Feb 27, 2011 Indicant Weekly Stock Market Report

Volume 02, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

 Climbing Walls of Worry Is Not Guaranteed

The stock market has historically climbed walls of worry. Evolving phenomena causing worry contains probabilistic outcomes with varying magnitudes of favorability cause this phenomenon. Those projections, based in probabilities, facilitate the stock market’s worrisome climb.

When probabilities lean toward unfavorability, the stock market will not climb walls of worry. On the contrary, the stock market can move quickly and with significant magnitude to the south with unfavorable projections. Moreover, it can remain at depressed levels for a generation; possibly more.

Stagflation is already rearing its ugly head. It can shift into inflation and possibly hyperinflation. Petroleum based products are moving north. Most of you, who gassed up last week, may have noticed the price hike in gasoline. It is massive at this critical time in the economic rebound, where profits are derived from cost cutting, as opposed to economic growth.

The Dow Transport Index and related sectors are distressed on a short-term basis. Rising transportation costs will transfer to consumption units. Those consumption units will then pass those costs onto the next consumption units. Eventually, inflation manifests to the retail consumer.

The stock market bear thrives in periods of inflation. That is because projected profit margins that would normally appear healthy, say 20% pre-tax, can be wiped out by inflation before the next quarterly report. There were two solid bearish cycles in the 1970’s highlighting this phenomenon.

State and municipal governments with significant budget deficits are figuring out ways to enhance their revenue streams and/or cut costs. That means more money, as a percentage of the total available, will be confiscated from the productive and given to the non-productive. That will yield less wealth since the non-productive are basic economic leeches. As the quality of life begins its southerly spiral, more governmental coffers will come under attack by the weak.

The attack on public coffers has been expanding the past several years by public servants and other “weaklings.” This reflects a culmination of years of democratic systems whereby politicians expanded the cause of socialism in keeping with campaign promises. Encumbered with OPM disease, national debts expand. OPM means other people’s money. It is very easy to spend someone else’s money.

Those pitiful souls protesting to protect their benefits this past week in Wisconsin clearly illustrate an attack on public coffers. Those protestors were not coerced to a career in public service. That was their choice. However, they want to coerce taxpayers to pay them salaries that are out of balance to their economic contribution to society. Public service is a low risk, low output vocation. Public service jobs should be among the lowest paid. All public service employees, including schoolteachers, are pure economic overhead and contribute nothing to the economy. The United States is just “average” in world rankings of public education. That suggests the teachers are average. Therefore, their salaries and benefits should not exceed the average within the society they work.

Tribalism never wins in the end. Communism, socialism, and unions are all forms of tribalism. Tribalism is appealing to those with limited talents and zero ambition. Such systems never last too long. Just as the American Indian found out, tribalism rushes one’s culture to a nasty expiration. Tribalism weakens its members; mainly because it is attractive to them, but being a tribe member adds to the weakness. The Russian male is still struggling after three generations of communism. Their average life expectancy is younger than most of you who are reading this report.

The S&P100 is the weakest index. Their large revenues attract the weakest managers and workers. That is why it is the poorest performer among the major indices. The average life cycle of a Fortune 500 company is less than 18-years for similar reasons.

The bailing out of large Wall Street Companies and labor unions in the automotive industry appears expected by other large tribes, such as public unions. Those large groups represent a huge block of votes. Politicians find such tribal units very appealing. That leads to their political appeasement.

A continuing expansion of appeasing tribal units will lead to more debt. There will be no return on that debt since the appeased tribal units do not convert their receipts to products of value.

Bailout protestors during 2008/9 did not have their hands out. They had their hands on their pocket books. Their message was, “quit taking from me and giving to the incompetent.” Some refer to those protestors as the Tea Party. The Wisconsin public service protestors have their hands out. Their message is, “keep filling my pocket book.” The latter group is beggars/takers. The former group is the facilitator/provider to the leech group.

The attack on public coffers has accelerated and will not abate for several years. That will continue to feed inflationary pressures. The stock market will not climb a wall of worry if the combination of inflation and prevailing interest rates exceed 8%. That milestone is not yet threatening, but worthy of monitoring. It has a solid history of supporting massive bearish ambition.

While the attack on public coffers expands, the petro production units and supply chain from the Middle East threatens consumer pocket books. Those two forces can quickly shift from stagflation to hyperinflation. That will be bearish, as interest rates will also rise. That will add to bearish magnitude.

If the recently elected politicians actually do not succumb to the low effort/high bloc of votes from unions, the stock market bull will be amused and continue its march to the north. If public debt actually starts a much-needed nosedive, the bull will accelerate its ambitious desires.

The stock market will not wait for an obvious conclusion on these potential outcomes. It will either climb the wall of worry if the conclusion is projected to be favorable (discontinuance of attacks on public coffers) or it will move bearishly if these attacks continue and without political interference.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 295 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 50.5%. That annualizes to 48.7%. The Mid-term Indicant has been signaling hold for these 295-stocks and funds for an average of 54.0-weeks.

The Mid-term Indicant is avoiding 38-stocks and funds of 340-tracked by the Indicant. The avoided stocks and funds are down an average of 41.0% since the Mid-term Indicant signaled sell an average of 96.5-weeks ago.

One year ago, on Feb 26, 2010, the Mid-term Indicant was holding 210-stocks and funds out of 333 tracked for an average of 39.1-weeks. They were up by an average of 27.6% (annualized at 36.8%). There were 102-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 36.4% since their respective sell signals an average of 83.6-weeks earlier one year ago. There were no buy signals and five sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for only 23-stocks and funds of the 344-tracked two years ago on Feb 27, 2009. They were up by an average of 103.1% (annualized at 57.1%) since their respective buy signals an average of 93.8-weeks earlier. The Mid-term Indicant was avoiding 321-stocks and funds at that time. They were down an average of 40.6% since their respective sell signals an average of 38.5-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued dominating on this weekend in 2009.

There were 148-stocks and funds with hold signals on Feb 22, 2008 since their buy signals an average of 161.5-weeks earlier. They were up by an average of 183.5% (annualized at 59.1%). There were 189-avoided stocks and funds at that time. They were down by an average of 11.1% from their respective sell signals an average of 16.0-weeks earlier. There were no buy signals and eight sell signals on this weekend in 2008 in addition to the 206-sell signals in the prior 15-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008.

On Feb 23, 2007, the Mid-term Indicant was signaling hold for 314-stocks and funds out of 345-tracked. They were up by an average of 113.7% (annualized at 62.9%) since their 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 by an average of 10.9% since their sell signals an average of 21.6-weeks earlier. There was one buy signal and no sell signals on this weekend in 2007.

Five years ago, on Feb 24, 2006, there were 290-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 114.8% (annualized at 64.5%) since their respective buy signals an average of 92.6-weeks earlier. There were 53-avoided stocks and funds then. They were down an average of 8.7% since their respective sell signals an average of 21.5-weeks earlier. There were no buy signals and two sell signals on this weekend in 2006.

On Feb 25, 2005, there were 250-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 89.7%, annualizing at 66.9%, since their respective buy signals an average of 69.8-weeks earlier. There were 61-avoided stocks and funds then. They were down by an average of 29.9% since their sell signals an average of 53.7-weeks earlier. There were two buy signals and seven sell signals on this weekend in 2005.

There were 275-stocks and funds with hold signals on Feb 27, 2004. They were up by an average of 70.0%, annualizing at 83.5%, since their buy signals 43.6-weeks earlier. The 15-avoided stocks and funds were down an average of 28.7% since their respective sell signals an average of 43.6-weeks earlier. There were no buy signals and no sell signals on this weekend in 2004.

On Feb 28, 2003, there were 155-stocks and funds with a hold signal, enjoying a 21.1% gain since their respective buy signals an average of 18.6-weeks earlier. That annualized at 58.9%. There were 127-avoided stocks at that time. They were down by an average of 10.6% since their sell signals an average of 7.2-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds in 2002-late 2004. The 2003 bull market was one week old on this weekend in 2003. More buy signals were to follow in subsequent weeks.

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.

Click this link to this week’s buy and sell signals.

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

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

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

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

The three buy signals used a short-cycle within the Mid-term Indicant. They are risky, as they are currently fundamental dog stocks. However, technically, long interest has configured, justifying a buy signal. Set your stop losses on those buys relatively tight.

The Mid-term and Short-term Indicant continue with support for the bull. The mid-term election year gained traction toward stock market bullishness. Much of this gain correlated with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011, albeit with potential near-term bearish expressions. The stock market’s bull, though, continues to impress with its resilience with each bearish incursion. Keep in mind configurations do not yet support such bearishness. That prognosis rests on political dynamics and historical standards. However, current configurations suggest that mere bearish spurts may manifest, but none support bearish dominance.

