Feb 2009 Indicant Weekly Stock Market Report

February 22, 2009 Indicant Weekly Stock Market Report

Volume 2, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Seeds, Gold, and Neighbors

Garden food seed sales are increasing. With continuing expectations of souring economic conditions, more people are growing their own food. Although probably a healthy activity, this phenomenon has been stimulated by a lack of confidence in the U.S. economy.

Gold prices are skyrocketing and hit four-digit values last week. Fear is the primary driver of this surge in gold prices. This is evident by virtue of declining prices in most other commodities.

In a hypothetical neighborhood, one neighbor plants corn. One plants tomatoes and another one grows peas. They barter among themselves so they can enjoy a balanced diet of corn, tomatoes, and peas. This system of barter is much less costly. The following are eliminated from the process; food processing, distributors, transporters, retailers, sales tax, income tax, etc. In essence those who are not engaged directly in the agriculture of food production would not benefit from a close local society that barters their production.

Those three neighbors may not enjoy excessive prosperity, but they are very well nourished. With that, they can engage in other activities that may provide wealth and happiness.

Suppose a fourth neighbor moves into the neighborhood. That neighbor is weak and plants nothing. The first three neighbors take pity on the fourth neighbor and provide food. People are good and care for neighbors in need. There may be some exceptions to this, but for the most part, this is generally believed as a truth.

A fifth neighbor moves into the neighborhood. He is young and healthy and immediately notices the first three neighbors provide food to the fourth neighbor. Although young and vibrant, the fifth neighbor is lazy and does not plant anything. He prefers watching Jerry Springer and soap operas all day long on the television. Hunger sets in. He wants food. The first three neighbors offer to show him how to plant seeds and care for a food-producing garden. He refuses and simply extends his empty plate. The first three neighbors refuse to feed this healthy young person. There is simply not enough food for five families. There is barely enough for the four families, as it is. Here are a few of the alternative courses of possible action.

The fifth neighbor can die of starvation. That is unlikely.
The fifth neighbor can steal the food from the fourth neighbor. The fourth neighbor will then die.
When the fourth neighbor dies, the fifth neighbor will now have to steal from the first three neighbors.
If the first three neighbors successfully defend, the fifth neighbor dies and all is well.
If the fifth neighbor kills one of the first three neighbors while stealing, there are now only two gardens of food.
The two remaining neighbors gang up on the fifth neighbor and eliminate him for good. Universal law suggests the non-producers will eventually be executed or else the species becomes extinct. With that, all philosophical arguments are deemed useless.
Unfortunately, this leaves only two gardens of food; one corn and one tomato. These two neighbors now have to wait for their children to grow up so that there can be more gardens and greater variety of nourishment. They are only five years old. So, about ten to fifteen years from now, the two neighbors may enjoy a more varied diet. Rest assured the children will not want to producing corn and tomatoes.

It generally takes a generation to return humanity’s head count back to a balance that sustains capitalism; mostly through war, both civil and international. Regardless of philosophy or wrong or right, people are least suppressed in capitalism and thus it will always be the underlying current to any other philosophy. Capitalistic views fade during periods of excessive ignorance and/or laziness. That fading leads to economic decline, which is suppose to weed out inefficiencies, ineptness, incompetence, etc. Interfering with this weeding effect will exacerbate and extend weak economic activity.

The fifth neighbor was not born that way. He was raised by non-producers. He did not know that he was a scumbag. He never saw production. He thought “entitlement” to assets produced by others was automatic and correct behavior. His mysticism led to his death.

Paper currencies are being used to feed the fifth neighbor. Fifth neighbors are not really busy, have a lot of idle time and more or less engage in breeding more. That leads to a “dump and lazy majority.” Based on recent elections and a perception of opinions, those fifth neighbors may be the majority of Americans. Paper currencies are allowing them to survive for the time being.

Universal law holds that the majority cannot be non-producers. At some point, the non-producer consumption of producer’s capacity imposes inequalities that lead to economic dysfunction; E.g., the death of the third neighbor causes a recession, while the death of the fifth neighbor facilitates increased civility. The elimination of the fifth neighbor reduces the breeding of more non-producers. Once the children of the first two neighbors grow up and start producing, greater economic equilibriums manifest. Unfortunately, though, paper currencies are extending the duration of the “natural” cycle of eliminating/reducing non-producers.

Gold prices are skyrocketing. It is a red bull on a Short-term Indicant basis. Gold is not paper. There is only one way to increase the supply of gold. It must be extracted. That is hard work and with very high risk. Many have wasted their entire lives engaged in failed attempts to extract gold.

It takes little effort to direct printing presses to increase the supply of paper currencies. Right now, there are millions of fifth neighbors benefitting from those printing presses. That relationship cannot last.

At some point, the consumptive capacity of non-producers will be flush with the output from these printing presses. As the gap increases between producer output and non-producer consumption, the paper currencies will hold less value. You will detect by observing inflation and possibly hyperinflation.

Gold traditionally holds its value regardless of the behavior of paper currencies. It has a finite supply and those in direct possession for the most part earned it. Keep in mind, Gold is primarily an emotional element. Here is an example.

The first two neighbors now have grown children. One raises peas while the other makes guns. The idea for the guns is to quickly eliminate any new fifth neighbor that may show up again with their hands out. The idea is to shoot them, if they are not quick at shoveling the dirt.

A few counties over, another neighborhood has gold. They have been surviving all these years by bartering gold for food. The neighborhood that produces guns can take the gold anytime they want it. Gold adds zero economic wealth. Gold does not provide security. A possessor of gold will fall prey to the possessor of guns any time the gun possessor wants the gold. One may argue that the gold possessor can barter for yet more guns. If the gun producer is evil, he will simply take all the gold. So, gold without guns, is pretty much a valueless possession when among the evil.

It is obvious that the possession of gold is gaining importance. Gold and other precious metals have vacillated in price swings before. However, this behavior is a bit different from the recent past. Gold is moving north without the support of other commodities. This suggests the rise in gold prices is based either on fear of civil unrest and/or inflation from excessive paper currencies in circulation that is feeding too many non-productive mouths.

The Dow Jones Industrial Average is down 39.4% since the 2006 mid-term election. The 2006 congressional leadership is not shy in conveying their disdain for producers and their willingness to help non-producers. The Dow is down 23.5% since the November 4, 2008 presidential election. The capital markets will not get too excited about a political environment, favoring non-producers over producers. Until those politicians are no longer elected, this bear market will continue. The next opportunity to gauge the percentage of non-producers in the United States will be in November 2010. If the incumbents are again reelected, a 2500 DJIA is optimistic.

The current consensus suggests the current economic recession began in December 2007. The Dow peaked on October 9, 2007. It is down 48.0% since that peak. Socialistic causes will not elevate the major market indices. This decline is at about the halfway point of the 1929-1932 bear market.

Based on political commentary and press popularity, there is an increasing suspicion that the non-producer’s consumptive capacity and political influence will continue shoving the free markets to the south. That will lead to a reducing quality of life for all. The bull market will not return until such time the producer’s productive capacity garnishes majority. Right now, leech consumptive capacity seems to be in majority. That phenomenon will continue depressing bullish potential and feeding bearish potential.

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

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

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

The Mid-term Indicant generated one buy signal and no sell signals. There have been 537-sell signals since October 26, 2007 and 38-buy signals since October 31, 2008.

In addition to the buy signal, the Mid-term Indicant is signaling hold for only 22 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 105.6%. That annualizes to 59.0%. The Mid-term Indicant has been signaling hold for these 22-stocks and funds for an average of 93.0-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 321-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 39.0% since the Mid-term Indicant signaled sell an average of 37.7-weeks ago.

The Mid-term Indicant is avoiding 99-of the 100-Mutual Funds tracked, excluding the 31-ETF’s tracked daily. The funds are down an average of 39.8% since their sell signals an average of 36.4-weeks ago.

The Mid-term Indicant signaled, buy, for contrarian MF#22-USPIX Ultra Short on Feb 20, 2009. It has been a typical post election year fund to hold, as it moves up while the market moves down. You can garnish the same benefit by buying QID, but not right now. Let’s wait for the Near-term Bull cycle to play out.

One year ago, on Feb 22, 2008, the Mid-term Indicant was holding 148-stocks and funds out of the 345 tracked for an average of 161.5-weeks. They were up by an average of 183.5% (annualized at 59.1%). There were 189-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 11.1% since their respective sell signals an average of 16.0-weeks earlier.

The Mid-term Indicant was signaling hold for 314-stocks and funds of the 345-tracked two years ago on Feb 23, 2007. They were up by an average of 113.7% (annualized at 62.9%) since their respective buy signals an average of 94.0-weeks earlier. The Mid-term Indicant was avoiding 30-stocks and funds at that time. They were down an average of 10.9% since their respective sell signals an average of 21.6-weeks earlier.

There were 285-stocks and funds with hold signals on Feb 24, 2006 since their buy signals an average of 92.6-weeks earlier. They were up by an average of 114.8% (annualized at 64.5%). There were 53-avoided stocks and funds at that time. They were down by an average of 8.7% from their respective sell signals an average of 21.5-weeks earlier.

On Feb 18, 2005, the Mid-term Indicant was signaling hold for 256-stocks and funds out of 320-tracked. They were up by an average of 86.2% (annualized at 65.3%) since their buy signals an average of 68.6-weeks earlier. The Mid-term Indicant was avoiding 61-stocks and funds at that time. They were down by an average of 29.6% since their sell signals an average of 52.9-weeks earlier.

Five years ago, on Feb 21, 2004, there were 281-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 67.8% (annualized at 82.6%) since their respective buy signals an average of 42.7-weeks earlier. There were only 15-avoided stocks and funds then. They were down an average of 27.9% since their respective sell signals an average of 42.7-weeks earlier.

On Feb 22, 2003, there were 110-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 28.3%, annualizing at 54.9%. There were 130-avoided stocks and funds then. They were down by an average of 9.2% since their sell signals an average of 6.2-weeks earlier.

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

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

Link to this week’s buy and sell signals.

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

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

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

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

The Dow Utilities finally succumbed to the bear. This was the only index offering bullish potential. There is no reason to expect any bullish potential on a near-term, short-term, or mid-term basis.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 1.1% since its secular low on October 9, 2002. The NASDAQ is up 29.4% and the S&P500 is down 0.9% since then. The small cap index, S&P600, is up 27.5% since October 9, 2002. Interestingly, the NASDAQ100 is up 45.2% since October 9, 2002, which is more than the other indices. RIMM, Apple, and a few others who have strongly performed are the primary contributors.

The Dow is down 48.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 49.6% since its last peak on Oct 31, 2007. The S&P600 is down 51.1% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 71.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 49.6% since its similar secular peak on March 23, 2000. The Dow is down by 37.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases with malevolence by politicians, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes. Yes, the masses, for the most part, are weak and stupid. It just depends on what critical mass believes the lies and what critical mass keeps moving forward with progressive capitalism. There is always a chance that “Steven Jobs-like” creativity in product development and successful marketing may lead to economic benefits, in spite of governmental interference.

The Dow is down 16.1% so far this year. The NASDAQ is down 8.6% this year. Keep in mind the post election year is the most bearish and has lost money since 1832.

The NASDAQ year-to-date performance was bearish by 6.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 9.0% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was down by 0.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 1.7% and finished up by 8.6% for that year, which was congruent with election year bullishness although shy of magnitude standards. It was down by 5.4% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards. In 2006, it was up 3.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.0% at this time in 2007 and finished up that year by 9.8%, which was consistent with pre-election year bullishness. It was down 12.3% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, in this post election year, the Dow is down 16.1%. The S&P500 is down 14.7% and the NASDAQ is down 8.6%.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for your longer-term holdings. The Short-term and Mid-term Indicant continues signaling bear. Most of the longer-term holdings are with “avoid” signals, but a few are still holding. The risk of continued holding, even for the likes of Apple, is increasingly approaching the benefit to continued holding. If you feel you will need cash within the next two years, you should consider selling all stocks. (The Indicant is not signaling hold for any mutual funds, except those that short the market when bullish spurts are not threatening). The ETF are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models participate in bullish spurts, while the Mid-term Indicant is more focused on fundamentals and longer-term technical data.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term interest rates were stable last week after moving north in the previous three weeks. The issue confronting the Fed is the threat of deflation from a souring economic environment, followed by hyperinflation as the supply of printed money is increasing well beyond productive capacities. That will eventually lead to demand exceeding supply by significant amounts and thus leading to hyperinflation.

There is no change from the past six weeks. Interest rates remain at record low levels. That normally fosters a bullish stock market. Unfortunately, souring economic conditions at an accelerating rate have reduced the normal bullish relationship of low interest rates as irrelevant. Although rates are low, the process of borrowing money is not a capitalistic relationship between borrower and seller and thus irrelevant to the capital markets. Government intervention is going to wreak havoc on the United States economy. Governments simply cannot perform due to their riskless and reckless decision-making.

The idea of capitalisms is to borrow or capitalize and expanding the supply of money through productive effort. That is not what is going on right now.

The U.S. dollar continues to strengthen in its bullish cycle. It is a profoundly strong cycle indeed. The U.S. dollar remains strong, as the U.S. economy is perceived to have the greatest chance of returning to robustness when compared to other countries. As stated the past five weeks, the exception to this is China, who may or may not need U.S. consumption to bolster their economy. A weakening dollar against the Yuan may enjoy a longer-term labor relationship with the West. However, the stock market is focused only on the next six to nine months.

Commodities bearish cycle continues even with recent vacillations in commodity prices. That volatility is common during major directional cyclical shifts. As stated the past six weeks, prior deflationary concerns have paused with vacillating commodity prices.

Gold is an exception. It is rising and dynamically so. This is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity.

As stated 18-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental.

As stated 15-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.”

As stated eleven weeks ago, this bear has teeth, is hungry, and is nowhere near expiration. Cyclical spurts of a bullish configuration will occur from time to time, but the trend should remain bearish throughout the next year and into 2010. Bullish spurts will occur from time to time. As we learned from the November 28, 2008 – January 21, 2009 bullish spurt, profit potential from them is limited and in some cases disappoint rather rapidly. The attempted spurt on Feb 6, 2009 faded quickly and expired on Feb 19, 2009. The short-term trader will trade on those spurts, while mid-to-long-term investor should remain on the sidelines.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 41.7% since that sell signal. It has been bearish in seven of the last nine weeks. It was solidly bearish this past week.

Fidelity Gold, Fund #28 is down 10.4% since the Midterm Indicant signaled sell on August 1, 2008. It was mildly bullish last week.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 30.1% since that sell signal. It was solidly bearish the past two weeks.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 46.2% since that sell signal. It was also solidly bearish last week.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 57.8% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 31.5% since that sell signal.

Energy related funds were solidly bearish the past two weeks. They have endured significant bearishness in 19 of the last 28-weeks.

