August 2011 Weekly Stock Market Reports

Aug 28, 2011 Indicant Weekly Stock Market Report

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

Conflicts

As stated last week and repeated here, the Dow Utilities continues resisting the stock market bear’s wrath. That resistance contributed somewhat to last week’s bullish response to four consecutive weeks of dominance by the stock market bear. The Dow Utilities was bearish this past Friday, while the stock market was solidly bullish on Friday. However, Utilities was bullish for the week, albeit mildly so.

The ten major indices tracked by the Mid-term Indicant were up by an average of 4.9% this past week. The largest gainers were the S&P400 and S&P600 with a whopping 6.1% increase for the week. The smallest gainer was the Dow Utilities, which is the only remaining Mid-term Indicant bull. It is up by only 12.1% since the MTI Bull signal 59-weeks ago. The mid-cap and small-caps exceeded over half it the utilities growth in the past year just last week.

As previously stated, the Dow Utilities has been an exceedingly lazy bull since the 2009 stock market bottoming, but a bull nonetheless. That contrasts with utilities being a very strong bull in the 2003-2007 bull market. Periodically, the Dow Utilities bullish magnitude even exceeded that of the NASDAQ100 in the 2003-2007 bull market.

As long as the Dow Utilities does not succumb to the stock market bear, the overall stock market cannot endure a major collapse in spite of the Dow Theory Forecast’s bearish projection. The Dow Theory Forecast is a very old model. It is widely followed. That suggests it is a prime candidate for falling prey to the phenomenon of commonality.

As stated last week, the stock market has not produced a bearish conclusion in the presidential pre-election-year since 1939. Such Historical standards offer support for stock market bullish behavior for the rest of this year.

The Short-term Indicant recognized some significant bullish attributes after the stock market closed this past Friday. It signaled bull for the NASDAQ and NASDAQ100. That is because Force Vectors eclipsed Vector Pressure and jumped into bullish domains. Additionally, those two indices jumped above the Near-term blue curve. Several ETF’s did the same and garnished buy signals, accordingly. Next week’s stock market behavior will be very interesting.

In summary, the stock market bull can find inspiration from the Dow Utilities, historical standards of pre-election year bullishness, and the Short-term Indicant. Unfortunately, the bear can find some inspiration, as well.

The stock market is entering a period of the year that is sometimes referred to as the heart and soul of bearish seasonality. On average, it lasts for about six weeks. The greatest bearish expressions occur at this time of year more than any other time of year. Also, there is more bearish behavior this time of year. Of course, there are exceptions from time to time, but probabilistic modeling suggests this time of year is a time for a paranoid view of stock market performance. Recovery quickly follows with the heart and soul of bullish seasonality, which usually begins sometimes in October. Of course, there are exceptions from time to time with the latest in 2008’s bear market. Then, there was no recovery. The recovery is typically identified with bull/buy signals if there were bear/avoid signals triggered ahead of this bullish behavior.

There is a very good reason for the annual period of bearish seasonality. Congress returns to work. After their long summer vacation, they have relaxed and made a list of their vote-getting actions to take. The stock market bear finds enthusiasm, since congress typically sides with those whose hands are out. Consequently, money is confiscated from the productive and given to non-productive. That sort of behavior has aroused the stock market bear for nearly two-hundred years. New laws are passed and the president signs them; also for vote-getting purposes. The stock market bear finds all this political behavior very appealing for its purposes.

Politicians can only cater to the weak. That is because the productive are too busy to pay much attention to them. That hurts the feelings of politicians, who clamor to those who are willing to applaud their lies and/or handouts. The system works that way. It is accelerating, unfavorably. The stock market bull and bear are both aware of this and statistical support for this phenomenon is overwhelming.

Last week’s Near-term Indicant bull signals for the NASDAQ and NASDAQ100 were not accompanied with significant volume increases. Much of the recent robustness in the Indicant Volume Indicator correlates with stock market bearishness. Sustainable stock market bullishness is commonly paralleled with large volume increases early in the cycle. That did not occur last week.

In summary, the stock market bear can find inspiration with the bearish seasonality, congress returning to Washington D.C., and a lack of volume support. These conflict with the aforementioned reasons for bullish expectations on the immediate horizon.

As stated last week, keep your eye on the Dow Utilities and the Daily Stock Market Report. If Utilities continues resisting the stock market bear along the Mid-term Indicant cycle and more near-term bullishness occurs with some added volume support, the stock market bear should be defeated by the stock market bull. If congress is active and in agreement with the president, coupled with declining Force Vectors and collapsing Near-term Blue Curves, the stock market bear will gain momentum.

Whipsawed – Review of Wild Swings Last Week

NAS#23-LOGI-was the NASDAQ’s biggest gainer last week. It was up 18.1%, but down 70.9% since its all-time high. It is down 22.5% since the MTI signaled sell on Apr 15, 2011.

ISTK#42-AFFX was up 17.7% last week. It is down 96.7% since its all-time high. It is down 77.1% since the Mid-term Indicant’s sell signal in January 2008.

ISTK’s biggest loser was ISTK#08-RNWK. It was down 23.1% last week and down 97.6% from its all-time high. It is down 69.5% since the Mid-term Indicant sell signal in January 2007.

DJIA#06-BAC was up 11.3% last week as Warren Buffet bought quite a few shares. Keep in mind it is down 83.7% from its all-time high. It is down 78.8% since the Mid-term Indicant signaled sell in January 2008.

MF#22-USPIX was down 11.8% last week with the NAS100 bullish behavior. It is down 74.7% since the Mid-term Indicant signaled sell in Apr 2009.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 202 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 58.9%. That annualizes to 35.5%. The Mid-term Indicant has been signaling hold for these 202-stocks and funds for an average of 86.2-weeks.

The Mid-term Indicant is avoiding 133-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 15.6% since the Mid-term Indicant signaled sell an average of 46.0-weeks ago.

One year ago, on Aug 27, 2010, the Mid-term Indicant was holding 135-stocks and funds out of 333 tracked for an average of 67.4-weeks. They were up by an average of 47.7% (annualized at 36.8%). There were 181-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 21.6% since their respective sell signals an average of 60.2-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 137-stocks and funds of the 344-tracked two years ago on Aug 28, 2009. They were up by an average of 22.6%, annualized at 60.1%, since their respective buy signals an average of 19.5-weeks earlier. The Mid-term Indicant was avoiding 173-stocks and funds at that time. They were down an average of 35.4% since their respective sell signals an average of 67.7-weeks earlier. There were six buy signals adding to the 113-buy signals in the prior five weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 174-stocks and funds with hold signals on Aug 22, 2008 since their buy signals an average of 110.0-weeks earlier. They were up by an average of 144.2% (annualized at 69.0%). There were 168-avoided stocks and funds at that time. They were down by an average of 18.4% from their respective sell signals an average of 30.7-weeks earlier. There were no sell signals on this weekend in 2008, in spite of the 390-sell signals in the prior 41-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.” There were seven buy signals on this weekend in 2008 as a bullish mini-spurt manifested on light summertime volume.

On Aug 24, 2007, the Mid-term Indicant was signaling hold for 257-stocks and funds out of 345-tracked. They were up by an average of 145.5% (annualized at 62.2%) since their 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 by an average of 5.0% since their sell signals an average of 14.7-weeks earlier. There were no buy signals and no sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Aug 25, 2006, there were 221-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 118.7% (annualized at 66.6%) since their respective buy signals an average of 92.7-weeks earlier. There were 116-avoided stocks and funds then. They were down an average of 7.6% since their respective sell signals an average of 17.2-weeks earlier. There were 8-buy signals and no sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Aug 26, 2005, there were 225-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 101.5%, annualizing at 58.4%, since their respective buy signals an average of 90.3-weeks earlier. There were 90-avoided stocks and funds then. They were down by an average of 9.4% since their sell signals an average of 20.9-weeks earlier. There was one buy signal and four sell signals on this weekend in 2005.

There were 176-stocks and funds with hold signals on Aug 27, 2004. They were up by an average of 87.0%, annualizing at 67.1%, since their buy signals 59.7-weeks earlier. The 109-avoided stocks and funds were down an average of 26.3% since their respective sell signals an average of 43.3-weeks earlier. There were 11-buy signals and no sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was abating at this time.

On Aug 29, 2003, there were 259-stocks and funds with a hold signal, enjoying a 48.2% gain since their respective buy signals an average of 27.1-weeks earlier. That annualized at 92.4%. There were only 29-avoided stocks at that time. They were down by an average of 8.3% since their sell signals an average of 10.5-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 8-buy signals in addition to 288-buy signals in the prior 23-weeks. There were no sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 26-weeks old on this weekend in 2003.

On Aug 30, 2002, there were 215-stocks and funds with hold signals. They were up 6.3% since their buy signals an average of 7.1-weeks earlier, annualizing at 45.7%. There were 69-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 25.0-weeks earlier. There were two-buy signals in addition to 205-buy signals in the prior four weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while several others were reversed with sell signals a few months later. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008.

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 here. It is in the member’s only section.

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

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

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

Other than the Dow Utilities, all other remaining major indices remain as bears. Utilities continued resistance to bearish ambition suggests the heart and soul of bullish seasonality will be normal this year. This usually occurs in late September or early October.

Concerns regarding 2011’s presidential pre-election year bearishness are subsiding. Although threats continue, Utilities resistance suggests the bear is weakening.

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 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 5% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 54.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 122.6% and the S&P500 is up 51.5% since then. The small cap index, S&P600, is up 124.4% 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. That will again be an attribute to monitor in coming months. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news.

The NASDAQ is down 50.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 23.0% since its similar secular peak on March 23, 2000. The Dow is down by 3.7% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence. If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. Look at the resumes of intellectual elites who argue against these points. You will detect they are pure economic leeches arguing on behalf of such regulations, which is a source of their livelihoods. None has ever produced anything of value.

The NASDAQ year-to-date performance was bearish by 22.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 28.6% 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 NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 32.6%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 7.5% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was down 2.5% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 2.9% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.7% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 10.9% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 28.4% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 6.6% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 2.5% this year. The S&P500 and NASDAQ are down 6.4% and 6.5%, respectively. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939.

The Dow is down 20.3% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 13.3% since its last peak on Oct 31, 2007. The S&P500 is down 24.8% since its Oct 9, 2007 peak. This coincides with political coziness in Washington DC.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 eight weeks ago. That was the second time this year such accomplishment has been enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression in three of the past four weeks clearly demonstrate repulsions to bettering 2007 peak prices. The index closest to achieving its 2007 cyclical peak is the NAS100. It is 3.4% shy.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago. It, along with other major indices similar behavior, retreated below those peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 27.2% since its Oct 9, 2007 weekly closing peak. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Most major last cyclical bottoms 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 last weekly cyclical bottom on November 20, 2008.

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

The Dow is up 72.4% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 95.5% and the S&P500 is up 73.9% since then. The S&P600, Small Cap Index, is up 107.9% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle is now underway.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes a while for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past three weeks.

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As you have seen the past few weeks, the potential for a massive and long-lasting bear is possible as dilettantes the world wide continue converting their currencies to meaningless expressions.