The current stock market bull originated in anticipation of stalemated politicians. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish in spite of potential for near-term bearish behavior. Mid-eastern unrest will resume its threat to the stock market bull, as a function of speculation of those empty souls who are attempting to gain control of Mubarak’s revenue stream.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest, but they should be tight. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 66.5% since its secular weekly low on October 9, 2002. The NASDAQ is up 149.6% and the S&P500 is up 69.9% since then. The small cap index, S&P600, is up 153.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current configurations. Historical standards and political climate support continued bullishness during 2011. Much of that depends, however, on unrest in the Middle East.

The NASDAQ is down 44.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 13.6% since its similar secular peak on March 23, 2000. The Dow is up by 3.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulations shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bearish by 8.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 9.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was down 0.5%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 1.0% and finishing up for that year by 1.4%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 5.1% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up 3.7% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 4.1% at this time in 2007, finishing up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 12.2% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was down 9.6% on this weekend in 2009. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 1.5% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 14.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 2.7% since its last peak on Oct 31, 2007. The S&P500 is down 15.7% since its Oct 9, 2007 peak. The S&P600-small cap index is down 2.6% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Interestingly, the NAS100 topped its pre-crash highs of 2007/8 a few weeks ago.  It continues maintaining that lofty achievement. It is up by 4.8% since its Oct 31, 2007 peak. The S&P400 is the other major index tracked by the Indicant that is also above pre-2008-crash levels. It is up by 4.1% since its prior peak on 7/13/2007. The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 18.8% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its last weekly cyclical bottom on November 20, 2008.

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

The Dow is up 85.3% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 119.4% and the S&P500 is up 95.1% since then. The S&P600, Small Cap Index, is up 138.5% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the shorter near-term cycle is not as supportive of the bull. Middle Eastern unrest, although, is a bit threatening to the stock market bull, depending though on the nature of that unrest. If oil prices skyrocket, the bear will be delighted. If democracy expands in that region, the bull will be delighted.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As promised by Bernanke over a year ago, the discount rate (and prime) rate are holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness two weeks ago and held flat the past two weeks. That suggests little demand problems. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time. However, the 6-month CD yield increased significantly eleven weeks ago, suggesting desired longer-term upward pressures. Even with all that, it remains depressed and has been flat since then. It actually fell 10-basis points last week. In essence, a level of stability has been found after wild variations in such a minor investment vehicle. Anyone buying a 6-month CD at 0.40% with 2+% CPI is heading to the poor house unless deflationary pressures manifest. At any rate, all CD’s remain as Yellow Bears. China is enduring CPI’s ranging above 4.0% and increasing interest rates because of that.

The Euro jumped to Red Bull status five weeks ago and holding at that level, but remains with weakening trend and weakening mid-term cycle. There is no good reason to assume its long-term cyclical decline will reverse. The Canadian dollar, like the Yen, has been stable the past several weeks, but with a mild strengthening bias. Its cyclical direction and trend remain bullish. The CA$ tends to parallel oil prices. The forecast for the CA$ continues with projected strengthening. The Japanese Yen trend and mid-term cycle continues with strengthening trend, but has been trading in a shallow zone the past several weeks.

Overall, the US dollar threatens to continue strengthening, but continues to weaken against the Japanese Yen (high productivity) and the Canadian dollar (resource rich).

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot in spite of near-term cyclical bearishness. The prior $2,000/oz-forecast by 2014 continues to challenged, based on political dynamics. However, statistical bullishness remains in tact. At the same webpage, you will notice oil is less stable, but enjoying steady increases the past several weeks. Middle Eastern unrest is adding a bit of pizzazz to those increases.

As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl, albeit departing on the high end of his desired tolerance levels the past several days. It has been nudging a bit higher than that for the past several weeks. The high end forecast, though, projects $120/bbl by 2012. The Saudi Kingdom will have to approve that, though. Reports suggest the kingdom is now comfortable at $100/bbl. It has been vacillating around $90/bbl the past several weeks with some speculative bullishness and solid economic reasons for that bullishness. Middle Eastern unrest offer additional pizzazz to its recent bullishness. The King is probably a bit concerned about his job security and related pleasures, but there is little doubt the kingdom remains in charge of such matters. Speculators can shift the numbers around and if oil prices escape his desired targets, rest assured he will take countermeasures.

Commodity price’s quick-term cycle continues increasing.  Significant bullish behavior continues. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish. Spot prices have expressed stability for the past few weeks.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. It continues to skyrocket, setting a new all time high during the week of November 8, 2010 and continues to set new highs. It remains economically bullish with inflationary considerations later. The CRB Bridge Futures continues its shift from waffling to more bullish aggression. It is also a solid Red Bull.

This paragraph remains the same. Commodities, overall, discontinued behavior consistent with uncertainty in favor of outright bullishness. “Extract baby extract” seems to be an evolving theme as more people around the planet are moving toward capitalistic progressions in spite of American waffling.

Mortgage rates remain configured with countering the prevailing bearish trend. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. Fannie and Freddie have the same rates. There are plans to dissolve. Tax payers are down $150,000,000,000. Again, interference by government and politicians clearly illustrates a consistent conclusion; chaos. It is interesting that each generation has to relearn the ineffectiveness and related economic damage by politicians in spite of its predictability.

The consumer price index and producer price index continue to be relatively stable.

Overall, hard economic data continues with stability, albeit with increasing commodity prices. That is non-bearish, but lending support to longer-term inflationary potential. However, rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. 

At some point, the U.S. Congress will learn they have no influence on how China, India, and other countries manage their economies, which will enjoy larger economies than the U.S. at some point. If those rapidly developing economies retain a penchant for capitalism, rest assured prices for all commodities will escalate. However, rising productivity associated with capitalists could dampen the effects on consumers. These potential economic shifts are unparalleled in the annals of history.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 14.2%, annualizing at 31.8% since then. It was mildly bearish last week. As stated the past four weeks, gold could be in trouble, but it displayed some resistance to that prognosis the past three weeks. If there is no retreat in the next week or two, it will most likely continue moving to the north. It was mildly bearish last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 22.0% since then, annualizing at 14.7%. This lazy fund has been bearish in five of the past seven weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 31.8%, annualized at 71.1% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 52.6%, annualized at 117.6%, since its Sep 17, 2010 buy signal. Mild bearishness correlated with Mubarak’s resignation, but since then bullishness has correlated well with unrest in the Middle East.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is up 33.6% since then, annualizing at 86.4%.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 47.6% since that buy signal, annualizing at 106.4%.

The Quick-term and Near-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 43.9% since then, annualizing at 96.9%. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 70.3% since that buy signal, annualizing at 31.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It is up 1.5%, annualizing at 75.0%, since its most recent Near-term Indicant buy signal on Feb 18, 2011.

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

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

All the major indices are up by an average of 27.0% since their bull signals an average of 46.6-weeks ago. That annualizes at 30.1%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,813,769. That beats buy and hold performance of $1,845,497 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $155,984. That beats buy and hold’s $129,286 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $237,878. That beats buy and hold’s $96,430 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 76.0% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred last August, but quickly endured “fluttering” behavior, followed by bearish aggression. A sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being. It may not receive a buy signal until 2013, which is the next post election year.

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 319.1% (annualized at 16.5%) since the Long-term Indicant signaled bull 1,008-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

As stated on Feb 9, 2011, “on the other hand, international ETF’s are increasingly bearish,” in spite of bullish behavior the past two Fridays.  ETF#13-EWH-Hong Kong, ETF#20-EEM-Emerging Markets, and ETF#21-EWZ-Brazil, and ETF#28-EWT-Taiwan are being avoided by the Near-term Indicant. Although exchange rates and civil unrest could be contributing to their distress, the burning question is, “can these funds be bearish by themselves?” If yes, then the stock market can remain bullish, lifting these three funds back into bullish participation at some point. If “no” and they remain bearish, then the overall stock market will follow their bearish path. As stated the past few days, “yes” remains with a mild advantage over “no.”

Bearish aggression earlier this week did not do enough to shift the answer to “no.” There are too many Red Bulls and relatively high Vector Pressure for the bear to dominate at this point. ETF#06-EWJ-Japan remains with bullish configurations in spite of its continuing currency strength.

