December 2006 Indicant Weekly Stock Market Report

Dec 31, 2006 Indicant Weekly Stock Market Report

Volume 12, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

Mid-term Election Year Finishes on Bullish Note

The 2006 Dow finished up 16.3%. More than one-half of that bullishness occurred from August 14, when the Quick-term Indicant advised of a bullish bias shift. The Dow moved up 11.0% between August 14, 2006 and last Friday. The other bullish segment was during normal bullish seasonality from December 31, 2005 through April 30, 2006. The Dow moved up 6.0% during that period. All of 2006’s bullishness occurred during normal bullish seasonality and during the Quick-term Indicant’s bullish bias shift.

Deep bearish seasonality did not occur this past year. Deep bearish seasonality is typically more pronounced during presidential mid-term election years. The Quick-term Indicant announced a shift to bullish bias on August 15, 2006. Since then the Dow moved up 11.0%, which is a solid bullish expression. The NASDAQ moved north by 14.2% during this time.

The heart and soul of bullish seasonality still has about four more weeks before its historical standard expires. The market’s behavior, coupled with the Indicant Volume Indicator, should obviate the market’s directional propensity moving into 2007.

The most bullish year in four-year presidential election cycle is the pre-election year. A $10,000 stock market investment in 1832 only during presidential pre-election years grew to $283,810 by 2003. That contrasts significantly to investing only in the post-election year where that $10,000 shrunk to $8,758. These amazing statistics span nearly 180 years.

The last four presidential pre-election years produced double-digit gains. The last losing pre-election year occurred in 1939 with a 2.9% drop.

Although statistical evidence suggests bullish optimism for 2007, it is not automatic. The pre-election year of 1931 resulted in a 52.7% decline. The stock market will not allow for 100% accuracy in predictability. One of the problems with historical standards is their increasing popularity. Once a model becomes popular, it quits working. Once a critical mass of investment popularity culminates, the market always punishes. The number of winners must be smaller than the number of losers on a short-term basis.

The market actually does not care about historical standards. Such standards are irrelevant at any moment in time. The market is always focused on fundamentals and the law of supply and demand. Stock prices can increase on weak fundamentals when holders of stocks refuse to sell. That elevated demand, relative to the supply for sell, will shove stock prices to the north. Rest assured there will be few sellers this coming year if oil prices continue to decline.

Technically, the stock market bull remains somewhat overheated. This particular bull, during the heart and soul of bullish seasonality, has not enjoyed dynamic bullish expressions. Volatility has been absent, as well. It has been just a steady bull. That steadiness has very quietly produced an overheated configuration.

This overheating does not mean bearish behavior is about to occur. Although all overbought conditions eventually lead to bearish expressions, anticipating the dive to the south is not advisable. Some of these bearish expressions are mere spurts. If overbought holders choose not to sell, the resulting low supply for sell and high demand to buy can cause dynamic northerly movement before the southerly dip. The net effect of such bearish spurts can still provide a gain while the dive is worrisome. The steady hand usually wins in these short battles between bull and bear.

Fundamentally, economic conditions favor a bullish presidential pre-election year. The cyclical shifts supporting that fundamental desire has not yet occurred, but the unfavorable fundamental cycles have at peaked. For example, the CRB Bridge Futures has passed its peak and heading south. The current southerly direction favors a bullish stock market. Click the following link.

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

As you can see this commodities index has shifted to the south, which should be favorable to the desires of a bullish stock market. The oil chart just above it has also shifted to the south, but has not yet made a cyclical commitment to the south. The Reuter Index just to the left of the CRB Bridge Futures continues to be obstinately locked into its northerly cycle.

These phenomena are the reason for this steady and tame bull. There are not enough fundamental dynamics available to excite the bull. However, those that are favorable to the bull are strong enough to prevent the bear from getting aggressive.

Overall, the Quick-term Indicant continues to bias in favor of the bull. That bias remains in strong support of the bull. Until you see it shift its bias away from the bull, enjoy this bull.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 31-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 13.3% since the Mid-term Indicant signaled sell an average of 20.2-weeks ago.

There were 50-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 16.0% since their respective sell signals an average of 27.2-weeks earlier. Two years ago, on December 31, 2004, the Mid-term Indicant was avoiding 15-stocks and funds that were down an average of 39.6% since their respective sell signals an average of 60.1-weeks earlier. Three years ago on December 27, 2003, there were only 10-avoided stocks and funds. They were down 26.6% from their respective sell signals an average of 37.2-weeks earlier. On December 28, 2002, the Mid-term Indicant was avoiding only 16-stocks and funds out of 296-tracked. They were down by an average of 25.6% since their sell signals an average of 21.9-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 313 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 106.1%. That annualizes to 62.7%. The Mid-term Indicant has been signaling hold for these 313-stocks and funds for an average of 87.9-weeks.

One year ago on December 30, 2005, the Mid-term Indicant was holding 269-stocks and funds out of the 320 tracked at that time for an average of 85.8-weeks. Those 269-stocks and funds were up by an average of 94.8% (annualized at 57.5%). The Mid-term Indicant was signaling hold for 304-stocks and funds of the 320-tracked two years ago on December 31, 2004. They were up by an average of 73.3% (annualized at 66.2%) since their respective buy signals an average of 57.6-weeks earlier. There were 283-stocks and funds with hold signals on December 27, 2003 since their buy signals an average of 35.0-weeks earlier. They were up 55.8% (annualized at 82.9%). The Indicant was only tracking 296 stocks and funds in 2002-2003. On December 28, 2002, the Mid-term Indicant was signaling hold for 274-stocks and funds out of 296-tracked. They were up by an average of 14.2% (annualized at 54.7%) since their buy signals an average of 13.5-weeks earlier.

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

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

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

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time.

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

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

This section is a repeated each week with a few modifications, reflecting recent secular influences and performance data. Although appearing redundant at times, it is important to read this section to keep abreast of secular market shifts. Quantifications and qualifications are updated, weekly. Remember, secular shifts can last twenty-five or more years. Fortunately, secular market movements do not deter mid-term, short-term, and quick-term profit opportunities. However, they can wreak havoc to the long-term investors’ plans and those that buy and hold.

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August in this mid-term election year of 2006. Deep bearish seasonality was not influential this year, which usually occurs from late August through early October. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality.

Current Indicant configurations suggest the market is in the process of honoring the historical normalcy of the heart and soul of bullish seasonality. It got off to an early start this year, showing little respect for the historical standards of deep bearish seasonality. Since August 14, 2006, the Dow is up 11.0%. The NASDAQ is up 14.2%.

The market synchronized with near perfection to normal seasonality in the mid-term election year of 2002. The rolling half of May-October 2002 was typically bearish. The 2002 seasonal bear leg was dynamic and configured perfectly to historical standards, although the depth of that bearish cycle was deeper than normal. The NASDAQ bear cycle approached the magnitude of the 1930-32 Dow bear cycle but the 2000-2002 NASDAQ bear leg lasted several weeks longer.