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value. Bernanke recently promised more of the same for the next two years. Of course, such promises should not be taken seriously. Those sort of folks have been breaking promises for centuries.

The stock market is anticipating either high interest rates, inflationary pressures, or both.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. After three consecutive weeks of zero yields, the three month yielded 0.1% six weeks ago, up to 0.5% five weeks ago, back down to 0.1% four weeks ago, and finally back to 0.0% the past three weeks. The Fed may be reacting to the stock market by lowering rates with bearish behavior and raising during bullish spurts.

The Euro jumped to Red Bull status 31-weeks ago. It remains as a Red Bull, but still troubled. As stated the past several weeks, it is hovering without direction. That is interesting for a currency that may not exist in a few years.

The Canadian dollar and the Japanese Yen remain strong and continue strengthening.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. It is trading well above the 2012 yearend forecast at above $1800/oz. Its recent bullish behavior is indeed impressive. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild bearish bias, but with increased bearish pressure the past few weeks. It became a yellow bear nine weeks ago, but bounced north off yellow, like all good bulls do. However, it fell again below yellow four weeks ago on souring economic news and continuing to the south. This is favorable, however, to the North American economy.

Commodity prices continue falling from their recent record highs due to souring economic forecast. Most are no longer Red Bulls. Their potential contribution to inflationary pressures remains absent. The Dow Jones AIG Commodity Index and Spot Prices are currently not Red Bulls.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues waffling, but remaining above the bullish Red Curve, but getting close to contact.

Commodity prices, overall, were bearish in fourteen of the last 17-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply the past three weeks ago on souring economic news, they enjoyed a nice bullish bounce this past week.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months, depending on economic activity. High unemployment will continue to contribute to non-inflationary tendencies.

Overall, hard economic data is supportive of lackluster economic behavior and non-threatening toward inflation or deflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 10.9%, annualizing at 11.4% since then. As stated 17-weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. Unfortunately, this fund has not paralleled the price of gold the past several weeks. Of course, its constituents exceed the singularity of gold, one could be a bit critical of the mix of those constituents. It appears the managers bought into the gold bubble hype, while gold is increasingly one of the few remaining trustworthy assets one can have.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is up 1.3% since that buy signal, even though gold prices were up the past five weeks. Vanguard Gold continues to outperform Fidelity. It would be better to move to Vanguard the next time you see a buy signal for Vanguard Gold even with some of the recent criticisms directed at Vanguard.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 11.0%, annualized at 11.5% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 22.9%, annualized at 24.0%, since its Sep 17, 2010 buy signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is up 7.8% since then, annualizing at 8.7%.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 21.2% since that buy signal, annualizing at 22.2%.

The Quick-term signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 8, 2011. It is down 5.7% since that sell signal. The Near-term Indicant signaled sell on Aug 4, 2011. It is down 4.2% since that sell signal. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 120.0% since that buy signal, annualizing at 43.7%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It is up 18.1% since then, annualizing at 133.1%.

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

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

The lone index retaining the bull signal is the DJU. It is up 8.3% since its bull signal on Sep 17, 2010, annualizing at 8.8%. Last week’s report suggested it was a recent bull. That was an error.

The remaining major indices with bear signals are down by an average of 1.3% since their bear signals on Aug 5, 2011, including the NASDAQ100’s bear signal on Aug 19, 2011.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,716,802 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $115,271 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,610. That beats buy and hold’s $85,896 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1648.3%, 23.0%, and 151.9%, 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 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. The stock market did not succumb to the bear during the post election year, 2009.

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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 74.7% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund. The Short-term Indicant is signaling hold for QID, adding some hope for a Mid-term buy signal for MF#22.

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 289.8% (annualized at 14.6%) since the Long-term Indicant signaled bull 1,034-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

A few buy signals were triggered on Friday after the market closed. Execution of those buys cannot occur until Monday morning. Those buy signals were qualified with Force eclipsing Pressure. Prices climbed above the Near-term Indicant Blue curve. Buy signals were also justified with Force crossing into bullish domains.

Sell signals will be quick if prices fall below the NTI Blue curve and Force falls below Pressure. It will take several days for NTI Green to climb above the buy price. Until then, these buys should be considered with high risk. In spite of that, though, we will be buying. Stop losses will be set. Floor traders will see them and drive prices below them if they are too tight for their gain and your loss.

Keep in mind, this bullish behavior is along near-term cycle, where directional shifts and inflection points occur with higher frequency. There are a couple of other attributes of concern. There is no volume support for sustainability. Bullish breadth has not yet formed. Both of those attributes must be resolved before a relaxed posture with bullish expectations.

The Near-term Indicant could not signal sell for QID even though QQQ received a buy signal. Such conflicts seldom last more than a week. So, next week will be interesting. QID will not qualify for selling until its price interacts with NTI Green. It is still up by double digits since its July 29-buy signal. If you recall, its buy signal occurred a few days before the QQQ-sell signal last Aug 2.

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

Index Report Card Summary

The Near-term Indicant signaled two new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for contrarian VIX and non-contrarian Dow Utilities. Combined, they are up 26.6% since their bull signals an average of 2.3-weeks ago, annualizing at 606.1%. The DJU is down slightly, while the VIX is up by over 50% since bull signals.

The Near-term Indicant is signaling bear for eight major non-contrarian indices. They are down by an average of 9.1% since the bear signals an average of 3.9-weeks ago.

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

The Quick-term Indicant is signaling bull for the same two indices as the Near-term Indicant with the same performance results.

The Quick-term Indicant is signaling bear for ten non-contrarian indices. They are down by an average of 2.9% since their bear signals an average of 3.1-weeks ago.

Indicant Volume Indicators

Both major indices are robustly in high interest domains and accelerating in that configuration. That robustness coincides with bearish aggression. That adds to bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle. So far, that is absent.

Aug 26-Fri-Low volume on bullish behavior is a phony rally.

Aug 25-Thu-Mediocre volume on bearish aggression means little as the stock market is a bear on the short-term cycles.

Aug 24-Wed-Mediocre volume on stock market bullishness offers a tint of suspicion to that bullish behavior.

Aug 23-Tue-Unimpressive volume, coupled with bullish aggression does not suggest a new and sustainable bull cycle is about to unfold.

Aug 22-Mon-Low volume on mild bullish behavior does not encourage any change in directional intensity. Bearish bias prevails.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for five-ETF’s. They are up 22.4% since their buy signals an average of 3.9-weeks ago, annualizing at 300.1%. These holdings include mostly contrarian ETF’s and one non-contrarian.

The NTI is avoiding 21-ETF’s. They are down by an average of 8.8% since their sell signals an average of 3.7-weeks ago.

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

The Quick-term Indicant is signaling hold for five-ETF’s. They are up by an average of 30.7% since their buy signals an average of 30.3-weeks ago. This annualizes at 52.7%. Gold has been held since late 2008. It’s contrarian classification is the reason this hold duration is as long as it is. The other three were recent buys from late July 2011.

The Quick-term Indicant is avoiding 25-ETF’s. They are down by an average of 2.8% since the QTI sell signal an average of 3.1-weeks ago.

Several ETF prices crossed above NTI Blue. Their Force crossed above Pressure and into bullish domains. Therefore, buy signals were triggered. These buys are without bullish volume support. There is limited bullish breadth. However, there at the very least should be a late summer rally. Several strong bulls so far this century originated during the month of August.

Sell signals will occur when prices fall below NTI Blue and Force dips below Pressure or into bearish domains until NTI Green climbs above the buy price.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on Aug 4 2011. It is down 4.2% since that sell signal. Force must topple Pressure before signaling buy along the near-term curve. Libyan oil may further depress this ETF. Although it was solidly bullish the past three days, its configuration remains bearish.

ETF#11-Gold and Precious Metals is up 120.0% since the QTI signaled buy on December 11, 2008. Annualized growth is at 43.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $140.22 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $177.47.

The Near-term Indicant signaled buy on Jul 8, 2011, as Force penetrated bullish domains. It is up 18.1% since that buy signal, annualizing at 133.4%. NTI Green is above buy price and the next near-term sell signal will not occur until price’s interaction with NTI Green and a pathetically configured Force Vector. As stated last Tuesday, do not be surprised at more gold “cooling.” You saw some of that this past Wednesday with significant bearishness, but still configured solidly in support of the gold bull.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from both the Near-term and Quick-term Indicant models. Force crossed into bullish domains and above positive Pressure at that time. It is up 10.8% since those buy signals, annualizing at 138.8%. The next sell signal will not occur until interaction with NTI Green and Force in bearish domains.

ETF#31-QID received a buy signal on Fri, Jul 29, 2011 by the Near-term Indicant. It is up 12.7% since that buy signal, annualizing at 163.5%. The QTI signaled buy on Aug 2, 2011. It is up 6.4% since that buy signal, annualizing at 96.2%. Next sell signal is when price falls below NTI Green in spite of Friday’s buy signal for QQQ.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 18.1% since then, annualizing at 361.7%. It is up 72.3% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 897.2%. This ETN will be abandoned once the stock market stabilizes, as its tracking to VIX is unreliable.

Major ETF Events

Aug 26-Fri-Near-term buy signals were triggered based on prices climbing above NTI Blue with Force crossing above Pressure into bullish domains.

Aug 25-Thu-Some Force Vectors crossed above Pressure, but prices fell back below NTI Blue. Therefore, there were no buy or bull signals.

Aug 24-Wed-Two consecutive days of bullish behavior does not form a trend. However, there was one non-contrarian ETF buy signal, which was forced by virtue of gaining Red Bull status.

Aug 23-Tue-The stock market bull correlated well with an earthquake near the capitol.

Aug 22-Mon-Utilities was mildly bearish on an otherwise mildly bullish day. The bear still lurks and can still pounce with some punch.

Current Strategy-Short-term Indicant- Aug 26, 2011-Buy signals could be a mere late summer rally or it could be a new sustainable bull. Reasons are irrelevant. As long as NTI Blue continues to increase, the bull will be enjoyed. If prices fall below NTI Blue and Force dips below Pressure and/or into bearish domains before NTI Green crosses above buy price sell signals

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence this past week. That interrupted four consecutive weeks of combined bearish convergence/divergence, which is a solid bearish configuration. The major indices continue not finding comfort eclipsing 2007 cyclical peaks in spite of last week’s bullish behavior.

Indicant Conclusion

Four consecutive weeks of overall stock market bearishness was arrested, finally, by a bullish week. However, the stock market has not yet demonstrated an ability to exceed 2007 peak levels. Technically, the question remains, “are corporations in better position for growth now than then?” The obvious answer is “no.” The current economic environment is not going to foment revenue increases. Corporate profitability is being enhanced via cost cutting and work force reductions. The stock market bull desires revenue increases that couple to bottom line increases.

The good news, though, is that none of the major indices are Yellow Bears. Just as the 2009-2011 was a “suspicious” bull, the current bear market can be viewed with some suspicion until such time, all the major indices are Yellow Bears.

Rising interest rates and/or inflationary threats may manifest in coming weeks/months. The stock market bear will not wait for those manifestations. Corporate profits will take a back seat to those two threats if they indeed manifest.