Interestingly, several international ETF’s were non-bearish on last Wednesday’s bearish aggression. Many are bumping against auto buy signals. Victims are recent bearishness will do same in days. Some of that occurred this past Friday. However, the NTI Green curve is a point of commonality for that phenomenon.

So far, the remaining ETF’s remain with bullish configurations in spite of recent near-term bearish aggression.

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

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

The Short-term Indicant is signaling bull for all eleven non-contrarian indices. These bulls are up 15.1% since the NTI signaled bull an average of 19.8-weeks ago. That annualizes to 39.7%. The lone bear is contrarian VIX. It is down 11.5% since its bear signal 23.1-weeks ago.

As stated last Wednesday, “the VIX was up over 30% on combined Tue-Wed performance. It achieved Red Bull status on Wed, but it did not receive a bull signal. The past few times it crossed above Red, it quickly retreated.” It retreated over 10% this past Thu-Fri.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 11.5% since that bear signal.

The Quick-term Indicant is signaling bull for all eleven major non-contrarian indices. The eleven major indices are up by an average of 17.0% since their bull signals an average of 23.8-weeks ago, annualizing at 37.2%.

Short-term Market Summary

Ten Red Bulls remain supportive of the Quick-term bull cycle. The Near-term Bull is distressed as all Blue Bulls evaporated with this bear attack. The Dow Transports lost its Red Bull status this past Wed, citing a direct correlation between rising energy costs and this petro-thirsty sector. It also fell below NTI Green this past Wed, qualifying for a bear signal. However, more bearish synergy is required before the Near-term Indicant signals bear. Interestingly, the Transport Force Vector is bullishly mature, suggesting additional bullish counterattacks to bear’s recent zeal.

All non-contrarian Force Vectors are no longer in bullish domains. Some short-term bullish support has been lost, but not enough to signal bears for the major indices. Overall, though, Vector Pressure remains relatively high and protective of bull’s ambition. Unfortunately, Force pierced through Vector Pressure on several indices on Wed. Although discerning, it remains as a minor issue.

Indicant Volume Indicators  

This has been a low volume bull since inception in May 2009 with occasional volume surges in support of the bull. The NASDAQ IVI is rising with mixed correlation to bull/bear expressions. The big board’s IVI remains lethargic.

Feb 25, 2011-Fri-Low volume again with a bullish counterattack adds bullish bias support.

Feb 24, 2011-Thu-Low volume on mixed behavior is not inspiring the bear. Bullish bias prevails.

Feb 23, 2011-Wed-Volume nudge up again, but not robustly on bearish aggression. Again, this is emotionally based and currently without fundamental support. Middle Eastern tensions remain as culprit, but that will eventually settle.

Feb 22, 2011-Tue-Volume was up a bit on bearish aggression. In spite of this aggression, bias remains favor of the bull. However, additional bearish aggressions with heightened volume in the next few days could threaten current bullish bias.

Feb 18, 2011-Fri-Again, low volume prevails and not disruptive to continuation of stock market bull.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 25-ETF’s. They are up by an average of 18.5% since their buy signals an average of 22.0-weeks ago. This annualizes at 43.8%.

The NTI is avoiding seven ETF’s. They are down by an average of 14.5% since their sell signals an average of 11.2-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up 21.9% since their buy signals an average of 31.0-weeks ago. This annualizes at 36.8%.

The Quick-term Indicant is avoiding 3-ETF’s (QID, VXX, TLT). They are all contrarian ETF’s. They are down by an average of 42.7% since their sell signals an average of 45.2-weeks ago.

Short-term Summary: There are 26-Red Bulls (gained three on Fri after losing three this past week for flat performance), mitigating dynamic and sustainable bearish behavior. The five NTI Blue Bulls (lost twenty last Tue-Wed, but gained nine on Fri) continue mitigating dominance by the stock market bear, but significantly weakened with stock market bearish aggression this past week. Only one NTI Blue Bull can offer resistance to complete near-term bearish domination.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 43.9%, annualizing at 96.9%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. The “energy bear” cannot find sustainable forces with current bullish attributes. This remains solidly bullish.

ETF#11-Gold and Precious Metals  is up 70.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 31.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $123.60 and still rising, albeit slowing down. Being patient here is important since your buy price approximates $80.65.

The Near-term Indicant signaled buy on Feb 18, 2011. It is up 1.5% since then, annualizing at 75.0%.

Near-term attributes for signaling next sell signal will be price below NTI Blue with negative Vector Pressure.

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

As stated since late 2008, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring. Keep in mind, GLD tracks the price of gold in U.S. dollars. A strengthening dollar will have a depressing effect on the price of gold. Please read on, as this paragraph is now being challenged.

Although the Near-term Indicant signaled buy today, a sound fundamental persists in continued threats to the gold bull. In reference to the Indicant Weekly Report of January 16, 2011, political influences may be gold’s worst enemy, as it is approaching its prior peak from 1492. If political forces result in shifting sovereign debt loads to the south, currencies will strengthen, dampening the “emotional” value of gold. The Tea Party movement may invoke this shift, as that political pressure strongly supports dynamic cuts in Federal spending. Perceptions hold that will dampen inflationary threats and thus depress the price of Gold in U.S. dollars.

ETF#14-TLT-Long Government  received a sell signal from Quick-term Indicant on Nov 15, 2010, as price fell below QTI-Yellow. It is down 0.3% since that sell signal. It is a Yellow Bear, which offers no bullish support.

The Near-term Indicant signaled sell on Oct 14, 2010. It is down 7.5% since then.

TLT enjoyed dynamic bullishness on stock market bearish aggression this past week. If the stock market bull is aroused, this ETF should resume its bearish cycle. Its configuration as a stand alone observation suggests near-term bearishness.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 35.7% since then. As stated last week, attributes are no longer solidly bearish, while not yet strongly supporting the “short-bull.” The overall stock market is not yet supportive of QID’s bullish desires. Interestingly, it received a reverse stock split this past Friday. Its bearish performance had it in single digit ranges a few days week before last. (Less than $10). Now it is above $50 due to the reverse split.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 60.7% since then.  Pressure remains low and not capable of extensive bullish behavior. Its Force Vector is bullishly mature. That should depress the stock market bear.

Major ETF Events

Feb 25, 2011-Fri-There were several “minor” events suggesting a continuation of Friday’s bullish counterattack against the bear’s passion this past week. However, the battle bull-bear battle continues.

Feb 24, 2011-Thu-There were no major events other than the slowing of bearish ambition.

Feb 23, 2011-Wed-Transports fell below NTI Green with Force in bearish domains. However, the absence of bearish synergy prevents bear signal.

Feb 22, 2011-Tue-Another international ETF received a sell signal today. It was ETF#28-EWT-Taiwan. Also, the overall stock market was aggressively bearish.

Current Strategy-Short-term Indicant- Feb 25, 2011-Holding remains safe, relative to NTI Green prices. Prices remain above Green, for the most part, and Green is well above the buy prices. Falling below Green with minimal Force will trigger the next sell signals. International related ETF’s remain configured with weak bullish support. Some have endured recent sell signals and are being avoided. For those of you who bought GLD on Dec 2008 buy signal, wait for the price to fall below Yellow before selling.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market endured bearish divergence last week with the energy sector enjoying bullish behavior. The stock market again contained a tinge of the 1970’s with rising energy costs, some early signs of inflation (or stagflation), and a bearish stock market. However, the overall stock market has enjoyed bullish convergence in three of the past four weeks. The stock market did not deliver the desired four consecutive weeks of bullish convergence. That is disappointing to those desiring stock market bullishness this past week. However, there is little reason to fear a dynamic and aggressive bear at this time.

Indicant Conclusion

The presidential pre-election year stock market bull remains in tact and in full conformance to historical standards. There is no technical support for stock market bearish behavior.

The Indicant Volume Indicator remains depressed, as the post holiday sessions did not introduce significant increases in volume. Volume should increase in coming weeks and months, offering additional obviations of directional intensity. The absence of that expectation is somewhat discerning, as the bull will require significant increases in volume to sustain itself. At least that is the norm. Regardless, though, of these extraneous attributes, one cannot argue with a low volume bull.

As stated the past 73-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena in the U.S., coupled with low interest rates, continue in support of the bull. That political phenomenon extended from Egypt three weeks ago, where another among the corrupt class fell. More Middle Eastern unrest with what appears to be an expansionary interest in democracies continues in several countries. Challenging the corrupt class is bullish. The complete eradication of the corrupt class will be even more bullish. That also dampens inflationary causes as democracies tend to yield a stabilizing effect on prices, including oil.

