9%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 4.4% since the Near-term buy signal, annualizing at 13.3%. Gold, like oil prices, has been relatively static for several months.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up 3.7% since that bull signal, annualizing at 190.8%. The 9-trillion dollars are chasing the bull upward and the Blue Dogs may be stalemating government.

Click this sentence to view a summary of their performance.

 The Mid-term Indicant Dow Jones Industrial Average performance is at $27,302,070. That beats buy and hold performance of $1,446,213 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,484. That beats buy and hold’s $100,512 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $184,162. That beats buy and hold’s $70,073 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 39.9% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 228.4% (annualized at 12.8%) since the Long-term Indicant signaled bull 929-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

As stated last Monday, overall configurations suggest the bear cannot dominate at this time.

The early warnings of the next bearish threat rests with the Near-term Bullish Blue Curve. As long as it moves north, there is nothing to fear. Even when it collapses, Force Vector position will be telling on the seriousness of any bearish threat. Right now, neither of those two attributes are near in support of the bear. (ETF#13-EWH-may be the first to collapse when it occurs).

The Near-term Bull is 24-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. So far, the bear has been silent to bullish expressions.

Bullishness the past several weeks appeared to be emotionally-based, as the so-called improving fundamentals are not justification for the magnitude of the bull’s wrath. However, as usual, the market can move with sustainability against reasoned fundamentals. This may turn out to be a Blue Dog Bull with the help of 9-trillion dollars chasing the bull north. Cap and Trade and Healthcare Reform, if stopped, will be bullish for the stock market. Tyranny by the majority, in this case, is the correct tyranny, when desiring bullish stock markets.

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

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

The eleven existing bulls are up 16.7%, annualizing at 78.8%, since the NTI signaled bull an average of 11.0-weeks ago.

The NTI is signaling bear for one major index (contrarian VIX). It is down 0.1% since the bear signal 5.4-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 10.8%, annualizing at 54.6%, since their bull signals an average of 10.3-weeks ago.

The lone bear, VIX, is down 30.2% since its bear signal 18.1-weeks ago. 

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day, unless they are also dated.

QTI Red Bull Status-Jul 27, 2009-Bullish bias. Eleven red bulls discourage bear.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. Eleven of eleven non-contrarian indices are above bearish yellow.

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven non-contrarians continue moving north and thus in full support of the bull. Keep your eye on the NTI Blue Curve. As long as it does not collapse, the bull remains dominant.

-NTI Green Bear Direction – Jul 30, 2009-Non-bearish bias. Eleven non-contrarian moving north and solidly non-bearish. The bull will remain in tact until the next time there is an interaction with NTI green. Aug 14, 2009-Fri-Green is now rising rapidly, which will offer greater visibility toward protection of profits from this cycle. Aug 18, 2009-Contrarian VIX now bullish with Green moving north.

-STI Force Vector Position- Aug 17, 2009-Non-bullish bias and non-bearish. No Force Vectors are above Vector Pressure, none in bullish domains, and none in bearish domains. Overall neutral.

-STI Force Vector Direction – Jul 30, 2009-Bullish bias; 12-moving north. Aug 17, 2009-Even though Force Vectors vacated bullish domains, their direction remains argumentative to the bear’s ambition.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Eleven non-contrarian in bullish domains and solidly bullish.

-Vector Pressure Direction- Jul 9, 2009-Bullish bias. Eleven of eleven non-contrarian moving north, supporting bull. Aug 20, 2009-VIX also moving north with minor threat to bull.

-Near-term Directional Intensity Unanimity-Jul 30, 2009-Bullish unanimity remains.

-Quick-term Direction Intensity Unanimity-Aug 10, 2009-Bullish-Eleven Red Bulls and eleven Vector Pressures in bullish domains are solidly in support of the bull.

-Tangential Protection - None of the 11-major indices possess this attribute.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

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

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

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

As stated yesterday, the NYSE and NASDAQ Indicant Volume Indicators  are no longer configuring with potential robustness. That suggests little dynamic interest in either bearish or bullish ambition. Therefore, the current bullish bias should be prevailing.

Current Strategy-Short-term Indicant- Aug 21, 2009-Fri-Nothing new; bullish bias is solid. Aug 20, 2009-Thu-Nothing new; meandering is more common than not. Aug 19, 2009-Wed-No bearish attributes configuring, yet. Aug 17, 2009-Mon-The bear cannot dominate until several conditions are met; prices below QTI bullish red curve; NTI bullish blue collapses, Force Vectors in bearish domains, Vector Pressure vacates bullish domains, and prices below NTI bearish green curve.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 11.8%, annualizing at 73.7%, since their buy signals an average of 8.3-weeks ago. Although there were no sell signals, the NTI is avoiding one ETF; contrarian QID. It is down by 5.4% since its sell signal 4.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 14.7% since their buy signals an average of 12.0-weeks ago. Those with hold signals are annualizing at 63.5%. Although there were no sell signals, the lone avoided ETF, QID, is down by 43.7% since its sell signal 21.1-weeks ago.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 29-trading days ago to 29-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are 22-ETF’s with this bullish and non-bearish configuration. There remains no bearish dynamic threat with sustainable duration at this time. The protection is deteriorating slightly, but still significantly non-bearish.

Force Vectors are configuring with some degree of normalcy. Favorable probabilities of bearish aggression are now shifting from late August to mid September when Congress returns and with enough lead time to legislate continuing stupidity. If Congress behaves like communists, the bear will be aroused. Even with that, though, no sell signals will occur until prices interact with NTI green curves, which are moving north.

With current configurations, the Quick-term Bull is no where near extinction.

Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update. You will notice buy signals the past few weeks for the first time in several months.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 5.4% since that sell signal.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 43.7% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $37.23 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is down 0.8% since those buy signals, annualizing at 16.6%. The declining Force Vector is no longer discerning as it has shifted back to the north. The consolidating configuration appeared to have been in favor of its bull, as mildly anticipated the past several days.

ETF#11-Gold and Precious Metals  is up 16.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 22.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $86.29 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 4.4% since then, annualizing at 13.3%.

The gold bull has been lazy, but a survivor, so far. Keep your eye on the NTI Bullish Blue Curve. The first indication of gold’s vulnerability to major bear attacks will be a collapse in the bullish blue curve. Another tangential projection line is now in play. If and when it falls to NTI Green and below tangential protection, bearish interest will be elevated. It will either bounce north off of it or succumb to bearish influences. It is unlikely to continue meandering like it has been at Green contact.

Gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. Commodities, including Gold, are again approaching a bearish threat. Notice how GLD is driving toward the NTI Green Curve. It will be interesting to see how it reacts to NTI green. Once contact with green is made, buying call options the next morning if gold is down should be profitable.

ETF#14-TLT-Long Government  received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. By rule, its price moved above NTI Blue and Green and QTI Yellow with Force Vectors penetrating bullish domains. It is down 1.0% since that buy signal. It will be difficult for this hold to produce profitability as long as the market is bullish.

Major ETF Events

Aug 21, 2009-Bull was angered with Dow Utilities weakness yesterday with a resounding bullish response to that bearish threat.

Aug 20, 2009-Dow Utilities NTI Bullish Blue flattened, but not yet collapsed.

Aug 19, 2009-None; just laziness and a lack of strong directional intensity commitment.