As stated the past few weeks, the energy industry will not be bullish as long as politicians are trying to run it. The North American automotive industry will be weak for years to come as long as government is loaning money to dilettante managers. The quality of the products, regardless if fuel-efficient or not, will deteriorate. If you want to buy a car for your young daughter, do not buy American.

The Near-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on Feb 17, 2009. It is down 3.1% since that sell signal. The Quick-term Indicant continues to signal avoid since September 2, 2008. It is down 39.7% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 21.3% since that buy signal, annualizing at 107.8%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.

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

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

The Mid-term Indicant signaled bear on February 20, 2009 for the ten major indices. The Feb 6, 2009 bullish potential was a mere spurt.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $25,504,680

That beats buy and hold performance of $1,120,595 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $120,730. That beats buy and hold’s $75,429 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $162,770. That beats buy and hold’s $49,973 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,176.0%, 60.1%, and 225.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on Feb 20, 2009.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 154.5% (annualized at 8.9%) since the Long-term Indicant signaled bull 903-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up 154.5%, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below:

Keep in mind this recession is not yet as bad as the 1979-81 recession. The Long-term Indicant is not influenced by short-term or mid-term cyclical behavior. It also takes into account longer-term performance within the model.

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

Short-term Indicant Stock Market Report - Summary

The Near-term Bull born on Friday, Feb 6, 2009 expired on Feb 19, 2009. Most ETF and Major Index Vector Pressures are near minimum values. That is non-bullish. Bearish Force Vectors are mature. Their behavior next week, which should contain some bullishness, will enhance obviations of directional intensity. Regardless, though, current configurations offer zero bullish support.

ETF#05, XLF-Chart, is an exception to bearishly configuring Vector Pressure. It is configured with non-bearishness. It is possible for this ETF to stabilize with significant bearishness elsewhere. Watch for “political” adjustments to Sarbanes Oxley and Mark to Market. It is humorous laws were made to minimize voodoo bookkeeping invented by Enron. Now, political mindlessness is engaged with the idea of adjusting asset values, regardless of what the asset’s real value is.

Regardless of the nonsensicality of all of this, this ETF and its exponential cousin, UYG, could enjoy a swift and solid bullish stimulant from political pandering. Although a bit of a gamble, UYG or XLF are building a relatively high reward/risk ratio in spite of the void in basic principle and fundamental. They could move like gold; that is on pure emotion and with absolutely no economic reason. Keep your eye on the Near-term Indicant for ETF#05-XLF. UYG is configured the same. Keep in mind, though, as of this writing, XLF is under a Near-term avoid signal.

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

On-going attribute watch for major indices:

-Directional Intensity Unanimity-As of Feb 20, 2009, bearish unanimity now exists with bear signals for all major indices and a bull signal for the VIX.

-QTI Red Bull Status-None of the major indices possess this feature. Red Bulls disallow stock market crashing. This assurance is absent right now.

QTI Yellow Bear Status-All major indices are yellow bears. Quick-term yellow bears offer no resistance level to falling stock prices.

-NTI Blue Bull Status-Unfortunately, the only major index with a rising Near-term Bullish Blue Curve is the contrarian VIX Index.

-NTI-Bearish Green Curve-None of the major indices possess this potential floor attribute. The VIX has it, but it is contrarian.

-Force Vector Position-Only contrarian VIX is not in bearish domains. All non-contrarian indices are now configured with this bearish attribute.

-Vector Pressure Direction-Other than the Dow Transports most are configuring for a southerly trend, which is non-bullish. The Dow Utilities is configured for solid bearishness.

DJIA

02/20/09-Fri-Same as last Wednesday. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Southerly moving Vector Pressure suggests the trend is bearish. 2/17/09-Tue-Received bear signal today. The nature of the impending bullish response will reveal more information regarding near-term directional intensity, which currently favors the bear. 02/13/09-Fri-the Feb 6 Near-term Bull was severely weakened today. This bear market may not even offer any bullish spurts to enjoy. This NIT Bull is now teetering on expiration. If Force Vectors fall into bearish domains, it is over and the bear will resume domination.

DJ Composites

02/20/09-Fri-Same as last Wednesday. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Same as DJIA. 2/17/09-Tue-Same as DJIA. 02/13/09-Fri-Same as DJIA.

DJ Transports

02/20/09-Fri-Same as last Wednesday. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Same as DJIA. Again, Vector Pressure is extremely low and that typically mitigates bearish aggression and fosters bullish behavior. However, as you can see from the chart, its Vector Pressure may be sucked back down into bearish domains. That occurred last October. It was disappointed there was no bullish response to yesterday’s bearish onslaught. 2/17/09-Tue-Same as DJIA and the same as last Friday due to the maturity of its Force Vecor cycle. 02/13/09-Fri-Same as DJIA, except this is technically poised for a bullish response, in spite of a complete and absolute omission of fundamental reason to do so.

DJ Utilities

02/20/09-Fri-Same as last Wednesday. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Contrary to Transports, Utilities appears to be ready for a southerly trend, but the wide gap between Force Vector and Vector Pressure is an invitation to the bull to express its presence. 2/17/09-Tue-Same as DJIA. Additionally, the expiration of the longest Near-term Bull cycle from November 28, 2008 suggests any bullish spurts will be short-lived. Today’s bear signal was devastating to any bullish ambition. 02/13/09-Fri-The bearishly configured Force Vector is mature, which suggests a bullish bounce. Force Vector now in bearish domains for the first time since December 9, 2008. That triggered a bullish response. Let’s wait until Monday to see if the same is enjoyed.

NASDAQ

02/20/09-Fri-The Near-term Indicant signaled bear today. 2/19/09-Thu-Same as yesterday, but the “glimmer of hope” is dimming. 2/18/09-Wed-This remains as a glimmer of hope for those desiring some bullish behavior. 2/17/09-Tue-This index, along with a few others, continues with obstinate configurations to complete bearish dominance. Notice its Force Vector has not yet fallen into bearish domains. Unfortunately, its Vector Pressure cycle is nearing a maximum point and increasingly non-bullish on a Quick-term and Short-term basis. However, configurations are in support of an immediate bullish bounce. If the bounce is with minimal magnitude and longevity, the bear will resume complete dominance. At least there is a bull/bear battle underway and that should at the very least invite some additional volatility, which offers some positional stability in the stock market for the time being. 02/13/09-Fri-Remains configured as a Near-term Bull.

NASDAQ100

02/20/09-Fri-The Near-term Indicant signaled bear today. 2/19/09-Thu-Same as NASDAQ. 2/18/09-Wed-Same as NASDAQ. 2/17/09-Tue-Same as NASDAQ. 02/13/09-Fri-Same as NASDAQ.

S&P500

02/20/09-Fri-Same as last Tuesday. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Same as yesterday. 2/17/09-Tue-Same as DJIA. This is the oldest Near-term Bear, dating back to January 29, 2009. It never supported bullish desires and continues to behave in that manner. 02/13/09-Fri-Similar to DJIA, but Force Vector remains above Vector Pressure, which is non-bearish.

S&P100

02/20/09-Fri-Same as S&P500. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Same as DJIA. 2/17/09-Tue-Same as DJIA. 02/13/09-Fri-Same as S&P500.

S&P400

02/20/09-Fri-Same as yesterday. 2/19/09-Thu-This index received a Near-term Bear signal today. Its Force Vector fell into bearish domains and its price fell below the Near-term’s bearish green curve. 2/18/09-Wed-Same as NASDAQ and one of the few remaining indices offering a bit of resistance to bearish dominance. 2/17/09-Tue-Same as NASDAQ. 02/13/09-Fri-Same as S&P500.

S&P600

02/20/09-Fri-Same as yesterday. 2/19/09-Thu-Bearish attributes are strengthening. The desired bullish response remained absent. 2/18/09-Wed-Same as DJIA, as it finally succumbed to bearish ambition. 2/17/09-Tue-Same as NASDAQ but a bit more interesting. The cyclical slope of the Near-term bullish blue curve and Near-term bearish green curve shifted north today. That brightens the glimmer of bullish hope, but ever so slightly. 02/13/09-Fri-Same as S&P500, but a bit stronger in support of the Near-term Bull.

NYSE

02/20/09-Fri-With solid bearish configurations. 2/19/09-Thu-Same as yesterday. 2/18/09-Wed-Same as DJIA. 2/17/09-Tue-Same as NASDAQ. 02/13/09-Fri-Very strong bullish configuration with Force Vector inside bullish domains.

VIX (Market Contrarian)

On-going attribute watch: Mature Force Vector with rising Vector Pressure is bullish for this contrarian index. This index remains configured with potential bullishness and thus bearish for the stock market.

02/20/09-Fri-The Near-term Indicant signaled bull today. 2/19/09-Thu-Same as yesterday, except Vector Pressure is low, which is a bullish configuration. That suggests increasing stock market bearishness. 2/18/09-Wed-Same as the past few days. Additionally Force Vectors are configuring with indecisiveness. 2/17/09-Tue-There is no difference from last Friday. 02/13/09-Fri-Force Vector fell back into bearish domains. This is the most interesting configuration with a significant probability of a bullish bounce, which would be bearish for overall stock market. However, falling into bearish domains lends support to the VIX’s bear.

The Near-term Indicant signaled bear for the NASDAQ and NAS100 and bull for the VIX index. All eleven major indices are down 2.3% since the Near-term Indicant signaled bear 0.7-weeks ago.

The tour is still being developed but most of you are now familiar with the Near-term bull/bear cycles.

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant.

The NYSE and NASDAQ Indicant Volume Indicators continue moving robustly. That robustness was losing energy until Friday’s tremendous surge in volume. Friday’s volume was mostly “confused” as the early part of the day was massive selling on the fear of socialism. The second half of the day was buying on “politicians” denial of that threat. It is unbelievable that investors believe politicians. Why even listen. This robust cycle has paralleled mixed market behavior, which is an unusual attribute. This attribute is doing little to obviate the market’s directional intensity at this time. The more recent relationships favor bearish momentum.

Short-term Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for seven ETF’s. They are up by an average of 1.0%, annualizing at 9.0% since their buy signals an average of 5.5-weeks ago. In addition to the sell signals, the NTI is avoiding 22-ETF’s. They are down an average of 3.5% since their sell signals an average of 1.0-weeks ago.

The Quick-term Indicant did not generate any buy or sell signals today.

The Quick-term Indicant is signaling hold for only four ETF’s. They are up 98.9% since their buy signals 19.2-weeks ago. 27-ETF’s are down 42.8% since their sell signals an average of 29.8-weeks ago.

Most of the regular Mutual Funds received sell signals in late 2007 and in early 2008. As you know, all 100-Mutual Funds have been avoided since their sell signals several weeks/months ago. (Note: The Mid-term Indicant signaled buy for contrarian ProShares Ultra Short on January 23, 2009, leaving 99-Funds with avoid signals at that time. Note 2 – The Mid-term Indicant had to signal sell for ProShare Ultra Short on Feb 6, 2009 when the bull was threatening the bear and actually triggered a Near-term bullish bias. Note-3-The Mid-term Indicant signaled buy for this fund on Feb 20, 2009. There is a significant probability this fund will be the only fund with a hold signal for the balance of 2009 and through the mid-term elections in 2010. So, 99-of the 100-mutual funds are being avoided).

The selling and avoidance of the 99-non-contrarian funds were triggered by the Mid-term Indicant. Click here to get a quick overview of the regular mutual funds as they stood a few months ago. As you can see, many of them were down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update.

The Near-term Indicant is more aggressive in buying and selling, while the Mid-term Indicant is much more passive. The Quick-term Indicant is somewhere in between the two models.

Many of you noticed some uncharacteristic yellow bear buy signals for about half of the ETF’s that were quickly followed with sell signals during October and early November. The other half of the ETF’s followed the strict rule of not buying yellow bears. It is those values that are represented in the Near-term and Quick-term tables for ETF’s.

The Near-term Indicant has been developed to provide greater visibility of this sort of activity on the same charts as the Quick-term Indicant, as opposed to two separate charts. The Quick-term, Near-term, and Short-term expressions are contained on a single chart for each of the ETF’s, as opposed to the previous three separate set of charts.

Clicking the following link will take you to a table that contains both the Near-term and Quick-term Indicants. It is for members only as it contains buy and sell signals each day. You will notice the red and yellow bearish curves are the same as the previous Quick-term Indicant model. In other words, those attributes are the same as before. However, the difference is the strict adherence to avoiding yellow bears; especially if Vector Pressure is in bearish domains.

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

Current Strategy-Short-term Indicant – Feb 20, 2009-Fri-The capital markets are subjected to socialistic interferences similar to that of the 1930’s. That will be confusing to the capital markets. The printing presses are running wild and that will invoke inflation. It will take longer for the free market to find optimum balances between supply and demand. That coupled with current Near-term, Quick-term, and Short-term configurations suggests a continuing bearish bias that may take decades to correct. There will be bullish spurts and the Near-term Indicant will configure accordingly. Feb 19, 2009-Thu-QID received a buy signal today as it configured to Near-term buying conformance. QQQQ has not yet configured to Near-term selling conformance, but should very soon. Configurations are suggesting a very strong bearish bias. Feb 18, 2009-Wed-Take a look at the QID. Notice its Vector Pressure is positioning to support QQQQ bearishness. It appears the Feb 6 bullish spurt is going to be very short-lived with more bearish behavior in the near future. Keep in mind this is just one attribute, but worthy of pointing out. You will know the degree of commitment of directional intensity when the Near-term Indicant signals buy for QID and sell for QQQQ. Feb 17, 2009-Tue-Several Indices received bear signals today, as Force Vectors dipped into bearish domains. This typically invokes a bullish response. If this response is feeble, there is a very high probability, the bear will resume complete dominance of a long lasting cycle. This recent bullish cycle was weak, formless, and without any bullish character; sort of mirror imaging the political intrusion into the free enterprise system that worked well for a few hundred years. Feb 13, 2009-Fri-The Near-term Bull continues to weaken, but continues to survive. Force Vectors are nearing tell-tell positions. Bulls typically voice their presence with the underlying configurations. If this bull does not, it will acquiesce to the bear’s strength. On a socio-economic-political front, this bear may indeed unfold configurations never seen before in the North American markets. This bear may just continue drifting to the south until Americans abandon socialistic causes. In other words, there may be no substantial bullish spurts to play within this deep bear dive.

Near-term and Quick-term Summary

The bearish bias originating on January 20, 2009 has now been replaced with a new bullish bias as of February 6, 2009 and now that bias is severely threatened with mixed signaling. These near-term cycles are occurring with greater frequency than they have since early 2006, but similar to that of 2001-2002. However, these spurts are flat. The bearish bias originating on September 5, 2008 and expiring on November 4 was relatively long.

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

The former Quick-term Indicant signaled sell for QID on November 21, 2008. It was down 33.7% on Friday, Dec 26, 2008 since that sell signal. It continues to be down considerably since then.