Even with that, last Friday’s bullish behavior elevated short-term Force Vectors into bullish domains and higher than Vector Pressure. So, there is some hope for the stock market bull. Historical standards and political movements toward reduced government spending around the world could support bullish aspirations. The stock market bull, though, will behave according to activity, as opposed to political chit-chat.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/28/2011

Aug 21, 2011 Indicant Weekly Stock Market Report

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

Presidential Pre-Election Years

Since 1939, the stock market has not completed a presidential pre-election year with a bearish conclusion. The last pre-election year, 2007, concluded with a 6.7%-gain for the year, even though it contained the cyclical peak from the 2003-2007-stock market bull. The $10,000-investment only during presidential pre-election years since 1832 aggregated to a nice sum of $302,066 in 2007.

The pre-election year is the most bullish year along the four-year presidential election cycle. Investing in 2011’s pre-election year with bullish expectations has a long history of not enduring variations to that expectation.

The last presidential pre-election year to endure a bearish conclusion occurred in 1939. It, however, bordered minutiae. That year was bearish by only 2.9%. Unfortunately, its bearishness was predecessor to extreme bearishness two years later in the presidential post-election year, which is generally bearish.

It is always interesting to note that a $10,000 stock market investment in 1832 only during presidential post-election years is still only worth about $10,000. The reason for this phenomenon is simple. The post-election year is when the president encounters the least congressional resistance. In other words, the executive and legislative branches do not argue that much in presidential post-election years. They get things done, as the newly elected president is riding the typical wave of popularity in their first year of their new four-year term.

Unfortunately, getting things done from those two organizational entities is destructive and always slows the advances of your quality of life. This is factual correlation and factual causation. Only idiots argue with those facts.

Clicking this sentence will take you to three charts. The top chart displays hypothetical portfolio results by investing in only one of the four years along the presidential four-year cycle. As you will see, the presidential post-election year has not made money since 1832.

At issue is the current presidential pre-election year. The DJIA is down 6.6% so far this year. That is unusual. It is threatening the usually reliable expectation of pre-election year bullishness. The problem confronting this year’s normal bullishness could relate to the executive and legislative branches of government elevating the debt ceiling. There is a long history of those two branches of government agreeing to unfavorable passage of law and stock market bearishness.

The second chart illustrates the paltry bear market in 1939’s pre-election year. You may have to scroll down to view that chart. Although 1939 was somewhat of a trivial bear, you should notice what happened following that minor bear.

The third chart is a bit more dramatic. The next to last pre-election stock market bear occurred in 1933. It was not a minor one like that in 1939. The 1933-stock market bear concluded with a 52.7% decline. Politicians were jawboning tax increases in 1933. Does that sound familiar?

You should also notice that the 1933-bear was on the heels of a massive bear already underway. The 1933-Mid-term Indicant Bear signal was triggered while the stock market was already with Yellow Bear configurations. The major indices are not yet Yellow Bears so far this year. The MTI-Yellow curve offers potential resistance, just as it did in 1939. It even offered resistance to dynamic bearishness in 1932 for about four months. So, technical resistant points remain in place. That should offer some solace against otherwise excesses in paranoid behavior.

This is not a forecast. However, sometimes history repeats. Throughout the annals of history, there is not one objective element of fact highlighting an increased quality of life of the citizens of a massive government. On the contrary, the quality of the life of the citizens in massively oversized governments has always declined and significantly so. The capital markets know this. That is because a supersized government can only stand in the way of innovation, growth, and profits. In other words, profit margins shrivel. With that, bear markets dominate.

There is one final point that offers some potential to resisting dynamic bearishness on the immediate horizon. The Dow Utilities has not yet succumbed to the stock market bear along the Mid-term cycle. It is very close to retaining its Red Bull status. It has been the laziest bull since the 2009 bull market began, but it has also been the most resistive to bearish ambition.

However, many of you recall how the Dow Utilities was the last to resist bearish ambition in late 2008. It resisted the 2008 collapse for several weeks after most of the other indices were enduring significant dips in September 2008. However, once the DJU succumbed, the bottom fell out.

Keep your eye on Dow Utilities. The Short-term Indicant tracks it on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

This section will resume next week, assuming stock market normalcy manifests. That did not occur the past two weeks.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated no buy signals and 28-sell signals.

The Mid-term Indicant is signaling hold for 202 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 51.7%. That annualizes to 31.5%. The Mid-term Indicant has been signaling hold for these 202-stocks and funds for an average of 85.2-weeks.

The Mid-term Indicant is avoiding 105-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 26.6% since the Mid-term Indicant signaled sell an average of 65.5-weeks ago.

One year ago, on Aug 20, 2010, the Mid-term Indicant was holding 135-stocks and funds out of 333 tracked for an average of 66.4-weeks. They were up by an average of 48.2% (annualized at 37.7%). There were 181-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 21.4% since their respective sell signals an average of 59.2-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 138-stocks and funds of the 344-tracked two years ago on Aug 21, 2009. They were up by an average of 22.1%, annualized at 62.1%, since their respective buy signals an average of 18.5-weeks earlier. The Mid-term Indicant was avoiding 179-stocks and funds at that time. They were down an average of 35.0% since their respective sell signals an average of 62.1-weeks earlier. There were no buy signals not adding to the 113-buy signals in the prior four weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 167-stocks and funds with hold signals on Aug 15, 2008 since their buy signals an average of 110.0-weeks earlier. They were up by an average of 144.9% (annualized at 68.5%). There were 169-avoided stocks and funds at that time. They were down by an average of 16.0% from their respective sell signals an average of 29.3-weeks earlier. There were two sell signals on this weekend in 2008, adding to the 388-sell signals in the prior 40-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.” There were seven buy signals on this weekend in 2008 as a bullish mini-spurt manifested on light summertime volume.

On Aug 17, 2007, the Mid-term Indicant was signaling hold for 256-stocks and funds out of 345-tracked. They were up by an average of 137.7% (annualized at 59.2%) since their 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 by an average of 7.3% since their sell signals an average of 14.5-weeks earlier. There was one buy signal and 6-sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Aug 18, 2006, there were 175-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 149.1% (annualized at 68.1%) since their respective buy signals an average of 113.9-weeks earlier. There were 124-avoided stocks and funds then. They were down an average of 6.2% since their respective sell signals an average of 16.0-weeks earlier. There were 46-buy signals and no sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Aug 19, 2005, there were 227-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 102.3%, annualizing at 58.7%, since their respective buy signals an average of 90.6-weeks earlier. There were 87-avoided stocks and funds then. They were down by an average of 8.3% since their sell signals an average of 20.6-weeks earlier. There were two buy signals and four sell signals on this weekend in 2005.

There were 157-stocks and funds with hold signals on Aug 20, 2004. They were up by an average of 83.0%, annualizing at 66.0%, since their buy signals 65.4-weeks earlier. The 120-avoided stocks and funds were down an average of 26.3% since their respective sell signals an average of 42.2-weeks earlier. There were 19-buy signals and no sell signals on this weekend in 2004, in addition to 172-sell signals in the prior 16-weeks. The 2004-meandering bear market that pestered throughout most of 2004 was abating at this time.

On Aug 22, 2003, there were 231-stocks and funds with a hold signal, enjoying a 49.5% gain since their respective buy signals an average of 36.0-weeks earlier. That annualized at 90.8%. There were only 36-avoided stocks at that time. They were down by an average of 8.4% since their sell signals an average of 9.6-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 28-buy signals in addition to 260-buy signals in the prior 22-weeks. There was one sell signal on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 25-weeks old on this weekend in 2003.

On Aug 23, 2002, there were only 189-stocks and funds with hold signals. They were up 11.4% since their buy signals an average of 7.3-weeks earlier, annualizing at 81.1%. There were 69-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 25.0-weeks earlier. There were 35-buy signals in addition to 172-buy signals in the prior three weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while several others were reversed with sell signals a few months later. Energy related buy signals in Aug 2002, however, held strongly through the December 2002 bear and lasted until late 2008.

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 here. It is in the member’s only section.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

Other than the Dow Utilities, all other remaining major indices remain as bears. The NASDAQ100 succumbed to the stock market bear’s ambition this past week.

Although the presidential pre-election is traditionally the most bullish in the four-year cycle, a threat of variance is occurring here in 2011. The unusual bullishness in 2009’s post election year, which is traditionally the most bearish, may be offset with a similar, but unfavorable, variance in 2011.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 48.5% since its secular weekly low on October 9, 2002. The NASDAQ is up 110.2% and the S&P500 is up 44.6% since then. The small cap index, S&P600, is up 108.7% 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. That will again be an attribute to monitor in coming months. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. The previous sentence is now being challenged. Washington D.C. stupidity is far more reaching than historical standards suggest. You saw some of that the past few weeks.

The NASDAQ is down 53.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 26.4% since its similar secular peak on March 23, 2000. The Dow is down by 7.7% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

The NASDAQ year-to-date performance was bearish by 24.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 28.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 31.9%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 9.2% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was down 1.8% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 1.9% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 3.7% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 10.1% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 24.9% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 4.0% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 6.6% this year. The S&P500 and NASDAQ are down 10.7% and 11.7%, respectively. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939.

The Dow is down 23.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 18.1% since its last peak on Oct 31, 2007. The S&P500 is down 28.2% since its Oct 9, 2007 peak. This coincides with political coziness in Washington DC.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 seven weeks ago. That was the second time this year such accomplishment has been enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression the past three weeks clearly demonstrate repulsions to bettering 2007 peak prices.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago. It, along with other major indices similar behavior, retreated below those peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 30.3% since its Oct 9, 2007 weekly closing peak. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow is up 65.2% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 84.6% and the S&P500 is up 66.1% since then. The S&P600, Small Cap Index, is up 96.0% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle is now underway.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes awhile for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past three weeks. Here’s why. The debt ceiling agreement among politicians was an “agreement.” The stock market bear does not like it when politicians “agree.”

Political behavior is favoring the stock market bull in the long run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull.

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.

The stock market is anticipating either high interest rates, inflationary pressures, or both.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. After three consecutive weeks of zero yields, the three month yielded 0.1% ffive weeks ago, up to 0.5% four weeks ago, back down to 0.1% three weeks ago, and finally back to 0.0% the past two weeks. The Fed may be reacting to the stock market, lowering rates with bearish behavior and raising during bullish spurts.

The Euro jumped to Red Bull status 30-weeks ago. It remains as a Red Bull, but still troubled. As stated the past several weeks, it is hovering without direction. That is interesting for a currency that may not exist in a few years.

The Canadian dollar and the Japanese Yen remain strong and continue strengthening.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. It is trading well above the 2012 yearend forecast at above $1800/oz. Its recent bullish behavior is indeed impressive. It was up over $100/oz. last week. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild bearish bias, but with increased bearish pressure the past few weeks. It became a yellow bear eight weeks ago, but bounced north off yellow, like all good bulls do. However, it fell below yellow three weeks on souring economic news and continuing to the south. This is favorable, however, to the North American economy.