Aug 18, 2009-None

Aug 17, 2009-TLT appears bullish and GLD is setting up for increased volatility in the next two to three days.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Combined bullish convergence/divergence in the five of the six prior weeks remains bullish.  Bearish convergence occurred in four of the past nine weeks, which is non-threatening to the bull. Eighteen of the past twenty-three weeks enjoyed combined bullish convergence/divergence. This suggests this Near-term Bull will not expire with the efficiency desired by the bear. This suggests the current Near-term Bull’s expiration will be extended to September/October. Political influences can cause its expiration. Capitalist are the only influence on its continuation.

Indicant Conclusion

The Mid-term Indicant is increasingly supportive of the Near-term and Quick-term bulls that are currently in progress. The high number of buy signals the past few weekends are supportive of this. Political discourse is bullish. Keep your eyes open to dilettante management, their cozy relationships with the government, and voodoo bookkeeping. If it persists, the bear will be delighted.

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 

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

08/23/09

Aug 16, 2009 Indicant Weekly Stock Market Report

Volume 8, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Political Discourse Is Bullish

You will find a chart highlighting statistical significance between a bullish stock market and the declining popularity of the President of the United States. It is at the following link. Click this sentence to take you to that chart.

You will notice a profound increase in the president’s disapproval rating a few weeks after inauguration. It shot up from a disapproval rating of 29% to 36% by late January 2009. You will notice a small bullish spurt in the Dow following that disapproval surge. You can see the president’s disapproval rating continue to deteriorate through February, while the stock market is aggressively bearish. That relationship is counter to the point being made in this weekly report.

Although not an expert in polling practices, it appears the bull is threatened as long as disapproval is less than 45%, regardless of its trend. In essence, even when presidential popularity is trending unfavorably to the president, the bull remains absent until the disapproval exceeds 45%. At that point, the bull sees hope for a “do-nothing” government and expresses its delight at that point.

With disapproval ratings of less than 40%, that statistical relationship is a bit misleading. Congress is most likely to support a popular president. Recent statistics suggest a disapproval rating of less than 40% is a popular president. With that, government tends to meddle a bit too much in the lives of citizens of a free country.

The bear is delighted when the executive and legislative branches of government are in agreement. As stated many times in this weekly report, the only positive economic contribution a politician can make is to undo the prior damage of their predecessors. Politicians add absolutely nothing to the economy as they do not manufacture, perform agriculture, or extract raw materials.

The stock market tends to be bullish when the executive and legislative branches of government are in disagreement. It tends to be bearish, when there is harmony between the two groups. As stated a few weeks ago, George W. Bush’s mistake was when he reached across the aisle to the newly elected democratic controlled congress in 2006. The stock peaked the following year and has been going down ever since then.

The bull delights when the executive and legislative branches of government are name-calling, pointing accusatory fingers at each other, and bordering hate between the legislative and executive branches of government. The bull was ecstatic with that from 1994-2000 when the Newt Gingrich led legislative branch and the Bill Clinton executive branch were at odds on what to do, which led to basically a do-nothing government other than a small bit of undoing some prior political damage. And that was exceedingly bullish. The bull zoomed to record heights when Bill Clinton shared the paradigm, “the days of big government are over.”

Following World War II, President Dwight D. Eisenhower went to the golf course. I don’t recall him going to Germany, Italy, or Japan and apologizing for the allies total annihilation of their countries and their stupid ideologues ahead of the war.

The bull delighted as Ike’s golf handicap went down and the stock market zoomed north in the 1950’s. If I could get a copy of Ike’s golf score cards, I would bet a high correlation existed between his golf scores and the bullish stock market.

We want our presidents to enjoy life; not work too hard; and do one simple thing. That is, protect us from foreign enemies. They can also set up a program for their libraries and deliver speeches advising how they achieved political success and how they are monitoring our protection from any potential foreign threats. They are positioned at a very high advantage point where their perspectives on a variety of subjects can have valuable meaning to the rest of us.

We do not want the President or Congress meddling with the economy; that is, if you prefer bull markets. Politicians invented financial derivatives that led to the housing bubble, the housing crash, and the stock market crash. The only people who can create economic wealth are capitalists. And the real wealth is created in only three sectors; manufacturing, agriculture, and extraction. There is ample evidence proving that point. Arguing it is pure stupidity. As Ann Rand once said, immediately abdicate any discussions containing stupidity….before you are contaminated.

Focused stimulus spending on a few select companies, who are skilled at digitizing health records, is not economic wealth building. Such services save money and improve the quality of healthcare, but they do not create wealth. The productivity from those efforts though, can enhance the wealth that has already been created by manufacturing, agriculture, and extraction.

However, like all organizations for profit, their existence and profitability should be a function of market demand; not governmental stimulus. Keep in mind, such services do not “create wealth” as they are not in the manufacturing, agriculture, or the extraction sectors.

Government’s relationship with “stimulus receiving” companies is ripe for corruption. If the economy is mainly connected to government contracts, rest assured the economy will settle into the lethargic patterns of socialism, possibly fascism, ahead of its eventual collapse from the corruption it leads to, much like the 1930’s Italy.

Laws are supposed to prevent politicians from benefitting from government contracts. Those laws are abstract objects and therefore relate to crap shoot conclusions. It is difficult to detect Leroy, the politician, providing investment guidance to his third cousin, Elroy, just ahead of a government contract award. Setting up a system of corruption in the U.S. will result in Mexico wanting to construct a fence to keep Americans out of Mexico. The only people who will enjoy the nice life would be Leroy and Elroy, while 250-million others live in poverty. Of course, Leroy and Elroy would need plenty of bodyguards. But, they can afford it.

Now back to the chart. As you can see, the stock market found a cyclical bottom in early March 2009. Just ahead of that bottoming, the presidential disapproval climbed from 38% to 43%. Somewhere between 38% and 43%, the bull may have detected a shift in trend favoring political discourse in Washington D.C. That detection certainly aroused the bull, while depressing the bear.

As you can see, though, the president’s popularity increased when the disapproval waned back down to below 40% leading into July 2009. As you can see, this depressed the bull and encouraged the bear. The president’s disapproval rating flattened out from April through early July. This correlates to a flattening of the stock market during the same period with some encouragement to the bear toward the end of that cycle.

The Blue Dog democrats started resisting the Healthcare Reform bill in early July. With that, the president’s disapproval resumed its climb and the stock market climbed in near perfect congruence. The bear was about to dominate in mid-July and propel stock prices to near the March lows. But the Blue Dogs clearly demonstrated political discourse to the point of holding up on the Healthcare vote. The bull was obviously encouraged by that.

Why does this political phenomenon correlate? Here is a sequence of the five whys.

1-Why does the stock market and presidential disapproval-rating correlate?

Answer-Popular presidents get their way with Congress and that is always bearish when relating to the economy.

2-Why do popular presidents get their way with Congress?

Answer-Congressmen lose votes when disagreeing with a popular president.

3-Why do Congressman do not want to lose votes?

Answer-Congressman enjoy the nice life in Washington D.C.

4-Why is the nice life enjoyed in Washington D.C.?

Answer-There is no day-to-day competition that makes one work harder until the next election.

5-Why is Congress afraid of hard work?

Answer-Human nature.

With the exception of Bill Clinton, most presidents are of high moral character; mostly good people who feel they can contribute to the goodness of all. There is nothing wrong with that line of thinking. So far, the current president, Barack Obama, appears to fit right in with the normalcy of high character with a high morale purpose. He appears genuine, honest, and certainly hard working. (We’d be better off, though, if he worked on his golf game. It takes four to five hours to play a around of golf, while basketball is of a shorter duration. The more time spent on the golf course, the higher the stock market would go).