Disrupting this line of thinking is when the corrupt class refuses to step down. On the contrary when the corrupt class uses military force to maintain their position of corruption, the stock market finds related uncertainty unsettling. The bear is inspired from unknown conclusions. Libya remains a crap shoot and thus the bear expressed strength in the face of that uncertainty last week.

Inflationary threats are starting to show. Stagflation is an accurate descriptor of the current economy. That, coupled with Libya, could inspire the bear to gain traction. Keep in mind, though, inflation is inevitable in the future unless Congress is successful in reducing 2.5-trillion dollars from the national debt. Recent political rhetoric is increasingly passive toward that amount. The problem is like the old TV commercials regarding oil changes; “pay me now or pay me later.”

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/27/2011

Feb 20, 2011 Indicant Weekly Stock Market Report

Volume 02, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

The Revolt against the Corrupt Class Is Bullish

Rebels in any form can be rational, logical, and correct or they can be the opposite. The Nazi rebellion in the 1930’s was irrational, illogical, and incorrect to the forces of nature. That was obvious during the early stages. The obviating element was millions raising their right arms with hand extended shouting “Fuhrer.” The obviation of irrational, illogical, and incorrect within the confines of the force of nature was that the Fuhrer was just another human being with the same limiting capacity as those who subordinated themselves. The only difference between the weak and their leader is that the leader was capable of fooling the masses.

Communism failed for similar reasons in addition to one other. Communism resulted in a few living like kings while the other five hundred million lived in poverty. The proletariat enjoyed existence for about three generations before its stupidity was acknowledged by the masses. The second reason is interesting. Pareto’s law holds that 20% of the people hold 80% of the wealth. The incompetent, idle, and lazy (among the 80%) find that law distasteful. There are constant societal pressures to reverse it. The problem is that it is irreversible. It is a constant within the forces of nature. In spite of that, there are constant attempts to reverse the 80-20 rule, but all attempts to do so result in chaos and economic calamity.

Capitalism has demonstrated an ability to elevate the quality of life for the weaker 80% group. For example, during the 1990’s Microsoft employed thousands of millionaires. Other organizations, such as Home Depot, McDonalds, and others have done the same.

Any time large numbers of human beings bow to a small number of human beings, chaos will eventually follow. That is because the capacity of the small number of human beings, the leaders, to do something meaningful for a larger number is mathematically impossible. The same number of therbligs that all humans employ during their lives encumbers those who lead the masses. As the great Shigeo Shingo said, all normal human beings live their lives by doing exactly the same 18-things (the therbligs); no more; no less. That is all we do from the day we were born until death; no more; no less.

Yet, millions of people for thousands of years have subordinated themselves to others who have no extra therblig capacity. The 18-therbligs bound all of us.

Monarchies, dictatorships, communism, socialism, and democracies cannot exist for very long within the confines of the forces of nature. Those forms of governance are all man-made abstracts and are void within the forces of nature. The stock market, on the other hand, represents a powerful force of nature. That is, two opposing forces transact without asset destruction. Sure, one force will be disadvantaged and other force gains advantage. The seller into a bullish cycle loses to the buyer and vice versus. Yet, assets are not destroyed in spite of one party being on the losing end of the transaction. However, the corrupt class always destroys. That is an inherent result of being corrupt. It is impossible to be corrupt and non-destructive to some asset.

The corrupt class, though, bounded by their 18-therbligs, most of which address their personal needs require the employment of therbligs from many others. Union leaders, union members, dictators, and all politicians are among the corrupt class. These corrupt classes of people display an inherent desire to tax others’ therbligs for their gain and only their gain.

Several months ago, a New Jersey schoolteacher said she could not live an adequate life on her $69,000 annual salary. The newly elected New Jersey governor responded, “Get another job.” The schoolteacher is corrupt. Rather than creating a company or organization that would facilitate her paying herself a higher income, she has her hand out to others. That is the lowest form of corruption.

The Wisconsin governor and state senate are proposing a bill that reduces benefits to government workers and teachers. They are unionized and are doing their marching around as opposed to adding economic value to society. These unions desire to live off those who add economic value.

Just because someone is a teacher, does not mean they are a good person. On the contrary, many called in sick this past Friday so they could march in protest in Wisconsin. Calling in sick while not being sick is lying. Low character is a common attribute among the corrupt class. Those who called in sick and can be spotted on film should be fired for they are obviously not sick.

Contemporary rebellions are extremely interesting. The Egyptian uprising quickly expanded to other countries in the Middle East the past two weeks. As earlier stated, the state of Wisconsin is not immune to these rebellions. Wisconsin and the Middle Eastern protests are shrouded within the same argument; that is, high effort therbligs owe nothing to low effort therbligs.

Increasing monies to the hands of the non-productive (those who do not participate in manufacturing, agriculture, or extraction) will lead to inflationary pressures. These non-productive classes of people do not reinvest monies to expand more wealth. That is because they do not participate in real wealth creation. Such societal behavior dampens enthusiasm for entrepreneurialism. That results in reduced supply of goods and services, which leads to a reduction in the quality of those goods and services. However, the corrupt class wants things. Since they produce nothing, the balance between supply and demand increases prices. That is inflationary.

Mubarak, Gaddafi, all politicians, union leaders and union members are members of the corrupt class. Their strength correlates to economic weakness. Their weakness correlates to economic strength.

From Wisconsin to Egypt, Libya, Tunisia, and Bahrain, the corrupt classes of people are being challenged. “Why should you among the corrupt class live such a lavish lifestyle, while you produce nothing and we, the people, have little?” The corrupt class will never answer that question. That is because the honest answer would hasten their annihilation. The honest response from the corrupt class would be, “my egotistical thoughts believe my superiority over you.” However, most among the corrupt class cannot break 90 on the golf course and thus are not superior. None of them created one product of value. If their I-Pods or Blackberries broke, they would not know how to repair them. The corrupt class has no skills of value. In essence, the corrupt class’s therblig activities are directed to their personal needs and the therblig activities of their subservients provide those personal needs.

Many parts of the earth contain humanity that is inferior to the wider and wilder animal kingdom, where each creature survives or perishes on its own competence. That is the underlying force of nature confronting the corrupt class, where they desire to diminish the substance of competence. That flies in the face of universal law.

Societal pressures around the world appear bent on shifting resources away from the corrupt class. If successful, that will facilitate resource expansion to the productive class. That is bullish for the stock market. The stock market has been steadily bullish as unrest expanded the past two weeks. The stock market bull appears invigorated with the nature of this unrest. However, the stock market bear will be invigorated if another group of corrupt people replaces the existing corrupt class.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 290 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 54.4%. That annualizes to 52.3%. The Mid-term Indicant has been signaling hold for these 290-stocks and funds for an average of 54.1-weeks.

The Mid-term Indicant is avoiding 41-stocks and funds of 340-tracked by the Indicant. The avoided stocks and funds are down an average of 40.0% since the Mid-term Indicant signaled sell an average of 95.1-weeks ago.

One year ago, on Feb 19, 2010, the Mid-term Indicant was holding 215-stocks and funds out of 333 tracked for an average of 37.4-weeks. They were up by an average of 27.5% (annualized at 38.4%). There were 102-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 25.9% since their respective sell signals an average of 82.6-weeks earlier one year ago. There was one buy signal and sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Feb 13, 2009. They were up by an average of 105.6% (annualized at 59.0%) since their respective buy signals an average of 93.0-weeks earlier. The Mid-term Indicant was avoiding 322-stocks and funds at that time. They were down an average of 39.0% since their respective sell signals an average of 37.7-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued dominating on this weekend in 2009.

There were 154-stocks and funds with hold signals on Feb 15, 2008 since their buy signals an average of 156.5-weeks earlier. They were up by an average of 176.0% (annualized at 58.5%). There were 187-avoided stocks and funds at that time. They were down by an average of 8.8% from their respective sell signals an average of 15.0-weeks earlier. There were two buy signals and two sell signals on this weekend in 2008 in addition to the 204-sell signals in the prior 14-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008.

On Feb 16, 2007, the Mid-term Indicant was signaling hold for 311-stocks and funds out of 345-tracked. They were up by an average of 114.0% (annualized at 63.4%) since their 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 by an average of 11.6% since their sell signals an average of 20.8-weeks earlier. There were three buy signals and one sell signal on this weekend in 2007.

Five years ago, on Feb 17, 2006, there were 286-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 115.9% (annualized at 65.2%) since their respective buy signals an average of 92.4-weeks earlier. There were 53-avoided stocks and funds then. They were down an average of 9.2% since their respective sell signals an average of 20.5-weeks earlier. There were six buy signals and no sell signals on this weekend in 2006.