The Near-term Indicant signaled buy on Feb 19, 2009. It is down 0.8% since that buy signal. Its Force Vector is mature and it may decrease in price next week. However, its bullish potential from its depressed Vector Pressure is high right now. It is configured, at worse, with significant non-bearishness. You will notice the Quick-term Indicant in the table adhered to the yellow bear rule and has not yet signaled sell.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF was down 39.5% since the Quick-term Indicant sell signal on July 24, 2008, as of December 29, 2008. As you can see from the table, the QTI adhered strictly to the yellow bear rule with a buy and sell signal after July 24, 2008. The yellow bear rule had it signal sell on September 2, 2008 and it is down 39.7% since then.

As previously stated, the Quick-term Indicant will not signal buy until Vector Pressure is positive and Yellow Bear expires.

The Near-term Indicant signaled sell for this ETF on Feb 17, 2009. It is down 3.1% since then.

ETF#11-Gold and Precious Metals is up 21.3% since the NTI and QTI signaled buy on December 11, 2008. It is annualized growth is at 107.8% since then. Although Vector Pressure is approaching a maximum and thus nearing a peak, configurations are too bullishly strong to consider holding a threat. This is configuring for dynamic bullishness based on “fear.” The fear is a function of economic blundering by politicians, which is the only possible result from their actions.

The concern is the same as last week. Its declining Force Vector and relatively high Vector Pressure, but again, continue holding. It may start wavering a bit, but it is nowhere nearing a sell signal by either model.

ETF#14-Long Government received a sell signal on Feb 9, 2009 from the Near-term Indicant while the Quick-term Indicant continues signaling hold. It is up 1.3% since the Near-term sell signal. It is on the verge of receiving a Near-term buy signal.

As reported on February 11, 2009-Wed-it moved south considerably today yielding a nice profit on the naked options play. As of today, Feb 19, 2009, naked call options with March expiration are appealing.

We’re continuing to hold unless it becomes a Yellow Bear, as the goal is to simply beat buy and hold. It is up 17.1% since the Quick-term Indicant signaled buy on June 24, 2008.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term and Short-term Indicant for Major Indices

Divergence versus Convergence

Bearish convergence occurred for the second consecutive week. The market has expressed a combined bearish convergence/divergence in eight of the past nine weeks. That is a testament of this bear and a prognosis of its continuation.

Again, depending on political landscape, this bear could last for decades.

Indicant Conclusion

There were again no Mid-term Indicant buy signals for non-contrarian Mutual Funds. All 99-of those funds are with avoid signals.

Those funds tracked by the Mid-term Indicant are down by an average of 39.8% since their sell signals an average of 36.4-weeks ago. Although the Quick-term and Short-term Indicant models are holding a few of the ETF’s, the Mid-term Indicant will not signal buy for most of the Mutual Funds until they remove themselves from bearish domains. Current configurations suggest it could be a year or longer for that to occur.

Although commodity prices have been stable the past several weeks, deflation remains as an immediate concern. If it manifests, a 2500 Dow by 2010/11 may be optimistic. If the purported inflationary depression hits, the prognosis of a 2500 Dow would be similarly optimistic.

The sharp increase in Gold and other precious metals the past few weeks, suggests inflation and/or fear elements are predominant themes.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/22/09

February 15, 2009 Indicant Weekly Stock Market Report

Volume 2, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Capital Markets Do Not Lie; Politicians Do

Capital markets can be cyclically fooled from time to time, but their trend is always right on target. If the trend is south, like the current one, the outlook for corporate earnings is pessimistic. Souring corporate earnings lead to workforce reductions and other cost cutting activities. One Fortune 500 company laying off 10,000 employees or so, such as Caterpillar, leads to thousands of fewer sales for Blackberries and I-PODS. So, RIMM and Apple have to do their on cost cutting. And so on and so on.

As businesses are threatened with survivability, the dilettantes are quick to be removed. Their inadequacy becomes too visible to retain their employment. Once the business that do survive are employed by highly productive people, capital markets find their bottom and the cycle reverses course to bullish behavior. It is a natural cycle, but it is seldom allowed to play out.

Even OPEC has not been immune in this recession. When a staple product, such as oil, endures demand reductions, the economic climate is a bit more dire than usual. Of course, the demand for crude by the parasitical elite remains at a high level. E.g., Nancy Pelosi’s use of military and/or private jets to visit Europe. The number of private jets arriving for Barack Obama’s inauguration was mind boggling. The rest of you are discouraged from this sort of greed consumption. Such consumptive behavior is limited only to those of us who are members of the parasitical elite.

The parasitical elite include all politicians. None of them add economic value. They are excellent speakers. Their regurgitations of “selected knowledge” is their one and only outstanding ability. When confronted by non-selected knowledge, they lie and do a good job of it, fooling millions.

The layer just below politicians is also a constituent of the parasitical elite. That includes most academia, Hollywood, and the ultra rich. They, for the most part, are miserable souls. They are negative and expend quite a bit of energy doing PR for nonsensical causes. The reason their causes are nonsensical is that they do not physically engage in their so-called causes of importance. They simply use Orangutan PR to get attention. They have the same psychological problems as their leaders (the politicians).

The third layer down is the press. They are made up, primarily, of liberal arts types who have never encountered what it means to be precise. Most have degrees in journalism.

Journalism at one time was a vocation, where one was trained to report on something that happened. For example, “the green chevy plowed into the red truck.” They, for the most part, did a pretty good job of this in the past. Somewhere along the way, one or two started offering their opinions. Not sure why, as most of their opinions would be embarrassing to them if their brains were not as dysfunctional as they are.

Opinions are abstract objects. No precision is required. Opinions can contain error but the only detection method to those errors is a different opinion, which may also contain undetectable errors. For the sake of argument, one opinion could be the right one and the other the wrong one. When politician are offering the wrong one, they simply lie.

Politicians caused the Great Depression. Politicians caused the current recession. Moreover, they lie about it. They not only lie, they convince a huge number of people they are “knowledgeable” and understand how to right the wrongs. Unless they commit suicide, their claim is impossible. When the wrong are righting the wrong, two negatives and only one positive in that statement, leads to an inarguable conclusion more wrong will manifest.

The fourth layer down or maybe on par with the third layer in the parasitical elite are most Fortune 500 executives. Those folks are classmates of their political brethren. We saw extreme examples of that from Enron, MCI, and a few other companies that failed due to lying. Lies never conclude with a desired result. It takes extraordinary political skills to climb the corporate ladder. What you wind up with at the top are a bunch of folks who are no different from the politicians in government. That is why the large caps are consistently the lowest performing of the major indices.

Abstract objects are worthless. Only physical objects can demand a price. Physical objects require absolute precision in their construction, except for most art. That is why government subsidizes many artists. Not too many people want all that art as the supply capacity far exceeds the demand. So, all of you pay for all those artists producing product that very few want. That is called coercion by the government.

Most man-made physical objects require tremendous focus on every detail required in their construction and their function. When precision is absent, the evidence of error is indisputable. Abstract objects never offer this evidence of inadequacy. Most of the airways are filled with non-stop abstract objects; mere opinions with zero evidence of their adequacy. That hocus-pocus culture is increasingly negative. That will lead to more nonsensical interactions between those hocus pocus opinions on the left and the right. That is what the abstract world does. Negative stimulation is their purpose. However, since one side exists, the other is needed.

Those who only engage in abstract objects are incapable of complete and accurate perspectives in just about any subject. Those poor souls formulate opinions (abstract objects), which never display any dysfunction. So, they continue with dysfunctional thinking. When those people rise to power with the approval of the duped masses, rest assured that the issues confronting that group of people would be more than just mere economic problems. Germany offers a couple of pretty nice examples of this nonsensical behavior. Many talented people in Germany were killed before they could express meaningful contributions to the quality of life for all because they were duped and then killed.

When someone is conveying abstract opinions, it is important to recognize that one is hearing imprecision. There are errors. When someone else offers a counterpoint, all you have is merging of errors. Lies, then ensue, as it is difficult for one to abandon their wrong headed thinking.

Look around at your possessions. The producer of them is not one that lives in an abstract world. His or her vocation results in an absolute inarguable observation of their success or failure. Due to the required precision in their efforts, most of these people do not have time nor understand much of what the lazy abstract folks are doing or saying. They, for the most part, continue producing. Most do it out of passion, as opposed to economic gain. Some are rewarded, economically, for their efforts, but for the most part, that was not the incentive for those fine people.

Let’s take a quick look at two abstract objects; the Communist Manifesto and the United States Constitution. Some may find difficulty in determining which one is right, as they both disagree with how people should live their lives. They are both abstract. Both have been tried resulting in some physical observations. 99% of the people living in communism lived in poverty-like conditions. Long lines manifested as the Manifesto gained influence. Long lines are physical objects. It can be measured and correlated to either being negative or positive. From that, more objects that are abstract can be conveyed by the opinions of people. Regardless of those opinions the line is, say, an eighty-minute line. That is what is neat about physical objects. The Lexus is better than the Cadillac. That fact is measured by changes in market share. Opinions (abstract objects) become irrelevant when physical evidences suggest what is “is.”

Blue states in the United States have longer lines in their retail stores than red states. That is because the producers are shrinking in number in the blue states, as it is human nature to take the path of least resistance. Blue states provide many such paths. They tax the producer and give money to the non-producer. The non-producer then goes to the store and clutters up the service lines. Rest assured with social medicine your long wait at the doctors office will become longer. Hillary would do more for the health industry by becoming a nurse. Adding capacity is hard. Creating phony demand against finite capacity is easy. And that is what most people do; take the easy road.

Are long lines unfavorable? Well, the answer would be a mere opinion, regardless of the length of the line. Those without a busy and productive schedule may not be bothered with long lines. It helps kill the time and maybe helps them escape their misery by watching others in the same line as also being miserable. One’s misery is easier to deal with as long as everyone else is also miserable. Miserable people do not like happy people, but that is a mere opinion.

Physical objects from the Communist Manifesto suggests that more people are miserable than not. Is that wrong or right? Is it better for only 1% of the populace to enjoy a higher quality of life than the other 99%? Some would argue, yes, as being the proper answer to that question. Those that argue for an answer no are conveying a simple abstract opinion. This is the sort of stuff intellectuals love to embellish. It allows them to show off their intelligence in spite of their non-productive lives. Those sort of folks do get ahead, though, is socialistic communities. Sounding is important in socialism. Producing products of appeal is not well respected in socialism.

Regardless of what is wrong or right, the capital markets are expressing continuing pessimism in corporate earnings. That suggests a reduction in production and productivity. If money is pumped into the system without a corresponding increase in the production of products, expect longer lines. Some of you may enjoy that. The prices will go up as well. Some may even enjoy that prices are preventing consumption and invoking yet more misery. After all, the earth is now keeping its oil and invoking a cooler earth.

The quality of life increases from one and only one source; rising productivity. It is about to decline. Quality of life is an abstract object. Physical objects can help define it. For example, one living in a heated home can be perceived, as enjoying a higher quality of life than one living in a tent. The home and tent are physical objects. If the outside temperature is minus forty degrees, who enjoys the higher quality of life?

Some would argue that the home dweller is consuming the earth’s resource, oil, to keep their house warm. Their argument would convey that as being a wrong (negative) activity. That is an abstract thought but the depletion of the oil from the earth is a physical observation. It is difficult to extract that oil. Those who get it are heroic in their efforts. Those who live in the abstract world, only, have no idea how hard it is to get the oil. All they know is it gets warmer when they manipulate their thermostats. Those same people then march on Washington, screaming the war with Iraq is only about oil. They are hypocritical and do not even know it.

Again, that is opinion and maybe being hypocritical is not negative. Maybe everyone should be hypocritical, as some would argue. What is fun is to hear “abstract-only” folks argue about the magnitude of hypocrisy. They have no idea about precise measurement, so that simply tout more abstract noise to convey their low effort abstract views. It is actually not fun to listen to that sort of nonsensical commentary, but it is amusing that people get paid to do it. Rest assured their days are numbered.

If the tent dweller survives, the good news by some is that the earth still has its oil, as some would say. Here is an abstract thought. The parasitical elite will live in houses that are heated from the earth’s oil. You will not find the parasitical living in tents even though none of them have ever added economic wealth. As socialism increases, there will be more tent dwellers. If those tent dwellers continue voting for the parasitical elite, at some future point, the dumb majority will see the façade. At that point, capitalism, after the murderous behavior by the masses, will resume. It always has and that will always be. No known organism in the animal kingdom readily accepts suppression from any source.

The capital markets always foretell the truth. Politicians do not. In spite of political rhetoric, the capital markets are conveying a bearish future. This bear’s first bullish spurt, which continues, was and remains flat. The bear of 1929-1932 at least enjoyed a few bullish spurts of significant magnitude. So far, this one has only offered one flat spurt. There is a mild chance it could gain some altitude and thus the Near-term Bull signal from Feb 6, 2009 persists, but under duress.

The bullish surge occurred when politicians were arguing on Feb 5 through Feb 9. When the political mumbo-jumbo started agreeing on the stimulus package, the bullish spurt caved to bearish ambition on Feb 10. That solid bearish expression did not completely expire the Near-term Bull, as the bull is always aware that a quiet, highly productive individual, is somewhere on this planet with his or her head down, working on a physical object that will offer happiness for a price and generate profits and economic prosperity.

In spite of the non-value adding methods of politicians, some heroic capitalist(s) remains hard at work. With that, we should expect some bullish expressions from time to time. Of course, politicians will take credit for any bullish market behavior. That would be another lie, but the masses will probably believe them.

Keep your eye on the stock market’s trend. As long as politicians are entangling themselves into the capitalistic process, rest assured their effort will always add unfavorable disruption. If they would simply go play golf like Ike did, we would have a bull market to enjoy. It was during Ike’s presidency when the stock market finally got back up to where it was twenty-five years earlier and after twenty years of FDR political mumbo-jumbo.

Here’s an idea. In the next election, only elect political candidates who have a two handicap or less or wish to have a two handicap or less in golf. Rest assured they are more interested in their golf game than anything else, as one has to work pretty hard to maintain a two handicap. If only serious golfers were elected to public office, they would play golf more than anything else. Better yet, in the winter months, they would never be in Washington D.C. That would be bullish and it would be fun to play those bullish cycles during the winter months.

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

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

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

The Mid-term Indicant generated no buy signals and no sell signals. There have been 537-sell signals since October 26, 2007 and 37-buy signals since October 31, 2008.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 22 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 111.9%. That annualizes to 63.0%. The Mid-term Indicant has been signaling hold for these 22-stocks and funds for an average of 92.4-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 322-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 34.5% since the Mid-term Indicant signaled sell an average of 36.8-weeks ago.

The Mid-term Indicant is avoiding all 100-Mutual Funds tracked, excluding the 31-ETF’s tracked daily. The funds are down an average of 36.4% since their sell signals an average of 36.8-weeks ago.

The Mid-term Indicant signaled, sell, for contrarian MF#22-USPIX Ultra Short on Feb 6, 2009. It will again signal buy once the bullish spurt expires. It is a typical post election year buy fund, as it moves up while the market moves down. You can garnish the same benefit by buying QID, but not right now. Let’s wait for the Near-term Bull cycle to play out.