The increasing unpopularity with Barack Obama rests with economic sourness. Although he is innocent of creating the current economic crisis, he has done little to help the economy. All any politician can do to favorably impact the economy is to undo the prior damage of their predecessors.

The problem with most presidents is they generally have an above average IQ. It does not take too much IQ to undo the prior damage of their predecessors. Thus it is not a popular political engagement. Although Ronald Reagan’s IQ is not known, one can surmise it was pretty much average. So, he set out to undo prior political damage and the bull showed its appreciation for this. His popularity was high for the most part, but Congress was against him and that helped the bull along.

Ike was burned out, following WWII. One can surmise that leading over a half a million people to their deaths was emotionally draining. With that, he found solace playing a lot of golf and overseeing a much smaller war in Korea. War is generally good for the economy.

Most presidents typically desire using their IQ and do this or that. The more complex this or that is, the better they feel about themselves. It is intellectually stimulating. Unfortunately, their self-aggrandizement is not favorable to the rest of us when Congress is in agreement with the President.

The stock market likes simplicity. It is interested in only three numbers; revenues, profits, and cash flow as a percentage of shareholder equity. When the government penetrates into the realms of those three numbers, the bull vacates and bear flourishes. The greater the complexity of this and that by politicians, the more difficult it is to garnish favorability in corporate revenue, profits, and cash flow as percentage of shareholder equity.

Some corporate leaders are taking the easy path to revenues. If the contracts they garnish by cozying up to the President and other governmental employees is on a cost-plus-basis, as opposed to firm-fixed-pricing, expect your tax dollars to be buying $600 rolls of toilet paper at some future point. Of course, the executives pulling that off will gain access to profound bonuses since a roll of toilet paper costs less than a buck in 2009-dollars. (It may well zoom to $600 in a few years, but that executive will be pricing that roll at $20,000 or so). That always happens on cost plus contracting. When it is discovered and at least 51% of the populace is angered by that, you will not be wanting to hold related stocks and funds that garnished “effortless profits.” Keep in mind, though, during the early stages of such fraud, you will want to own those stocks. There is nothing immoral to making money, as long as you do not directly join the mafia.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

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

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

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

Although there were no buy signals, the Mid-term Indicant is signaling hold for 138 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 20.1%. That annualizes to 59.7%. The Mid-term Indicant has been signaling hold for these 138-stocks and funds for an average of 17.5-weeks. The reason the statistics are quite a bit different is due to recent buy signals. Some are up by scant amounts since they have been held for only a few weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 179-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 36.6% since the Mid-term Indicant signaled sell an average of 65.7-weeks ago.

Stocks and funds no longer traded are identified with the letters, NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

Dilettante run companies, such as GM, Eastman, and others will continue to be tracked as long as they are traded. We will move them from their former classifications, such as the Dow30, NAS100, etc., to the Indicant Select Stocks category. In a few instances, where there is little hope for a company to rebound, we will simply remove them from our tracking. This is difficult to do, as companies nearing the end, from time to time, are fortunate enough to hire a talented manager. Although rare, it does happen, and when it does, you would want to know about it.

One year ago, on August 15, 2008, the Mid-term Indicant was holding 167-stocks and funds out of the 345 tracked for an average of 110.0-weeks. They were up by an average of 144.9% (annualized at 68.5%). There were 169-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 16.0% since their respective sell signals an average of 29.3-weeks earlier.

The Mid-term Indicant was signaling hold for 256-stocks and funds of the 345-tracked two years ago on Aug 17, 2007. They were up by an average of 137.7% (annualized at 59.2%) since their respective buy signals an average of 121.0-weeks earlier. The Mid-term Indicant was avoiding 82-stocks and funds at that time. They were down an average of 7.3% since their respective sell signals an average of 14.5-weeks earlier.

There were 175-stocks and funds with hold signals on Aug 11, 2006 since their buy signals an average of 112.9-weeks earlier. They were up by an average of 141.8% (annualized at 65.3%). There were 168-avoided stocks and funds at that time. They were down by an average of 5.7% from their respective sell signals an average of 16.7-weeks earlier.

On Aug 12, 2005, the Mid-term Indicant was signaling hold for 230-stocks and funds out of 320-tracked. They were up by an average of 102.4% (annualized at 60.4%) since their buy signals an average of 88.2-weeks earlier. The Mid-term Indicant was avoiding 86-stocks and funds at that time. They were down by an average of 17.3% since their sell signals an average of 20.9-weeks earlier.

Five years ago, on Aug 13, 2004, there were 155-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 77.0% (annualized at 61.5%) since their respective buy signals an average of 65.1-weeks earlier. There were 133-avoided stocks and funds then. They were down an average of 29.1% since their respective sell signals an average of 41.4-weeks earlier.

On Aug 16, 2003, there were 197-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 52.6%, annualizing at 88.2%, since the buy signals an average of 31.0-weeks earlier. There were 60-avoided stocks and funds then. They were down by an average of 7.1% since their sell signals an average of 8.6-weeks earlier.

On Aug 16, 2002, there were 125-stocks and funds with hold signals. They were up 14.4%, since their buy signals 8.9-weeks earlier. They were annualizing at 84.6%. The 102-avoided stocks and funds were down an average of 42.9% since sell signals an average of 18.7-weeks earlier. There were 66-buy signals, mostly in energy and commodity sectors, on Aug 16, 2002, following several similar buy signals in the prior week on August 9, 2002.

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.

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

Bearish behavior this past week, although mild, prevented several more buy signals. Many stocks and funds are very near the Mid-term Indicant’s bearish yellow curve. So, there were no buy or sell signals this weekend from the Mid-term Indicant. In essence, the market still lacks bullish synergy on a Mid-term Indicant basis.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 27.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 78.2% and the S&P500 is up 29.3% since then. The small cap index, S&P600, is up 75.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics support 100% accuracy in the Reverse Tangential Projections will occur at some future point.

The Dow is down 34.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 30.6% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 32.8% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them in two of the past three weeks. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

However, if inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return to previous levels. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction. Wealth must be produced; not taken.

The NASDAQ is down 60.7% since its last weekly secular peak on March 9, 2000. The S&P500 is down 34.3% since its similar secular peak on March 23, 2000. The Dow is down by 20.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will continue reducing U.S. political power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 6.2% so far this year. The NASDAQ is up 25.9%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time.

The NASDAQ year-to-date performance was bearish by 20.5% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 31.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 27.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 12.3% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.  It was down by 0.9% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 6.2% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 3.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 7.5% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish. Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at what appears to be a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market for the time being.

As stated seven weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. Such a movement is asynchronous to underlying market forces. Interestingly, Freddie Mac 30-Day Delivery eclipsed the bullish red curve this past week, while other Freddie’s and Fannie’s remained stable. Regardless of bureaucratic and political interventions, the laws of supply and demand will prevail. Politicians delay impacts from time to time, but the markets will “catch-up” to the natural requirements.

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projections of declining demand. Although oil prices have been “softening” the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations.

A few weeks ago, commodities elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment.

Although the Near-term Indicant is observing some concerns regarding gold, it remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. That would signal expectations in deflation and related economic decline. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 46-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists and communists. If they back down and join the evil ones, then the paragraphs remain in tact.