The current mid-term election year of 2006, fundamentally, supported historical standards for the first two thirds of this year. Although there was mild bearishness in this mid-term election year, it was nowhere as deep as 2002’s bearishness. The meandering bear in the first two-thirds of 2006 supported the historical standard. That support was extremely mild.

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. The Quick-term Indicant has been supporting this bullish bias since August 15, 2006.

Ignore recent news about economic lethargy. The stock market may recalibrate expectations six to nine months from now, but it does not care about the current economic situation. It addressed that in the first quarter of this year and pretty much had it figured out. That is why the market was a mild bearish meanderer from February through mid-August of this year. Since August, the market has been consistently, but not dynamically, bullish.

The heart and soul of bullish seasonality from mid-October 2005 through January 31, 2006 demonstrated bullish normalcy. The market had been more or less a meanderer since January 31, 2006 until mid-August 2006, when the Quick-term Indicant shifted from bearish to bullish bias.

The last period of the heart and soul of bullish seasonality, ending January 31, 2006 produced gains of 2.8%, 4.2%, and 7.2% for the Dow, S&P500, and NASDAQ, respectively. Expect greater gains than that in the current heart and soul of bullish seasonality, which is underway and will not expire until mid to late January 2007. However, the current bearish spurt is somewhat threatening an early expiration to the current heart and soul of bullish seasonality cycle.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 71.0% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 116.8% since October 9, 2002. The S&P600, small caps, is up even more by 134.3% since October 9, 2002.

The NASDAQ is down 52.2% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 6.3% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 7.1% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 109.0% and S&P500 by 7.7% to establish new weekly closing highs.

Historical standards suggest the NASDAQ will not return to historical high until 2025 or so. A 2000 buyer and holder will not be back to break-even until then, assuming zero inflation. Including inflation, a thirty-year-old investor will be in his or her eighties before the NASDAQ profits from early 2000 investment dollars, which assumes minimal inflation.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness. The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed follow-on bullish behavior due to this lack of demand with the exception of normal bullish expressions during the heart and soul of bullish seasonality in 2004, 2005, and the current heart and soul of bullish seasonality this year.

Until mid-August 2006, most major market indices have been slightly bullish since late 2003 with pronounced meandering behavior. The only significant bullish expressions, not followed by bearish expressions, occurred in the heart and soul of bullish seasonality (Nov-Jan) in 2003, 2004, and 2005. Other than those “heart and soul” bullish cycles, the market was relatively flat from early 2004 through August 2006.

For example, the Dow fell 4.4% from January 31, 2004 through October 31, 2004. The NASDAQ fell by the same amount. The Dow fell 0.5% from January 31, 2005 through October 31, 2005, while the NASDAQ was up only 2.8%. The Quick-term Indicant shifted to bullish bias on August 15, 2006. The NASDAQ was down 10.3% from January 31, 2006 through August 14, 2006. The S&P500 was down 0.9% while the Dow was up 2.1%. The market was not bullishly expressive after the heart and soul of bullish seasonality in 2004 and 2005.

As earlier stated, the Dow is up 11.0% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 10.3% and 14.2%, respectively since that bias shift.

As earlier stated, the Indicant began its buying barrage in October – November 2002 just after the market bottomed from the severe 2000-2002 Bear Market. There were 239 buy signals between October 5, 2002 and November 9, 2002 out of the 296 stocks and funds tracked by the Mid-term Indicant at that time. Even badly managed companies received a buy signal, which is a common attribute of sustainable new bull markets. As many of you noticed, those companies eventually dipped back to the south after the euphoria of new bullishness.

Since August 18, 2006, the Mid-term Indicant generated 147-buy signals and only nine sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

Some of you recall the Indicant Stock Market Report tracking the Short-term Indicant Bear for the NASDAQ in 2002. It was the longest in history. It even exceeded the Dow’s 1929-1932 Short-term Indicant Bear in breadth and approached it in magnitude. The good news is that the NASDAQ’s decline did not lead to a depression, which is a clear indication of how little influence tech stocks have on the economy.

There are two important axioms to remember and are always repeated in this report. 1) Real economic wealth is created in only three ways - manufacturing, agriculture, and extraction. 2) The only positive influence politicians have on the economy is to undo their prior damage. They are now doing their damage, some of which will be undone in 2007; the next presidential pre-election year. That is why the market typically finds a bottom in the mid-term election year. That is also why the presidential pre-election year is historically the most bullish on the four-year cycle. If the strength of the current Mid-term Bull can be subjected only to meandering behavior, like 2004 and 2005, then it is possible for the current Mid-term Bull to be a record setting one in terms of duration.

Political institutions reduce wealth. Politicians continually attempt to redistribute wealth, which flies in the face of the laws of nature. They promote “middle class” attainment. The larger the middle class, the more power politicians and their academic brethren have. The communists tried that, resulting 99% poverty, while the ruling 1% lived like kings. In other words, socialism rewards an ability to intellectualize, while capitalism rewards the results of appealing effort.

The remainder of this section, Secular Market Blend, is repeated, in part, from the past several months, but it does not hurt to reread it each week. As time progresses and conditions change, there will be modifications to it to maintain a balanced frame of reference.

You will notice many of the mutual fund buy signals occurred in March 2003. Many of them endured sell signals for the first time since early 2003 during the mildly bearish meandering behavior in mid-2005. However, recent bullish spurts and the bull’s resiliency have minimized selling activity and resumed buying. As a matter of fact, the Mid-term Indicant is now signaling buy or hold for all mutual funds it tracks with the exception of contrarian funds.

Many of you recall how the market did not synchronize with the heart and soul of bullish seasonality from November 2002 through February 2003. December 2002 was the most bearish since 1931, but not nearly as dynamic as the 1931 bearish expression. After the asynchronous behavior in the November 2002 rolling third of the year, the market turned bullish in March 2003 and again did not synchronize with normal seasonality. The Mid-term Indicant continued signaling bull/hold during bearish seasonality in 2003. The market continued moving north during that time, contrary to historical standards. As stated in most of 2004, bearish expressions on a Mid-term basis between May and October 2004 should not be surprising. That is exactly what occurred. The result was a meandering market with a slight bearish bias during most of 2004 and 2005 and the first two-thirds of 2006.

The Quick-term Indicant’s bearish bias most of this year was replaced with a bullish bias in mid-August. Several buy signals ensued shortly after that bias shift. The bullish behavior occurred, as expected, since mid-August. The various Indicant models, economic fundamentals, and historical standards suggest significant bullishness in the coming months and the next two years.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias shift and bullishly evolving economic fundamentals.

Use a 10% trailing stop loss or the yellow or green values you will find on the tables for your longer-term hold positions. If your stock or fund is above the bearish yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 10% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 10% trailing stop loss.

If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 20% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending and excessive concerns about social issues. Those types are more interested in burning your money for their pleasures, as opposed to making you money. High performing companies remain focused on honoring the investments made by their shareholders.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds with those “bearish” attributes. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. Use the Quick-term Indicant as a guide in your decision-making processes. If the stock price is falling in a Quick-term Bear market, it is not advisable to buy.