One year ago, on Feb 15, 2008, the Mid-term Indicant was holding 154-stocks and funds out of the 345 tracked for an average of 156.5-weeks. They were up by an average of 171.0% (annualized at 58.5%). There were 188-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 8.8% since their respective sell signals an average of 15.0-weeks earlier.

The Mid-term Indicant was signaling hold for 312-stocks and funds of the 345-tracked two years ago on Feb 16, 2007. They were up by an average of 114.0% (annualized at 63.4%) since their respective buy signals an average of 93.5-weeks earlier. The Mid-term Indicant was avoiding 30-stocks and funds at that time. They were down an average of 11.6% since their respective sell signals an average of 20.8-weeks earlier.

There were 285-stocks and funds with hold signals on Feb 17, 2006 since their buy signals an average of 92.4-weeks earlier. They were up by an average of 115.9% (annualized at 65.2%). There were 53-avoided stocks and funds at that time. They were down by an average of 9.2% from their respective sell signals an average of 20.5-weeks earlier.

On Feb 11, 2005, the Mid-term Indicant was signaling hold for 247-stocks and funds out of 320-tracked. They were up by an average of 88.1% (annualized at 65.9%) since their buy signals an average of 69.5-weeks earlier. The Mid-term Indicant was avoiding 62-stocks and funds at that time. They were down by an average of 30.1% since their sell signals an average of 51.9-weeks earlier.

Five years ago, on Feb 14, 2004, there were 281-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 68.5% (annualized at 85.6%) since their respective buy signals an average of 41.7-weeks earlier. There were only 13-avoided stocks and funds then. They were down an average of 27.0% since their respective sell signals an average of 41.7-weeks earlier.

On Feb 15, 2003, there were 106-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 26.1%, annualizing at 50.2%. There were 174-avoided stocks and funds then. They were down by an average of 8.3% since their sell signals an average of 5.2-weeks earlier.

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

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

Link to this week’s buy and sell signals.

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

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

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

However, the lone Near-term Bull that was residual to the November 28, 2008-bullish bias was the Dow Utilities. It never acquiesced to the bearish bias of January 20, 2009. It pestered the bear, not with tenacity, but by just “hanging around.” The January 20-Near-term Bear had some early momentum, but never attained bearish unanimity by virtue of the continuing Dow Utilities Near-term Bull, while all of the other major indices were bears.

The market is having difficulty accessing the economic stimulus packages. Most of the market’s bullish behavior in early February parallel Congressional disagreement on the stimulus bill. The bull delighted at the conflict between the executive and legislative branches of government and that was enough seed to encourage the bull to participate.

As previously stated, the market will eventually digest the confusion and it is only a matter of time before the bear resumes dominance. If there are no Nicola Tesla’s or Steve Jobs’ introducing new products and markets and the headlines consist of names like Pelosi, Reed, Frank, and similar economic leeches, rest assured the bull will not get too excited.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 7.7% since its secular low on October 9, 2002. The NASDAQ is up 37.7% and the S&P500 is up 6.4% since then. The small cap index, S&P600, is up 37.7% since October 9, 2002. Interestingly, the NASDAQ100 is up 53.2% since October 9, 2002, which is more than the other indices. RIMM, Apple, and a few others who have strongly performed are the primary contributors.

The Dow is down 44.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 46.3% since its last peak on Oct 31, 2007. The S&P600 is down 47.2% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 69.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 45.9% since its similar secular peak on March 23, 2000. The Dow is down by 33.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 10.6% so far this year. The NASDAQ is down 2.7% this year. Keep in mind the post election year is the most bearish and has lost money since 1832.

The NASDAQ year-to-date performance was bearish by 1.1% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 4.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was down by 4.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 2.5% and finished up by 8.6% for that year, which was congruent with election year bullishness although shy of magnitude standards. It was down by 4.5% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards. In 2006, it was up 1.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 1.8% at this time in 2007 and finished that year up by 9.8%, which was consistent with pre-election year bullishness. It was down 10.5% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, in this post election year, the Dow is down 10.6%. The S&P500 is down 8.5% and the NASDAQ is down 2.7%.

Keep your eye on the daily stock market report.

Stop Loss Management

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term interest rates moved north the past three weeks. As stated the past few weeks, that is not hard to do when they are near zero. The issue confronting the Fed is the threat of deflation from a souring economic environment, followed by hyperinflation as the supply of printed money is increasing well beyond production capacity. That will eventually lead to demand exceeding supply by significant amounts and thus leading to hyperinflation.

There is no change from the past five weeks. Interest rates remain at record low levels. That normally fosters a bullish stock market. Unfortunately, souring economic conditions at an accelerating rate have reduced the normal bullish relationship of low interest rates as irrelevant. Although rates are low, the process of borrowing money is not a capitalistic relationship between borrower and seller and thus irrelevant to the capital markets. Government intervention is going to wreak havoc on the United States economy. Governments simply cannot perform due to their riskless and reckless decision-making.

The idea of capitalisms is to borrow or capitalize and expanding the supply of money through productive effort. That is not what is going on right now.

The U.S. dollar continues to strengthen in its bullish cycle. It is a profoundly strong cycle indeed. The U.S. dollar remains strong, as the U.S. economy is perceived to have the greatest chance of returning to robustness when compared to other countries. As stated the past four weeks, the exception to this is China, who may or may not need U.S. consumption to bolster their economy. A weakening dollar against the Yuan may enjoy a longer-term labor relationship with the West. However, the stock market is focused only on the next six to nine months.

Commodities bearish cycle continues even with recent vacillations in commodity prices. That volatility is common during major directional cyclical shifts. As stated the past five weeks, prior deflationary concerns have paused with vacillating commodity prices.

As stated 17-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental.

As stated 14-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.”

As stated ten weeks ago, this bear has teeth, is hungry, and is nowhere near expiration. Cyclical spurts of a bullish configuration will occur from time to time, but the trend should remain bearish throughout the next year and into 2010. Bullish spurts will occur from time to time. As we learned from the November 28, 2008 – January 21, 2009 bullish spurt, profit potential from them is limited and in some cases disappoint rather rapidly. However, the short-term trader will trade on those spurts, while mid-to-long-term investor should remain on the sidelines.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 39.2% since that sell signal. It has been bearish in six of the last eight weeks. It was solidly bearish this past week.

Fidelity Gold, Fund #28 is down 12.1% since the Midterm Indicant signaled sell on August 1, 2008. It was mildly bearish last week.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 22.8% since that sell signal. It was solidly bearish last week.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 41.0% since that sell signal. It was also solidly bearish last week.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 52.0% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 22.0% since that sell signal, but up last week.

Energy related funds were solidly bearish last week. They have endured significant bearishness in 18 of the last 27-weeks.

The Near-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Feb 6, 2009. Last week’s report reported it signaled sell on Feb 6 in error. The tables and email broadcasts were accurate, though. It is down 5.0% since that buy signal. The Quick-term Indicant continues to signal avoid since September 2, 2008. It is down 33.2% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 14.8% since that buy signal, annualizing at 83.3%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.

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

There were no new bull signals and no bear signals.

The Mid-term Indicant signaled bull on February 6, 2009 for the ten major indices. Last week’s report did not mention this, but the tables and charts were properly updated. The ten major indices are down by an average of 5.0% since those bull signals. Keep in mind these bull signals are inspired solely due to the bullish spurt that is now underway but under a severe bearish threat.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,183,161

That beats buy and hold performance of $1,194,342 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $129,633. That beats buy and hold’s $80,991 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $173,288. That beats buy and hold’s $53,202 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,176.0%, 60.1%, and 225.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on Feb 6, 2009 due to the expiration of the Near-term Bear last week. Although another buy signal will be forthcoming in a week or two, the market shifted to strongly to the north the week before last. Unfortunately, the bear exerted its influence this past week, but not enough to expire the Near-term bullish spurt now underway. This introduced excessive risk in holding for the time being.

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 171.2% (annualized at 9.9%) since the Long-term Indicant signaled bull 902-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up 171.2%, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below:

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

Short-term Indicant Stock Market Report - Summary

The new baby Near-term Bull was born on Friday, Feb 6, 2009. It strengthened last Monday. It was attacked by the bear on Tuesday, Feb 10. That bearish attack was severe, but it did not cause its expiration. Although there was no follow-up expressions by the bear, the bull was equally quiet. Toward the end of this past week, the bear persistently, but yet passively, has eroded the strength of this Near-term Bull.

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

On-going attribute watch:

-Directional Intensity Unanimity-All non-contrarian indices are bulls except the S&P500. Directional unanimity is required for cyclical substance and sustainability. That is not configured as desired by the bull.

-QTI Red Bull Status-None of the indices possess this feature. Red Bulls disallow stock market crashing. This assurance is absent right now.

QTI Yellow Bear Status-All major indices are yellow bears, which is bearish on a quick-term basis.

-NTI Blue Bull Status; Several gained this advantage last Monday and lost it with Tuesday’s solid bearish aggression. This is normally a call option buy opportunity. That is the case right now, as of Feb 11. Opportunities were best last Thursday with intraday bearish aggression. Force Vectors are positioning themselves, demanding more robustness from either the bull or the bear. The bull has a slight edge in being the chosen one.

-NTI-Bearish Green Curve-In spite of bearish aggression last Tuesday, most are still rising and still below the indices prices. This offers a floor to repel the bear. It is discerning that DOW fell below green last Tuesday. It stabilized, but on Friday, it succumbed more severely to the bear’s desires and is extremely threatening to the new Near-term Bull. A solid bull would respond. Let’s see what this one does.

-Force Vectors-Still residing in bullish domains. Tuesday’s bearish aggression did not challenge this bullish attribute. If they fall below bullish domains, baby bull may perish while still in infancy. So far, this baby bull continues expressing a desire to grow, but the bear continues its assault, but with some suggestion of fatiguing.

-Vector Pressure-Mixed with Dow Transports supporting bullish cycle and Dow Utilities supporting bearish cycle. Bias remains in favor of the bull since Force Vectors remain in bullish domains. This condition of conflict is an invitation to increasing volatility, but with a bullish bias. Note: Utility Force Vectors fell sharply on Thursday and Friday, but even with that its lame bull cycle remains in tact.

DJIA

02/13/09-Fri-the Feb 6 Near-term Bull was severely weakened today. This bear market may not even offer any bullish spurts to enjoy. This NIT Bull is now teetering on expiration. If Force Vectors fall into bearish domains, it is over and the bear will resume domination. 02/12/09-Thu-Configurations are weakening, but nowhere near acquiescence to strong bearish ambition. Although baby bull is struggling, it has not perished. 02/11/09-Wed-Near-term Bullish attributes continue in tact, as Force Vectors remain in bullish domains. 02/10/09-Tue-Fell below bullish blue and bearish green today, threatening baby bull. Force Vectors remained in bullish domains and thus bull still has near-term hope of surviving and possibly manifesting into a nice bullish cycle. Again, keep in mind that falling below bearish green is a major threat. The fact that it did not pause at green, defying an 89% probability of doing so adds to that concern. 02/09/09-Mon-Force Vectors crossed into bullish domains today for the first time since early January, which triggered a bearish response. If that happens again and drives the DJIA below bearish green, which is currently 8016.75, the bear will again dominate on a near-term basis. The good news is that the Dow is fairly close to green and such an obviation of directional intensity would be pretty quick, as opposed to dragging on. However, today’s event is a bit different. The Near-term Indicant signaled bull for the DJIA, whereas in early January, the DJIA was already with a Near-term Bull signal. 02/06/09-Fri-The DJIA did not receive a bull signal today because it did not move above its bullish blue curve. That is the only attribute preventing a near-term bull signal. Its Force Vector elevated into bullish domains for the second time in the past few days and that is bullish. However, it must move above bullish blue curve.

DJ Composites

02/13/09-Fri-Same as DJIA. 02/12/09-Thu-Price fell below NTI bearish green curve today and the slope of NTI bullish blue shifted south. Force Vectors fell from bullish domains. In spite of these unfavorable configurations for those desiring bullish behavior, this index remains a Near-term Bull. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Simply fell below NTI blue curve today. This index is still up from its Feb 2, 2009 close, which supports the bullish intention here, but not quite with the desired bullish strength. 02/09/09-Mon-The Composites received its Near-term Bull signal last Friday. It is maintaining okay for the time being and is expected to continue doing so on a near-term basis. 02/06/09-Fri-The Transports and Utilities elevated enough to catapult this into a Near-term Bull.

DJ Transports

02/13/09-Fri-Same as DJIA, except this is technically poised for a bullish response, in spite of a complete and absolute omission of fundamental reason to do so. 02/12/09-Thu-This index is being punished quite severely by the bear. What the bear may not understand is that Near-term Bull will return the favor within a matter of days with more magnitude than the bear’s infliction on Transports. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Same as composites. 02/09/09-Mon-Likewise, the Transports received their bull signal last Friday after a tremendous bullish behavior. It has a solidly bullish configuration on a near-term and short-term basis. 02/06/09-Fri-The bullish threat manifested. Vector Pressure was near bearish domains. Rather than succumbing more deeply to the bear, it reacted with bullish gusto that is consistent with this technical reading.

DJ Utilities

02/13/09-Fri-The bearishly configured Force Vector is mature, which suggests a bullish bounce. Force Vector now in bearish domains for the first time since December 9, 2008. That triggered a bullish response. Let’s wait until Monday to see if the same is enjoyed. 02/12/09-Thu-Force Vector fell below Vector Pressure today in addition to falling from bullish domains. This is money rotation from utilities and not yet configured in support of dynamic bearishness. 02/11/09-Wed-As you can see, this bullish cycle has occurred remaining below the Near-term Bullish blue curve for the most part since inception. Force Vectors fell below Vector Pressure today. A strong bull would react to that with solid bullish behavior. This bull has seldom demonstrated strength, but it has been persistent and obstinate to bearish desires. If bull responds in the next day or two, it should enhance sustainability to bearish yellow. 02/10/09-Tue-This bullish cycle is unnatural, but it remains in tact. Although it is an underachiever as far as bullish cycles go, it remains a bull nonetheless. 02/09/09-Mon-The Utility Index is the oldest bull of the major indices as it was born on November 26, 2008. Until last Friday, it was the only Near-term Bull among the major indices. It weakened a bit today falling below the Near-term bullish blue curve. Although this has been a lazy bull, the focal point should be on the bearish green curve. It is rising. As long as there is no contact with that green curve, this will remain identified as a Near-term Bull. Indices seldom crash below green. They typically contact it, rest a day or two and then escape from it in either direction .02/06/09-Fri-Well, this lazy Near-term Bull is shaking loose from what appeared to be weak genetics. It may be a late bloomer. So far, so good for those desiring bullish behavior.