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

As stated 42-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is over one-half complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated in early September.

As stated last week, on a positive note, it appears enough of the populace are influencing their political representatives to put an end to the stupidity. If this happens, then bearish expectations of great magnitude will be muted.

The bear has been too passive. The bull has expressed behavior that correlates with the declining popularity of Barack Obama. The market is sensing an increasing possibility that social programs will be delayed. That is bullish in the capital markets.

The Near-term Indicant is the prime attribute to monitor. Rising Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 9.6% since that sell signal. It has been bearish in 16-of the last 32-weeks. It has been bullish in eleven of the last 18-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Fidelity Gold, Fund #28 received a sell signal on July 10, 2009 after disappointing from the previous buy signal in May 2009. Although gold prices should continue to increase, risks of continued holding of this fund are currently too great. Fidelity Gold has been inconsistent for several years now.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 0.1%, annualizing at 2.4% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 21.5% since that sell signal. It has been bullish in 16-of the last 23-weeks, but also solidly bearish in six of the last nine weeks.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 35.0% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 5.7% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. (Last week’s report indicated an error on the buy date). It is down 2.3% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 15.3% since that buy signal, annualizing at 22.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 3.7% since the Near-term buy signal, annualizing at 11.8%. Gold, like oil prices, has been relatively static for several months.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up 2.3% since that bull signal. The 9-trillion dollars are chasing the bull upward and the Blue Dogs may be stalemating government.

Click this sentence to view a summary of their performance.

 The Mid-term Indicant Dow Jones Industrial Average performance is at $26,771,995. That beats buy and hold performance of $1,418,135 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $130,617. That beats buy and hold’s $98,353 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $180,938. That beats buy and hold’s $68,846 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 37.6% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 220.0% (annualized at 12.4%) since the Long-term Indicant signaled bull 928-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Configurations remain correlated with political influences. The market has been going up, paralleling the president’s increasing unpopularity. This, coupled with the Blue Dog Democrats resisting socialism, reversed very high probabilities of a return to the bear market in mid-July. Although the bull can linger for several more weeks, without much pizzazz, risks of not broadly participating in a solid bull leg are too high.

The early warnings of the next bearish threat rests with the Near-term Bullish Blue Curve. As long as it moves north, there is nothing to fear. Even when it collapses, Force Vector position will be telling on the seriousness of any bearish threat. Right now, neither of those two attributes are near in support of the bear. (ETF#13-EWH-may be the first to collapse when it occurs).

The Near-term Bull is 23-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. So far, the bear has been silent to bullish expressions. Even today’s bearishness did nothing to upset bullish configurations with a minor disruption to bullishly moving Vector Pressure.

Bullishness the past several weeks appeared to be emotionally-based, as the so-called improving fundamentals are not justification for the magnitude of the bull’s wrath. However, as usual, the market can move with sustainability against reasoned fundamentals. This may turn out to be a Blue Dog Bull with the help of 9-trillion dollars chasing the bull north. Cap and Trade and Healthcare Reform, if stopped, will be bullish for the stock market. Tyranny by the majority, in this case, is the correct tyranny, when desiring bullish stock markets.

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

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

The eleven existing bulls are up 14.3%, annualizing at 74.5%, since the NTI signaled bull an average of 10.0-weeks ago.

The NTI is signaling bear for one major index (contrarian VIX). It is down 3.0% since the bear signal 4.4-weeks ago. 

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 8.6%, annualizing at 48.1%, since their bull signals an average of 9.3-weeks ago.

The lone bear, VIX, is down 32.3% since its bear signal 17.1-weeks ago. 

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day, unless they are also dated.

QTI Red Bull Status-Jul 27, 2009-Bullish bias. Eleven red bulls continue to discourage bear.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. Eleven of eleven non-contrarian indices are above bearish yellow.

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven moving north and thus in full support of the bull. Keep your eye on the NTI Blue Curve. As long as it does not collapse, the bull remains dominant.

-NTI Green Bear Direction – Jul 30, 2009-Non-bearish bias. Eleven moving north and solidly non-bearish. The bull will remain in tact until the next time there is an interaction with NTI green. Aug 14, 2009-Fri-Green is now rising rapidly, which will offer greater visibility toward protection of profits from this cycle.

-STI Force Vector Position- Jul 30, 2009-Bullish bias. A majority of eight remain in bullish domains.

-STI Force Vector Direction – Jul 30, 2009-Bullish bias; Only VIX moving south. Disfigured Force Vectors in bullish domains support bullish bias.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Eleven in bullish domains and solidly bullish.

-Vector Pressure Direction- Jul 9, 2009-Bullish bias. Eleven moving north and solidly bullish.

-Near-term Directional Intensity Unanimity-Jul 30, 2009-Thu-Bullish unanimity remains.

-Quick-term Direction Intensity Unanimity-Aug 10, 2009-Mon-Eleven Red Bulls and bullish Vector Pressure continues discouraging the bear.

-Tangential Protection - None of the 11-major indices possess this attribute.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

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

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

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

The NYSE and NASDAQ Indicant Volume Indicators  continue favoring the potential for a robust cycle. Volume was mild on today’s bearishness, suggesting short-term trading nervousness and without impact to substantive bullish. The overall configuration remains non-bearish.

Current Strategy-Short-term Indicant- Aug 14, 2009-Fri-Nothing new today except for some investor nervousness paying attention to fundamental realities. However, the $9-trillion is chasing and that overrides fundamental awareness. The bear will have to do much more than it has done this past week to scare the $9-trillion away from the market. It will be sort of like feeding frenzies; where the ample is quickly devoured. That late bloomers will pay the price, as always. Aug 13, 2009-Thu-There is no fundamental reason for bullishness. However, there are a huge number of investors and dollars fearful of being left behind. They are buying and invoking the law of supply and demand for stocks and thus propelling the bull to retain dominance. Aug 12, 2009-Wed-Nothing new; bull remains in tact. Aug 11, 2009-Tue-Although all attributes favor the bull, meandering behavior can persist. However, as long as configurations suggest bullish bias, one should continue holding. Aug 10, 2009-Mon-All Short-term attributes favor the bull. The first indicator of a bearish threat will be the collapsing of NTI Blue Curve. Until then, the bull rules.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 10.2%, annualizing at 69.9%, since their buy signals an average of 7.6-weeks ago. Although there were no sell signals, the NTI is avoiding two ETF’s; contrarian QID and TLT. They are down by an average of 0.9% since their sell signals an average of 2.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 13.2% since their buy signals an average of 11.4-weeks ago. Those with hold signals are annualizing at 59.9%. Although there were no sell signals, the two avoided ETF’s are down by an average of 19.2% since their sell signals an average of 10.6-weeks ago.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 24-days ago to 27-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are 26-ETF’s with this bullish and non-bearish configuration. There remains no bearish threat. Bullish behavior in fifteen of the last 24-trading days reversed the bearish threat in early July. Eleven Vector Pressures continue moving north, building bullish pressure that resists the bear. (However, that is down by eight from last Wednesday, as the bull is again suggesting some tiring. However, with that, the bull remains dominant; just a bit more vulnerable to attacks by the bear).

Force Vectors are configuring with some degree of normalcy. Favorable probabilities of bearish aggression shifted to late August or early September when Congress returns. If Congress behaves like communists, the bear will be aroused. Even with that, though, no sell signals will occur until prices interact with NTI green curves, which are moving north.

With current configurations, the Quick-term Bull is no where near extinction.

Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update. You will notice buy signals the past few weeks for the first time in several months.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 1.9% since that sell signal. Also, it should be noted that QQQQ is not close to receiving a sell signal. QQQQ is up 30.7% since the NTI signaled buy on Mar 31, 2009.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 41.7% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $37.81 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is down 2.3% since those buy signals. It has not found comfort at being a Red Bull. Declining Force Vector is a bit discerning. All attributes are in a tight consolidating type of configuration with somewhat of a bearish bias building.

ETF#11-Gold and Precious Metals  is up 15.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 22.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $86.02 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 3.7% since then, annualizing at 11.8%. Fundamentally, it is one of the few ETF’s that could continue to increase in price in the face of an overall bearish stock market.

The gold bull has been lazy, but a survivor, so far. Keep your eye on the NTI Bullish Blue Curve. The first indication of gold’s vulnerability to major bear attacks will be a collapse in the bullish blue curve. Another tangential projection line is now in play. If and when it falls to NTI Green and below tangential protection, bearish interest will be elevated. It will either bounce north off of it or succumb to bearish influences. It is unlikely to continue meandering like it has been at Green contact.

Gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. Commodities, including Gold, are no longer under Near-term bearish threat.

ETF#14-TLT-Long Government  received a sell signal on Aug 7, 2009 from both the Near-term and Quick-term Indicant. It is up 3.2% since the sell signal. It has been again contrarian the past three days; rising on market bearishness and falling on market bullishness. This suggests an added force of market stability.

Major ETF Events

Aug 14, 2009-Fri-Intraday bearish aggression reflected sour economic fundamentals, but the supply and demand for stocks continues to be protective of the bull.

Aug 13, 2009-Thu-Only four Force Vectors are moving north; down from eight five days ago. Although non-threatening to the bull, there is a bit more vulnerability to attacks by the bear.

Aug 12, 2009-Wed-No major events, other than today’s bullishness offset bearishness the past two day, furthering the prognosis of meandering behavior until Congress returns. The bull will patiently await for clarity on the desired “do-nothing” government.

Aug 11, 2009-Tue-Again no major events. The market is simply contracting to NTI Bullish Blue Curve. As long as bullish blue continues to rise, the bull continues to dominate.

Aug 10, 2009-Mon-No major events; mild meandering bearishness with periodic bullish expressions would consistent with current configurations. Traders will buy on the dips and since there is such a huge sum of money remaining on the sidelines, the bull remains in tact.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence last week, follows a combined bullish convergence/divergence in the four prior weeks.  Bearish convergence occurred in three of the past eight week, which is non-threatening to the bull. Seventeen of the past twenty-two weeks enjoyed combined bullish convergence/divergence. This suggests this Near-term Bull will not expire with the efficiency desired by the bear. This suggests it will be quite a long time before the Near-term Bull now underway will expire.

Indicant Conclusion

The Mid-term Indicant is increasingly supportive of the Near-term and Quick-term bull that are currently in progress. The high number of buy signals in two of the past three weekends are supportive of this. Political discourse is bullish. Keep your eyes open to dilettante management, their cozy relationships with the government, and voodoo bookkeeping. If it persists, the bear will be delighted.

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 

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

08/16/09

Aug 9, 2009 Indicant Weekly Stock Market Report

Volume 8, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Corruption, Voodoo Bookkeeping, and Leeches

Some of the Enron executives were prosecuted for their voodoo bookkeeping. Bernard Madoff was sent to prison for his Ponzi crimes. Many others have been prosecuted for similar crimes and deeds.

Why were these folks prosecuted? Cash inflow potential was light and/or not that many votes could be garnished by politicians upon the discovery of their crimes. One can get away with ill will if there are enough votes and/or potential incoming cash from operations. The votes and the money are needed by the politicians. If you cheat, lie, or steal, you need to do it with a large number of employees and a continuing stream of cash. You will enjoy immunity from prosecution.

As Bill Clinton demonstrated, lying is okay. You can get away with it. Corporate dilettantes follow this paradigm very well.

Bank of America failed. It should be out of business. Bank of America executives (mostly dilettantes) should be looking for a job just like millions of others. After failing, Bank of America dilettantes never missed a paycheck. Your tax dollars covered their payroll requirements.

Bank of America published their financial reports and did not proactively report $5-billion bonuses paid to executives. The SEC fined Bank of America a mere $33-million. No one went to jail. No one paid the fine with his or her own money. No one at Bank of America got hurt. They did just fine. Clintonian lies are not punishable when caught. Leeching must be a wonderful life as so many do it. You will notice that most are within a 200-mile radius of Washington D.C. This is an increasingly hotbed for fostering Mexican like corruption.

The SEC fines to Bank of America are a bit of a joke. Here is the summary. Take billions of money from taxpayers. Dole out $5-billion in bonuses, plus the normal salaries. Lie to the shareholders, get caught and pay $33-million in fines with taxpayer money. In essence, in bank lingo, “where is the risk in lying and taking huge sums of money without actually earning it? Ans. Zero risks.”

Zero risks will lead to more and more. That is the prime source of corruption. Politicians snooze through this as some of that $5-billion is plowed right back to their campaign contributions. It is sort of like a money laundering operation in Washington D.C. The folks who work hard for a living are too busy to notice this sort of corruption. The campaign contributions ensure the repeated re-election of the politicians.

General Electric is one of the Dow30 stocks. That is, for the time being, as it will eventually fade along the same lines that General Motors and Eastman Kodak faded. GE is an excessively dilettante rich to maintain its standing as a Dow30 Blue Chip. GE use to manufacture many more products than they do today. The reason they had to cut back on manufacturing was their inability to compete. Components to the light bulb traveled thousands of miles around the world ahead of its production. This facilitated dilettante travels at shareholder expense to exotic places. That is the epitome of the dilettante infested corporate America. The Mid-term Indicant may eventually signal buy for GE, but it would be technical. Fundamentally, the company is sick.

GE was the recipient of $139-billion in low interest loans from the government. GE was recently fined $50-million by the SEC for misrepresenting financial information. Again, no one paid the fine with their own money. In other words, people who committed the crimes are immune to any punishment for those crimes. Voodoo bookkeeping is making a comeback. Either the shareholders and/or taxpayers will pay the fines. Zero risks will perpetuate and facilitate more of the same.

Keep in mind, the stock market bull will vacate if voodoo bookkeeping escalates.

Corruption is, of course, a deadly path to take. The host will eventually destroy the leech. That is natural, based on the natural instinct to survive. Leeches know they must leech to survive. After all, leeches are talented in one and only one thing; leeching. The more they leech, the better they become at it and the worse they become other things they could do.

Eventually, leeches become so sedated with their steady flow of financial nourishment, they sometimes forget they are leeches. They evolve their thoughts into believing they must have enjoyed some sort of birthright to leeching. So, when the host takes a swipe at them, they do not scurry to another host. They resist and tend to feel the host is being unreasonable. They, then gather up the other leeches and gang up on the host.

Leeching capacity, of course, is fractional to the efforts of the productive (the hosts). You will know when leeching capacity extends beyond the capacity of the productive. You will be very hungry and most likely in the process of killing or being killed. We are a long way from that, but if you are unfortunate to witness it first hand, take some comfort. It has happened thousands of times before and will certainly happen again. In other words, you will not be a charter member of civil strife and a lawless land. It has been more like that since the beginning than what you have enjoyed in your lifetime. All institutions eventually fail. All do when leeching capacity exceeds productive capacity.