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

Stock and Fund Update

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

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past five weeks, interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. They are configuring to dive into the desired dip to the south, but remain in a teasing mode. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher. Intuitively, one can see that interest rates have been meandering and positioning for a turn to the south. There is no guarantee they will turn south, but it does not hurt to anticipate that.

The market reacted bearishly to strong economic news late last week. Ignore that sort of herky-jerky reaction by the short-term traders, whose investment strategy is emotion-based, which is never right in the longer term.

As stated the past two weeks, the U.S. dollar continues to weaken. The weaker dollar provides the Federal Reserve Board to move interest rates to the south.

Commodity prices are mixed, but the CRB Bridge and Oil Futures are providing a cyclical direction that favors a bullish stock market.

As stated the past four weeks, this mixed economic behavior can have a freezing effect on the Federal Reserve Board. That is one contributing reason for this lazy, but substantive bull and has been influential in the current bearish spurt. It is moving bullishly on seasonal expectations, but longer-term fundamentals do not support dynamic bullish expressions.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-seven weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 284.2%. The current annualized growth rate since the April 13, 2001 buy signal is 49.1%. It moved to the north in eight of the past eleven weeks. It moved south the past three weeks and last week’s bearish expression was deep.

Fidelity Gold, Fund #28, is up 44.8% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 32.9%. This fund moved south in three of the past four weeks. Last week, this fund moved north in reaction to excessive bearishness in the previous three weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 161.3% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 36.4%. This fund moved south last week, after dropping sharply three weeks ago and last week.

Vanguard Energy #18, VGENX, is up 174.2% (annualized at 46.0%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 123.1% (annualized at 39.6%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 120.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 35.2%.

The energy related funds were mixed last week, but are pretty much paralleling the decline in oil prices.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times. Fundamentals appear to be shifting in favor of selling the above funds (09/10/06). Do not sell until the Mid-term Indicant signals sell.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 45.2% since then. It is annualized at 31.7%. Its bullish position is being threatened on a Quick-term Indicant basis, but it moved aggressively to the north last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 172.7% (annualized at 45.2%). This fund was relatively flat last week.

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

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

Nine of the ten major indices are bulls. They are up by an average of 22.6% since the Mid-term Indicant signaled bull an average of 76-weeks ago. That annualizes to 14.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

Also, dynamic bullish statistics were eliminated from the Dow Transports bear signal last weekend have weakened overall performance statistics.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,753,868. That beats buy and hold performance of $1,906,113 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $183,123. That beats buy and hold’s $138,926 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $202,089 that beats buy and hold’s $83,748 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.7%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

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

Divergence versus Convergence

Last week enjoyed bullish divergence. Inflation sensitive securities moved south, while general equities moved to the north. That eases the concerns about bearish convergence the past few weeks.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 15.4% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 330.6% (annualized at 21.7%) since the Long-term Indicant signaled bull 791-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-seven of thirty; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

Both Indicant Volume Indicator’s are locked into a lethargic pattern, which is consistent for holiday seasons. Volume configurations will return to normal in January and help obviate the market’s directional propensity. The configuration remains in support of the underlying bullish theme.

The Dow is up 8.4% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 9.0% since the Short-term Indicant signaled bull on the same day. They are annualizing at 28.4% and 30.4%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 59.9% (annualized at 32.6%) since their respective buy signals an average of 94.2-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 61.6% (annualized 34.7%) since the STI signaled, buy, an average of 91.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 13.3% (annualized at 24.6%) since the QTI signaled buy an average of 27.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

Unanimous bullish consensus between the Short-term Indicant and the Quick-term Indicant remains absent. However, a bullish majority prevails, albeit weak. There are no conflicts, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull.

There are ninety hold signals out of a possible 90, while there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 9.8%. This is maintaining the market’s non-bearish posture. This non-bearish configuration is strong with near zero threat of bearish behavior.

Twenty-seven ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 2.3% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

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

None of the ETF are contacting their breakout lines. As stated the past several weeks, the high concentration of breakout contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 2.6%, which is not a great distance to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 20.0%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

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

Twenty-five of the thirty ETF Force Vectors are in bullish domains. This is a tremendous increase from early last week. This configuration solidly supports the bullish bias.

Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today for the eighth consecutive trading day.

Although the market has been bullish, it is not dynamically so. It is just a simple steady bull with less magnitudes of follow-on bearishness , which is not favorable to naked options plays. The absence of volatility is not friendly to naked options buy/selling. Stalking successfully is the only way to make money during limited volatility.

Twenty-eight ETF Vector Pressures are in bullish domains, which supports a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias.

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

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

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias since early February 2006. The Quick-term and Short-term Indicant models are suggesting bullish bias.

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact.

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

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bearish convergence ended with last week’s bullish divergence. That eases the concerns about bearish convergence last week.

The Indicant Daily Stock Market Report suggested configurations in support of a bearish spurt early last week, which manifested later that week. Then early last week, the Indicant Daily Stock Market Report announced the bearish spurt was nearing conclusion. The market responded with aggressive bullishness.

The Quick-term Indicant remains solidly in support of the bullish stock market. That bullishness may continue beyond the heart and soul of bullish seasonality, which concludes in the next few weeks.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

12/31/06

Dec 24, 2006 Indicant Weekly Stock Market Report

Volume 12, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bearish Spurt Is Underway

Early last week, the Indicant Daily Stock Market Report stated configurations support a bearish spurt. So far, this bearish spurt is not threatening to the underlying Quick-term Bull market. However, it has weakened the bull somewhat, albeit remaining strong; wounded but still dominant over the bear.

The problem with bearish spurts is the ever-present concern of maturing into a full-fledged bear market. Investors grapple with this on a continuous basis. There are only two possible prognosis investors have available to them during these episodic bearish spurts. The market will rebound is the favored response most investors convey during bearish spurts. Most long-term investors take the attitude of not caring, as their position is long-term only.

Short sellers take a different stance. They tend to believe each bearish spurt is going to cascade into a deep and horrendous bear market. Their short selling however applies bullish pressure against their desired bearish results. Short selling guarantees buyers, which enhances the demand side of the law of supply and demand. Short sellers luck out periodically, but not very often. That good fortune occurs when economic fundamentals or psychological turmoil dump stock prices into a tailspin.

So, after all that, the burning question that most have, is this bearish spurt an embryo to a long lasting and deep bear market? Alternatively, is it merely a bearish spurt?

The Quick-term Indicant’s current configurations clearly indicate recent bearishness is just a spurt. It is not even a Quick-term Bear Market. There is no need to speculate.

The current bearish spurt did some damage though. It triggered a Dow-Transports bear signal from the Mid-term Indicant.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-06-DJT-Curr.htm

This index rose 59.1% since its last bear signal on March 26, 2004. You will notice that bear was short-lived. Bearish and bullish spurts can cause market fluttering where many bull/bear signals can occur. To minimize the effects of this fluttering the Quick-term Indicant started tracking 30-ETF’s last year to get a broader read on the market, as opposed to simply tracking major indices. So far, the Quick-term and Short-term Indicant models do not support this Mid-term Indicant bear signal.