On Feb 18, 2005, there were 256-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 86.2%, annualizing at 65.3%, since their respective buy signals an average of 52.9-weeks earlier. There were 61-avoided stocks and funds then. They were down by an average of 29.6% since their sell signals an average of 52.9-weeks earlier. There was one buy signal and two sell signals on this weekend in 2005.

There were 281-stocks and funds with hold signals on Feb 20, 2004. They were up by an average of 65.3%, annualizing at 86.2%, since their buy signals 42.7-weeks earlier. The 15-avoided stocks and funds were down an average of 27.9% since their respective sell signals an average of 43.1-weeks earlier. There were no buy signals and no sell signals on this weekend in 2004.

On Feb 21, 2003, there were 110-stocks and funds with a hold signal, enjoying a 28.3% gain since their respective buy signals an average of 26.8-weeks earlier. That annualized at 54.9%. There were 130-avoided stocks at that time. They were down by an average of 9.2% since their sell signals an average of 6.2-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds in 2002-late 2004. There were 51-buy signals on this weekend in 2003. The stock market began an early dip that year ahead of the nice 2003 bull leg, incurring five sell in addition to the 196-sell signals in the prior four weeks in 2003. However, a nice bull leg began its charge on this weekend in 2003.

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.

Click this link to this week’s buy and sell signals.

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

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

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

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

The Mid-term and Short-term Indicant continue with support for the bull. The mid-term election year gained traction toward stock market bullishness. Much of this gain correlated with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011, albeit with potential near-term bearish expressions. The stock market’s bull, though, continues to impress with its resilience with each bearish incursion. Keep in mind configurations do not yet support such bearishness. That prognosis rests on political dynamics and historical standards. However, current configurations suggest that mere bearish spurts may manifest, but none support bearish dominance.

The current stock market bull originated in anticipation of stalemated politicians. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish in spite of potential for near-term bearish behavior. Mid-eastern unrest will resume its threat to the stock market bull, as a function of speculation of those empty souls who are attempting to gain control of Mubarak’s revenue stream.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest, but they should be tight. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 70.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 154.4% and the S&P500 is up 72.9% since then. The small cap index, S&P600, is up 158.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current configurations. Historical standards and political climate support continued bullishness during 2011. Much of that depends, however, on the Middle Eastern riots.

The NASDAQ is down 43.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 12.1% since its similar secular peak on March 23, 2000. The Dow is up by 5.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulations shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bearish by 1.8% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 7.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 0.8%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 3.6% and finishing up for that year by 1.4%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 5.4% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up 3.5% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 3.4% at this time in 2007, finishing up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 12.5% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was down 6.9% on this weekend in 2009. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 1.2% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 12.5% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 0.9% since its last peak on Oct 31, 2007. The S&P500 is down 14.2% since its Oct 9, 2007 peak. The S&P600-small cap index is down 0.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Interestingly, the NAS100 topped its pre-crash highs of 2007/8 a few weeks ago.  It continues maintaining that lofty achievement. It is up by 6.9% since its Oct 31, 2007 peak. The S&P400 is the other major index tracked by the Indicant that is also above pre-2008-crash levels. It is up by 6.0% since its prior peak on 7/13/2007. The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 17.4% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its last weekly cyclical bottom on November 20, 2008.

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

The Dow is up 89.3% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 123.4% and the S&P500 is up 98.5% since then. The S&P600, Small Cap Index, is up 142.7% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the shorter near-term cycle is not as supportive of the bull. Middle Eastern unrest, although, is a bit threatening to the stock market bull, depending though on the nature of that unrest. If oil prices skyrocket, the bear will be delighted. If democracy expands in that region, the bull will be delighted.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As promised by Bernanke over a year ago, the discount rate (and prime) rate are holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness two weeks ago and held flat this past week. That suggests little demand problems. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time. However, the 6-month CD yield increased significantly ten weeks ago, suggesting desired longer-term upward pressures. Even with all that, it remains depressed and has been flat since then. In essence, a level of stability has been found after wild variations in such a minor investment vehicle. Anyone buying a 6-month CD at 0.41% with 2+% CPI is heading to the poor house unless deflationary pressures manifest. At any rate, all CD’s remain as Yellow Bears. China is enduring CPI’s ranging above 4.0% and raising interest rates as a result of that.

The Euro jumped to Red Bull status four weeks ago and holding at that level, but remains with weakening trend and weakening mid-term cycle. There is no good reason to assume its long-term cyclical decline will reverse. The Canadian dollar, like the Yen, has been stable the past several weeks, but with a mild strengthening bias. Its cyclical direction and trend remain bullish. The CA$ tends to parallel oil prices. The forecast for the CA$ continues with projected strengthening. The Japanese Yen trend and mid-term cycle continues with strengthening trend, but has been trading in a shallow zone the past several weeks.

Overall, the US dollar threatens to continue strengthening, but continues to weaken against the Japanese Yen (high productivity) and the Canadian dollar (resource rich).

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot in spite of near-term cyclical bearishness. The prior $2,000/oz-forecast by 2014 is now being challenged based on political dynamics. However, statistical bullishness remains in tact. At the same webpage, you will notice oil is less stable, but enjoying steady increases the past several weeks.

As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. It has been nudging a bit higher than that for the past several weeks. The high end forecast, though, projects $120/bbl by 2012. The Saudi Kingdom will have to approve that, though. Reports suggest the kingdom is now comfortable at $100/bbl. It has been vacillating around $90/bbl the past several weeks with some speculative bullishness and solid economic reasons for that bullishness. The Egyptian routs have offered some additional pizzazz to its recent bullishness. Those routs have expanded within the Middle East. That adds to the pizzazz.

Commodity price’s quick-term cycle continues increasing.  Significant bullish behavior continues. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish. Spot prices have expressed stability for the past few weeks.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. It continues to skyrocket, setting a new all time high during the week of November 8, 2010 and continues to set new highs. It remains economically bullish with inflationary considerations later. The CRB Bridge Futures continues its shift from waffling to more bullish aggression. It is also a solid Red Bull.

This paragraph remains the same. Commodities, overall, discontinued behavior consistent with uncertainty in favor of outright bullishness. “Extract baby extract” seems to be an evolving theme as more people around the planet are moving toward capitalistic progressions in spite of American waffling.

Mortgage rates remain configured with countering bearish trend. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. Fannie and Freddie have the same rates. There are plans to dissolve. Tax payers are down $150,000,000,000. Again, interference by government and politicians clearly illustrates a consistent conclusion; chaos. It is interesting that each generation has to relearn this horrible, but real fact.

The consumer price index and producer price index continue to be relatively stable.

Overall, hard economic data is stabilizing, albeit with increasing commodity prices. That is non-bearish, but lending support to longer-term inflationary potential. However, rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. 

At some point, the U.S. Congress will learn they have no influence on how China, India, and other countries manage their economies, which will enjoy larger economies than the U.S. at some point. If those rapidly developing economies retain a penchant for capitalism, rest assured prices for all commodities will escalate. However, rising productivity associated with capitalists could dampen the effects on consumers. These potential economic shifts are unparalleled in the annals of history.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 15.7%, annualizing at 36.7% since then. It was mildly bearish last week. As stated the past three weeks, gold could be in trouble, but it displayed some resistance to that prognosis the past two weeks. If there is no retreat in the next week or two, it will most likely continue moving to the north.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 22.5% since then, annualizing at 15.2%. This lazy fund has been bearish in four of the past six weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 29.8%, annualized at 69.8% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 53.5%, annualized at 125.1%, since its Sep 17, 2010 buy signal. Mild bearishness correlated with Mubarak’s resignation, but since then it has skyrocketed.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is up 31.7% since then, annualizing at 85.9%.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 47.3% since that buy signal, annualizing at 110.6%.

The Quick-term and Near-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 42.2% since then, annualizing at 97.3%. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 64.1% since that buy signal, annualizing at 29.1%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010.

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

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

All the major indices are up by an average of 29.7% since their bull signals an average of 45.6-weeks ago. That annualizes at 33.8%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $32,497,750. That beats buy and hold performance of $1,885,174 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $158.717. That beats buy and hold’s $131,552 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $242,403. That beats buy and hold’s $98,265 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 76.8% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred last August, but quickly endured “fluttering” behavior, followed by bearish aggression. A sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being. It may not receive a buy signal until 2013, which is the next post election year.