Commodity prices continue falling from their recent record highs due to souring economic forecast. Some are no longer Red Bulls. Their potential contribution to inflationary pressures remains absent. The Dow Jones AIG Commodity Index and Spot Prices are currently not Red Bulls.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues waffling, but remaining above the bullish Red Curve, but getting close to contact.

Commodity prices, overall, were bearish in thirteen of the last 16-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After spending several weeks in economic neutrality, they fell sharply the past two weeks on souring economic news and especially so in the housing sector.

Overall, hard economic data is supportive of lackluster economic behavior and non-threatening toward inflation or deflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 5.2%, annualizing at 5.6% since then. As stated 16-weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. Unfortunately, this fund has not paralleled the price of gold the past several weeks. Of course, its constituents exceed a singularity of gold, one could be a bit critical of the mix of those constituents. It appears the managers bought into the gold bubble hype, while gold is increasingly one of the few remaining trustworthy assets one can have.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 0.4% since that buy signal, even though gold prices were up the past four weeks. Vanguard Gold continues to outperform Fidelity. It would be better to move to Vanguard the next time you see a buy signal for Vanguard Gold even with some of the recent criticisms directed at Vanguard.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 7.3%, annualized at 7.8% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 16.6%, annualized at 17.8%, since its Sep 17, 2010 buy signal.

The Quick-term signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 8, 2011. It is up 1.5% since that sell signal. The Near-term Indicant signaled sell on Aug 4, 2011. It is down 8.0% since that sell signal. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 123.8% since that buy signal, annualizing at 45.2%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It is up 19.8% since then, annualizing at 169.4%.

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

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

The lone index retaining the bull signal is the DJU. It is up 6.5% since the last MTI Bull signal last week. That annualizes at 7.1%. This percentage performance will adjust next week if Utilities retains bull status due to cumulative dividend adjustments and a slight change to MTI modeling.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,645,771 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $110,053 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,160. That beats buy and hold’s $81,201 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1723.8%, 28.8%, and 166.8%, respectively, for these indices as of this past week. Those statistics were 1650.7%, 15.4%, and 134.0% last week. They continue adjusting in favor of the Mid-term Indicant since the MTI signaled bear a few weeks ago.

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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 71.3% since then.

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 273.3% (annualized at 13.8%) since the Long-term Indicant signaled bull 1,033-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

This paragraph remains unchanged since this past Aug 9. The next buying opportunity will not occur until Force crosses above Pressure and prices climb above NTI blue curves. Sometimes Force crosses above Pressure and then plummets again after severe bearish behavior such as recent impressive bearish expressions. So, there will be no buy or bull signals unless Force can hold above Pressure for a few days.

Force Vectors have shifted solidly to the south. The short-term bear cycle will gain even yet more momentum if Force falls below the maximum depth in the last Force Vector cycle. If Force shifts back to the north before that attaining that depth, the stock market bear will consider planning for annual hibernation sometimes this October.

As you saw with bearish aggression the past two days, the stock market bear dominated. This so-called “interesting” phase has concluded that the stock market bear retains its advantage.

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

Short-term Market Summary

Force Vectors are again moving south on bearish stock market Pressure. This configuration adds to the bearish support along the short-term cycle that was identified in late July

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull solely for contrarian VIX. It is up 87.3% since its bull signal 3.3-weeks ago, annualizing at 1,382.2%.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 12.0% since the bear signals an average of 2.8-weeks ago.

The Quick-term Indicant did not signal any new bulls or new bears.

The Quick-term Indicant is signaling bull only for contrarian VIX. That bull signal occurred 3.3-weeks ago, coinciding with the Near-term Indicant bull signal at the same time. It is up 87.3% since its bull signal, annualizing at 1,382.2%.

The Quick-term Indicant is signaling bear for eleven non-contrarian indices. They are down by an average of 6.3% since their bear signals an average of 2.1-weeks ago. The bear was humbled last Thu, Fri, and Mon, but as you saw stock market bearish aggression this Thu and Fri, its wounds were not fatal. The Near-term and Quick-term Indicant stock market bear remains alive and well.

Note: Aug 15, 2011-Mon-Last Friday’s report contained some erroneous performance data. The charts and bull/bear signals were not impacted. The errors only impacted the performance data for this section. The website’s report card information was accurate.

Indicant Volume Indicators

Both major indices are robustly in high interest domains and accelerating in that configuration. Much of that robustness coincides with bearish aggression. That adds to bearish bias.

Aug 19-Fri-Bearish aggression continues to be correlative to volume aggression and thus in support of continued bearishness.

Aug 18-Thu-Aggressive volume on bearish aggression continues to inspire the stock market bear.

Aug 17-Wed-Light volume on mixed, but mainly mild bearish, behavior does nothing to discourage the rampaging stock market bear.

Aug 16-Tue-Light volume on bearish behavior is not encouraging to the stock market bear. However, bearish attributes persist.

Aug 15-Mon-Mediocre volume on bullish behavior is not supportive of sustainable or dynamic bullish behavior.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for four-ETF’s. They are up 34.9% since their buy signals an average of 3.8-weeks ago, annualizing at 479.9%. These holdings are contrarian ETF’s.

The NTI is avoiding 28-ETF’s. They are down by an average of 11.6% since their sell signals an average of 2.7-weeks ago.

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

The Quick-term Indicant is signaling hold for four-ETF’s. They are up by an average of 45.0% since their buy signals an average of 36.8-weeks ago. This annualizes at 63.5%. These holds are contrarian ETF’s. Gold has been held since late 2008. It’s contrarian classification is the reason this hold duration is as long as it is. The other three were recent buys from late July 2011.

The Quick-term Indicant is avoiding 28-ETF’s. They are down by an average of 5.9% since the QTI sell signal an average of 2.1-weeks ago.

The next round of QTI buy signals will not occur until after the NTI signals buy. Force Vectors must climb above Pressure and hold for a few days before the Near-term Indicant can signal buy. Prices must also climb above the NTI bullish blue curve. The Force Vector cycle is bearishly embryonic, suggesting buy signals for non-contrarian ETF’s are not on the short-term horizon. ETF#12-Utilities did this, but as stated the past few days, it cannot be a standalone hold. As you can see, it has also fallen prey to the bear and thus avoiding during it irrational run up was appropriate.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on Aug 4 2011. It is down 8.0% since that sell signal. Force must topple Pressure before signaling buy along the near-term curve. Force climbed into bullish domains this past Wed, but price still remains below NTI Blue and thus no buy signal. As you saw the past two days, it was aggressively bearish. It is currently not behaving in a contrarian nature.

The Quick-term Indicant signaled sell on Aug 7, 2011, as price fell below QTI bearish yellow curve. There was no bounce in Force and time to take profits and wait for the next buying opportunity. It is up 1.5% since that sell signal. The Quick-term Indicant cannot signal buy until the Near-term Indicant does so in spite of its impressive bullishness last Thu through this past Mon. Today’s bearish aggression offers support for this discipline.

ETF#11-Gold and Precious Metals is up 123.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 45.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $139.09 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $179.95.

The Near-term Indicant signaled buy on Jul 8, 2011, as Force penetrated bullish domains. It is up 19.8% since that buy signal, annualizing at 169.4%.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from both the Near-term and Quick-term Indicant models. Force crossed into bullish domains and above positive Pressure at that time. It is up 13.6% since those buy signals, annualizing at 232.5%.

ETF#31-QID received a buy signal on Fri, Jul 29, 2011 by the Near-term Indicant. It is up 27.9% since that buy signal, annualizing at 478.9%. The QTI signaled buy on Aug 2, 2011. It is up 20.8% since that buy signal, annualizing at 440.1%.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 22.3% since then, annualizing at 731.1%. It is up 78.5% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 1,284.2%. This ETN will be abandoned once the stock market stabilizes, as its tracking to VIX is unreliable.

Major ETF Events

Aug 19-Fri-The just completed bullish Force Vector cycle related to classical emotion and automated buys by computers. Force is heading south again, which should invite more stock market bearish behavior along the short-term cycle.

Aug 18-Thu-As expected bullishly exhausted Force Vectors could no longer offer the stock market bullish support and in fact inspired the stock market bear with some solid gusto.

Aug 17-Wed-Several Force Vectors crossed into bullish domains, but prices remain below NTI Blue. Utilities is impressively bullish, but cannot be a standalone bull. However, if Force continues climbing and NTI Blue is surpassed, then buy signals will ensue along the near-term cycle and most quick-term cycles. If not, the bear will gain momentum.

Aug 16-Tue-Most Force Vectors crossed above Pressure, offering mild inspiration to the stock market bull. However, prices fell and most are below the near-term bearish green curve. Bullish attributes remain absent.

Aug 15-Mon-Utilties Force crossed Pressure and into bullish domains. It also eclipsed NTI Blue. The problem is that it is the only one. Others must join before invigorating the bull along the near-term cycle.

Current Strategy-Short-term Indicant- Aug 19, 2011. Vector Pressure remains solidly in bearish domains, supporting the stock market bear. Force is again in decline. The point of interest is how far they fall. If they fall below the last cycle’s depth, the short-term bear cycle will maintain dominance with unknown sustainability. If Force bounces back to the north before surpassing last depth, the bull will find some inspiration for a counter-attack.

Reverse Tangential Projections

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.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market endured bearish convergence last week, following two consecutive weeks of bearish convergence and one week of bearish divergence. That is a solidly bearish configuration. The major indices continue not finding comfort eclipsing 2007 cyclical peaks.

Indicant Conclusion

Four consecutive weeks of overall stock market bearishness supports to more of the same.

The stock market was incapable of crossing above 2007 peak prices. Technically, the question is, “are corporations in better position for growth now than then?” The obvious answer is “no.”

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/21/2011

Aug 14, 2011 Indicant Weekly Stock Market Report

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

2007-Cyclical Peaks Continue Resistance

The NASDAQ100 again crossed above its 2007 cyclical peak last week with a solid bullish conclusion to a tumultuous week. Of the ten major indices tracked by the Mid-term Indicant, the NASDAQ100 is the only major index above its 2007 peak price.

This is the fourth time since November 2010 this has occurred for the NASDAQ100. Several other indices crossed above their 2007 cyclical peaks since last November, but each time they found discomfort in doing so. The NASDAQ100 displayed similar discomfort three times since November 2010. Some, such as the weak S&P100 Index, have not yet achieved a glorious new cyclical peak price. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Consequently, during the past nine months, the stock market has not engendered significant bullish behavior, although with a few significant short-term bullish and bearish cycles with each cycle offsetting predecessor cycles for a flat conclusion to all those cycles. The NASDAQ100 is up 2.4% since its prior cyclical peak on Oct 31, 2007. After commission and taxes who recently sold in the bear scare the past two weeks, they would have been better off in CD’s or money market funds without the hassle of having to trade.

The NASDAQ100’s “glorious” 2.9% topping of its Oct 2007 cyclical peak contrasts with the weakest major index, which is the S&P100. It is down 22.6% since its prior cyclical peak on Oct 9, 2007. Technically, the S&P100 remains as a solid bear and has been as such for nearly four years. As stated many times before in this report, the S&P100 has the highest concentration of dilettante infested management and thus the reason for its lackluster performance.