The Mid-term Indicant signals are backed by over 100-years of history and related empirical observations. For those of you who have studied this history understand how the market engages in fluttering from time to time with many wild bounces to the north and the south. This causes rapid signal shifts from bull to bear. It is important to be able to recognize fluttering. The last flutter point in any cycle is when the market becomes committed to either a bullish or a bearish direction.

Right now, the market remains committed to a bull cycle. Next week’s report will demonstrate why you should be bullish in the upcoming presidential pre-election year. In the meantime, the Quick-term Indicant will keep you posted on the market’s integrity with respect to historical standards.

Weekly Buy/Sell Summary – Stocks and Funds

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

In addition to the sell signals, the Mid-term Indicant is avoiding only 30-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 12.4% since the Mid-term Indicant signaled sell an average of 20.1-weeks ago.

There were 49-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 15.0% since their respective sell signals an average of 26.6-weeks earlier. Two years ago, on December 23, 2004, the Mid-term Indicant was avoiding 16-stocks and funds that were down an average of 39.6% since their respective sell signals an average of 58.2-weeks earlier. Three years ago on December 20, 2003, there were only 10-avoided stocks and funds. They were down 26.6% from their respective sell signals an average of 36.6-weeks earlier. On December 20, 2002, the Mid-term Indicant was avoiding only 10-stocks and funds out of 296-tracked. They were down by an average of 27.5% since their sell signals an average of 22.7-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 312 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 103.9%. That annualizes to 62.0%. The Mid-term Indicant has been signaling hold for these 312-stocks and funds for an average of 87.1-weeks.

One year ago on December 23, 2005, the Mid-term Indicant was holding 269-stocks and funds out of the 320 tracked at that time for an average of 84.6-weeks. Those 269-stocks and funds were up by an average of 97.4% (annualized at 59.9%). The Mid-term Indicant was signaling hold for 302-stocks and funds of the 320-tracked two years ago on December 23, 2004. They were up by an average of 72.3% (annualized at 66.4%) since their respective buy signals an average of 56.7-weeks earlier. There were 277-stocks and funds with hold signals on December 20, 2003 since their buy signals an average of 34.7-weeks earlier. They were up 55.4% (annualized at 83.1%). The Indicant was only tracking 296 stocks and funds in 2002-2003. On December 20, 2002, the Mid-term Indicant was signaling hold for 275-stocks and funds out of 296-tracked. They were up by an average of 16.0% (annualized at 67.3%) since their buy signals an average of 12.4-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year of 2006. Deep bearish seasonality was not influential this year, which usually occurs from late August through early October. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 69.4% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 115.5% since October 9, 2002. The S&P600, small caps, is up even more by 132.5% since October 9, 2002.

The NASDAQ is down 52.4% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 5.3% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 7.6% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 110.3% and S&P500 by 8.3% to establish new weekly closing highs.

The Dow is up 9.9% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 9.7% and 13.5%, respectively since that bias shift.

Since August 18, 2006, the Mid-term Indicant generated 146-buy signals and only nine sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

The Quick-term Indicant’s bearish bias most of this year was replaced with a bullish bias in mid-August. Several buy signals ensued shortly after that bias shift. Do not be surprised at dynamic bullish behavior in the next few weeks/months that should carry on through next year. The various Indicant models, economic fundamentals, and historical standards suggest significant bullishness in the coming months and the next two years.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias shift and bullishly evolving economic fundamentals.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past two weeks, the U.S. dollar continues to weaken, but with mixed behavior to specific currencies.

Rising commodity prices continue to confront the desired interest rate reduction.

As stated the past three weeks, this mixed economic behavior can have a freezing effect on the Federal Reserve Board. That is one contributing reason for this lazy bull and has been influential in the current bearish spurt. It is moving bullishly on seasonal expectations, but longer-term fundamentals do not support dynamic bullish expressions.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-seven weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 316.0%. The current annualized growth rate since the April 13, 2001 buy signal is 54.7%. It moved to the north in eight of the past eleven weeks. It moved south the past two weeks.

Fidelity Gold, Fund #28, is up 41.5% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 30.9%. This fund moved south the past three weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 163.2% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 37.0%. This fund moved aggressively south last week, after dropping sharply three weeks ago

Vanguard Energy #18, VGENX, is up 172.5% (annualized at 45.8%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 124.6% (annualized at 40.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 121.2% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 35.7%.

The energy related funds again moved aggressively to the south last week, after enduring significant bearish behavior three weeks ago.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 41.6% since then. It is annualized at 29.6%. Its bullish position is being threatened on a Quick-term Indicant basis. It moved slightly to the south last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 172.5% (annualized at 45.4%). This fund also endured bearish expressions last week.

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

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

Nine of the ten major indices are bulls. They are up by an average of 21.9% since the Mid-term Indicant signaled bull an average of 83-weeks ago. That annualizes to 13.7%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

Also, dynamic bullish statistics were eliminated from the Dow Transports bear signal this past weekend have weakened overall performance.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,390,572. That beats buy and hold performance of $1,887,867 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $182,149. That beats buy and hold’s $138,188 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $200,909 that beats buy and hold’s $83,259 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.7%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

Last week endured bearish convergence after divergence behavior the past few weeks. This configuration was induced by the current bearish spurt underway. However, this does not mean the market is headed for bearish dominance. We will continue to monitor this.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 11.1% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 326.4% (annualized at 21.5%) since the Long-term Indicant signaled bull 790-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine of thirty; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence, except Gold.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

Quick-term Red Bulls: Twenty-seven of thirty; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence, except Gold.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

Both Indicant Volume Indicator’s have shifted back into a lethargic pattern. This is due to the holidays. Volume configurations will return to normal in January and help obviate the market’s directional propensity. The configuration remains in support of the underlying bullish theme.

The Dow is up 7.4% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 8.4% since the Short-term Indicant signaled bull on the same day. They are annualizing at 26.6% and 30.2%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 58.1% (annualized at 32.0%) since their respective buy signals an average of 93.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 59.8% (annualized 34.0%) since the STI signaled, buy, an average of 90.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.3% (annualized at 23.5%) since the QTI signaled buy an average of 26.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

There are ninety hold signals out of a possible 90, while there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 9.2%. This is maintaining the market’s non-bearish posture. This non-bearish configuration is strong with near zero threat of bearish behavior.

Twenty-seven ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute. Although this is down by three the past few days, it is non-threatening to this bull.

All thirty ETF average positions are 1.7% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

None of the ETF’s are contacting their breakout lines. As stated the past several weeks, the high concentration of breakout contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 3.3%, which is not a great distance to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 19.1%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Five of the thirty ETF Force Vectors are in bullish domains. Force Vectors appear to be primed to move to the south. The bearish spurt mentioned four days ago is now underway. Force Vectors are behaving with a slight increase in their support of bearish behavior, but non-threatening to the Quick-term Bull.

Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today for the fourth consecutive day.

Twenty-nine ETF Vector Pressures are in bullish domains, which supports a bullish bias. That is down by one from last Thursday, which is the first drop in several weeks. However, this Quick-term Bull remains in tact. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact but Quick-term configurations no longer support strenghthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bearish convergence is always bothersome. That occurred this past week. However, one week is not a trend. Four consecutive weeks of this configuration will be unfavorable to the underlying bull market.

The Indicant Daily Stock Market Report suggested configurations in support of a bearish spurt early last week, which manifested later in the week. That spurt prompted a bear signal for the Dow Transports. That was the first bear signal since early 2004. Although this is a concern, maintain a bullish posture.

The Quick-term Indicant remains solidly in support of the bullish stock market. However, the bull has been weakened somewhat the past few days, but still a bull.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

12/24/06

Dec 17, 2006 Indicant Weekly Stock Market Report

Volume 12, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Six Weeks Remaining on the Heart and Soul of Bullish Seasonality

Do not be alarmed with the above heading. Normal bearish seasonality technically begins on May 1, according to the Stock Traders Almanac. There is plenty of time for the underlying bullishness to continue before historical standards have the opportunity to exert their influence. Do not be concerned about the heart and soul of bullish seasonality expiring around the end of January.

One should approach the next several months with a bullish mindset. Although the Indicant does not forecast the market, it openly engages in fundamental, technical, historical, and political analyses.

Last week’s report illustrated an increasing probability of fundamental support for a bullish stock market. Interest rates appear configuring for a cyclical shift to the south. The consumer price index and the producer price index have discontinued their support for inflation. The economy has softened somewhat. That allows the Federal Reserve Board to relax their posture on money tightening. Energy prices are declining, along with some commodities. As you can see, economic fundamentals support stock market bullishness.

Technically, the Quick-term and Short-term Indicant shift from bearish to bullish bias on August 15, 2006 suggest more than normal bullish optimism. Although the Quick-term and Short-term Indicant bull cycle has been tame during this year’s heart and soul of bullish seasonality, the early start to that bullishness last August has laid the foundation for bullish sustainability. Vector Pressure has remained positive during this period and has shown little interest in shifting to negative (bearish) expressions. It has maintained that positive energy for a long period. It has not been dynamic or volatile.

The market appears to configuring to support historical patterns. The upcoming presidential pre-election year of 2007 supports bullish expectations. It is the most bullish year on the four-year presidential election cycle. The last presidential election year of 2003 was bullish and did not even incur normal bearish seasonality. The market was bullish in 2003. That bull coincided with the Iraqi war. Historically, the market has expressed bearishness during war, but that particular bull ignored it. Deeper analysis may suggest the market found that war favorable to supporting the concept of capitalism.

Politically, the legislative and executive branches of government will be from different party affiliations. Democrats will control Congress. This is setting up for a classical confrontation with a Republican president. If this produces the normal stifling effect on the government, the stock market should enjoy explosive bullishness. The market performs with greater bullishness with more of a do-nothing government. History clearly illustrates greater bullishness when the executive and legislative branches of government are from different political parties.

In summary, the market has bullish support from the three broad areas of fundamentals, technical, and historical standards. As always, keep your eye on the daily stock market report, as the market tends to delight with variance from expectation from time to time.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 31-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 12.7% since the Mid-term Indicant signaled sell an average of 19.7-weeks ago.

There were 48-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 15.8% since their respective sell signals an average of 28.3-weeks earlier. Two years ago, on December 17, 2004, the Mid-term Indicant was avoiding 16-stocks and funds that were down an average of 40.2% since their respective sell signals an average of 58.0-weeks earlier. Three years ago on December 13, 2003, there were only 15-avoided stocks and funds. They were down 25.1% from their respective sell signals an average of 35.9-weeks earlier. On December 13, 2002, the Mid-term Indicant was avoiding only 8-stocks and funds out of 296-tracked. They were down by an average of 27.4% since their sell signals an average of 23.0-weeks earlier.

In addition to the buy signals this weekend, the Mid-term Indicant is signaling hold for 312 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 107.7%. That annualizes to 65.0%. The Mid-term Indicant has been signaling hold for these 312-stocks and funds for an average of 86.1-weeks.

One year ago on December 16, 2005, the Mid-term Indicant was holding 270-stocks and funds out of the 320 tracked at that time for an average of 83.5-weeks. Those 271-stocks and funds were up by an average of 98.0% (annualized at 61.0%). The Mid-term Indicant was signaling hold for 300-stocks and funds of the 320-tracked two years ago on December 17, 2004. They were up by an average of 70.8% (annualized at 65.3%) since their respective buy signals an average of 58.0-weeks earlier. There were 279-stocks and funds with hold signals on December 13, 2003 since their buy signals an average of 33.5-weeks earlier. They were up 53.1% (annualized at 82.6%). The Indicant was only tracking 296 stocks and funds in 2002-2003. On December 13, 2002, the Mid-term Indicant was signaling hold for 283-stocks and funds out of 296-tracked. They were up by an average of 14.8% (annualized at 67.4%) since their buy signals an average of 11.5-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year of 2006. Deep bearish seasonality was not influential this year. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality.

Currently, Indicant configurations suggest the market is in the process of honoring the historical normalcy of the heart and soul of bullish seasonality. It got off to an early start this year, showing little respect for the historical standards of deep bearish seasonality.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 70.8% from the last mid-term presidential election year bottom. The NASDAQ is up 120.6% since October 9, 2002. The S&P600, small caps, is up even more by 136.1% since October 9, 2002.

The NASDAQ is down 51.3% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 6.2% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high a several weeks ago. The S&P500 is down 6.6% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 105.5% and S&P500 by 7.0% to establish new weekly closing highs.

The Dow is up 10.8% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 11.0% and 16.2%, respectively since that bias shift.

Since August 18, 2006, the Mid-term Indicant generated 145-buy signals and only seven sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias shift and bullishly evolving economic fundamentals.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past four weeks, interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher. Intuitively, one can see that interest rates have been meandering and positioning for a turn to the south. There is no guarantee they will turn south, but it does not hurt to anticipate that.

As stated last week, the U.S. dollar continues to weaken, but with some mixed behavior to specific currencies. It is weakening dynamically against the British Pound and the Euro. This should result in some pressure on the Fed to lower interest rates. That would foster more bullishness in the stock market. Interestingly, the U.S. Dollar is strengthening against the Canadian Dollar, which is consistent with it being tied to the price of oil. The fundamental relationship between high oil prices and a strong Canadian dollar continues to be related. Weakening oil prices is influencing the weakening Canadian dollar.

Rising commodity prices continue to confront the desired interest rate reduction.

As stated the past two weeks, this mixed economic behavior can have a freezing effect on the Federal Reserve Board. That is one contributing reason for this lazy bull. It is moving bullishly on seasonal expectations, but longer-term fundamentals do not support dynamic bullish expressions.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-six weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 323.3%. The current annualized growth rate since the April 13, 2001 buy signal is 56.2%. It moved to the north in eight of the past ten weeks. It moved slightly south last week.