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 328.1% (annualized at 16.9%) since the Long-term Indicant signaled bull 1,007-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

This bull remains dominant. Even the weaker Dow Utilities is beginning to display rejections to the bear.  However, international related funds continue lacking bullish ambition.

As stated on Feb 9, 2011, “on the other hand, international ETF’s are increasingly bearish,” in spite of Friday’s bullish behavior.  ETF#13-EWH-Hong Kong, ETF#20-EEM-Emerging Markets, and ETF#21-EWZ-Brazil are being avoided by the Near-term Indicant. Although exchange rates could be contributing to their distress, the burning question is, “can these funds be bearish by themselves?” If yes, then the stock market can remain bullish, lifting these three funds back into bullish participation at some point. If no and they remain bearish, then the overall stock market will follow their bearish path. So far, “yes” has a mild advantage over “no.”

ETF#06-EWJ-Japan remains with bullish configurations.  ETF#28-EWT-Taiwan is no longer a Red Bull. Its Force Vector is bearishly mature and due for a rebound. If that rebound does not invigorate the Taiwan bull, it will receive a Near-term sell signal. Its Force Vector is bearishly mature and its rebounding nature will offer more insight of its directional intensity.

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

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

The Short-term Indicant is signaling bull for all eleven non-contrarian indices. These bulls are up 17.5% since the NTI signaled bull an average of 18.8-weeks ago. That annualizes to 48.2%. The lone bear is contrarian VIX. It is down 24.4% since its bear signal 22.1-weeks ago.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 24.4% since that bear signal.

The Quick-term Indicant is signaling bull for all eleven major non-contrarian indices. The eleven major indices are up by an average of 19.4% since their bull signals an average of 22.8-weeks ago, annualizing at 44.2%.

Short-term Market Summary

The majority of Force Vectors remain in bullish domains, supporting the bull. Force Vector remains directionally mixed with most supporting the bull, but a few expressing some bearish interest. The Dow Utilities Force Vector remains in bearish domains even though it was bullish today. Overall though, Vector Pressure is relatively high and protective of bull’s continuation.

Indicant Volume Indicators  

This has been a low volume bull since inception in May 2009 with occasional volume surges in support of the bull. It appears content in remaining as such for the time being and it has become even more depressed since the New Year. As stated the past several days, the Indicant Volume Indicator is returning to near holiday levels. Volume is nearing a cyclical bottom, which offers potential stock market interest. Unfortunately, that interest level remains subdued, but this apparently has not been discouraging to the bull.

Feb 18, 2011-Fri-Again, low volume prevails and not disruptive to continuation of stock market bull.

Feb 17, 2011-Thu-Summer time/holiday volume continues to persist. Although not necessarily disturbing, it is very interesting the strongest bull leg (since Aug 2010) in this bull (starting May 2009) has not garnished much interest. The NASDAQ is setting just under pre-2008-crash levels, while the Big Board remains well below its pre-crash levels. Although not while not yet alarming, this low volume bull cannot persist without volume support. The next time Force Vectors dip into bearish domains on relatively high volume, this bull could expire. Granted much of this bull is generated via “play” money, it is a bull nonetheless. The Indicant never worries about illogical bulls. A bull is a bull, period!

Feb 16, 2011-Wed-Volume was up a tad on today’s mild bullishness. Bullish bias remains in effect.

Feb 15, 2011-Tue-Same as yesterday.

Feb 14, 2011-Mon-Depressed volume continues, but does nothing to threaten bullish bias.

Feb 11, 2011-Fri-Volume was again slightly above recent averages, but remaining well below historical averages on solid bullish behavior. Such behavior remains as stock market bias.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 25-ETF’s. They are up by an average of 20.9% since their buy signals an average of 21.9-weeks ago. This annualizes at 49.5%.

The NTI is avoiding six ETF’s. They are down by an average of 17.7% since their sell signals an average of 12.0-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up 23.7% since their buy signals an average of 30.0-weeks ago. This annualizes at 41.1%.

The Quick-term Indicant is avoiding 3-ETF’s (QID, VXX, TLT). They are all contrarian ETF’s. They are down by an average of 44.6% since their sell signals an average of 44.2-weeks ago.

Short-term Summary: There are 26-Red Bulls (gained one this Fri), mitigating dynamic and sustainable bearish behavior. The 25-NTI Blue Bulls (lost one on Fri) continue mitigating dominance by the stock market bear.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 42.2%, annualizing at 97.3%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. The “energy bear” cannot find sustainable forces with current bullish attributes. This remains solidly bullish in spite of the late week bear attacks in three of the prior six weeks. Even with those attacks, it remains as a NTI Blue Bull. Force was approaching bearish domains, but shifted north like all good bulls do a few days ago. Continued unrest in Meddle East adds to this funds bullishness.

ETF#11-Gold and Precious Metals  is up 67.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 30.6%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $123.29 and still rising, albeit slowing down. Being patient here is important since your buy price approximates $80.65.

The Near-term Indicant signaled buy today. Its Force Vector shifted non-bearishly in bullish domains with bullish Vector Pressure. It also resumed its Red Bull status.  Although the gold bear lingers on a near-term basis, it demonstrated an inability to display its ambition the past several days.

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

As stated since late 2008, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring. Keep in mind, GLD tracks the price of gold in U.S. dollars. A strengthening dollar will have a depressing effect on the price of gold. Please read on, as this paragraph is now being challenged.

Although the Near-term Indicant signaled buy today, a sound fundamental persists in continued threats to the gold bull. In reference to the Indicant Weekly Report of January 16, 2011, political influences may be gold’s worst enemy, as it is approaching its prior peak from 1492. If political forces result in shifting sovereign debt loads to the south, currencies will strengthen, dampening the “emotional” value of gold. The Tea Party movement may invoke this shift, as that political pressure strongly supports dynamic cuts in Federal spending. Perceptions hold that will dampen inflationary threats and thus depress the price of Gold in U.S. dollars.

ETF#14-TLT-Long Government  received a sell signal from Quick-term Indicant on Nov 15, 2010, as price fell below QTI-Yellow. It is down 3.3% since that sell signal. It is a Yellow Bear, which offers no bullish support.

The Near-term Indicant signaled sell on Oct 14, 2010. It is down 10.3% since then.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 37.8% since then. It finally succumbed to single digit status at $9.98 last Monday. After rebounding to $10.00 last Tue, it remains at a single digit status of $9.92. Attributes are no longer solidly bearish, while not yet strongly supporting the “short-bull.” The overall stock market is not yet supportive of QID’s bullish desires.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 63.8% since then.  Pressure remains low and not capable of extensive bullish behavior. This ETN continues to not track the VIX.

Major ETF Events

Feb 18, 2010-Fri-None.

Feb 17, 2010-Thu-Although economic news was favorable, the bull’s bullishness was mild.

Feb 16, 2010-Wed-None.

Feb 15, 2010-Tue-None.

Feb 14, 2010-Mon-The prior statement erroneously stated Friday’s behavior paralleled the 1970’s stock market. It should have stated Friday’s behavior … paralleled the 1980’s stock market.

Feb 11, 2011-Fri-Oil down, gold down, energy sector down while stock market was up. This all relates to Mubarak’s resignation as Egypt’s dictator. These configurations also parallel the 1970’s stock market.

Current Strategy-Short-term Indicant- Feb 18, 2011-Holding remains safe, relative to NTI Green prices. Prices remain above Green, for the most part, and Green is well above the buy prices. Falling below Green with minimal Force will trigger the next sell signals. International related ETF’s remain configured with weak bullish support. Some have endured a sell signal and being avoided. For those of you who bought GLD on Dec 2008 buy signal, wait for the price to fall below Yellow before selling, even though it is now enduring a Near-term avoid signal.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence the past three weeks. Four consecutive weeks of that behavior is solidly bullish. So, next week will be important relative to this metric. Configured attributes within the long-term and mid-term modeling do not offer any evidence of dynamic and sustainable bearish behavior.

Indicant Conclusion

The presidential pre-election year stock market bull remains in tact and in full conformance to historical standards. There is no technical support for stock market bearish behavior.

The Indicant Volume Indicator remains depressed, as the post holiday sessions did not introduce significant increases in volume. Volume should increase in coming weeks and months, offering additional obviations of directional intensity. The absence of that expectation is somewhat discerning, as the bull will require significant increases in volume to sustain itself. At least that is the norm. Regardless, though, of these extraneous attributes, one cannot argue with a low volume bull.