Leeching must be a natural element in any society from insects, to plants to people. It seems to be everywhere and humans appear to breed their own leeches. There are two types of people; those that provide products and services via working effort and those that do not. The first group are the hosts and the second group are the leeches. All leeches are members of the economic overhead group. In other words, they do not contribute to economic wealth. They drain it.

It is not easy for the productive to spot a leech member of society. The productive are highly focused on their vocations and are a prime target of the leeches. The productive is usually a very honest person and cannot fathom the concept of leeching. This makes the productive more vulnerable and thus one reason why they become a host for the leeches. They start sucking without the host even knowing it.

Politicians are not productive members of society. Many are master leeches. They have learned to leech just a little bit from many. They figure that a small amount of leeching from each constituent will cause no harm for them or their hosts. The problem is the amount drained. As you have seen the past two years, the drainage from the hosts has been significant. Keep in mind there are some good politicians, but they do not last too long. The longer they spend time in Washington D.C. the more their “goodness” erodes.

Nothing remains static. All existence is either in an expansion mode or a contraction mode. Leeching is not exempt from this. Washington D.C. is looking more and more like 1950’s Mexico where the leeches successfully enslaved their hosts. Those hosts climb and scratch their way to the U.S. where they perceive leeching as less severe than in Mexico. Those illegal immigrants could be in for a big surprise. They may crawl and scratch to get back to Mexico at some future point.

Capital markets understand the natural ebb and flow of leeching. The capital markets tend to contract when leeching has expanded to excessive amounts. This rests with one physical law. Energy cannot be created nor destroyed. In essence, productive energy is P. Leeching is L. Capital markets expand when P is significantly more than L. Bear markets unfold when the gap between P and L narrows. There is no market when L becomes greater than P. That is when institutions and societies become disfigured. Civil strife follows. Some of you may have been fortunate enough to see how the Soviet Union collapsed. There was no productive energy near the end. L was much greater than P in the Soviet Union. The primary cause of this was that government bureaucrats cannot perform as well as capitalists.

People leeched phony wealth through unearned funds from their escalating real estate values. Politicians helped them. Their so-called altruistic methods without productive effort will always lead to bear markets. The consequence of altruism without any productive energy creates a fake demand and once detected, the bear is aroused and punishes accordingly. Politicians are the biggest enemy to the bull.  That led to a bubble as the real appreciation for real estate cannot exceed the population’s growth rate over a long period. Of course, leeches are incapable of paying back what they took. Leeches merely consume. There is no output.

When the number of leeches exceeded a critical mass, the capital markets fail prey to the bears’ claws. Politicians took over where the original leeches (unproductive homeowners) and covered the leech shortage. The politicians took even more from the hosts (the productive) and put it into the hands of yet more leeches, such as the U.A.W. via General Motors and Chrysler.

Most bankers are leeches. They are merely middlemen between the productive hosts and their vaults. They add no economic wealth. One has to wonder how a bank can award $5-billion to a group of people that do not contribute to economic wealth. They have actually and directly contributed to debt and deficit, but yet paid billions in bonuses. Leeches are getting a bit too aggressive.

Now back to General Electric. The Chairman of the Board and CEO of General Electric is one of the U.S. President’s economic advisors. This is the formula for corruption.

Now, lets review the money flow. In the March 22, 2009 weekly report, a flow chart was produced that show how money flows among the parasitical elites. You are hosting that.

http://www.indicant.net/Non-Members/Back%20Issues/Supplements/Mar/2009-03-22%20Supplement.htm

High cash flow is a magnet to people-leeches. These people seek to find huge amounts of cash flows. They gravitate to it and figure out a way to get it. Once on the “inside” they start leeching. That always damages and sometimes leads to the extinction of their hosts.

For those who prefer buying stocks as opposed to funds, keep your eyes open on the potential for voodoo bookkeeping. It appears to be gaining in popularity again and the punishment is increasingly miniscule, relative to the crime. Companies that practice voodoo bookkeeping will not participate with the bull. Watch the executives. If they are not hard at work, improving operations, consider that a fundamental weakness. Even if the Mid-term Indicant signals buy for a stock, maintain vigilance. The bear punishes such stocks swiftly and deeply when voodoo bookkeeping is detected. If the management is not fired for doing so, avoid that stock until they retire or die.

Voodoo bookkeeping is not the only problem with stock ownership. Just as you have seen with GE, GM, and Eastman, keep in mind the dilettantes are who the big companies hire. The highly productive generally do not work for such large companies. There are a few exceptions, but you need to stay on top of it if you own stocks.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

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

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

The Mid-term Indicant generated 13-buy signals and no sell signals.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 125 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 34.9%. That annualizes to 100.9%. The Mid-term Indicant has been signaling hold for these 125-stocks and funds for an average of 18.0-weeks. The reason the statistics are quite a bit different is due to last week’s 85-buy signals. Some are up by scant amounts since they have been held for only one week.

Although there were no sell signals, the Mid-term Indicant is avoiding 179-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 36.4% since the Mid-term Indicant signaled sell an average of 64.7-weeks ago.

Stocks and funds no longer traded are identified with the letters NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

Dilettante run companies, such as GM, Eastman, and others will continue to be tracked as long as they are traded. We will move them from their former classifications, such as the Dow30, NAS100, etc., to the Indicant Select Stocks category. In a few instances, where there is little hope for a company to rebound, we will simply remove them from our tracking. This is difficult to do, as companies nearing the end, from time to time, are fortunate enough to hire a talented manager. Although rare, it does happen, and when it does, you would want to know about it.

One year ago, on August 8, 2008, the Mid-term Indicant was holding 165-stocks and funds out of the 345 tracked for an average of 109.9-weeks. They were up by an average of 148.0% (annualized at 70.0%). There were 174-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 17.2% since their respective sell signals an average of 28.1-weeks earlier.

The Mid-term Indicant was signaling hold for 262-stocks and funds of the 345-tracked two years ago on Aug 10, 2007. They were up by an average of 139.4% (annualized at 60.8%) since their respective buy signals an average of 119.2-weeks earlier. The Mid-term Indicant was avoiding 79-stocks and funds at that time. They were down an average of 6.0% since their respective sell signals an average of 14.0-weeks earlier.

There were 173-stocks and funds with hold signals on Aug 4, 2006 since their buy signals an average of 114.8-weeks earlier. They were up by an average of 149.5% (annualized at 67.7%). There were 165-avoided stocks and funds at that time. They were down by an average of 4.7% from their respective sell signals an average of 15.9-weeks earlier.

On Aug 5, 2005, the Mid-term Indicant was signaling hold for 229-stocks and funds out of 320-tracked. They were up by an average of 102.6% (annualized at 60.2%) since their buy signals an average of 88.7-weeks earlier. The Mid-term Indicant was avoiding 229-stocks and funds at that time. They were down by an average of 17.2% since their sell signals an average of 19.9-weeks earlier.

Five years ago, on Aug 6, 2004, there were 160-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 75.8% (annualized at 61.1%) since their respective buy signals an average of 64.5-weeks earlier. There were 130-avoided stocks and funds then. They were down an average of 27.8% since their respective sell signals an average of 40.5-weeks earlier.

On Aug 9, 2003, there were 199-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 48.9%, annualizing at 82.9%, since the buy signals an average of 30.6-weeks earlier. There were 33-avoided stocks and funds then. They were down by an average of 11.0% since their sell signals an average of 15.0-weeks earlier.