Fidelity Gold, Fund #28, is up 43.6% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 33.0%. This fund moved south the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 173.4% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 39.5%. This fund moved slightly south last week, after dropping sharply two weeks ago

Vanguard Energy #18, VGENX, is up 190.0% (annualized at 50.9%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 137.9% (annualized at 44.9%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 131.7% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 39.0%.

The energy related funds rebounded slightly last week, after enduring significant bearish behavior two weeks ago.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 42.7% since then. It is annualized at 30.9%. Its bullish position is being threatened on a Quick-term Indicant basis, but not as much as it was last week. It rebounded slightly last week and its Force Vector appears configuring at a cyclical bottom. Keep in mind Force Vector cycles last only for a few days.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 187.6% (annualized at 49.7%).

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

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

All ten major indices are bulls. They are up by an average of 28.1% since the Mid-term Indicant signaled bull an average of 88-weeks ago. That annualizes to 16.6%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,700,463. That beats buy and hold performance of $1,903,431 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $184,257. That beats buy and hold’s $139,787 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $205,596 that beats buy and hold’s $85,201 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.7%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

The energy sector rebounded ever-so slightly last week, along with a mildly bullish expression from general equities. Both of these two groups were mixed, with some bearishness. Technically, bullish convergence occurred, but ever-so mildly. This bullish convergence followed last week’s bullish divergence, which supports continuing bullishness. Although of little concern, recent mild expressions suggest a lack of strong bullish conviction.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 17.0% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 329.2% (annualized at 21.7%) since the Long-term Indicant signaled bull 789-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine of thirty; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence, except Gold.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

As stated the past few days, both Indicant Volume Indicator’s continue shifting toward lethargy. The advancing holidays support this behavior and will not adversely influence the market’s bias shift. There is a slight overbought configuration, but not threatening to the sustainability of the underlying quick-term bull market.

The Dow is up 8.2% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 10.9% since the Short-term Indicant signaled bull on the same day. They are annualizing at 32.0% and 42.3%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 61.0% (annualized at 34.0%) since their respective buy signals an average of 92.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 62.7% (annualized 36.1%) since the STI signaled, buy, an average of 89.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 14.1% (annualized at 28.0%) since the QTI signaled buy an average of 25.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

There are ninety hold signals out of a possible 90, while there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 11.4%. This is maintaining the market’s non-bearish posture. This non-bearish configuration is strong with near zero threat of bearish behavior.

Twenty-nine ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 3.9% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

Five ETF’s are contacting their breakout lines. As stated the past several weeks, the high concentration of breakout contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 1.8%, which is not a great distance to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 21.1%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Six of the thirty ETF Force Vectors are in bullish domains. That is two consecutive days of increases, supporting accelerating bullishness.

Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no call option signals today. We detected an error in our options program. The error was deficient in signaling call option buys. It was harmless to you, but it did prevent more call option participation in the past few months. You will notice an increase in call options in the next few weeks due to the correction of the error.

Thirty ETF Vector Pressures are in bullish domains, which support a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

The heart and soul of bullish seasonality has been exceedingly tame this year. However, it did get an early start. That early start last August provided significant bullish expressions through deep bearish seasonality. Technically, the heart and soul of bullish seasonality would have offered more bullish magnitudes if deep bearish seasonality had been allowed to play out.

The heart and soul of bullish seasonality has six weeks remaining. However, the upcoming presidential pre-election year supports continuing bullishness. The declining energy sector offers even more bullish optimism for the stock market even if configured with bullish divergence.

Keep your eye on the Quick-term and Short-term Indicant where the market’s bias is monitored daily.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

12/17/06

Dec 10, 2006 Indicant Weekly Stock Market Report

Volume 12, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bearish Divergence Ends – Back to Normal

The market was bullishly divergent last week after two consecutive weeks of bearish divergence. General equities were mildly bullish last week while the energy sector was extremely bearish. This is referred to bullish divergence since contrarian stocks moved to the south. Strong bull markets are possible with bearish contrarian sectors.

The most desired configuration is bullish convergence, which was the predominant attribute with the 2003 bull leg. Energy, commodities, and other contrarian sectors moved north along with general equities.

The great bull market of the 1990’s was spotted with significant periods of bullish divergence with commodities, energy, and other contrarian sectors moving south. During that time, the market not only moved north to new heights the rate of that bullish movement was historic.

Bearish divergence is a common predecessor to bearish convergence, where all sectors move south. That configuration typically precedes recessions. That was the concern the last two weeks. Rising interest rates are a common predecessor to inflation.

Fundamentally, the Federal Reserve Board has some room to relax their interest rate policy. The Producer Price Index is shifting to provide that support. It is configuring to support stock market bullishness.

http://www.indicant.net/Members/Updates/Economic/E-PPI.htm

Scroll down the page on the above link. You will notice the stock market will flip to a bearish configuration if the Producer Price Index falls too sharply. The stock market does not inflation, but will react even more bearishly to deflationary cycles.

The CPI is shifting favorably to long-term bullishness. You will notice the Consumer Price Index has dropped dramatically.

http://www.indicant.net/Members/Updates/Economic/E-CPI.htm

The Consumer Price Index still remains in positive territory. The Producer Price Index has nudged slightly into negative territory. If the Producer Price Index continues to dip further the south, the Consumer Price Index will most likely follow. That would foster conditions to support economic recession. The market will anticipate that and turn bearish beforehand. These dynamics are a probable cause for the tameness of this Quick-term Bull market. In other words, the bull is sniffing for a troublesome future and does not wish to participate.

The Long-term Indicant remains configured to support continuing long-term bullishness.

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

Some take a long-term view of the market, while others are engaged on a short-term horizon. Some are even engaged on an hour-by-hour basis. The longer-term investors can continue to relax and enjoy their long-term gains, while the short-term oriented can continue to use the Short-term and Quick-term Indicant.

Many of the Fidelity Funds took it on the chin. The Mid-term Indicant did not signal sell as many of the buy signals are dated from March 2003. Therefore, they are still up by a tremendous amount and remain favorable to long-term gains. A rebound would not be out of line during the heart and soul of bullish seasonality, which remains underway.

Keep your eye on the Indicant Daily Stock Market Report. It currently remains configured with a bullish bias. It will quickly identify any bias shift in the stock market.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 33-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 11.9% since the Mid-term Indicant signaled sell an average of 19.1-weeks ago.

There were 47-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 16.2% since their respective sell signals an average of 27.7-weeks earlier. Two years ago, on December 10, 2004, the Mid-term Indicant was avoiding 17-stocks and funds that were down an average of 43.7% since their respective sell signals an average of 57.3-weeks earlier. Three years ago on December 6, 2003, there were only 14-avoided stocks and funds. They were down 24.9% from their respective sell signals an average of 35.4-weeks earlier. On December 7, 2002, the Mid-term Indicant was avoiding only 9-stocks and funds out of 296-tracked. They were down by an average of 24.9% since their sell signals an average of 22.4-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 311 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 108.1%. That annualizes to 65.8%. The Mid-term Indicant has been signaling hold for these 311-stocks and funds for an average of 85.3-weeks.