NASDAQ

02/13/09-Fri-Remains configured as a Near-term Bull. 02/12/09-Thu-Force Vectors remain in bullish domains and the sloped of Vector Pressure shifted bullishly today. Bullishly sloping Vector Pressure is the most desired bullish attribute of them all. This Near-term bull is not behaving as a solid one with significant longevity, but it is a Near-term Bull nonetheless. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Same as Dow Composites. 02/09/09-Mon-The NASDAQ remains with a solid Near-term Bull configuration. 02/06/09-Fri-This Vector Pressure is in the mid-way between bearish and bullish domains. When Force Vector fell into bearish domains in mid-January, it was configuring to support southerly moving Vector Pressure which would have encouraged the bear. However, the failure of the first vote on stimulus spending stimulated the bull and was obviously depressing to the bear.

NASDAQ100

02/13/09-Fri-Same as NASDAQ. 02/12/09-Thu-Same as NASDAQ. 02/11/09-Wed-Same as DJIA except with a bit more bullish support from rising Vector Pressure. 02/10/09-Tue-Same as Dow Composites. 02/09/09-Mon-The NAS100 is a bit stronger bull than the NASDAQ. It would not be surprising to see it contact the Quick-term’s Bullish Red curve in this cycle. No promises here, but the configurations are performing classically to a bear market rally. Those rallies during the maturing cycles of a Quick-term Bear quite frequently move to contact Red or Yellow and then retreat to the bear’s delight from there. 02/06/09-Fri-Same as NASDAQ.

S&P500

02/13/09-Fri-Similar to DJIA, but Force Vector remains above Vector Pressure, which is non-bearish. 02/12/09-Thu-Still waiting for this index to cross above the Near-term Indicant’s bullish blue curve. As long as unanimity remains absent, some distrust of this baby bull’s potential for sustainable survivability is appropriate. 02/11/09-Wed-Remains a bear as it needs to cross above the Near-term bullish blue curve. A Near-term bull signal requires that attribute and Force Vectors inside bullish domains simultaneously. That has yet to occur in this newly evolving Near-term bullish bias. 02/10/09-Tue-This remains as a bear. It is the lone bear and the contributor to the lack of the desired unanimity for a more thorough Near-term Bull to unfold. 02/09/09-Mon-The dilettante infested large caps now remains as the only non-contrarian bear. That is bullish for the overall market. Both the bull and bear desire synergy and the bull has a leg up on that desire by virtue of last Friday’s bull signals for several of the other major indices, in addition to a few more today. 02/06/09-Fri-Just as the case with the Dow, the dilettante infested large caps are still below the Near-term bullish blue curve.

S&P100

02/13/09-Fri-Same as S&P500. 02/12/09-Thu-Force Vectors remain in bullish domains, supporting Near-term bullish sustainability. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Same as Dow Composites. Its Force Vector shifted south today in a noticeable fashion. Those desiring bullish behavior do not want to see Force Vectors dive too deeply or quickly. If Force Vectors are in bearish domains by the end of the week, it is likely the bear will resume dominance. 02/09/09-Mon-Force Vectors rose today deeper into bullish domains and below the prior Force Vector peak, which facilitates more bullish growth. 02/06/09-Fri-This index barely nudged above bullish blue curve and thus the near-term bull was generated since Force Vectors surprisingly shifted back into bullish domains.

S&P400

02/13/09-Fri-Same as S&P500. 02/12/09-Thu-Same as S&P100. 02/11/09-Wed-Same as NASDAQ100. 02/10/09-Tue-It is disappointing to see its Force Vector weakening in shallow bullish domains. However, robustness remains possible here. 02/09/09-Mon-A solid bullish configuration persists. 02/06/09-Fri-Same as S&P100.

S&P600

02/13/09-Fri-Same as S&P500, but a bit stronger in support of the Near-term Bull. 02/12/09-Thu-Same as S&P100. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Same as S&P400. 02/09/09-Mon-The small caps Force Vector finally nudged into bullish domains. That triggered a Near-term Bull signal. It would be great for those desiring bullish desires to see it not be so timid in doing so. 2/06/09-Fri-This index is above bullish blue curve, but Force Vectors suggests all of the other bull signals should be viewed with some suspicion. Until Force Vectors cross into bullish domains, this index will continue as a bear..

NYSE

02/13/09-Fri-Very strong bullish configuration with Force Vector inside bullish domains. 02/12/09-Thu-Same as S&P100. 02/11/09-Wed-Same as DJIA. 02/10/09-Tue-Same as Dow Composites. 02/09/09-Mon-The big board also was rewarded with a Near-term Bull signal as its Force Vector crossed into bullish domains. 02/06/09-Fri-Altough difficult to see, Force Vectors shifted microscopically above Vector Pressure but not yet into bullish domains and thus a continuation of the bear signal.

VIX (Market Contrarian)

On-going attribute watch: Mature Force Vector with rising Vector Pressure is bullish for this contrarian index. There is nothing different here. This index remains configured with potential bullishness and thus bearish for the stock market.

02/13/09-Fri-Force Vector fell back into bearish domains. This is the most interesting configuration with a significant probability of a bullish bounce, which would be bearish for overall stock market. However, falling into bearish domains lends support to the VIX’s bear. 02/12/09-Thu-Same as yesterday with continuing timidity. That remains non-confrontational to the overall stock market’s Near-term Bull. 02/11/09-Wed-Crossed out of bearish domains and above Vector Pressure today. But as you can see from the chart, timidity is configuring. This supports a bullish stock market on a Near-term basis. 02/10/09-Tue-Interestingly, Force Vector fell into bearish domains. It will be interesting to see if the VIX bull reacts to this, which would be bearish for the stock market. 02/09/09-Mon-Force Vector fell below Vector Pressure today, but not yet into bearish domains. It appears there is an increasing probability of this index’s Vector Pressure slipping into bearish domains. This configuration suggests risk are too high to own it. 02/06/09-Fri-Force Vector moved above Vector Pressure, which supports its bullish potential. If Force Vector does not find comfort there and reverses, there will be no bullish potential in this cycle for the VIX.

The Near-term Indicant signaled bull for several major indices last Friday and Monday. The issue of unanimity in directional intensity appeared on the way to resolution in favor of the bull on a near-term basis last Monday. The bear obviously interceded and with significant punch last Tuesday, but relatively quiet since then except for some intraday mischievousness. In spite of Tuesday’s bearish aggression and as stated last week, it remains possible a solid Near-term Bullish cycle could manifest as high as the Quick-term’s bearish yellow curves.

Unanimity is needed for sustainability on a near-term basis. The only obstinate index confronting that desired unanimity is the S&P500-Index. Again, without regard to Congressional action, there is no economic fundamental reason for this, as a Near-term Bullish cycle will be short-lived and followed by deep bearish expressions. This anticipated bullish cycle is one of those emotional things that occur from time to time. Last Tuesday’s bearish aggression represented negative emotion as the market was disappointed by the Treasury Secretary. It is amazing that a government official could say nothing and disappoint the market. In this case it is about money and that is confusing to the market as it is focused on a non-value adder to provide it. The market would rather be focused on the efforts of the likes of a value adder, such as Henry Ford.

The tour is still being developed but most of you are now familiar with the Near-term bull/bear cycles.

The Short-term Indicant begrudgingly signaled bull last Friday for both the NASDAQ and Dow. Both indices are down since then based on last Tuesday’s bearish aggression. Since then the bear has been relatively quiet. The bad news is that bull has been equally quiet, as if it is pouting from last Tuesday’s smack by the bear. A thoroughbred bull would have retaliated by now. This bullish spurt is, so far, pathetic, but accurately pointing to the pathetic economy and those poor pathetic souls trying to correct it. Feebleness appears to be the order of the day.

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

The NYSE and NASDAQ Indicant Volume Indicators continue moving robustly. This robust cycle has paralleled mixed market behavior, which is an unusual attribute. Tuesday’s volume was high on solid and dynamic bearish expressions, supporting the bear’s ambition. Wednesday’s volume was down, but rather average flat behavior. The same occurred the past two days. There is little obviation of directional intensity from this attribute, but with a mild bias favoring the bull in spite of last Tuesday’s bearish behavior.

Short-term Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 25-ETF’s. They are down by an average of 2.7%, annualizing at -2.7% since their buy signals an average of 2.4-weeks ago. Although there were no sell signals, the NTI is avoiding six ETF’s. They are down an average of 2.1% since their sell signals an average of 2.5-weeks ago.

The Quick-term Indicant did not generate any buy or sell signals today.

The Quick-term Indicant is signaling hold for only four ETF’s. They are up 80.2% since their buy signals 18.2-weeks ago. 27-ETF’s are down 38.6% since their sell signals an average of 28.8-weeks ago.

Most of the regular Mutual Funds received sell signals in late 2007 and in early 2008. As you know, all 100-Mutual Funds have been avoided since their sell signals several weeks/months ago. (Note: The Mid-term Indicant signaled buy for contrarian ProShares Ultra Short on January 23, 2009, leaving 99-Funds with avoid signals at that time. Note 2 – The Mid-term Indicant had to signal sell for ProShare Ultra Short on Feb 6. It will signal buy for this fund as soon as the near-term bullish spurt expires. So, again all 100-mutual funds are being avoided).

The selling and avoidance of the 99-non-contrarian funds were triggered by the Mid-term Indicant. Click here to get a quick overview of the regular mutual funds. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008 this year. The Mid-term Indicant will be updated this weekend with a link to the member’s section. Members can click this sentence to get a more recent update.

The Near-term Indicant is more aggressive in buying and selling, while the Mid-term Indicant is much more passive. The Quick-term Indicant is somewhere in between the two models.

Clicking the following link will take you to a table that contains both the Near-term and Quick-term Indicants. It is for members only as it contains buy and sell signals each day. You will notice the red and yellow bearish curves are the same as the previous Quick-term Indicant model. In other words those attributes are the same as before. However, the difference is the strict adherence to avoiding yellow bears; especially if Vector Pressure is in bearish domains.

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

Current Strategy-Short-term Indicant – Feb 13, 2009-Fri-The Near-term Bull continues to weaken, but continues to survive. Force Vectors are nearing tell-tell positions. Bulls typically voice their presence with the underlying configurations. If this bull does not, it will acquiesce to the bear’s strength. On a socio-economic-political front, this bear may indeed unfold configurations never seen before in the North American markets. This bear may just continue drifting to the south until Americans abandon socialistic causes. In other words, there may be no substantial bullish spurts to play with in this deep bear dive. Feb 12, 2009-Thu-Intraday dynamic bearishness was perfect for those bought again after being stopped out last Tuesday. Prices were down for the most part during the day but recovered prior to market close. The new Near-term Bull remains in tact. Therefore continue holding, as Vector Pressure is beginning to rise again. Feb 11, 2009-Wed-Today’s mixed behavior allows you to buy if you stopped out yesterday. The overall bias remains bullish on a Near-term basis. Feb 10, 2009-Tue- In spite of today’s bearish aggression, there is nothing different from yesterday. If you stopped out, stay out. There will be plenty of other Near-term cycles before the end of this year, as the bear will be dominant more than not. Feb 9, 2009-Mon-The Near-term Indicant suggests bullish bias. If you decide to buy, do one or all three of the following. 1) Set stop losses equal to one point below the green price. 2) If the gap between current price and green is more than 8%, then use the 8% number. 3) Buy a small number of out of the money low cost call options that approximate a point or two above your stop loss. The early days of bullish spurts are dangerous. Some expire within days. However, it would not be surprising to see an 8% to 10% gain within four to eight weeks. Feb 6, 2009-Fri-Well, the theme has shifted quite a bit in just one day. Force Vectors moved into bullish domains the second time in less than a week for several ETF’s and the major indices. VIX is not supportive of this bullish stock market behavior and may move incongruently to its normal contrarian behavior. Other than the VIX index, too many attributes are favoring the bull on a near-term basis. It would not be surprising for this evolving near-term bull to dart toward the bearish yellow curve. That could take several weeks to accomplish. It has around a 10% potential bullish gain to that point. It is worth the risk in shifting bias from bear to bull. If VIX weakens, the bull will be more aggressive.

Near-term and Quick-term Summary

The bullish bias born on November 28, 2008 and expiring on January 20, 2009 was rather short. As you can see from the charts, bearish depth for most of the major indices and ETF’s was limited, as opposed to at least falling another five or so percent. However, when major indices and ETF’s topple their bullish near-term blue curves, those of you who enjoy short-term trading should again buy for a near-term bull cycle. That occurred last Friday and continued through last Monday.

Tuesday’s bearish aggression eliminated the security of a the bullish blue curve, but that is only one attribute. Losing that luxury alone is not justification for signaling bear at this time. Force Vectors remain in support of the bull at this time. Keep in mind, the Mid-term Indicant will not generate buy signals on the basis of Near-term behavior without Quick-term support. So, for those of you with a longer-term view, continue avoidance as suggested by the Mid-term Indicant. This bear market is nowhere nearing completion unless the politicians do something miraculous, such as a simple “across the board tax cut.” They will not do that as it confronts their psychological problems from their non-value adding livelihoods.

As stated the past few days, the new bearish bias continues being threatened with bullish ambition, but probabilities favor the bear.

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

The former Quick-term Indicant signaled sell for QID on November 21, 2008. It was down 33.7% on Friday, Dec 26, 2008 since that sell signal. It continues to be down considerably since then. The Near-term Indicant signaled sell on Feb 6, 2009. You will notice the Quick-term Indicant in the table adhered to the yellow bear rule and has not yet signaled sell.

It would not be surprising if this fund contacts its bearish yellow curve in the next few days/weeks. Bearish yellow is in the mid-forties. From there, it should bounce north with the bearish stock market cycle that should occur upon expiration of the February 6 Near-term bullish bias signal.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF was down 39.5% since the Quick-term Indicant sell signal on July 24, 2008, as December 29, 2008. As you can see from the table, the QTI adhered strictly to the yellow bear rule with a buy and sell signal after July 24, 2008. The yellow bear rule had it signal sell on September 2, 2008 and it is down 33.2% since then. As previously stated, the Quick-term Indicant will not signal buy until Vector Pressure is positive and Yellow Bear expires. The Near-term Indicant signaled buy for this ETF on Feb 6, 2009. It is down 5.0% since then.

Fundamentally, OPEC is cutting production, which should dampen the drop in oil prices. This fund tends to parallel oil prices, but more stable.

ETF#11-Gold and Precious Metals is up 14.8% since the NTI and QTI signaled buy on December 11, 2008. It is annualized at 83.3% since then. Although Vector Pressure is approaching a maximum and thus nearing a peak, configurations are too bullishly strong to consider holding a threat. In addition to losing blue bull status, its Force Vector fell from bullish domains yesterday, but rebounded today by moving above Vector Pressure. That should anger the gold bull. You should find some discomfort in holding if Force Vectors continue drifting south toward bearish domains.

The concern is the same as last week. Its declining Force Vector and relatively high Vector Pressure, but again, continue holding. It continues to skyrocket.

ETF#14-Long Government received a sell signal on Feb 9, 2009 from the Near-term Indicant while the Quick-term Indicant continues signaling hold. It is down 0.2% since then. The Near-term Indicant bullish blue curve collapsed on Friday, January 23, 2009.