The major indices continue to struggle eclipsing their 2007 cyclical peaks. Why is this? There could be thousands of answers. If one asked a thousand different people, a thousand different answers would not be surprising. Al Gore would probably blame it on global warming, while John Kerry would blame the Tea Party. George W. Bush would probably not provide an answer, while some would point to him as primary causation to stock market bearishness and a souring economy.

Qualitative opinions about any subject at any time regardless of who is talking and who is listening are valueless since proof of such low effort claims is always absent. Liberal leaning politicians recently blamed the Tea Party for recent stock market bearishness. Of course, they did not forewarn. Like most pundits, their fictional reasoning is always post-mortem.

Quantifications, such as GDP, offer correlative evidence for the major indices finding difficulty eclipsing 2007 cyclical peaks. Quarter IV-2008 GDP found its most recent bottom at a 7% decline. Quarter I-2009’s GDP was less negative at minus 5%. That was when the 2009-stock market bull was born. The stock market considered those two data points, bad and less bad, as a trend and the bull expressed its ambition to dominate late into Quarter I-2009 right on cue with the improving GDP numbers. Again, this is correlative evidence, but GDP causation to stock market behavior can be proven, both from empirical datasets and from mathematical formulations. However, you would not want to read it, as it would be tedious. Therefore, welcome the proof’s exclusion here. However, some soft comments later should obviate the proof.

GDP consistently increased each quarter since the horrors of Quarter IV-2008. That is, until Quarter II-2010’s 3.5% growth in GDP. As usual, the stock market anticipated these steady increases in GDP as evidenced by the stock market bull during that time from Quarter I-2009 through November 2010, which is when most of the major indices started interacting with their 2007 cyclical peaks. GDP has been in steady decline since QIV-2009. With that, the stock market bull cannot rationalize its continuation.

Unfortunately and previously stated, the rate of GDP growth has steadily declined since Quarter IV-2009. Although GPD behavior has been bumpy since then, its trend is south. A simple extrapolation from Quarter IV-2009 through the six succeeding quarters suggests negative GDP in future quarters. Two consecutive such quarters is classified as an “official” recession. Of course, simple extrapolations are not reliable. In spite of that, though, Quarter II-2011 barely escaped shrinkage and Quarter I-2011 was adjusted to barely above flat. Those revisions can be unsettling to the capital markets. This is especially so with downward revisions.

However, the stock market is influenced by such trends in GDP, regardless of simplicity or complexity. In effect, GDP growth is unimpressive and the last reported numbers was somewhat scary, suggesting miniscule economic growth. With that, it is more difficult to generate corporate earnings. With that, stock prices are not anxious to increase.

Cash flow as a percentage of shareholder equity is what drives a stock price to the north. Flat GPD minimizes the incoming cash flow to the corporation’s revenue stream. However, flat GDP will encourage superior corporations to gain market share to garnish the requirement of cash flow’s influence to their stock price. So, some companies will perform well during less than desired economic conditions, while most will fall in line with the bear’s influence. Only a few know how to be bullish during bear markets.

For example, RIMM, which is a NASDAQ100 company, is rapidly losing market share. Their infamous Blackberry product is having difficulty. It is NAS#55. It is down 47.0% since the MTI signaled sell on May 6, 2011. One of RIMM’s competitors, Apple, which is also a NASDAQ100 company, was recently purported to have more cash than the U.S. federal government for a day or two. It is NAS#01. It is up 5,119.8% since the MTI signaled buy on May 2, 2003.

Flat GDP is certainly not friendly to RIMM, while Apple has gained share and in doing so generated lofty stock price behavior with cash flow as a percentage of shareholder equity much higher than that of the Blackberry folks. When analyzing companies, a study of the cash flow statement is more informative than a study of the income statement. It is always about the accumulation of cash, relative to equity. After studying cash flows, look at the balance sheet next. However, always keep in mind that balance sheets must be studied over a long period and measured for content that is consistent with prior cash flow statements. Do not pay too much attention to forecasts. Just keep an eye on the product. When you see more I-Phones or Androids than Blackberries, do not be holding RIMM. Eventually, Apple and Google will follow the same path as RIMM is now enduring. All organizations eventually expire.

Sovereign defaults always threaten the capital markets. European nations with these threats continue to swell. That, coupled with flat GDP numbers is not cause for bullish expectations. Triple-A rated France is home to many banks with phony balance sheet content and recently purported to be in trouble. That adds to souring economic expectations. Someone recently noticed inconsistencies between cash flow and balance sheet content at French banks. Balance sheets and income statements are easily pencil-whipped. It is difficult to pencil-whip cash flow. It is always what it is. Ignore any inventory cost changes on cash flow statements. Some attempt to fool you by pencil-whipping that number. Just look at inventory receipts and shipments and use your own assessment on that account.

Next week’s CPI will reviewed with some added interest. Eventually, inflation is going to become a problem. It is mathematically impossible for inflation to not eventually confront the economy. Each printed dollar, without corresponding economic wealth increases, reduces the value of all previously printed dollars. That reduction in value is inflation. Politicians can tax you two ways; directly or with inflation with their unrelenting desire to print money. The stock market bull does not like either. The CPI may not disappoint next week, but it will at some point. In other words, flat GDP is not covering the printing press mentality in Washington D.C. and other countries. That is a pressing dilemma for policy makers. The problem with those policy makers is they typically make bad situations much worse.

The debt ceiling debate was indeed bullish. The short-term bullish cycle was invigorated by the fact that there was even a debate. The bull accelerated its joyful behavior every time politicians stormed out meetings and bad-mouthed each other. The stock market bull does not like political enemies suddenly becoming pals. Once the debate concluded with compromise, the bull was disappointed. The debate’s conclusion may not be causative to the aroused bear, but the correlation in timing between the bear’s arousal and the debate’s conclusion is inarguable.

Contrary to most thinking and pundit chitchat, the stock market bull desires a return to political discourse is Washington D.C. The stock market bull knows that capitalism can catch up and surpass the destructive behavior of politicians. If enough disagreeing politicians accumulate in Washington D.C. in the next few years, capitalists will figure out massive productivity methods to worm their way through regulatory constraints confronting them. The key point here is that the rate of regulatory creations must come to a dead halt. When that happens, the stock market bull will recognize such stalemate and stampede to the north. With that, GDP should increase. Stock prices will rise in accordance to the demands of the stock market bull.

Keep your eye on the CPI and future GDP numbers. Listen, every now and then, to political chitchat. If the numbers are bad and politicians start making claims to fix the bad numbers, sell, as Mid-term Indicant Yellow Bear population will increase. If politicians state that the capital markets will take care of themselves, buy, as Mid-term Indicant Red Bull population will increase.

Whipsawed – Review of Wild Swings Last Week

This section will resume next week, assuming stock market normalcy manifests. That did not occur last week.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 230 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 51.3%. That annualizes to 33.4%. The Mid-term Indicant has been signaling hold for these 230-stocks and funds for an average of 79.8-weeks.

The Mid-term Indicant is avoiding 105-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 23.0% since the Mid-term Indicant signaled sell an average of 64.5-weeks ago.

One year ago, on Aug 13, 2010, the Mid-term Indicant was holding 135-stocks and funds out of 333 tracked for an average of 65.4-weeks. They were up by an average of 47.5% (annualized at 37.8%). There were 179-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 21.3% since their respective sell signals an average of 58.2-weeks earlier one year ago. There were no buy signals and two sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 138-stocks and funds of the 344-tracked two years ago on Aug 14, 2009. They were up by an average of 20.1%, annualized at 59.7%, since their respective buy signals an average of 17.5-weeks earlier. The Mid-term Indicant was avoiding 179-stocks and funds at that time. They were down an average of 36.6% since their respective sell signals an average of 65.7-weeks earlier. There were no buy signals adding to the 113-buy signals in the prior three weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 165-stocks and funds with hold signals on Aug 8, 2008 since their buy signals an average of 109.9-weeks earlier. They were up by an average of 148.0% (annualized at 70.0%). There were 174-avoided stocks and funds at that time. They were down by an average of 17.2% from their respective sell signals an average of 28.1-weeks earlier. There were two sell signals on this weekend in 2008, adding to the 386-sell signals in the prior 39-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.” There were four buy signals on this weekend in 2008 as a bullish mini-spurt manifested on light summertime volume.

On Aug 10, 2007, the Mid-term Indicant was signaling hold for 262-stocks and funds out of 345-tracked. They were up by an average of 139.4% (annualized at 60.8%) since their 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 by an average of 6.0% since their sell signals an average of 14.0-weeks earlier. There were no buy signals and 4-sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Aug 11, 2006, there were 175-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 141.8% (annualized at 65.3%) since their respective buy signals an average of 112.9-weeks earlier. There were 175-avoided stocks and funds then. They were down an average of 5.7% since their respective sell signals an average of 16.7-weeks earlier. There were no buy signals and three sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Aug 12, 2005, there were 230-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 102.4%, annualizing at 60.4%, since their respective buy signals an average of 88.2-weeks earlier. There were 86-avoided stocks and funds then. They were down by an average of 17.3% since their sell signals an average of 20.9-weeks earlier. There was one buy signal and three sell signals on this weekend in 2005.

There were 155-stocks and funds with hold signals on Aug 13, 2004. They were up by an average of 77.0%, annualizing at 61.5%, since their buy signals 65.1-weeks earlier. The 133-avoided stocks and funds were down an average of 29.1% since their respective sell signals an average of 41.4-weeks earlier. There were two buy signals and six sell signals on this weekend in 2004, in addition to 166-sell signals in the prior 15-weeks. The 2004-meandering bear market continued pestering, but nearing its acquiescence to bullish ambition.

On Aug 15, 2003, there were 197-stocks and funds with a hold signal, enjoying a 52.6% gain since their respective buy signals an average of 31.0-weeks earlier. That annualized at 88.2%. There were only 60-avoided stocks at that time. They were down by an average of 7.1% since their sell signals an average of 8.6-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 35-buy signals in addition to 225-buy signals in the prior 21-weeks. There were 60-sell signals on this weekend in 2003, as the stock market endured a classical late summer sell-off. The 2003 bull market was 24-weeks old on this weekend in 2003.

On Aug 16, 2002, there were only 125-stocks and funds with hold signals. They were up 14.4% since their buy signals an average of 8.9-weeks earlier, annualizing at 84.6%. There were 102-stocks and funds were being avoiding since the Mid-term Indicant signaled sell an average of 18.7-weeks earlier. There were 66-buy signals in addition to 106-buy signals in the prior two weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while several others were reversed with sell signals a few months later. Energy related buy signals in Aug 2002, however held strongly through the December 2002 bear and lasted until late 2008.

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 here. It is in the member’s only section.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

Other than the NASDAQ100 and Dow Utilities, all other remaining major indices remain as bears. Clicking the links in the prior sentence will show the NASDAQ100 and DJU remain as Mid-term Indicant Red Bulls. Their persistence in maintaining that lofty status offers the stock market bull some inspiration.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 54.7% since its secular weekly low on October 9, 2002. The NASDAQ is up 139.6% and the S&P500 is up 61.4% since then. The small cap index, S&P600, is up 142.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. The previous sentence is now being challenged. Washington D.C. stupidity is far more reaching than historical standards suggest. You saw some of that the past few weeks.