One year ago on December 9, 2005, the Mid-term Indicant was holding 271-stocks and funds out of the 320 tracked at that time for an average of 82.1-weeks. Those 271-stocks and funds were up by an average of 92.7% (annualized at 58.7%). The Mid-term Indicant was signaling hold for 300-stocks and funds of the 320-tracked two years ago on December 10, 2004. They were up by an average of 68.8% (annualized at 64.6%) since their respective buy signals an average of 55.2-weeks earlier. There were 271-stocks and funds with hold signals on December 6, 2003 since their buy signals an average of 33.2-weeks earlier. They were up 53.7% (annualized at 84.0%). The Indicant was only tracking 296 stocks and funds in 2002-2003. On December 7, 2002, the Mid-term Indicant was signaling hold for only 286-stocks and funds out of 296-tracked. They were up by an average of 16.2% (annualized at 81.0%) since their buy signals an average of 10.4-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year of 2006. Deep bearish seasonality was not influential this year. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality in this mid-term election year.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 68.9% from the last mid-term presidential election year bottom. The NASDAQ is up 118.8% since October 9, 2002. The S&P600, small caps, is up even more by 136.6% since October 9, 2002.

The NASDAQ is down 51.7% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 5.0% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high a several weeks ago. The S&P500 is down 7.7% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 107.1% and S&P500 by 8.3% to establish new weekly closing highs.

Until the past few weeks, most major market indices have been slightly bullish since late 2003 with pronounced meandering behavior. The only significant bullish expressions, not followed by bearish expressions, occurred in the heart and soul of bullish seasonality (Nov-Jan) in 2003, 2004, and 2005. Other than those “heart and soul” bullish cycles, the market was relatively flat from early 2004 through August 2006.

The Dow is up 9.6% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 9.7% and 15.2%, respectively since that bias shift.

Since August 18, 2006, the Mid-term Indicant generated 143-buy signals and only seven sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias shift and bullishly evolving economic fundamentals.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past three weeks, interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher. Interest rates did move slightly to the south last week, though. That is encouraging to bullish desires.

Rising commodity prices continue to confront the desired interest rate reduction.

As stated last week, this mixed economic behavior can have a freezing effect on the Federal Reserve Board. That is one contributing reason for this lazy bull. It is moving bullishly on seasonal expectations, but longer term fundamentals do not support dynamic bullish expressions.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-five weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 329.7%. The current annualized growth rate since the April 13, 2001 buy signal is 57.5%. This fund has moved to the north in eight of the past nine weeks. Last week’s behavior was mildly bullish.

Fidelity Gold, Fund #28, is up 46.0% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 35.3%. This fund fell sharply to the south last week after moving north in the prior two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 175.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 40.0%. This fund lost one hundred percentage points last week.

Vanguard Energy #18, VGENX, is up 188.0% (annualized at 50.4%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 134.1% (annualized at 44.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 129.1% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.4%.

The energy related funds dropped sharply last week. The Fidelity Funds endured deeper price declines, due in part to litigious actions taken against most Fidelity Funds.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 42.5% since then. It is annualized at 31.1%. Its bullish position is being threatened on a Quick-term Indicant basis.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 180.3% (annualized at 48.0%).

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

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

All ten major indices are bulls. They are up by an average of 27.3% since the Mid-term Indicant signaled bull an average of 87-weeks ago. That annualizes to 16.3%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,282,337. That beats buy and hold performance of $1,892,431 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $182,030. That beats buy and hold’s $138,098 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $203,936 that beats buy and hold’s $84,513 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.5%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

Bearish divergence in the previous two weeks was replaced by bullish divergence. The energy sector nosedived while general equities were mildly bullish. That is favorable to the current bullish bias and has depressed last weeks concerns about bearish divergence.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 15.0% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 325.2% (annualized at 21.5%) since the Long-term Indicant signaled bull 788-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: All thirty; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence, except Gold.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

Both Indicant Volume Indicator’s continue toward a robust cycle. The current configurations remain in full support of the bullish bias. Recent minor bearishness is simply adjusting to over-bought dynamics.

The Dow is up 7.0% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 10.0% since the Short-term Indicant signaled bull on the same day. They are annualizing at 29.5% and 41.9%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 60.2% (annualized at 33.9%) since their respective buy signals an average of 91.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 61.9% (annualized 36.0%) since the STI signaled, buy, an average of 88.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 13.7% (annualized at 28.2%) since the QTI signaled buy an average of 24.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

There are ninety hold signals out of a possible 90, while there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 11.5%. This is maintaining the market’s non-bearish posture. This non-bearish configuration is strong with near zero threat of bearish behavior.

All thirty ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 4.0% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

One ETF is contacting its breakout line. As stated the past several days, the high concentration of breakout contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 1.7%, which is not a great distance to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 20.6%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Twenty-nine of the ETF Force Vectors are in bullish domains. This is an increase from the past four days and supports increasing bullish bias on the immediate horizon.

Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were two option buy signals today; one put and one call. The call is again for QQQQ and the put is for the contrarian fund, GLD. The QQQQ, although near its cyclical high is configured for bullish direction. The problem with QQQQ is its lack of volatility, which naked options need for profit. However, if you stalk and catch an intraday downward move, you should be able to buy at a significant discount and enjoy its profitable rebound.

The GLD, Gold, put option buy signal is interesting. All the Quick/Short-term models continue to signal hold, but as you can see from its chart, Vector Pressure is nearing negativity. That configuration supports bearishness. Such bearishness would be consistent with a bullish stock market.

Thirty ETF Vector Pressures are in bullish domains, which supports a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bullish divergence offset the prior two weeks of bearish divergence, alleviating concerns about bearish dominance. The energy sector was sharply down last week, while general equities moved mildly north. If the market is reading this correctly, expect solid bullish performance in the months to come. Expect price deterioration in the energy sector.

However, keep your eye on the Quick-term and Short-term Indicant where the market’s bias is monitored daily.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

12/10/06

Dec 03, 2006 Indicant Weekly Stock Market Report

Dear Indicant Members:

This Week’s Report

Two Consecutive Weeks of Bearish Divergence

Energy prices moved north last week. The energy sector skyrocketed last week. That coupled with a milder configuration the week before last is raising a discerning eyebrow. The major market indices were down last week. That combination of dynamics is bearish divergence. That does not threaten the life of this bull as much as bearish convergence, but somewhat discerning.

The NYSE Volume was exceedingly high last Thursday on a flat market day. Both the major exchanges enjoyed high volume, but the NYSE was exceedingly high. That was followed with a mild bearish expression last Friday. This high volume with bearish market behavior supports an increasing threat of a return to a bearish bias.

Interestingly, but not logically significant, the second most bearish December occurred in 2002. That was the last mid-term election year. December is also internal to the heart and soul of personality. Bearish Decembers are rare, but from time to time they do occur, as the market will never provide a pattern 100% of the time.