As reported on February 11, 2009-Wed-its Force Vector is very mature and configuring in favor of a naked put option buy.

We’re continuing to hold unless it becomes a Yellow Bear, as the goal is to simply beat buy and hold. However, if it returns to its contrarian behavior, it should fall in the event the baby near-term bull of Feb 6 enjoys sustainability. Force Vectors remain at a cyclical bottom favoring bullishness and at the very worse, non-bearishness. This configuration contradicts with the non-contrarian observation.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term and Short-term Indicant for Major Indices

Divergence versus Convergence

Last week delivered bearish convergence. The market has expressed a combined bearish convergence/divergence in seven of the past eight weeks. That is a testament of this bear and a prognosis of its continuation. The previous bearish bias has lost a bit of momentum, but current fundamentals suggest it will return.

Again, depending on political landscape, this bear could last for decades.

Indicant Conclusion

There were again no Mid-term Indicant buy signals for non-contrarian Mutual Funds. All 99-of those funds are with avoid signals. Due to the potential of a bullish spurt, contrarian ProFunds Short is being avoided at this time.

Those funds tracked by the Mid-term Indicant are down by an average of 36.4% since their sell signals an average of 35.0-weeks ago. Although the Quick-term and Short-term Indicant models are holding a few of the ETF’s, the Mid-term Indicant will not signal buy for most of the Mutual Funds until they remove themselves from bearish domains. Current configurations suggest it could a year or longer for that to occur. Of course, the evolving Near-term Bull may influence that prognosis to shift more optimistically. That Near-term Bull, though, is under duress.

As stated the past 14-weeks, interest rates are falling, which is bullish. Oil prices continue resting at relatively low levels. Those two elements, alone, are typically enough to stimulate bullish activity. The February 6, 2009 new bullish spurt may have some speculative punch to it. It could be a while for the market to digest its real economic impact. We are not going to try to figure it out. We will simply flow with the various Indicant models.

Although commodity prices have been stable the past several weeks, deflation remains as an increasing concern. If it manifests, a 2500 Dow by 2010/11 may be optimistic. The Near-term is again offering argument to the bearish prognosis. If the purported inflationary depression hits, the prognosis of a 2500 Dow would be similarly optimistic.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/15/09

February 8, 2009 Indicant Weekly Stock Market Report

This Week’s Report

Partisan Politics Was a Bullish Stimulant

The news was horrible last week. Just about every indicator was unfavorable to expectations, ranging from unemployment data, through consumer spending, to some corporate earnings, etc. However, the bull expressed its interest in participating in the market with a synergized and synchronous bullish expression.

As stated many times before, the stock market is seldom focused on the “right now.” It looks about six to nine months into the future. The market’s trend is based on fundamentals, such as corporate earnings and economic outlook. That trend remains bearish. There are times when corporate earnings are up and projected by some dilettante CFO’s to continue up. The market will shift bearishly during bullish corporate guidance if it sniffs a troubling economy or corporate incompetence. It does not ignore politicians, as it is bearishly biased when Congress is at work. Congress can wreak havoc with a movement of the pen on corporate earnings and economic prosperity.

During the course of the week, partisan politics was in play. That is bullish, having the same effect of a Congressional recess. When the politicians disagree, the market is generally bullish. The market smelled the pork and waste in the stimulus package the past few weeks. Fortunately, there were enough politicians challenging that waste. The bull woke up when it detected political bickering in Washington D.C.

Now rest assured on one thing, if you get nothing else out of this weekly report. That is politicians are now in control of money flow. They are lending it, for the most part, to dilettante managers. The likes of Henry Ford, Bill Gates, Michael Dell and other similar sort of entrepreneurs are not receiving this money. It is being dispersed by politicians to their crony classmates from college and other fifth generation hirelings that are overpaid and not too bright.

The money supply is not a function of hard-honest work of producing products or services of appeal. It is placating tyranny by the majority and the printing presses are running wild. If the majority really supports this magnitude of stupidity by corporate America and its political friendship with the burgeoning Politburo in Washington DC, rest assured that majority will pay the price for violating one of the universal laws. That is, mistakes require punishment. Universal law cannot be violated. Delaying its eventuality exponentially enhances its punishment. Do not Google Universal Law. None of the experts working on it understand what they are doing. You just read one of the main ones. It is too simple for intellectuals to deal with.

If the populace is stupid enough to re-elect Congressional incumbents in the next election in 2010, this bear will be deep and long. If the system devolves to the point of a “government of the idiots, by the idiots, for the idiots, then so be it. To make matters worse, contemporary society is not agrarian like the 1930’s. It will be interesting to see what happens when all those soft-handed intellectual, upside down thinking, snobs get hungry.

When our country’s founders defined the voting age, most 21-year olds were real people. They were on their own. They had a keen sense of universal law and associated reality. As smart, as our founding fathers were, they neglected to project that 21-year olds would still be living at home or setting around in Starbucks in their glitzy unearned life styles, philosophizing all that stupidity they learned from drug tainted professors in college. Let us change the voting age to 30-years old and see it that eliminates the government of the idiots, for the idiots, by the idiots.

One problem is that people think the greenback is real. It is real in the sense it is backed by production, hard work, and the presentation of values that appeal to contemporary society. Products of appeal range from perfume, to dog food, to nuclear warheads. All a physical object has to do is appeal itself enough for one to want to purchase it. The government does not produce physical objects, but an over abundance of wasteful abstract objects. The government will direct the employment of folks to build bridges that will collapse much sooner than the older one they will replace. The greenback is a physical object that, alone, is not worth toilet paper in the same size and weight. So, what you have today is a heightened element of mysticism that led to the extinction of the bow and arrow fighters against the Gatling gun.

So, in essence, money supply is outstripping the production of desirous physical objects in the United States. One expert suggests that will lead to an inflationary depression, which is much worse than the deflationary depression of the 1930’s. In other words, that trillion or so of un-backed dollars about to worm its way into the economy could lead to $500 loaf of bread and credit cards will become obsolete. Yes, the wheelbarrow business may be the business to invest with. The problem is that a good one will cost more than the last Cadillac you bought, but the quality will be better; not a hard thing to do.

In essence, this is not capitalism but the beginning of a repeat of the 1930’s. This deserving bear will thrive and view this bullish spurt as a nuisance; something that has to occur from time to time.

Spurts occur without regard to fundamental reason. The problem with spurts is that some of those spurts accurately define sustainable patterns of bullishness or bearishness. Most of the time spurts have their fun and then expire, returning the markets to the path of fundamental reason.

The Near-term Bullish cycle of the Dow Utilities continued resisting the bear the past few weeks, when most of the other major indices acquiesced to bearish desires. Utility indices and some other high dividend securities tend to do that as long as investors believe the advertised dividends will be paid.

The Near-term Indicant continued signaling bull for the Dow Utilities Index, even though it was flat since November 28, 2009. It was almost embarrassing to report it as a bull for so many weeks with flat performance, but its obstinately configured attributes never configured in favor of the bear. Its performance as a bull was below average, even though it has had a relatively long life. The expiration of flat Near-term Bull cycles is typically followed with bearish dominance. In this particular case, this Near-term Bull turned out to be a late bloomer. It is now manifesting into a glorious bullish cycle. At least, so far, that is the case. There are no promises here. If Force Vectors dip again and Vector Pressure shifts back to the south, this near-term bullish spurt will evaporate.

The Utility’s Vector Pressure is in bullish domains. That suggests it is near a peak level; not in value, but in timing. In other words, it can go up significantly for another few weeks and steady itself into a new trading range. However, once Vector Pressure is in bullish domains, it is near a cyclical top in terms of timing, regardless of its price range. That peaking typically lasts for two to eight weeks. The early indicator is when Force Vectors fall into bearish domains, which occurred several days ago. The market was priming itself for another deep bearish cycle at that time.

Political bickering fired up in Congress and the bull woke up inciting Force Vectors to climb back up into bullish domains. That first passage into bullish domains did not trigger Near-term Bull signals or any buy signals. However, that second passage into bullish domains suggests this bullish spurt may indeed provide some non-flat (northerly) sustainability.

Interestingly and contrarian to the Utilities Index, the Dow Transports was at another extreme last week. Its Vector Pressure was bordering on bearish domains. That typically suggests a cyclical bottom in terms of timing. (Again, a two to eight-week range).

So, the technical battle was on between these two major and important indices. They represent companies that cater to the lower end of Maslow’s “Hierarchy of Needs.” Such enterprises can exist and even prosper in the worst of economic times.

The question evolving last week dealt with a lack reducing obviations of directional intensity. Early, this past week, configuration were centering toward full bearish support. However, those configurations were highlighting bullish threats to this deserving bear. Would the market support the anticipated bearish cycle of the Dow Utilities based on its Vector Pressure position or would it support an equally anticipated bullish cycle of the Dow Transports due to its depressed Vector Pressure position? Based on Friday’s performance, the bull won that battle, but the bull-bear war looms.

Solid bullish or bearish cycles are supported with synchronized and congruent relationships among all of the major indices. When they are asynchronous and incongruent with one another, a dominant bullish or bearish cycle is a spurt. Unanimity is required for robust cycles in either direction. The market is constantly trying to synchronize and make all of the major market sectors the same. Fundamentally, it is impossible for one sector to be profitable while the other is not over the long-term. The market is basically confused on where profitability will be generated with a trillion phony dollars pumped into it through the hands of bureaucrats and managed by riskless decision makers in the government. Those folks get to retire with full benefits regardless of the consequences of their actions. If the wheelbarrow business turns out to be bad idea, get a job with the government.

From time to time high trader volume distorts these desired relations of synchronization and congruency. This flies in the face of fundamental reason most of the time, but that is the nature of the stock market. If a bullish or bearish spurt unfolds in dramatic fashion, emotion kicks in. If there is enough money on the sidelines, it will not want to be left behind just in case the underlying spurt actually transforms into one of those sustainable four-year bullish cycles. Therein lies the problem for short-term thinking. In this case, a longer-term view should be taken. When similarities to politburo politics start unfolding, rest assured the bull will remain absent. The bull prefers the likes of Henry Ford, Bill Gates, Michael Dell, Earle P. Halliburton, Thomas Edison, George Westinghouse, J. Paul Getty, etc. It has disdain for the likes of Bill and Hillary Clinton, George H.W. Bush, Nancy Pelosi, Harry Reid, Barney Franks and others whose only avenue is to talk, tax, talk, tax, talk, tax, etc.

There is a lot going on right now that is unusual for the stock market. Billions more bailout money will most likely be delivered to the economy. For the most part, the government is subsiding inefficiency, incompetence, and outright stupidity. The government contributed to the economic turmoil currently underway. The populace re-elected many of the guilty for this economic slaughter. So, two more years of profound bearishness and sick economic behavior should not be surprising, The government is going to add to that economic turmoil that could last for decades.

However, bullish spurts are worth participating in for those who enjoy trading. The longer-term investor probably is smart enough to detect the massive amounts of stupidity being conveyed to the market place. Nonetheless, last Friday’s stock market behavior suggests the market is going to synchronize Transports to Utilities, as opposed to allowing Transports Vector Pressure to fall into deep bearish domains. Of course, the market may decide to change its mind and support the Utilities into a bearish cycle to synchronize with the Transport bearishness. That is the nature of spurts; some last for several weeks; others less than two weeks.

For those of you who enjoy trading, there were several buy signals last Friday from the Near-term Indicant. The Quick-term Indicant identifies a yellow bear intensive environment and it has not signaled buy. The Quick-term Indicant will not signal bull until the yellow bear problem is resolved. Those jaundiced bears offer no floor to falling prices. The yellow bear expires when prices move above the yellow curve with supporting Vector Pressure. However, the Near-term is a good way to spot spurts and participate in their rallies in either direction. The problem is the quickness of their correction from their errant ways when considering fundamental reason.

It is possible the stimulus bill may get some cash into the right hands. That is, real capitalists. If so, this spurt may manifest into a nice bullish cycle. That is unlikely, but at this point the argument requires a forecast and that is a waste of time. Right now, the spurt is bullish as identified by the Near-term Indicant, but without support from the Quick-term and Mid-term Indicant. It would not be surprising for this spurt to attempt to contact bearish yellow curves. If it does, that suggests an eight to ten percent gain from current positions. However, this is not the first time this has been suggested; since all those yellow-bears were born last summer.

For those of you not familiar with terms such as Vector Pressure, a description of the underlying configurations can be found at the following link.

http://www.indicant.net/Non-Members/Back%20Issues/Supplements/Feb/2009-0208.htm

The market has basically projected the DJIA’s rise to 14,000+ was phony. Corporate earnings and people living off phony real estate values introduced a non-productive element to the economy. The stimulus package will be very similar, as it offers nothing in the way of production accept for those piddle infrastructure projects that will require only a few days of steel production capacity. Building bridges will not save the steel industry and keep in mind that producing steel is highly correlated to cultural strength and sustainability. Without it, most become extinct or dominated by those who can.

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

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

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

The Mid-term Indicant generated four buy signals and one sell signal. There have been 537-sell signals since October 26, 2007 and 37-buy signals since October 31, 2008.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 18 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 141.6%. That annualizes to 72.3%. The Mid-term Indicant has been signaling hold for these 18-stocks and funds for an average of 101.9-weeks.

In addition to sell signal, the Mid-term Indicant is avoiding 321-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 31.9% since the Mid-term Indicant signaled sell an average of 36.1-weeks ago.

The Mid-term Indicant is avoiding all 100-Mutual Funds tracked, excluding the 31-ETF’s tracked daily. The funds are down an average of 34.5% since their sell signals an average of 34.4-weeks ago. The Mid-term Indicant signaled, sell, for contrarian MF#22-USPIX Ultra Short this weekend. It will again signal buy once the bullish spurt expires. It is a typical post election year buy. You can garnish the same benefit by buying QID, but not right now. Let’s wait for the Near-term Bull cycle to play out.

One year ago, on Feb 8, 2008, the Mid-term Indicant was holding 155-stocks and funds out of the 345 tracked for an average of 154.5-weeks. They were up by an average of 171.6% (annualized at 57.7%). There were 188-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 9.6% since their respective sell signals an average of 14.2-weeks earlier.

The Mid-term Indicant was signaling hold for 312-stocks and funds of the 345-tracked two years ago on Feb 9, 2007. They were up by an average of 111.6% (annualized at 62.5%) since their respective buy signals an average of 92.9-weeks earlier. The Mid-term Indicant was avoiding 32-stocks and funds at that time. They were down an average of 11.1% since their respective sell signals an average of 19.5-weeks earlier.

There were 285-stocks and funds with hold signals on Feb 10, 2006 since their buy signals an average of 91.6-weeks earlier. They were up by an average of 111.9% (annualized at 63.5%). There were 59-avoided stocks and funds at that time. They were down by an average of 8.6% from their respective sell signals an average of 19.9-weeks earlier.