The NASDAQ is down 47.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.9% since its similar secular peak on March 23, 2000. The Dow is down by 3.9% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

The NASDAQ year-to-date performance was bearish by 20.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 33.0% 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 NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 26.3%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 12.5% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was down 0.9% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 6.7% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 5.4% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 8.4% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 26.7% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 3.5% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 20.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 6.6% since its last peak on Oct 31, 2007. The S&P500 is down 19.9% since its Oct 9, 2007 peak. This coincides with political coziness in Washington DC.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 six weeks ago. That was the second time this year such accomplishment has been enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago. It, along with other major indices similar behavior, has retreated below those peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 22.6% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow is up 72.1% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 110.4% and the S&P500 is up 85.4% since then. The S&P600, Small Cap Index, is up 128.2% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes awhile for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past two weeks.

Political behavior is favoring the stock market bull in the long run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and others, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The stock market is anticipating either high interest rates, inflationary pressures, or both.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. After three consecutive weeks of zero yields, the three month yielded 0.1% four weeks ago, up to 0.5% three weeks ago, back down to 0.1% two weeks ago, and finally back to 0.0% this past week. The Fed may be reacting to the stock market, lowering rates with bearish behavior and raising during bullish spurts.

The Euro jumped to Red Bull status 29-weeks ago. It remains as a Red Bull, but still troubled. As stated the past several weeks, it is hovering without direction. That is interesting for a currency that may not exist in a few years.

The Canadian dollar and the Japanese Yen remain strong and continue strengthening.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. It is trading well above the 2012 yearend forecast at above $1700/oz. Its recent bullish behavior is indeed impressive. The $2,000/oz-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild bearish bias, but with increased bearish pressure the past few days. It became a yellow bear six weeks ago, but bounced north off yellow, like all good bulls do. However, it fell below yellow two weeks on souring economic news and continuing to the south. This is favorable, however, to the North American economy.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues waffling, but remaining above the bullish Red Curve, but getting close to contact.

Commodity prices, overall, were bearish in twelve of the last 15-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After spending several weeks in economic neutrality, they fell sharply this past week on souring economic news and especially so in the housing sector.

Overall, hard economic data is supportive of lackluster economic behavior and non-threatening toward inflation or deflation.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 3.0% since that buy signal, even though gold prices were up the past three weeks. Vanguard Gold continues to outperform Fidelity. It would be better to move to Vanguard the next time you see a buy signal for Vanguard Gold.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 13.8%, annualized at 15.1% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 29.8%, annualized at 32.6%, since its Sep 17, 2010 buy signal.

The Quick-term signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 8, 2011. It is up 7.5% since then. The Near-term Indicant signaled sell on Aug 4, 2011. It is down 2.6% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 110.8% since that buy signal, annualizing at 40.9%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It is up 13.1% since then, annualizing at 135.0%.

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

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

The two major indices, retaining bull signals, are up by an average of 25.9% since their bull signals an average of 76.5-weeks ago. That annualizes at 17.6%. The two major indices resisting bearish ambition are the NASDAQ100 and the Dow Utilities.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,714,441 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $122,838 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,160. That beats buy and hold’s $92,553 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1650.7%, 15.4%, and 134.0%, respectively, for these indices as of this past week.

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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 74.7% since then.

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 289.3% (annualized at 14.6%) since the Long-term Indicant signaled bull 1,032-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

As stated last Tuesday, “the current Force Vector cycle is fatiguing in deep in bearish domains. That should slow bearish aggression, but in no way suggests the bear is about to hibernate.” Force Vectors finally shifted upward, offering a mild threat to the stock market bear.

Pressure remains solidly in bearish domains. All non-contrarian ETF’s and major market indices are yellow bears. There is no floor to bearish ambition. All of this is bearish.

This paragraph remains unchanged since last Tuesday. The next buying opportunity will not occur until Force crosses above Pressure and prices climb above NTI blue curves. Sometimes Force crosses above Pressure and then plummets again after severe bearish behavior such as recent impressive bearish expressions. So, there will be no buy or bull signals unless Force can hold above Pressure for a few days. This should be observable sometimes this week or early next week. Based on recent behavior, observations will not be available this week. If Force vacillates deep in bearish domains, where they currently reside, then recent bearish aggression will display fundamental merit, as opposed to trader neurosis.

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

Short-term Market Summary

Indices need to cross above NTI Green and Blue before a rebirth of a near-term stock market bull. Most of that occurred today. However, Force Vectors need to climb above Pressure and into bullish domains and hold there for a couple of days. Therefore, the bear signal remains.

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull solely for contrarian VIX. It is up 7.5% since its bull signal 2.3-weeks ago, contrasting significantly with yesterday’s position of over a 75% gain since the bull signal. The VIX’s name of Volatility demonstrated significant merit today. That annualizes at 171.3%.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 2.1% since the bear signals an average of 1.8-weeks ago.

The Quick-term Indicant did not signal any new bulls or new bears.

The Quick-term Indicant is signaling bull only for contrarian VIX. That bull signal occurred 2.3-weeks ago, coinciding with the Near-term Indicant bull signal at the same time. It is up 7.5% since its bull signal, annualizing at 171.3%.

The Quick-term Indicant is signaling bear for eleven non-contrarian indices. They are up by an average of 4.3% since their bear signals an average of 1.1-weeks ago. The bear was humbled the past two days, but its wounds are not fatal. Force needs to drive its piercing blow into bullish domains before the short-term bear cycle endures fatality.

Indicant Volume Indicators

Both major indices are robustly in high interest domains and accelerating in that configuration. Much of that robustness coincides with bearish aggression. That adds to bearish bias.

Aug 12-Fri-Low volume on bullish aggression does not support the idea of a return to bullish dominance.

Aug 11-Thu-Healthy volume, although less than bearish related volume, offers some hope for a new bull’s birth.

Aug 10-Wed-Again strong volume, coupled to bearish aggression, continues in support of a bearish stock market.

Aug 9-Tue-Healthy volume on maximal intraday volatility with bullish close identifies trader nervousness, as opposed to fundamental directional shifts.

Aug 8-Mon-Another day of aggressive volume on dynamic bearish aggression support continuing stock market bearish behavior.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for four-ETF’s. They are up 19.2% since their buy signals an average of 2.8-weeks ago, annualizing at 359.0%. These holdings are contrarian ETF’s.

The NTI is avoiding 28-ETF’s. They are down by an average of 7.4% since their sell signals an average of 1.7-weeks ago.

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

The Quick-term Indicant is signaling hold for four-ETF’s. They are up by an average of 30.8% since their buy signals an average of 35.8-weeks ago. This annualizes at 44.8%. These holds are contrarian ETF’s. Gold has been held since late 2008. It’s contrarian classification is the reason this hold duration is as long as it is.

The Quick-term Indicant is avoiding 28-ETF’s. They are down by an average of 1.5% since the QTI sell signal an average of 1.1-weeks ago.

The next round of QTI buy signals will not occur until after the NTI signals buy. Force Vectors must climb above Pressure and hold for a few days before the Near-term Indicant can signal buy. Prices must also climb above the NTI bullish blue curve. After that, prices must climb back above QTI Yellow before the Quick-term Indicant can signal buy.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on Aug 4 2011. It is down 2.6% since that sell signal. Force, which is very depressed, must topple Pressure before signaling buy along the near-term curve. This fund was not contrarian in this bearish cycle.

ETF#11-Gold and Precious Metals is up 110.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 40.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $138.15 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $169.97.

The Near-term Indicant signaled buy on Jul 8, 2011, as Force penetrated bullish domains. It is up 13.1% since that buy signal, annualizing at 135.0%.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from both the Near-term and Quick-term Indicant models. Force crossed into bullish domains and above positive Pressure at that time. It is up 7.8% since those buy signals, annualizing at 200.9%.

ETF#31-QID received a buy signal on Fri, Jul 29, 2011 by the Near-term Indicant. It is up 12.8% since that buy signal, annualizing at 330.1%. The QTI signaled buy on Aug 2, 2011. It is up 6.5% since that buy signal, annualizing at 235.1%.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is down 1.9% since then. It is up 43.2% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 1,1035.9%. This ETN will be abandoned once the stock market stabilizes, as its tracking to VIX is unreliable. The VIX was down nearly 50% on Friday, while this ETN held flat.

Major ETF Events

Aug 12-Fri-Strong bullish behavior remains unsupported by Force Vectors. The bear has not yet expired.

Aug 11-Thu-Strong bullish behavior was classical with deeply depressed Force. However, there is little technical meaning to this until prices cross above NTI Blue, which is collapsed and declining.

Aug 10-Wed-Force Vectors fell to near 2008-depressed levels. Strong bearish behavior should start meeting some resistance. If not, one can predict shabby economic conditions will follow.

Aug 9-Tue-Intraday volatility was extreme today with a 600-point jump in the Dow in the last hour of trading.

Aug 8-Mon-The stock market bear demonstrated its strength with dynamic bearish behavior.

Current Strategy-Short-term Indicant- Aug 12, 2011. Vector Pressure remains solidly in bearish domains, supporting the stock market bear. Force finally shifted north, but not enough to expire the stock market bear. As stated last Tuesday, Force will rebound within a few days. The nature of its rebound will offer insights to when this bearish cycle will find resistance by the bull. Force Vector behavior during Vector Pressure interaction will be interesting. That should occur sometimes next week.

Reverse Tangential Projections

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.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market endured bearish divergence last week, following two consecutive weeks of bearish convergence. That is an increasing bearish configuration. The major indices continue not finding comfort eclipsing 2007 cyclical peaks.

Indicant Conclusion

The bull acquiesced to bearish ambition this past three weeks, but last week included some profound bullish expressions in some sectors and a few major indices. There is little commitment to bullish directional intensity, while there is a mild edge favoring the stock market bear at this time.

The stock market was incapable of crossing above 2007 peak prices. However, the NASDAQ100 again crossed its 2007 cyclical peak again last week. The remaining major indices remain below their respective 2007 cyclical peaks. Until they all cross above those cyclical peaks, any bullish behavior should be viewed as suspicious.

Rising interest rates and/or inflationary threats may manifest in coming weeks/months. The stock market bear will not wait for those manifestations.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/14/2011

Aug 7, 2011 Indicant Weekly Stock Market Report

The Downgrade

As most of you know, Standard and Poor’s downgraded the United States credit rating for the first time ever after the stock market closed on Friday. This has encouraged foreign leaders to start badgering the United States. Many of those political leaders represent countries that finance United States debt. Increased interest rates from the downgrade will line the foreign countries’ pockets. Do not be surprised at increasing disrespectful comments directed at the United States from foreign political leaders. They will be engaged in jawboning higher interest rates for self-gain and political promotion.

U.S. politicians, currently in power, will claim the downgrade as political. Standard and Poor’s will deny it. Those who are duped, economic leeches, will believe the politicians, while others will side with Standard and Poor’s. However, in the short-term, that will be irrelevant, as relevance occurs on Election Day, 2012. Interest rates and marketability of U.S. debt instruments is the short-term concern. No buyers of U.S. notes by foreign countries will be very bearish for the stock market.