As stated the past 72-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena in the U.S., coupled with low interest rates, continue in support of the bull. That political phenomenon extended from Egypt two weeks ago, where another among the corrupt class fell. More Middle Eastern unrest with what appears to be an expansionary interest in democracies continues in several countries. Challenging the corrupt class is bullish. The complete eradication of the corrupt class will be even more bullish. That also dampens inflationary causes as democracies tend to yield a stabilizing effect on prices, including oil.

Inflation has not yet threatened the bull. Keep in mind, though, it will in the future unless Congress is successful in reducing 2.5-trillion dollars from the national debt.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/20/2011

Feb 13, 2011 Indicant Weekly Stock Market Report

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

Who Replaces the Expulsed?

Egypt’s political and governmental leader, Hosni Mubarak, resigned this past week. The stock market responded with bullish glee. It generally does when a member of the corrupt class is endures expulsion from their seat of corruption. This expulsion was less predictable. Rather than anticipating Mubarak’s expulsion, the stock market bull paralleled the related euphoria.

The expulsion of several U.S. Congressman, most of whom are also among the corrupt class, was anticipated by the stock market last August. The stock market bull charged north, as political polls obviated massive incumbent expulsions from the U.S. Congress. The August bull leg is the strongest since the current bull was born in April 2009.

Capital markets always invigorate bullish behavior when any member of the corrupt class is troubled even during the poll stages. The stock market has a penchant for anticipating good and bad events. When an unanticipated good event occurs, such as Mubarak’s resignation, the stock market bull offers no shame in demonstrating its recognition with the event.

The most massive collapse among the corrupt class occurred with the crumbling of the Soviet Union. The Dow skyrocketed from around 1,000 to over 10,000 during that era. Assisting that massive bull market was the Newt Gingrich/Bill Clinton era where each troubled the other. In effect, their stalemating each other resulted in political powerlessness and slowed related corruption.

If the Chinese people overran their communist dictators, the Dow would shoot past 30,000 with relatively ease. In essence, the capital markets display significant favorability when the corrupt class is troubled and especially so during expulsions of any political leadership, whether Egypt or the U.S.

Mubarak was a dictator, but his psychological profile is not much different from anyone who gets into politics. Those sorts of people are either not willing or capable of adding any real economic value to society, but they do love to talk. That is easy when one does not honor the boundaries of facts or logical constraints. They, for the most part, love to manipulate, pontificate, and lead over the masses. In essence, they crave power, but they never confront their enemy with sword in hand and expose themselves to the potential miseries they invoke upon their constituents. In essence, politicians hold no real power and from time to time the masses revolt against the powerless.

The capital markets rejoiced at Mubarak’s resignation, albeit without significant magnitude. After all, Egypt is not an economic power. For thousands of years, Egyptians toiled and labored, building nonsensical pyramids for their various leaders, called pharaohs. If Egyptians had adopted the U.S. Constitution three thousand years ago and stuck to it, we would have landed on the moon around 1,000 AD, if not before. Egyptians and the rest of the world would be living like millionaires today. Cancer cures would be administered with the simplicity of applying a band-aid to a minor injury. Unfortunately, most who crave a political career do not like the idea of limited political powers contained in the U.S. Constitution and consequently cancer remains serious and trips to the moon and beyond remain limited.

The downside is that we would not have pyramids to marvel if the U.S. Constitution was written 3,000-years ago. In reality, though, those pyramids housed dead people. The early idea was to construct them high in the sky so that the political leader would not have to travel so far to heaven. He or she would get a head start by being a bit closer. Everyone else, including those who built the pyramids, would have to scratch through the dirt to get there. Although the objects of corruption have changed since the days of pyramid construction, political corruptive practices remain in tact.

When studying Mubarak’s resume, one can easily conclude he did not produce one cent to economic value. He never extracted, manufactured, or harvested food. He was pure economic overhead. However, he is no different in that respect from the majority of U.S. politicians and others around the world.

Although Mubarak did not have Egyptians build him a pyramid, it is purported he has amazed a fortune approaching fifty billion dollars. How can one, who does not contribute one cent to the economy, gain so much money? Well, he like most politicians, took from others. Rather than redistributing some of the takings, he kept it all to himself with some distributions to his family. That is the only difference between democratic politicians and dictators. Democratic politicians have to be a bit sneakier in how they gain through corrupt processes.

The capital markets rose late last week on the news. As speculated in last week’s Indicant Stock Market Report, the question remains on who will take his place? It is likely Mubarak’s replacement will contain the same psychological profile is the same as those who had pyramids built for them and those who have a desire to take; either for themselves or to redistribute to their pals. Not one seeking the position to replace Mubarak desires “power to the people.” Keep in mind those who screamed for his removal are descendants of pyramid construction workers.

Keep in mind the Google executive, Wael Ghonim, credited with fomenting the recent Egyptian revolution, has also never created real economic wealth. Although Google provides a significant service, it does not extract, manufacture, or harvest food. Google needs those three sectors for its existence. Those three wealth-building sectors existed long before Google.  They will continue their existence long after Google’s expiration. The wealth building sectors do not need Google, while Google needs them. So, do not think that a Google executive will introduce favorable results to the capital markets. Even with that, Mubarak’s replacement remains unknown.

The primary mid to longer-term economic concern is the potential of abstract contiguity with Iran and the Strait of Hormuz as discussed in last week’s Indicant Stock Market Report. If the new leader is an Islam extremist, rising oil prices and/or military accelerations will manifest in the region.

Who is going to take Mubarak’s place? Rest assured, regardless of nomenclature of democracy or radical Islam, it would be among those with varying elements of psychological dysfunction. Here is the dysfunction: “Hey there, folks, I am going to direct how you live.” Although it is unlikely they will begin construction of a new pyramid on their behalf, the psychological profile remains the same. Inherently, they think their 3-pound brain flows in a superior sort of way and even more so that the sum of the millions of pounds of brains they plan on directing. Some could argue that makes sense. After all, there are many pyramids in Egypt, suggesting one little three pound brain could direct the actions, thoughts, and deeds of millions for many generations to sweat and toil at pyramid building. Maybe the masses do need direction, regardless of the nature of that direction. It is amazing how many people demonstrate an inability to recognize there is no such thing as celebrity among the class of corruption; all politicians.

Paralleling Mubarak’s resignation were declining oil prices, gold, silver, and other commodities and increasing prices in capital stocks. That is all based on emotion and had nothing to do with earnings with the exception that Mubarak will no longer enjoy skimming millions from those passing through the Suez Canal. However, yet to be named is the next skimmer. So, profits will be where they have always been with respect to the variable costs of Mubarak’s skimming from those profits. In other words recent bullish emotion will eventually be wiped out by the reality of numbers; both real and fake.

The concern is Mubarak’s replacement. The focal point will be the relationship with Iran. A strained relationship between Egypt and Iran is bullish for the capital markets. A cozy one should be bearish, as the Strait of Hormuz may shrink in its capacity to deliver petro to a petro-starved planet. Skyrocketing oil prices from such chaos would of course be bearish. Those desiring bullish stock markets would prefer Egyptian and Iranian conflicts of interest; much like Bill Clinton and Newt Gingrich endured in the 1990’s.  The capital markets will be monitoring and stock market direction will be consistent with expanded or diminished political threats.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 289 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 53.3%. That annualizes to 51.6%. The Mid-term Indicant has been signaling hold for these 289-stocks and funds for an average of 53.7-weeks.

The Mid-term Indicant is avoiding 43-stocks and funds of 340-tracked by the Indicant. The avoided stocks and funds are down an average of 45.8% since the Mid-term Indicant signaled sell an average of 116.1-weeks ago.

One year ago, on Feb 12, 2010, the Mid-term Indicant was holding 215-stocks and funds out of 333 tracked for an average of 36.4-weeks. They were up by an average of 24.0% (annualized at 34.3%). There were 99-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 32.8% since their respective sell signals an average of 87.6-weeks earlier one year ago. There were no buy signals but there were three sell signals on this weekend last year in addition to eight sell signals in the prior two weeks.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Feb 13, 2009. They were up by an average of 111.9% (annualized at 63.0%) since their respective buy signals an average of 92.4-weeks earlier. The Mid-term Indicant was avoiding 322-stocks and funds at that time. They were down an average of 34.5% since their respective sell signals an average of 36.8-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued dominating on this weekend in 2009.

There were 149-stocks and funds with hold signals on Feb 8, 2008 since their buy signals an average of 154.5-weeks earlier. They were up by an average of 171.6% (annualized at 57.7%). There were 188-avoided stocks and funds at that time. They were down by an average of 11.1% from their respective sell signals an average of 19.5-weeks earlier. There was one buy signal and one sell signal on this weekend in 2008 in addition to the 203-sell signals in the prior 13-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008.