On Feb 4, 2005, the Mid-term Indicant was signaling hold for 228-stocks and funds out of 320-tracked. They were up by an average of 97.0% (annualized at 68.3%) since their buy signals an average of 73.9-weeks earlier. The Mid-term Indicant was avoiding 71-stocks and funds at that time. They were down by an average of 28.6% since their sell signals an average of 50.7-weeks earlier.

Five years ago, on Feb 7, 2004, there were 281-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 67.5% (annualized at 86.2%) since their respective buy signals an average of 40.7-weeks earlier. There were only 12-avoided stocks and funds then. They were down an average of 27.4% since their respective sell signals an average of 41.6-weeks earlier.

On Feb 8, 2003, there were 112-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 24.5%, annualizing at 51.2%. There were 150-avoided stocks and funds then, due to the high number of sell signals in the prior week. They were down by an average of 8.9% since their sell signals an average of 5.4-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.

Link to this week’s buy and sell signals.

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

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

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

The heart and soul of bullish seasonality expired on Tuesday, January 20, 2009. The Near-term Indicant signaled bear for the major indices and sell for most of the ETF’s on that day. The Mid-term Indicant did not generate any buy signals during the 2008-2009 heart and soul of bullish seasonality for the 100-mutual funds, which is a testament to the bear’s tenacity. The November 28, 2008 Near-term Bull, expiring on January 20, 2009 was lazy. It never gained traction. However, the lone Near-term Bull that was residual to this phenomenon was the Dow Utilities. It pestered the bear not with tenacity, but by just “hanging around.” The January 20 had some early momentum, but the market is having difficulty accessing the economic stimulus packages. The bull delighted at the conflict between the executive and legislative branches of government and that was enough seed to encourage the bull to participate. As previously stated the market will eventually digest the confusion and it is only a matter of time before the bear resumes dominance. If there are no Nicola Tesla’s introducing new products and markets and the headlines consist of names like Pelosi, Reed, Frank, and similar economic leeches, rest assured the bull will not get too excited.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 13.6% since its secular low on October 9, 2002. The NASDAQ is up 42.9% and the S&P500 is up 11.8% since then. The small cap index, S&P600, is up 45.3% since October 9, 2002. Interestingly, the NASDAQ100 is up 58.2% since October 9, 2002, which is more than the other indices. RIMM, Apple, and a few others who have strongly performed are the primary contributors.

The Dow is down 41.5% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 44.3% since its last peak on Oct 31, 2007. The S&P600 is down 44.3% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 68.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 43.1% since its similar secular peak on March 23, 2000. The Dow is down by 29.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases with coerced benevolence by politicians, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes. Yes, the masses, for the most part, are weak and stupid. It just depends on what critical mass believes the lies and what critical mass keeps moving forward with progressive capitalism. There is always a chance that Steven Jobs like creativity in product development and successful marketing may lead to economic benefits, in spite of governmental interference.

The Dow is down 5.6% so far this year. The NASDAQ is down 3.8% this year. Keep in mind the post election year is the most bearish and has lost money since 1832.

The NASDAQ year-to-date performance was bullish by 7.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 7.1% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was down by 2.5%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 3.0%. 2004 finished up by 8.6%, which was congruent with election year bullishness although shy of magnitude standards. It was down by 4.1% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.5% which was an excellent year based on post election year historical standards. In 2006, it was up 2.4% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 2.3% at this time in 2007 and finished that year up by 9.8%, which was consistent with pre-election year bullishness. It was down 14.1% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, in this post election year, the Dow is down 5.6%. The S&P500 is down 3.8% so far this year, while the NASDAQ is up 0.9%, This past Friday catapulted the 2009 NASDAQ into bullish territory.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for your longer-term holdings. The Short-term and Mid-term Indicant continue signaling bear. Most of the longer-term holdings are in avoid signals, but a few are still holding. The risk of continued holding, even for the likes of Apple, are increasingly approaching the benefit to continued holding. If you feel you will need cash within the next two years, you should consider selling all stocks. (The Indicant is not signaling hold for any mutual funds, except those that short the market). The ETF are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models participate in bullish spurts, while the Mid-term Indicant is more focused on fundamentals and longer-term technicals.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term interest rates moved north the past two weeks. That is not hard to do when they are near zero. The issue confronting the Fed is the threat of deflation, followed by hyperinflation as the supply of printed money is increasing well beyond production capacity. That will eventually lead to demand exceeding supply by significant amounts and thus leading to hyperinflation.

There is no change from the past four weeks. Interest rates remain at record low levels. That normally fosters a bullish stock market. Unfortunately, souring economic conditions at an accelerating rate have reduced the normal bullish relationship to low interest rates as irrelevant. Although rates are low, the process of borrowing money is not a capitalistic relationship between borrower and seller and thus irrelevant to the capital markets. Government intervention is going to wreak havoc on the United States economy. Governments simply cannot perform due to their riskless decision-making.

The idea of capitalisms is to borrow or capitalize and expanding the supply of money through productive effort. That is not what is going on right now.

The U.S. dollar continues to strengthen in its bullish cycle. It is a profoundly strong cycle indeed. The U.S. dollar remains strong, as the U.S. economy is perceived to have the greatest chance of returning to robustness when compared to other countries. As stated the past three weeks, the exception to this is China, who may or may not need U.S. consumption to bolster their economy. A weakening dollar against the Yuan may enjoy a longer-term labor relationship with the West. However, the stock market is focused only on the next six to nine months.

Commodities bearish cycle continues even with recent vacillations in commodity prices. That volatility is common during major directional cyclical shifts. As stated the past five weeks, prior deflationary concerns have paused with vacillating commodity prices.

As stated 16-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental.

As stated 13-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.”

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 38.0% since that sell signal. It has been bearish in five of the last seven weeks, but it was solidly bullish this past week.

Fidelity Gold, Fund #28 is down 13.1% since the Midterm Indicant signaled sell on August 1, 2008. It was also bullish last week.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 19.4% since that sell signal. It was bullish last week.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 37.1% since that sell signal. It was also bullish last week.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 50.7% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 19.4% since that sell signal, but up last week.

Energy related funds were solidly bullish last week, following three solidly bearish weeks and one mixed week. They have endured significant bearishness in 17 of the last 26-weeks.

The Near-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on Feb 6, 2009. The Quick-term Indicant continues to signal avoid since September 2, 2008. It is down 29.7% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Near-term Indicant and Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 11.2% since that buy signal, annualizing at 70.0%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%.

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

There were no new bull signals and no bear signals.

The Mid-term Indicant signaled bear for all ten indices this weekend, even though the Dow Utilities has not yet acquiesced to bearish ambition on a near-term basis.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,672,720

That beats buy and hold performance of $1,259,789 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $136,181. That beats buy and hold’s $80,082 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $179,765. That beats buy and hold’s $55,191 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,176.0%, 60.1%, and 225.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on Feb 6, 2009. The expiration of the Near-term Bear last week. Although another buy signal will be forthcoming, the market shifted to strongly to the north late last week. This introduced excessive risk in holding for the time being.

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 186.1% (annualized at 10.7%) since the Long-term Indicant signaled bull 901-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up 186.1%, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below:

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

Short-term Indicant Stock Market Report - Summary

The Near-term Bear has perished due in part to “partisan politics” and the potential of a “do-nothing” government. The bull favors do-nothing government and it demonstrated that today with bullish gusto for most of the indices. However, unanimity in either direction is non-existent. Please read on.

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

On-going attribute watch: The lack of unanimity in directional intensity overcame the Near-term Bear today. Contrary to what you read and hear, partisan politics and the possibility of a “do-nothing” government encouraged the bull to exert its influence. However, keep in mind the bull is not expressing unanimity either. If the so-called stimulus bill passes, there will likely be a quick bullish response of significant magnitude, followed by a major bearish cycle, which is going to happen anyway and with significant downward pressure. However, the Near-term Indicant is focused strictly on the near-term and thus several bull signals and ETF buy signals were generated today. The bullish threat discussed the past few days indeed manifested its destruction to the Near-term Bear. Please read on.

DJIA

02/06/09-Fri-The DJIA did not receive a bull signal today because it did not move above its bullish blue curve. That is the only attribute preventing a near-term bull signal. Its Force Vector elevated into bullish domains for the second time in the past few days and that is bullish. However, it must move above bullish blue curve. 02/05/09-Thu-The bull responded to yesterday’s near complete dominance by the bear. That did nothing to change bias from bear to bull on a near-term basis. 02/04/09-Wed-The only bullish attribute existing is that Vector Pressure is not in bearish domains. Other than that, the other fourteen attributes are bearishly biased and directed. 02/03/09-Tue-Force Vector remains above Vector Pressure, but shifting south. That position remains a mild threat to the bear and the directional Force Vector shift is unusually weak. However, the bias remains in favor of the bear. 02/02/09-Mon-Declining Force Vector should stimulate the bear to again dominate the market.

DJ Composites

02/06/09-Fri-The Transports and Utilities elevated enough to catapult this into a Near-term Bull. 02/05/09-Thu-Force Vector dropped below Vector Pressure fostering continuation of bearish bias. 02/04/09-Wed-Force Vector crossed below Vector Pressure today. If the bull offers no reaction to this expect continued bearishness. 02/03/09-Tue-Same as DJIA. 02/02/09-Mon-Same as DJIA.

DJ Transports

02/06/09-Fri-The bullish threat manifested. Vector Pressure was near bearish domains. Rather than succumbing more deeply to the bear, it reacted with bullish gusto that is consistent with this technical reading. 02/05/09-Thu-Contrary to the Dow Composites, Force Vector moved out of bearish domains and even crossed above Force Vector, adding to a market with no directional intensity. This configuration is a threat to the underlying bearish bias on a near-term basis. 02/04/09-Wed-Same as DJIA except for the already depressed Vector Pressure. This typically relates to a cyclical bottom, but in this case, the bear may be more punishing similar to the October slide. 02/03/09-Tue-Vector Pressure remains low, which usually identifies the completion of a bearish cycle. If the bear resumes directional control, this Vector Pressure will dip inside of bearish domains, which would be an added encouragement to the bear. It will be interesting to see if Transports resists in the next few days/weeks. 02/02/09-Mon-Same as DJIA, except Vector Pressure is already low. It can go lower, but with reduced probabilities of doing so, unless the bear has the same magnitude as that of last October and early November.

DJ Utilities

02/06/09-Fri-Well, this lazy Near-term Bull is shaking loose from what appeared to be weak genetics. It may be a late bloomer. So far, so good for those desiring bullish behavior. 02/05/09-Thu-Remains configured with solid bullish attributes. As previously stated, this Near-term Bull cycle was as lazy as they come. Vector Pressure remains in bullish domains, which suggests this bull cycle is nearing expiration. Many of you should recall a similar configuration in mid-2008, when most of the other indices acquiesced to the bear, while the Utilities Index remained obstinate for several days. 02/04/09-Wed-Remains obstinate to bearish desires, but Vector Pressure nearing bullish domains suggests this bull is nearing the conclusion of its potential. 02/03/09-Tue-Contrary to Transports, Vector Pressure is nearing bullish domains, which typically identifies the completion of a bullish cycle. Force Vectors remain in bullish domains and thus one major attribute supporting the continuing bull signal. 02/02/09-Mon-Although a weak one, this Near-term Bull’s obstinate behavior to bearish ambition is preventing the desired bearish unanimity.

NASDAQ

02/06/09-Fri-This Vector Pressure is in the mid-way between bearish and bullish domains. When Force Vector fell into bearish domains in mid-January, it was configuring to support southerly moving Vector Pressure which would have encouraged the bear. However, the failure of the first vote on stimulus spending stimulated the bull and was obviously depressing to the bear. 02/05/09-Thu-Force Vector crossing into bullish domains today again threatens the bear, but as long as Vector Pressure does not shift north, but bearish bias should prevail. 02/04/09-Wed-The embryonic Force Vector movement to the south is a bit disturbing to the Near-term Bear. Its hovering threatens the falling Vector Pressure. This is suggesting a possible bull cycle, but that is not likely, since too many other indices are not configuring as such. 02/03/09-Tue-Same as DJIA. 02/02/09-Mon-Force Vector also falling from bullish domains, which should facilitate a continuation of Vector Pressure’s bearish slope.

NASDAQ100

02/06/09-Fri-Same as NASDAQ. 02/05/09-Thu-This is beginning to form a bullish configuration. Force Vectors remain in bullish domains, which could facilitate Vector Pressure moving north. 02/04/09-Wed-This is the same as the NASDAQ. 02/03/09-Tue-Same as DJIA. 02/02/09-Mon-This index a bit stronger than its fatherly NASDAQ. It has been trying to configure into a Near-term Bullish cycle. Vector Pressure is attempting to reverse bearish cycle, but should not be successful.

S&P500

02/06/09-Fri-Just as the case with the Dow, the dilettante infested large caps are still below the Near-term bullish blue curve. 02/05/09-Thu-Force Vector fell below Vector Pressure today, offsetting, somewhat, the NAS100 threat to the Near-term Bear. 02/04/09-Wed-Force Vectors crossed below Vector Pressure, which should perpetuate the Near-term Bear. The bull may react to that, but so far configurations suggest it would be a mere spurt in the face of an underlying Near-term Bear cycle. 02/03/09-Tue-Same as DJIA, except Force Vectors retreated from bullish domains today. 02/02/09-Mon-Same as NASDAQ.

S&P100

02/06/09-Fri-This index barely nudged above bullish blue curve and thus the near-term bull was generated since Force Vectors surprisingly shifted back into bullish domains. 02/05/09-Thu-Interestingly, the S&P100 behaved oppositely to the S&P500 with is Force Vector crossing above Vector Pressure. This also threatens the Near-term bear somewhat. 02/04/09-Wed-Same as S&P500. 02/03/09-Tue-Same as DJIA with same S&P500 comment. 02/02/09-Mon-Same as NASDAQ.

S&P400

02/06/09-Fri-Same as S&P100. 02/05/09-Thu-Finally, an index that stood still today. Nothing changed from yesterday and remains configured in support of the bear. 02/04/09-Wed-Same as S&P500. 02/03/09-Tue- Same as DJIA with same S&P500 comment. 02/02/09-Mon-Same as NASDAQ.

S&P600

02/06/09-Fri-This index is above bullish blue curve, but Force Vectors suggests all of the other bull signals should be viewed with some suspicion. Until Force Vectors cross into bullish domains, this index will continue as a bear. 02/05/09-Thu-Force Vector fell below Vector Pressure today, support the Near-term Bear. 02/04/09-Wed-Force Vector remains above Vector Pressure offering a threat to the Near-term Bear. However, this threat should be defeated by the bear. 02/03/09-Tue-Same as yesterday. 02/02/09-Mon-Configuring strongly in support of bearish aggression.