Politicians have an edge here. The credit rating industry, as whole, has been exposed for its incompetence ahead of the housing market collapse in late 2007. The duped, who are generally passive listeners to political chit-chat, will allow their brains to be impregnated with the duped message; that is, “Standard and Poor’s must be republicans.” The capital markets hope that the duped do not vote in next year’s election.

Consensus holds that interest rates will rise. Foreign political leaders, who own U.S. debt related securities, will badger the U.S. for higher rates. The U.S. will have no choice but to pay the higher rates. Not doing so, would lead to inflation and possibly hyperinflation since paper currencies have no real value anyway. Not raising interest rates will further weaken the U.S. dollar and that would be inflationary. Stock market bears rejoice with massive gusto when the absolute additive values of inflation (or deflation) and interest rates exceed 8%. That is not yet a threat, but it can be with surprising velocity.

The question for Standard and Poor’s and other credit agencies is, why did it take them so long? The script was written when not the best and brightest voting public implanted a democratic majority in Congress on Election Day 2006 with a liberal president in office. That liberal president was George W. Bush. As stated before, he told the American public, “I hear you” shortly after his party was slammed in those 2006 elections. He, more or less, assumed a supporting role of the liberalism of Nancy Pelosi and Harry Reid, as opposed to resisting them.

Pelosi, if you recall, is the one who said, “natural gas is a good alternative to fossil fuels.” Keep in mind, people in her district repeatedly vote for her. What does that say about them? There is plenty of evidence elected political leaders do come from the people. The problem is the people. You are seeing firsthand why all prior democracies have failed. There are no guarantees written in the United States Constitution that the U.S. democracy will not fail. That would be impossible to legislate.

Senator Harry Reid argued for increasing taxes in the last debt ceiling debacle. The last time politicians elevated taxes during significant recessionary behavior was in 1929. That made the economy even worse. It is absolutely impossible for any government bureaucrat to handle your money better than you. Would you donate funds to study Chinese prostitute’s drinking behavior in China? Therefore, diverting funds from higher efficiency to lower efficiency is unfriendly to economic growth. Yet, Reid argued for this transfer from efficiency to inefficiency. And the folks in Nevada keep voting for him. What does that say about them?

Unfortunately, the U.S. voting public added salt to a serious wound by electing a more liberal president than George W. Bush in the 2008 elections. The not so smart voting public will pay a price. Stupidity is awarded only to a lucky few. Tens of millions of voters cannot be lucky.

Yes, the United States government is of the people, for the people, by the people. And look at who is running it. Dennis Kucinich has represented the 10^th District of Ohio since 1997. He was once the mayor of Cleveland in the 1970’s. Take a look at Ohio and especially Cleveland. It is a pitiful place, lacking in economic robustness for several decades now. For the past 30-years the folks in and around the 10^th District keep voting for Kucinich. He is a career politician. He is a typical politician. His behavior is like most; extort more money from the productive and give it to the majority, who are the least productive. That is the only way those, like Kucinich, can make a living. Well, now that Jimmy Swaggert must be approaching retirement, there are some options for those guys, depending on market depth and breadth.

The United States is not the only one with massive populations of duped souls. Most of you have seen the rioting in Greece. Rather than hunting for one’s own reindeer, societies around the world demand others to do that for them and they are the majority. They not only demand others hunt it, they demand the reindeer be skinned, butchered, cooked, and delivered for their gluttonous devouring of it. Economics is not much more complicated than that even though academia invented “economics” and even assigned PhD’s to pontificate about it. How many economist generated short term sell/bear signals days before last Thursday’s stock market collapse?

Several years ago, the intellectual elites substituted paper money over gold. In the 1960’s $35 would buy you an ounce of gold. It is now $1,669, as of this writing, reflecting the transfer from efficiency (you) to inefficiency (government). It is now being priced at just above $36/gram; about the same as for a whole ounce in the 1960’s. Keep in mind, an island that produced only gold, would be prisoner to an island that manufactured, extracted, and maintained agriculture. The latter island, if led by evil, would own the gold too.

Russia’s prime minister, Vladimir Putin, recently accused the United States of living beyond its means, like a parasite, on the global economy….” It is difficult to find argument with his comment. Russia also owns U.S. debt related securities. The badgering is being heightened for higher interest rates. The Chinese are starting to blast away with similar commentary.

Bearish behavior this past Thursday, according to many, was triggered by comments from Italy’s prime minister, Silvio Berlusconi. He is facing criminal charges for having sex with an underage prostitute. Last Thursday, Berlusconi indicated Italy has no economic problems, when in fact, that country has severe problems. The stock market bear loves that sort of commentary and related behavior.

Party animal Berlusconi was elected by people. People are always at the source of any economic problem, regardless of the system in which they live. The joyful Germans in the 1940’s paid the price for their “stupidity.” The joyful Russians in the early 1900’s paid the price for their stupidity, which spanned generations. The Germans were luckier. It did not take that long for the world to rid them of their political leadership.

There is no precedent for U.S. stock market behavior following a formal downgrade in U.S. credit ratings. It has never happened before.

However, this past week’s bearish stock market behavior occurred with the Mid-term Indicant with Red Bull status. That is unusual when Red Bulls perish within the same week of dynamic bearish behavior, such as that last week. The last two times this occurred was weekending March 24, 1987 and on January 4, 2008. The stock market bull resumed dominance shortly after the crash of 1987, while the stock market bear continued dominance for a year and a quarter following the January 4, 2008 bearish behavior. Click this sentence to view those two charts.

Although not shown, similar bearish behavior, stretching over multiple weeks, fall to bearish yellow 92% of the time. So, do not be surprised at this bear continuing dominance until such time prices fall to Mid-term Indicant bearish yellow curve. That means the S&P500 Index could fall another 7.6% and the NASDAQ could fall another 14.8%, if such dynamic bearish continued throughout next week. In normal circumstances, it usually takes some time for the bear to get there (to MTI Yellow).

Unfortunately, this is not normal. The U.S. has never encountered a formal downgrade in its credit ratings. So, next week will be interesting.

There is one final point. If prices fall below the Mid-term Indicant Yellow curve, you will not want to be holding capital stock; even those so-called buy forever stocks. Although the MTI Yellow Curve is a common point of resistance to bearish ambition, it is the final floor to stop bearish aggression. When there is no known floor to declining stock prices, please do not be holding. Set you stop losses above MTI Yellow, which is noted, on the right hand side of the tables, which can be accessed from this link.

Whipsawed – Review of Wild Swings Last Week

Last week’s bearish behavior induced several double-digit price swings; mostly bearish. Most behavior during dynamic bearish behavior borders irrationality. It is not the bearish behavior that was irrational, but the bull leg leading to it. Regardless of a bull’s substance, a bull is a bull. Unfortunately, the Mid-term Indicant was forced to signal bear for most of the major indices, including several sell signals; even for several mutual funds.

At any rate, political dynamics, such as the Tea Party versus conventional politicians, both democrat and republican, offers potential long-term bullishness. However, federal bureaucracies, political pandering, and major cuts in federal spending and related regulations must evaporate before a long-term sustainable bull can take shape.

This section will resume next week, assuming stock market normalcy manifests.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated no buy signals and 52-sell signals.

The Mid-term Indicant is signaling hold for 230 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.2%. That annualizes to 34.4%. The Mid-term Indicant has been signaling hold for these 230-stocks and funds for an average of 78.8-weeks.

The Mid-term Indicant is avoiding 53-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 34.2% since the Mid-term Indicant signaled sell an average of 76.3-weeks ago.

One year ago, on Aug 6, 2010, the Mid-term Indicant was holding 137-stocks and funds out of 333 tracked for an average of 64.4-weeks. They were up by an average of 51.9% (annualized at 41.9%). There were 179-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 17.7% since their respective sell signals an average of 57.2-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 125-stocks and funds of the 344-tracked two years ago on Aug 7, 2009. They were up by an average of 34.9%, annualized at 100.9%, since their respective buy signals an average of 18.0-weeks earlier. The Mid-term Indicant was avoiding 179-stocks and funds at that time. They were down an average of 36.4% since their respective sell signals an average of 64.7-weeks earlier. There were 13-buy signals adding to the 100-buy signals in the prior two weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 87-stocks and funds with hold signals on Aug 1, 2008 since their buy signals an average of 176.7-weeks earlier. They were up by an average of 220.6% (annualized at 64.9%). There were 174-avoided stocks and funds at that time. They were down by an average of 19.6% from their respective sell signals an average of 27.6-weeks earlier. There were four sell signals on this weekend in 2008, adding to the 382-sell signals in the prior 38-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.” There were 80-buy signals on this weekend in 2008 as a bullish mini-spurt manifested on light summertime volume.

On Aug 3, 2007, the Mid-term Indicant was signaling hold for 266-stocks and funds out of 345-tracked. They were up by an average of 138.7% (annualized at 61.0%) since their buy signals an average of 118.2-weeks earlier. The Mid-term Indicant was avoiding 59-stocks and funds at that time. They were down by an average of 11.5% since their sell signals an average of 17.7-weeks earlier. There were no buy signals and 20-sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Aug 4, 2006, there were 173-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 149.5% (annualized at 67.7%) since their respective buy signals an average of 114.8-weeks earlier. There were 165-avoided stocks and funds then. They were down an average of 4.7% since their respective sell signals an average of 15.9-weeks earlier. There were four buy signals and three sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Aug 5, 2005, there were 224-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 102.6%, annualizing at 60.2%, since their respective buy signals an average of 88.7-weeks earlier. There were 87-avoided stocks and funds then. They were down by an average of 17.2% since their sell signals an average of 19.9-weeks earlier. There were four buy signals and no sell signals on this weekend in 2005.

There were 160-stocks and funds with hold signals on Aug 6, 2004. They were up by an average of 75.8%, annualizing at 61.1%, since their buy signals 64.5-weeks earlier. The 130-avoided stocks and funds were down an average of 27.8% since their respective sell signals an average of 40.5-weeks earlier. There was one buy signal and five sell signals on this weekend in 2004, in addition to 161-sell signals in the prior 14-weeks. The meandering bear market was well underway at this time of year in 2004.

On Aug 8, 2003, there were 199-stocks and funds with a hold signal, enjoying a 48.9% gain since their respective buy signals an average of 30.6-weeks earlier. That annualized at 82.9%. There were only 33-avoided stocks at that time. They were down by an average of 11.0% since their sell signals an average of 15.0-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were two buy signals in addition to 223-buy signals in the prior 20-weeks. There were 62-sell signals on this weekend in 2003, as the stock market endured a classical late summer sell-off. The 2003 bull market was 23-weeks old on this weekend in 2003.

On Aug 9, 2002, there were only 51-stocks and funds with hold signals. They were up 26.7% since their buy signals an average of 19.6-weeks earlier. 168-stocks and funds were being avoiding since the Mid-term Indicant signaled sell an average of 15.5-weeks earlier. There were 76-buy signals in addition to 30-buy signals in the prior week. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008.