On Aug 9, 2002, there were 51-stocks and funds with hold signals. They were up 26.7%, since their buy signals 19.6-weeks earlier. They were annualizing at 71.0%. The 168-avoided stocks and funds were down an average of 37.2% since sell signals an average of 15.5-weeks earlier. There were 76-buy signals, mostly in energy and commodity sectors, on Aug 9, 2002.

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.

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

As earlier stated, the Mid-term Indicant had the largest number of buy signals since October 2002 last week. This buying continued this week, but somewhat muted from last week. The Near-term and Quick-term bullish cycles now underway are fully suggesting directional intensity of sustainable bullishness.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling strong bullish bias while the Mid-term Indicant is also shifting toward that bias.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 28.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 79.5% and the S&P500 is up 30.1% since then. The small cap index, S&P600, is up 78.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics support 100% accuracy in the Reverse Tangential Projections will occur at some future point.

The Dow is down 33.8% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 30.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 31.7% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past two weeks. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

However, if inflation manifests, triple digit gains over a twenty-year period will not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return to previous levels. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction.

The NASDAQ is down 60.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 33.8% since its similar secular peak on March 23, 2000. The Dow is down by 20.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will continue reducing their power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 6.8% so far this year. The NASDAQ is up 26.8%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard.

The NASDAQ year-to-date performance was bearish by 17.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 34.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 23.7%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 11.3% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.  It was up by 0.1% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness. In 2006, it was down 6.0% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.1% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 11.2% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish. Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at what appears to be a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market for the time being.

As stated six weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. Such a movement is asynchronous to underlying market forces. They have softened the past few weeks. Regardless of bureaucratic and political interventions, the laws of supply and demand will prevail. Politicians delay impacts from time to time, but the markets will “catch-up” to the natural requirements.

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projections of declining demand. Although oil prices have been “softening” the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations.

A few weeks ago, commodities elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment.

Although the Near-term Indicant is observing some concerns regarding gold, it remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. That would signal expectations in deflation and related economic decline. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 45-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists and communists. If they back down and join the evil ones, then the paragraphs remain in tact.

As stated 40-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is now over one-half complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated in early September.

As stated last week, on a positive note, it appears enough of the populace are influencing their political representatives to put an end to the stupidity. If this happens, then bearish expectations of great magnitude will be muted.

The bear has been too passive. The bull has expressed behavior that correlates with the declining popularity of Barack Obama. The market is sensing an increasing possibility that social programs will be delayed. That is bullish in the capital markets.

The Near-term Indicant is no the prime attribute to monitor. Rising Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 9.3% since that sell signal. It has been bearish in 15-of the last 31-weeks. It has been bullish in eleven of the last 17-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Fidelity Gold, Fund #28 received a sell signal on July 10, 2009 after disappointing from the previous buy signal in May 2009. Although gold prices should continue to increase, risks of continued holding of this fund are currently too great. Fidelity Gold has been inconsistent for several years now.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 0.5%, annualizing at 24.1% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 21.8% since that sell signal. It has been bullish in 16-of the last 22-weeks, but also solidly bearish in five of the last eight weeks.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 35.2% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 5.7% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on June 24, 2009. It is down 2.1% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 16.2% since that buy signal, annualizing at 24.5%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 4.5% since the Near-term buy signal, annualizing at 15.4%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up 2.3% since that bull signal. The 9-trillion dollars are chasing the bull upward and the Blue Dogs may be stalemating government.

Click this sentence to view a summary of their performance.

 The Mid-term Indicant Dow Jones Industrial Average performance is at $26,991,781. That beats buy and hold performance of $1,425,539 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $131,448. That beats buy and hold’s $98,797 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $182,280. That beats buy and hold’s $69,357 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 38.0% since then. It remains too risky to buy since the Near-term Indicant continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 223.7% (annualized at 12.5%) since the Long-term Indicant signaled bull 927-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Today’s strong bullish expression was similar to that of the 1990’s with commodities falling, safe securities, such as treasury bills are being ignored and rising stock prices.

Configurations remain correlated with political influences. The market has been going up, paralleling the president’s increasing unpopularity. This, coupled with the Blue Dog Democrats resisting socialism, reversed very high probabilities of a return to the bear market in mid-July. Although the bull can linger for several more weeks without much pizzazz, risks of not broadly participating in a solid bull leg are too high.

The early warnings of the next bearish threat rests with the Near-term Bullish Blue Curve. As long as it moves north, there is nothing to fear. Even when it collapses, Force Vector position will be telling on the seriousness of any bearish threat. Right now, neither of those two attributes are near in support of the bear.

The Near-term Bull is 22-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. So far, the bear has been silent to bullish expressions.

Bullishness the past three weeks appeared to be emotionally-based, as the so-called improving fundamentals are not justification for the magnitude of the bull’s wrath. However, as usual, the market can move with sustainability against reasoned fundamentals. This may in fact turn out to be a Blue Dog Bull with the help of 9-trillion dollars chasing the bull north. Cap and Trade and Healthcare Reform, if stopped, will be bullish for the stock market. Tyranny by the majority, in this case, is the correct tyranny, when desiring bullish stock markets.

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

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

The eleven existing bulls are up 15.2%, annualizing at 87.8%, since the NTI signaled bull an average of 9.0-weeks ago.

The NTI is signaling bear for one major index (contrarian VIX). It is down 1.1% since the bear signal 3.4-weeks ago. 

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 9.4%, annualizing at 58.9%, since their bull signals an average of 8.3-weeks ago.

The lone bear, VIX, is down 30.9% since its bear signal 16.1-weeks ago. 

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day, unless they are also dated.

-Near-term Directional Intensity Unanimity-Jul 30, 2009-Thu-Bullish unanimity exists. Bullishly mature Force Vectors did entice a response from the bear. This, at worse, is non-bearish.

QTI Red Bull Status-Jul 27, 2009-Bullish bias. Eleven red bulls continue to discourage bear.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. Eleven of eleven non-contrarian indices are above bearish yellow. This should anger the bear. The bear remains quiet and thus the non-bearish bias prevails. (As stated last Thursday, mild bearish behavior last Wed and Thu did nothing to discourage the bull).

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven moving north and thus in full support of the bull. Keep your eye on the NTI Blue Curve. As long as it does not collapse, the bull remains dominant.

-NTI Green Bear Direction – Jul 30, 2009-Non-bearish bias. Eleven moving north and solidly non-bearish. The bull will remain in tact until the next time there is an interaction with NTI green.

-STI Force Vector Position- Jul 30, 2009-Bullish bias. Ten in bullish domains and solidly bullish. July 24, 2009-Force Vectors remain in bullish domains, minimizing bearish threats.

-STI Force Vector Direction – Jul 30, 2009-Bullish bias; Only VIX moving south. Disfiguring Force Vectors in bullish domains support bullish bias.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Eleven in bullish domains and solidly bullish.

-Vector Pressure Direction- Jul 9, 2009-Bullish bias. Eleven moving north and solidly bullish.

-Tangential Protection - None of the 11-major indices possess this attribute.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

Click this sentence to the table, highlighting RTP’s. The values and magnitudes are expressed in this table on the website, as opposed to continuing to list here. Keep in mind there is 100% confidence in the above projections. The problem is not knowing when, but odds still favor later this year or early next year.