NYSE

02/06/09-Fri-Altough difficult to see, Force Vectors shifted microscopically above Vector Pressure but not yet into bullish domains and thus a continuation of the bear signal. 02/05/09-Thu-Same as S&P600. 02/04/09-Wed-Force Vector fell from bullish domains, suggesting some discomfort there. That favors the bear’s ambition. 02/03/09-Tue-Force Vector remains in bullish domains. Vector Pressure is rising, which offers mild bullish support. This reduces obviations of directional intensity since Vector Pressure is neutral. 02/02/09-Mon-Same as NASDAQ.

VIX (Market Contrarian)

02/06/09-Fri-Force Vector moved above Vector Pressure, which supports its bullish potential. If Force Vector does not find comfort there and reverses, there will be no bullish potential in this cycle for the VIX. 02/05/09-Thu-Force Vector climbed out of bearish domain today, suggesting some interest in renewing its bullish cycle, which should be bearish for the stock market. 02/04/09-Wed-Force Vector is rising from extreme depressed levels offering enhanced support for bearish ambition. The depressed Vector Pressure levels also lend a hand to bearish desires. It will be interesting to see how Force Vectors interact with Vector Pressure in the next few days. 02/03/09-Tue-Force Vectors have shifted back to the north, supporting non-bearishness for this index, which supports non-bullishness for the stock market. 02/02/09-Mon-Vector Pressure has dipped back to the south, but should quickly reverse due to bearishly mature Force Vector. The Near-term prognosis is bullish for this index and bearish for the stock market.

The Near-term Indicant signaled bull for several major indices today based on a combination of technical and fundamental reasons. The problem is a continuing omission of unanimity in directional intensity. However, a “do-nothing” government, which is surprising, is favorable to the bull on a near-term basis. Partisan, stalemated politicians inspired the bull with gusto today. If that continues, it is possible a solid Near-term Bullish cycle could manifest as high as the bearish yellow curve.

The quick-shift in Force Vector direction suggests significant bullish potential on a near-term basis. What is needed is unanimity. There is no economic fundamental reason for this, as a Near-term Bullish cycle will be short-lived and followed by deep bearish expressions.

The tour is still being developed but most of you are now familiar with the Near-term bull/bear cycles.

The Short-term Indicant begrudgingly signaled bull today. Near-term attributes shifted wildly on today’s partisan bellowing in Washington DC. This may be short-lived but that Force Vector hitch and post pattern inside bullish domains suggests bullish potential.

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

The NYSE and NASDAQ Indicant Volume Indicators are again moving robustly. High volume yesterday supported that bullish behavior. Rather than being followed with aggressive bearishness today, the bull sustained yesterday’s momentum with yet another day of high volume. That is bullish. The problem is that most of the robust volume behavior in the current cycle paralleled dynamic bearishness. However, the more recent volume is more influential when including Force Vector behavior and Near-term Indicant configurations.

Short-term Report Card, Status, and Charts

The Near-term Indicant generated 15-buy signals and one sell signal.

In addition to the 15-buy signals, the Near-term Indicant is signaling hold for six ETF’s. They are up by an average of 10.1%, annualizing at 54.4% since their buy signals an average of 9.7-weeks ago. In addition to the lone sell signal of QID, the NTI is avoiding 10-ETF’s. They are up by an average of 2.0% since their sell signals an average of 2.8-weeks ago.

The Quick-term Indicant did not generate any buy or sell signals today.

The Quick-term Indicant is signaling hold for only four ETF’s. They are up 70.0% since their buy signals 17.2-weeks ago. 27-ETF’s are down 35.3% since their sell signals an average of 27.8-weeks ago.

Most of the regular Mutual Funds received sell signals in late 2007 and in early 2008. As you know, all 100-Mutual Funds have been avoided since their sell signals several weeks/months ago. (Note: The Mid-term Indicant signaled buy for contrarian ProShares Ultra Short on January 23, 2009, leaving 99-Funds with avoid signals at that time. Note 2 – The Mid-term Indicant had to signal sell for ProShare Ultra Short on Feb 6. It will signal buy for this fund as soon as the near-term bullish spurt expires. So, again all 100-mutual funds are being avoided).

The selling and avoidance of those 99-funds were triggered by the Mid-term Indicant. Click here to get a quick overview of the regular mutual funds. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008 this year. The Mid-term Indicant will be updated this weekend with a link to the member’s section. Members can click this sentence to get a more recent update.

The Near-term Indicant is more aggressive in buying and selling, while the Mid-term Indicant is much more passive. The Quick-term Indicant is somewhere in between the two models.

The Near-term Indicant has been developed to provide greater visibility of this sort of activity on the same charts as the Quick-term Indicant, as opposed to two separate charts. Now, the Quick-term, Near-term, and Short-term expressions are contained on a single chart for each of the ETF’s, as opposed to the previous three separate charts.

Clicking the following link will take you to a table that contains both the Near-term and Quick-term Indicants. It is for members only as it contains buy and sell signals each day. You will notice the red and yellow bearish curves are the same as the previous Quick-term Indicant model. In other words those attributes are the same as before. However, the difference is the strict adherence to avoiding yellow bears; especially if Vector Pressure is in bearish domains.

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

Current Strategy-Short-term Indicant – Feb 6, 2009-Fri-Well, the theme has shifted quite a bit in just one day. Force Vectors moved into bullish domains the second time in less than a week for several ETF’s and the major indices. VIX is not supportive of this bullish stock market behavior and may move incongruently to its normal contrarian behavior. Other than the VIX index, too many attributes are favoring the bull on a near-term basis. It would not be surprising for this evolving near-term bull to dart toward the bearish yellow curve. That could take several weeks to accomplish. It has around a 10% potential bullish gain to that point. It is worth the risk in shifting bias from bear to bull. If VIX weakens, then the bull will be more aggressive. Feb 5, 2009-Thu-The mixed market and the omission of directional intensity, it is better to be passive in buying/holding. Several bullish attributes configured today. If the bear does not react to this, this Near-term Bull may be near expiration. The mature bull cycle, Utilities, is old and have been an underperformer. It is believed it is nearing expiration. This should lead to increased bearishness on a near-term basis. Feb 4, 2009-Wed-Force Vectors continue moving south, but not with the desired aggression for those with a bearish preference. Vector Pressure remains mixed and thus continuing with the threat to the Near-term Bear. However, that threat continues dissipating and thus the bearish bias continues. Many of you recall Utilities was the last to collapse ahead of the dynamic bearish cycles in 2008. The market and most of the ETF’s meandered, awaiting the Utilities submission to the bear. A very similar environment is occurring now. Utilities Vector Pressure is nearing a max. It can meander for days, depending on Force Vector, which remains in bullish domains, but as you can see it is moving south. The velocity and slope of this southerly movement is soft, as opposed to the steepness desired by the bear. Nevertheless, it is certainly non-bullish. Feb 3, 2009-Tue-Several Force Vectors fell from bullish domains today, offering a hint of discomfort at those lofty levels. A few continue residence there, continuing there threat against the survivability of the Near-term Bear. However, all of the Force Vectors shifted south, regardless of their current resting position. At the very least, this remains as a non-bullish configuration even with the on-going threat. If Force Vectors continue moving south, the interaction with Vector Pressure will be interesting. The bear desires that Force Vectors pass below Vector Pressure and onward to deep bearish domains. That would perpetuate a new deep bearish cycle. Volume is not yet supportive of this deep bearish prognosis, but other attributes are offering little in the way of bullish support. Feb 2, 2009-Mon-In spite of repulsive economic fundamentals, the market held steady today, following dynamic bearishness late last week. Vector Pressure remains directionally biased in favor of the bear. Dynamic bullishness early last week shifted some Vector Pressure to the north with neutral positions. In other words, the major indices and many ETF’s are not at extreme positions, where obviations of directional intensity exist. So, be cautious on a near-term basis. Of course the longer-term and mid-term views remain solidly in support of the bear. Jan 30, 2009-Fri-Force Vectors appear to be at a pinnacle. If they turn to the south, which is expected, the bear will unleash it wrath on the capital markets for the second great bear wave to the south. This is configuring similarly to the 1929-1931 DJIA.

Near-term and Quick-term Summary

The bearish bias originating on January 20, 2009 has now been replaced with a new bullish bias as of February 6, 2009. These near-term cycles are occurring with greater frequency than they have since early 2006, but similar to that of 2001-2002. The bearish bias originating on September 5, 2008 and expiring on November 4 was relatively long. The bullish bias born on November 28, 2008 and expiring on January 20, 2009 was rather short. As you can see from the charts, bearish depth for most of the major indices and ETF’s was limited, as opposed to at least falling another five or so percent. However, when major indices and ETF’s topple their bullish near-term blue curves, those of you who enjoy short-term trading should again buy for a near-term bull cycle. Keep in mind, the Mid-term Indicant will not generate buy signals on the basis of Near-term behavior without Quick-term support. So, for those of you with a longer-term view, continue avoidance as suggested by the Mid-term Indicant. This bear market is nowhere nearing completion unless the politicians do something miraculous, such as a simple “across the board tax cut.”

As stated the past few days, the new bearish bias continues being threatened with bullish ambition, but probabilities favor the bear.

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

The former Quick-term Indicant signaled sell for QID on November 21, 2008. It was down 33.7% on Friday, Dec 26, 2008 since that sell signal. It continues to be down considerably since then. Regrettably, the Near-term Indicant signaled sell today. You will notice the Quick-term Indicant in the table adhered to the yellow bear rule and has not yet signaled sell.

Buying QID is with high risk. It lost about 20% since the Near-term Indicant signaled buy. Although not mentioned before, as it should have been, when buying QID, we buy a few out of the money call options. If QID moves north, then double digit gains are enjoyed quickly. If it moves unfavorably, double digit losses are also quick, but those call options cover most of the losses. Depending on expiration of call options, in some cases, profits are still garnished. The downside exposure should be limited to less than $1000 on the call options. Do not buy QID options though. Always buy QQQQ options. There is plenty of open interest and enough trading volume to ensure you are paying and getting a fair price. QID options are too thinly traded to ensure a fair market price. For example, several QQQQ February 27 Calls were purchased last Monday when Force Vector and Vector Pressure were not behaving as the bear would like them to. It is worth $700 or so when holding QID. Since then, QID is down over 5%, but those call options purchased at eight cents are now worth 32-cents for a nice 244% gain. Since Monday, we lost around $1200 on QID and around $2400 since the buy signal. Here is how the “protective options strategy worked. Buy 100 Feb 27 calls x 0.08 x 100 shares cost approximately $800. Now they are worth 32 x 100 or $3200, which exceeds the loss of QID. The exposure of losing the $800 was worth the associate risk of holding QID since the buy signal and especially when QQQQ Force Vectors crossed into bullish domains the first time. Such strategy is appropriate when buying those ETF’s that move exponentially to their underlying security. The exposed option loss was $800 against a much larger potential QID gain. If you buy QLD on QQQQ signaling, it does not hurt to spend a few bucks on QQQQ puts. Again, do not buy QLD options. Also buy options where there is a lot of open interest and high trading volume. Never buy or sell an option if it has not traded within minutes of your desired transaction. Also, if you buy options at the market price, wait until the market is open. If you have to do this off-hours, make a price offer at the open. Try to find a few minutes during lunch hour to get a fair market price.

Keep in mind trading ETF’s, such as this, require commitment to their potential directional intensity. It does not take much time to enjoy triple digit gains. Unfortunately, fluttering can generate some wild vacillations in performance on a very short-term basis. The February 6, 2009 configurations of QID and QQQQ suggests recent bullishness is not fluttering. QQQQ configurations are now supporting sustainable potential. Therefore, it is better to sell avoid QID at this time. QQQQ’s Force Vector did not find discomfort in bullish domains. Its rising Vector Pressure and Near-term configurations are in support of its sustainability.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF was down 39.5% since the Quick-term Indicant sell signal on July 24, 2008, as December 29, 2008. As you can see from the table, the QTI adhered strictly to the yellow bear rule with a buy and sell signal after July 24, 2008. The yellow bear rule had it signal sell on September 2, 2008 and it is down 29.7% since then. As previously stated, the Quick-term Indicant will not signal buy until Vector Pressure is positive and Yellow Bear expires. The Near-term Indicant signaled buy for this ETF on today, Feb 6, 2009.

This particular Near-term Bull cycle has contained several up and down fluttering of prices within the range of the near-term’s upper and lower limit. When the price fell to the lower limit with Force Vectors in bearish domains, the Near-term Indicant signaled sell and continued avoiding since then until today. Force Vectors penetrated bullish domains for the second time within a week suggesting bias favors the bull. The problem is becoming too zealous about buying this fund is that its Vector Pressure is already high. As you can see, it rose steadily during the lateral moving behavior since late November. These sloppy Near-term Bull cycles occur from time to time. They are not even worthy of being called a spurt. They simply meander up and down for several weeks. However, that little Force Vector blip you see that has nudged back into bullish domains prompted the buy signal today. This is a Quick-term Yellow Bear, which is another reason to not get too excited about this buy signal. The idea with this buy signal is to have it move to bearish yellow curve, which would be about a 7% gain from the current price. Of course bearish yellow is declining and in three weeks, it will be around $52 from its current value of $55.

ETF#11-Gold and Precious Metals is up 11.1% since the NTI and QTI signaled buy on December 11, 2008. It is annualized at 70.0% since then. Comments about a near-term future sell signal were withdrawn last Friday. It is a Near-term Blue Bull. It is a Quick-term Red Bull, a configuration to never be argued with. Its Force Vector is in bullish domains and its Vector Pressure is again rising. Although Vector Pressure is approaching a maximum and thus nearing a peak, configurations are simply too bullishly strong to consider holding a threat. Until those attributes change, just keep on holding.

Of some concern is its declining Force Vector and relatively high Vector Pressure, but again, continue holding. Its Force Vector is positioning for a big bounce in price. If Force Vectors do not do this and fall below Vector Pressure, it will be under a Near-term threat by the bear. But even with that, continue holding.

ETF#14-Long Government is up 8.0 %, annualized at 35.7%, since the NTI buy signal on Nov 17, 2008. The Near-term Indicant bullish blue curve collapsed on Friday, January 23, 2009. The Near-term is threatening to signal sell, but please continue reading.

We’re going to hold unless it becomes a Yellow Bear. Contrary to last week, it is now configuring to favor additional buying. Just hold it if you own it if bought on the NTI signal on November 17, 2008 or the previous QTI buy signal. Vector Pressure is declining, but Force Vectors are at a bottom, favoring bullishness and at the very worse, non-bearishness.

This ETF behaved inversely to its tradition of being contrarian the late last week. If the overall market shifts bullishly, it is unlikely this ETF will participate and return to its contrarian form. E.g., goes down when the market moves up. It will be interesting to monitor this over the next few days, as there is absolutely no fundamental reason for the market to be bullish. This ETF demonstrated a flight to safety during the deep bear dive last fall. However, a bull market, regardless of reason or nonsensicality should induced non-bullishness here. The problem with that line of thinking is its depressed Force Vectors and Vector Pressure. If the market turns bearish next week, then this ETF should resume its bullish cycle.

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