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 here. It is in the member’s only section.

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

Other than the NASDAQ100 and Dow Utilities, all other remaining major indices are new bears.

The Near-term Indicant signaled bear before the stock market collapse this past Thursday for several of the major indices and most of the ETF’s that are tracked daily. The Quick-term also generated bear/sell signals for the first time in nearly a year, as last Thursday’s bearish behavior dropped prices below the QTI bearish yellow curve.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 57.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 127.3% and the S&P500 is up 54.4% since then. The small cap index, S&P600, is up 128.4% 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. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current Mid-term Indicant configurations, while the short-term indicators suggest differently at this time. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. The previous sentence is now being challenged. Washington DC stupidity is far more reaching than historical standards suggest. You saw some of that the past few weeks.

The NASDAQ is down 49.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 21.4% since its similar secular peak on March 23, 2000. The Dow is down by 2.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

The NASDAQ year-to-date performance was bearish by 16.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. Interestingly, the NASDAQ was explosively bullish on this week in 2001 in addition to the prior two weeks.

The NASDAQ was down by 38.2% 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 NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 25.3%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 9.1% and finishing up for that year by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was up 0.1% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 5.5% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.0% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

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

It was up 26.4% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 1.1% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 19.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 11.4% since its last peak on Oct 31, 2007. The S&P500 is down 23.4% since its Oct 9, 2007 peak. This coincides with political coziness in Washington DC.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago. It, along with other major indices similar behavior, has retreated below those peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 25.7% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow is up 74.8% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 99.6% and the S&P500 is up 77.3% since then. The S&P600, Small Cap Index, is up 114.5% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Of course, such bearishness will eventually occur, but the Mid-term Indicant finds limited evidence of that on the immediate horizon.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes awhile for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that this past week, albeit supported by historical standards.

Political behavior is favoring the stock market bull in the long run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and others, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The stock market is anticipating either high interest rates, inflationary pressures, or both.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. After three consecutive weeks of zero yields, the three month yielded 0.1% three weeks ago, up to 0.5% two weeks ago, but fell back to 0.1% late last week.

The Euro jumped to Red Bull status 28-weeks ago. It remains as a Red Bull, but still troubled. As stated the past several weeks, it is hovering without direction. That is interesting for a currency that may not exist in a few years.

The Canadian dollar and the Japanese Yen remain strong and continue strengthening.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Its recent bullish behavior is indeed impressive. The $2,000/oz-forecast by 2014 is challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains in tact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild bearish bias. It became a yellow bear five weeks ago, but bounced north off yellow, like all good bulls do. However, it fell below yellow last week on souring economic news.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues waffling, but remaining above the bullish Red Curve, but getting close to contact.

Commodity prices, overall, were bearish in eleven of the last 14-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011 and retreated back down to economic neutrality. They continue meandering in the zone of neutrality with bearish yellow being somewhat gravitational to their behavior.

Overall, hard economic data is supportive of lackluster economic behavior and non-threatening toward inflation or deflation.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 8.6% since that buy signal, even though gold prices were up the past two weeks. Vanguard Gold continues to outperform Fidelity. It would be better to move to Vanguard the next time you see a buy signal for Vanguard Gold.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 15.6%, annualized at 17.4% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 32.6%, annualized at 36.4%, since its Sep 17, 2010 buy signal.

The Quick-term signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 26.5% since then, annualizing at 29.5%. The Near-term Indicant signaled sell on Aug 4, 2011. It is down 1.0% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 100.3% since that buy signal, annualizing at 37.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy Jul 6, 2011. It is up 7.7% since then, annualizing at 98.4%.

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

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

The two major indices, retaining bull signals, are up by an average of 21.4% since their bull signals an average of 75.5-weeks ago. That annualizes at 14.8%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,741,155 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $117,483 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,160. That beats buy and hold’s $87,809 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 74.2% since then.

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 295.4% (annualized at 14.9%) since the Long-term Indicant signaled bull 1,031-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Several Force Vectors stopped their decline and a few even shifted north. They will be closely monitored next week.

The next buying opportunity will not occur until Force crosses above Pressure and prices above NTI blue curve. Sometimes Force crosses above Pressure and then plummets again after severe bearish behavior such as that this past Thursday. So, there will be no buy or bull signals unless Force can hold above Pressure for a few days. This should be observable sometimes next week or early the following week. If Force vacillates deep in bearish domains, where they currently reside, then last Thursday’s bearish aggression will display fundamental merit, as opposed to trader neurosis.

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

Short-term Market Summary

The Dow Utilities and NAS100 Vector Pressure remains in bullish domains, offering limited hope for the stock market bull. All of the other non-contrarian indices are in bearish domains.

The depth of Force suggests a tremendous amount of energy must be summoned by the bull for a rebound for sustainability. A bullish reverberation initially will be considered as a mere bullish spurt until such time that Force penetrates bullish domains and holds there. Pressure has been pierced and leaking badly. It will fall deep into bullish domains, where bullish sustainability finds difficulty in reasserting its dominance.

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for solely for contrarian VIX. It is up 39.3% since its bull signal 1.3-weeks ago. That annualizes at 1,587.5%. Civil unrest would precede manifestations of that annualized number.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 6.2% since the bear signals an average of 0.8-weeks ago.

The Quick-term Indicant did not signal new bulls or new bears.

The Quick-term Indicant is signaling bull for two major non-contrarian indices and contrarian VIX for an average of 21.9-weeks. They are up by an average of 17.6% since their bull signals, annualizing at 41.8%.

The Quick-term Indicant is signaling bear for nine non-contrarian indices. They are down by an average of 1.5% since their bear signals an average of 0.2-weeks ago. The QTI bearish yellow curve had resisted bearish aggression yesterday, but acquiesced to the stock market bear this past Thursday.

Indicant Volume Indicators

Both major indices are robustly in high interest domains. Much of that robustness coincides with bearish aggression. That adds to bearish bias.

Aug 5-Fri-High volume on maximal intraday volatility identifies trader neurosis more than fundamental stock market behavior. Bearish bias prevails based on more rational days in the recent past.

Aug 4-Thu-Extremely high volume, coupled with significant bearish aggression supports continuation of short-term bearish bias and threatening to mid-term bullish configurations.

Aug 3-Wed-Aggressive volume on mild bullish behavior suggests stock market “wonderment.” Fundamentals will eventually rule, but trader nervousness is influential right now.

Aug 2-Tue-Aggressive volume on bearish aggression is adding to short-term bearish bias.

Aug 1-Mon-Mild volume on mild bearishness, although with significant intraday volatility, is not inspirational to any bias shift. Mild bearish bias persists.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for four-ETF’s. They are up 13.6% since their buy signals an average of 1.8-weeks ago, annualizing at 394.8%. These holdings include contrarian ETF’s.

The NTI is avoiding 28-ETF’s. They are down by an average of 6.7% since their sell signals an average of 0.7-weeks ago.

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

The Quick-term Indicant is signaling hold for eight-ETF’s. They are up by an average of 23.2% since their buy signals an average of 48.4-weeks ago. This annualizes at 25.0%. Some of these holds also include contrarian ETF’s.

The Quick-term Indicant is avoiding 23-ETF’s. They are down by an average of 1.4% since the QTI sell signal an average of 1.0-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell this past Thursday. NTI Green did not resistance bearish ambition last Thursday. It is down 1.0% since last Thursday’s sell signal. Force, which is very depressed, must topple Pressure before signaling buy along the near-term curve. This fund has not been contrarian, lately.

The Quick-term Indicant signaled buy on Sep 15, 2010. It is up 26.5%, annualizing at 29.5% since then. The Quick-term Indicant will not signal sell until interacting with QTI Yellow. That occurred this Friday, but Force appears ready for a bounce. The model wants to see how this ETF will behave with rising Force. If Force continues to drop, then the petro bear will gain momentum.

ETF#11-Gold and Precious Metals is up 100.6% since the QTI signaled buy on December 11, 2008. Annualized growth is at 37.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $137.26 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $161.75.

The Near-term Indicant signaled buy on Jul 8, 2011, as Force penetrated bullish domains. It is up 7.7% since that buy signal, annualizing at 98.4%.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal last Fri, Jul 29, 2011 from both the Near-term and Quick-term Indicant models. Force crossed into bullish domains and above positive Pressure at that time. It is up 4.5% since those buy signals, annualizing at 231.1%.

ETF#31-QID received a buy signal on Fri, Jul 29, 2011 by the Near-term Indicant. It is up 14.9% since that buy signal, annualizing at 768.7%. The QTI signaled buy on Aug 2, 2011. It is up 8.5% since that buy signal, annualizing at 1,022.4%.

The Quick-term signaled sell on Apr 1, 2011 for ETF#32-VXX. This ETN does not track well with VIX. It is up 4.2% since that sell signal. It is up 27.1% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 1,221.3%.

Major ETF Events

Aug 5-Fri-The bull showed some life by responding to many QTI sell signals. Sustainable yellow bears can kill bull markets for relatively long periods. The bull reacted, offering some mild hope for its resurrection. Force Vector behavior the next few days will be telling.

Aug 4-Thu-Bearish aggression dominated today. QTI bearish yellow was timid in offering resistance. However, two major indices and a few ETF’s still offer some potential resistance. Force fell deeper into bearish domains, encouraging the bear.

Aug 3-Wed-QTI bearish yellow curve offered some resistance to bearish aggression, albeit an unimpressive one. VIX Force shifted south today. It will be interesting to see if its bearish cycle continues and even more interesting at how it interacts with Pressure, which is very bullish in position and direction.

Aug 2-Tue-The Dow Transports and NYSE became QTI Yellow Bears; the first in nearly a year. Four QTI Yellow Bears populate tracked ETF’s for the first time in nearly a year.

Aug 1-Mon-There were none other than validations that the debt deal is basically irrelevant to the capital markets at this time. Wait a few years, though, where monopoly money and/or double-digit interest rates will display its influence on the capital markets.

Current Strategy-Short-term Indicant- Aug 3, 2011. Vector Pressure is bearish for six of the non-contrarian indices. The stock market bear will find encouragement if the remaining five lose positive Pressure. Bearish shenanigans occurred, as expected. The impending rise in Force will be interesting. Prognosis more clear once they interact with Pressure. That should occur inside the next seven days.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being in spite of August 4, 2011 dynamic bearish behavior. However, if the yellow bears dominate and grow stronger, this will be worthy of more discussion and close monitoring. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market endured bearish convergence the past two weeks, following bullish convergence in five of the last seven weeks. The major indices did not find comfort eclipsing 2007 cyclical peaks.

Indicant Conclusion

The bull acquiesced to bearish ambition this past two weeks even with heightened political bickering on the debt ceiling. It is no longer appropriate to consider this bearish behavior as a mere bearish spurt.

The stock market was incapable of crossing above 2007 peak prices.

NTI Bullish Blue curves are collapsing. MTI and QTI Red Bulls are perishing.

Rising interest rates and/or inflationary threats may manifest in coming weeks/months. The stock market bear will not wait for that manifestation.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

08/07/2011