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

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

The NYSE and NASDAQ Indicant Volume Indicators  are now attempting a cycle of robustness. The configuration is escaping its embryonic state and positioning to support a continuation of the bull. If it manifest into a solid robust cycle, this Near-term Bull should accelerate to significantly new “near-term” highs and last for several more months. Tremendous bullish potential is building; mostly due to increasing demand for stocks. Volume was relatively high on mild bearishness last Wed and Thu, suggesting nervousness. As stated last Thu, this relationship is irrelevant to the underlying bullish cycle now underway.

Current Strategy-Short-term Indicant- Aug 7, 2009-Fri-Unemployment did not disappoint. Thus the Near-term Bull lives on and there are no threatening attributes confronting its survivability at this time. Aug 6, 2009-Thu-Same as last Monday, except that prices can fall below NTI Bullish Blue Curve over the next few days. That will not mean the bull is threatened. It just means prices are ahead of the natural ebb and flow of bull markets. It will not be surprising to see the market disappointed in unemployment and that could trigger some additional selling, which is what we have seen the past two days. Again, the key point is NTI bullish blue curves not collapsing. Aug 5,2009-Wed-Nothing new. Aug 3, 2009-Mon-All Short-term attributes favor the bull. If prices fall below Near-term Bullish Blue without causing its collapse, this bullish cycle will be long-lasting and with significant magnitude. It is configured in support of a relaxed posture on your part.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 11.1%, annualizing at 87.3%, since their buy signals an average of 6.6-weeks ago. In addition to the sell signal, TLT, the NTI is avoiding one ETF. It is contrarian QID. It is down 3.0% since its sell signal 2.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 14.1% since their buy signals an average of 10.4-weeks ago. Those with hold signals are annualizing at 70.3%. In addition to the sell signal of TLT, QID remains with an avoid signal. QID is down 42.3% since the sell signal 19.1-weeks ago.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 3-red bulls 21-days ago to 28-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are 27-ETF’s with this bullish and non-bearish configuration. There remains no bearish threat. Bullish behavior in thirteen of the last 19-trading days reversed the bearish threat with 28 moving north. That is up from only four 21-trading days ago. The bear was insulted by the bull and did not respond. That suggests the bull remains too strong for the bear to battle. As stated earlier this week, mild bearish expressions last Wed and Thu did nothing to threaten the bull.

Force Vectors are disfigured, which suggests market stability with a bullish bias since they are directionally lost in bullish domains. Defying a high probability of non-bullish to bearish behavior on the immediate horizon a few weeks ago is a testament of the strength of this bull. Favorable probabilities of bearish aggression shifted to late August or early September when Congress returns. If Congress behaves like communists, then the bear will be aroused. Even with that, though, no sell signals will occur until prices interact with NTI green curves, which are moving north.

With current configurations, the Quick-term Bull is no where near extinction.

The NTI Blue Curve continues to rise and with gusto. Bullishly mature Force Vectors delayed new buy signals and new bull signals. The bullishly mature Vector Pressure suggests the market is at or near a cyclical peak, but also configured in support of bearish passivity. Any defiance to cyclical peaking on a Near-term basis, suggests this bull cycle will be impressive. So far, the bull is bent on defying probabilistic expectations. That is, yet, more bullish.

Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update. You will notice buy signals the past two weeks for the first time in several months.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Near-term Indicant signaled sell for QID on Jul 23, 2009. The primary reason for the sell signal is to clearly identify the next buy signal, which will coincide with the next QQQQ sell signal. Keep in mind, though, QID is configured for a robust bullish cycle upon the expiration of QQQQ’s bullish configuration. QID is down 3.0% since that sell signal. Also, it should be noted that QQQQ is not close to receiving a sell signal. QQQQ is up 31.5% since the NTI signaled buy on Mar 31, 2009.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 42.3% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $38.42 and still falling.

Force Vector is at a minimum, but too low to assist a bullish charge for QID.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is down 2.1% since those buy signals. As stated last week, Vector Pressure had been shifting south, which is not supportive of bullish behavior. However, it is attempting to behave like the other ETF’s with a shift to the north. (Aug 4, 2009-Tue-Call options look good, but disappointing the past three days. It lost its Red Bull status yesterday. The bull should respond with some gusto. If not, then this fund will linger in its current position).

ETF#11-Gold and Precious Metals  is up 16.2% since the QTI signaled buy on December 11, 2008. Annualized growth is at 24.5%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $85.76 and rising. Although under Near-term duress, this ETF remains bullish from a long-term perspective. The Near-term duress is losing intensity, right now.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 4.5% since then, annualizing at 15.4%. Fundamentally, it is one of the few ETF’s that could continue to increase in price in the face of an overall bearish stock market. Declining Vector Pressure is discerning, though. It lost tangential protection several days ago, as green disrupted the tangential relationship. It is on its own, but remains with a bullish configuration. It is again a Red Bull, offering maximum resistance to the gold bear.

Gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs. Commodities, including Gold, are no longer under Near-term bearish threat.

ETF#14-TLT-Long Government  received a sell signal on June 22, 2009 from both the Near-term and Quick-term Indicant. Its behavior was contrarian. Investors are not inclined to invest is so-called safe instruments.

Aug 7, 2009-Fri-The U.S. dollar strengthened today, while most commodities and related ETF’s were mildly bearish. XLE did not respond bullishly as expected, as the market behaved more like a 1990’s rally.

Aug 6, 2009-Thu-Same as yesterday, but now setting on NTI Green. Volatile expressions typically follow this configuration. Tomorrow’s unemployment report will most likely have an impact on the U.S. dollar. If weakened, this fund will move south, while ETF#03-XLE will move north. The opposite will occur if unemployment does not disappoint.

Aug 5, 2009-Wed-Force Vector is dipping south. If it crosses below Vector Pressure, this ETF could shift back in a deep bearish cycle.

Aug 4, 2009-Tue-Force Vector crossed into bullish domains. If it does not find comfort there, sell signals will ensue. Treasury yields may not invite buyers and foreign economies appear to be garnishing potential for growth without U.S. economic robustness.

Aug 3, 2009-Mon-Interest rates are starting to creep up. TLT is configured to move in either direction, but rising interest rates or perceptions of greenback safety will assist bullish behavior. Right now it is nestled on bullish blue with Force Vectors in bullish domains and depressed Vector Pressure. If Force Vectors below Vector Pressure and NTI Blue collapses, sell signals will be generated.

Major ETF Events

Aug 7, 2009-Fri-Today’s strong bullish behavior configured similar to that of a 1990’s bullish expression with commodities falling, safety being ignored, and stock prices jumping to the north. Nine trillion dollars is now chasing the bull to the north, while discourse between Congress from within and with the public fully supports the bull.

Aug 6, 2009-Thu-Mild bearishness on increasing volume is not bearish. Prices can fall below NTI Blue Curve and not upset the bull.

Aug 5, 2009-Wed-30-NTI Bullish Blue Curves are moving north. Until anyone of them collapses, this Near-term Bull cycle will remain in tact.

Aug 4, 2009-Tue-Although not considered as major by many, steadiness with today’s flat market solidly supports bullish positions. Any volatility will favor the bull. Strong bearish expressions offer call option opportunities.

Aug 3, 2009-Mon-Strong bullishness suggests the $9-trillion is shoving the bull to the north. Such phenomenon can provide for a long-lasting bullish cycle. Behavior in September will be a significant study. Congressional inaction w