Fundamentally, commodity prices continue to remain at historically high levels. Recent bearish expressions appear to be reversing. That reversal could provide the Federal Reserve Board reason to not maintain or even raise interest rates.

Overall, the Quick-term Indicant continues to identify attributes consistent with sustainable bullish behavior. Of course, the Quick-term Indicant can shift its bias very quickly. Vector Pressure has been positive even the in face of non-descript Force Vectors. They are mixed in direction and it has been several weeks since any robust cycles. Even Quick-term bull cycles endure fits of bearish expressions. Technicians usually identify such instances deriving from an over-bought market. The results of that are typically identified with rising volume on aggressiveness bearishness. Last Thursday’s volume did not offer that clarity.

As always, keep your eye on the Quick-term Indicant models. As long as it maintains a bullish bias, the market’s directional inclination will be clear.

Weekly Buy/Sell Summary – Stocks and Funds

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

In addition to the sell signals, the Mid-term Indicant is avoiding only 31-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 12.0% since the Mid-term Indicant signaled sell an average of 19.8-weeks ago.

There were 47-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 17.1% since their respective sell signals an average of 27.5-weeks earlier. Two years ago, on December 3, 2004, the Mid-term Indicant was avoiding 17-stocks and funds that were down an average of 44.3% since their respective sell signals an average of 54.1-weeks earlier. Three years ago on November 29, 2003, there were only 19-avoided stocks and funds. They were down 27.1% from their respective sell signals an average of 34.6-weeks earlier. On November 30, 2002, the Mid-term Indicant was avoiding only 7-stocks and funds out of 296-tracked. They were down by an average of 29.8% since their sell signals an average of 22.7-weeks earlier.

Although there were no buy signals this weekend, the Mid-term Indicant is signaling hold for 311 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 113.1%. That annualizes to 69.7%. The Mid-term Indicant has been signaling hold for these 311-stocks and funds for an average of 84.3-weeks.

One year ago on December 2, 2005, the Mid-term Indicant was holding 268-stocks and funds out of the 320 tracked at that time for an average of 81.7-weeks. Those 268-stocks and funds were up by an average of 97.6% (annualized at 62.1%). The Mid-term Indicant was signaling hold for 301-stocks and funds of the 320-tracked two years ago on December 3, 2004. They were up by an average of 69.8% (annualized at 67.1%) since their respective buy signals an average of 54.1-weeks earlier. There were 261-stocks and funds with hold signals on November 29, 2003 since their buy signals an average of 34.6-weeks earlier. They were up 59.0% (annualized at 88.5%). The Indicant was only tracking 296 stocks and funds in 2002-2003. On November 30, 2002, the Mid-term Indicant was signaling hold for only 280-stocks and funds out of 296-tracked. They were up by an average of 22.2% (annualized at 120.0%) since their buy signals an average of 9.6-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year. Deep bearish seasonality was not influential this year. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality in this mid-term election year.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 67.4% from the last mid-term presidential election year bottom. The NASDAQ is up 116.6% since October 9, 2002. The S&P600, small caps, is up even more by 133.5% since October 9, 2002.

The NASDAQ is down 52.2% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 4.0% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high a few weeks ago. The S&P500 is down 8.6% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 109.2% and S&P500 by 9.4% to establish new weekly closing highs.

The Dow is up 8.6% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 8.6% and 14.1%, respectively since that bias shift.

Since August 18, 2006, the Mid-term Indicant generated 142-buy signals and only seven sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias shift and bullishly evolving economic fundamentals.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past two weeks, interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher.

The U.S. dollar continues to weaken. Its weakening dynamically against the British Pound and the Euro. This should result in some pressure on the Fed to lower interest rates. That would foster more bullishness in the stock market.

The problem confronting an interest rate reduction are rising commodity prices. After spending a few weeks favoring a bullish stock market, they resumed their path to the north. This, of course, provides a framework for inflationary threats and is justification for not lowering interest rates.

As stated last week, this mixed economic behavior can have a freezing effect on the Federal Reserve Board.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-five weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 326.2%. The current annualized growth rate since the April 13, 2001 buy signal is 57.1%. This fund has moved to the north in seven of the past eight weeks. Last week’s behavior was dynamically bullish.

Fidelity Gold, Fund #28, is up 52.4% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 40.9%. This fund moved north the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 275.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 63.3%. This fund moved north the past two weeks after meandering in the previous two weeks.

Vanguard Energy #18, VGENX, is up 188.2% (annualized at 50.7%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 135.2% (annualized at 44.6%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 140.9% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 42.2%.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 47.3% since then. It is annualized at 35.1%. Its bullish position is being threatened on a Quick-term Indicant basis.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 182.4% (annualized at 48.8%).

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

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

All ten major indices are bulls. They are up by an average of 26.5% since the Mid-term Indicant signaled bull an average of 86-weeks ago. That annualizes to 16.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $36,938,942. That beats buy and hold performance of $1,865,185 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,335. That beats buy and hold’s $136,212 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $201,915 that beats buy and hold’s $83,676 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

Bearish divergence has occurred for two consecutive weeks with contrarian sectors expressing bullish behavior in the face of overall bearish market behavior. Although bearishness was relatively mild, this parameter is worth monitoring. Continuation of this configuration will lead to a 1970’s type of market with energy and commodities rocketing to the north and other sectors sliding to the south.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 14.2% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 321.3% (annualized at 21.2%) since the Long-term Indicant signaled bull 787-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine; solid bullish support remains.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased and increasingly so.

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

Both Indicant Volume Indicator’s continue to evade robustness, but appear ready for a return to robustness. Volume the past two days has been high on slight bearishness. This is normally a bearish attribute, but the cyclical relationships are more indicative of the market’s inclination.

The Dow is up 6.1% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 8.9% since the Short-term Indicant signaled bull on the same day. They are annualizing at 27.6% and 40.6%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 58.2% (annualized at 33.2%) since their respective buy signals an average of 90.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 59.9% (annualized 35.3%) since the STI signaled, buy, an average of 87.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.6% (annualized at 27.1%) since the QTI signaled buy an average of 23.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

There are ninety hold signals out of a possible 90, while there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 10.8%. This is maintaining the market’s non-bearish posture.

Twenty-nine ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 3.6% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

Two of the non-contrarian and one contrarian ETF is contacting their breakout lines. As stated the past several days, a high concentration of contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 2.2%, which is not a great distance to take to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 19.5%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Seven of the ETF Force Vectors are in bullish domains. Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals for the ninth consecutive trading day.

Twenty-nine ETF Vector Pressures are in bullish domains, which supports a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Bearish market divergence the past two weeks is somewhat discerning. Energy and commodities skyrocketed to the north, while general prices fell. Last week’s record high volume on the NYSE was coupled with flat market behavior. That was followed the next day with mild bearish behavior. Although not a major concern at this time, continuation of this configuration will lead to bearish dominance.

However, keep your eye on the Quick-term and Short-term Indicant where the market’s bias is monitored daily.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

12/03/06