On Feb 9, 2007, the Mid-term Indicant was signaling hold for 312-stocks and funds out of 345-tracked. They were up by an average of 111.6% (annualized at 62.5%) since their 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 by an average of 11.1% since their sell signals an average of 19.5-weeks earlier. There were no buy signals and one sell signal on this weekend in 2007.

Five years ago, on Feb 10, 2006, there were 285-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 111.9% (annualized at 63.5%) since their respective buy signals an average of 91.6-weeks earlier. There were 59-avoided stocks and funds then. They were down an average of 8.6% since their respective sell signals an average of 19.9-weeks earlier. There was one buy signal and no sell signals on this weekend in 2006.

On Feb 11, 2005, there were 247-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 88.1%, annualizing at 65.9%, since their respective buy signals an average of 51.9-weeks earlier. There were 62-avoided stocks and funds then. They were down by an average of 30.1% since their sell signals an average of 51.9-weeks earlier. There were 11-buy signals and no sell signals on this weekend in 2005.

There were 281-stocks and funds with hold signals on Feb 13, 2004. They were up by an average of 68.5%, annualizing at 85.6%, since their buy signals 41.7-weeks earlier. The 13-avoided stocks and funds were down an average of 27.0% since their respective sell signals an average of 41.7-weeks earlier. There were no buy signals and two sell signals on this weekend in 2004.

On Feb 14, 2003, there were 106-stocks and funds with a hold signal, enjoying a 26.1% gain since their respective buy signals an average of 27.1-weeks earlier. That annualized at 50.2%. There were 174-avoided stocks at that time. They were down by an average of 8.3% since their sell signals an average of 5.2-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds in 2002-late 2004. There were eight buy signals on this weekend in 2003. However, the stock market began an early dip that year ahead of the nice 2003 bull leg, incurring eight sell in addition to the 188-sell signals in the prior three weeks in 2003.

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.

Click this link to this week’s buy and sell signals.

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

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

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

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

The Mid-term and Short-term Indicant continue with support for the bull. The mid-term election year gained traction toward stock market bullishness. Much of this gain correlated with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011, albeit with potential near-term bearish expressions. The stock market’s bull, though, continues to impress with its resilience with each bearish incursion. Keep in mind configurations do not yet support such bearishness. That prognosis rests on political dynamics and historical standards. However, current configurations suggest that mere bearish spurts may manifest, but none support bearish dominance.

The current stock market bull originated in anticipation of stalemated politicians. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish in spite of potential for near-term bearish behavior. Mid-eastern unrest will resume its threat to the stock market bull, as a function of speculation of those empty souls who are attempting to gain control of Mubarak’s revenue stream.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest, but they should be tight. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 68.4% since its secular weekly low on October 9, 2002. The NASDAQ is up 152.2% and the S&P500 is up 71.1% since then. The small cap index, S&P600, is up 155.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current configurations. Historical standards and political climate support continued bullishness during 2011. Much of that depends, however, on the Middle Eastern riots.

The NASDAQ is down 44.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 13.0% since its similar secular peak on March 23, 2000. The Dow is up by 4.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulations shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bullish by 0.001% (a few pennies) through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 5.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was down 3.0%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 4.5% and finishing up for that year by 1.4%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.5% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up 2.6% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 1.8% at this time in 2007, finishing up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 12.5% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was down 3.0% on this weekend in 2009. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

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

The Dow is down 13.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 1.7% since its last peak on Oct 31, 2007. The S&P500 is down 15.1% since its Oct 9, 2007 peak. The S&P600-small cap index is down 2.2% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Interestingly, the NAS100 topped its pre-crash highs of 2007/8 a few weeks ago.  It continues maintaining that lofty achievement. It is up by 6.3% since its Oct 31, 2007 peak. The S&P400 is the other major index tracked by the Indicant that is also above pre-2008-crash levels. It is up by 4.7% since its prior peak on 7/13/2007. The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 18.3% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its last weekly cyclical bottom on November 20, 2008.

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

The Dow is up 87.5% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 121.5% and the S&P500 is up 96.5% since then. The S&P600, Small Cap Index, is up 139.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The Mid-term Indicant is suggesting potential meandering behavior, but not yet strongly so. The Near-term Indicant is configuring with potential bearish behavior by the S&P600 Index.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the shorter near-term cycle is not as supportive of the bull. Middle Eastern unrest, although, is a bit threatening to the stock market bull. Mubarak’s resignation is the beginning of a new process with unknown results at this time. However, the stock market bull was delighted with his expulsion just as it was with the expulsion of many U.S. Congressmen last November.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As promised by Bernanke over a year ago, the discount rate (and prime) rate are holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness last week, suggesting little demand problems. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time. However, the 6-month CD yield increased significantly nine weeks ago, suggesting desired longer-term upward pressures. Even with all that, it remains depressed and has been flat since then. In essence, a level of stability has been found after wild variations in such a minor investment vehicle. Anyone buying a 6-month CD at 0.41% with 2+% CPI is heading to the poor house unless deflationary pressures manifest. At any rate, all CD’s remain as Yellow Bears.

The Euro jumped to Red Bull status three weeks ago and holding at that level, but remains with weakening trend and weakening mid-term cycle. There is no good reason to assume its long-term cyclical decline will reverse. The Canadian dollar, like the Yen, has been stable the past several weeks, but with a mild strengthening bias. Its cyclical direction and trend remain bullish. The CA$ tends to parallel oil prices. The forecast for the CA$ continues with projected strengthening. The Japanese Yen trend and mid-term cycle continues with strengthening trend, but has been trading in a shallow zone the past several weeks.

Overall, the US dollar threatens to continue strengthening, but continues to weaken against the Japanese Yen (high productivity) and the Canadian dollar (resource rich).

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot in spite of near-term cyclical bearishness. The prior $2,000/oz-forecast by 2014 is now being challenged based on political dynamics. However, statistical bullishness remains in tact. At the same webpage, you will notice oil is less stable, but enjoying steady increases the past several weeks.

As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. It has been nudging a bit higher than that for the past several weeks. The high end forecast, though, projects $120/bbl by 2012. The Saudi Kingdom will have to approve that, though. Reports suggest the kingdom is now comfortable at $100/bbl. It has been vacillating around $90/bbl the past several weeks with some speculative bullishness and solid economic reasons for that bullishness. The Egyptian routs have offered some additional pizzazz to its recent bullishness.

Commodity price’s quick-term cycle continues increasing.  Significant bullish behavior continues. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish. Spot prices have expressed stability for the past few weeks.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. It continues to skyrocket, setting a new all time high during the week of November 8, 2010 and continues to set new highs. It remains economically bullish with inflationary considerations later. The CRB Bridge Futures continues its shift from waffling to more bullish aggression. It is also a solid Red Bull.

This paragraph remains the same. Commodities, overall, discontinued behavior consistent with uncertainty in favor of outright bullishness. “Extract baby extract” seems to be an evolving theme as more people around the planet are moving toward capitalistic progressions in spite of American waffling.

Mortgage rates were a bit bearish the past few days, aligning with its cyclical and longer-term trend. They did not find comfort at their first Red Curve interaction since late 2008 this past week. Fannie and Freddie have the same rates. There are plans to dissolve. Tax payers are down $150,000,000,000. Again, interference by government and politicians clearly illustrates a consistent conclusion; chaos. It is interesting that each generation has to relearn this horrible, but real fact.

The consumer price index and producer price index continue to be relatively stable.

Overall, hard economic data is stabilizing, albeit with increasing commodity prices. That is non-bearish, but lending support to longer-term inflationary potential. However, rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. 

At some point, the U.S. Congress will learn they have no influence on how China, India, and other countries manage their economies; both of which will enjoy larger economies than the U.S. at some point. If those rapidly developing economies retain a penchant for capitalism, rest assured prices for all commodities will escalate. However, rising productivity associated with capitalists could dampen the effects on consumers. These potential economic shifts are unparalleled in the annals of history.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 11.3%, annualizing at 27.7% since then. It was mildly bearish last week. As stated the past two weeks, gold could be in trouble, but it displayed some resistance to that prognosis last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 16.5% since then, annualizing at 11.3%. This lazy fund has been bearish in four of the past six weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 25.8%, annualized at 63.3% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 45.5%, annualized at 111.4%, since its Sep 17, 2010 buy signal. Mild bearish correlated with Mubarak’s resignation.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is up 29.0% since then, annualizing at 82.9%.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 41.7% since that buy signal, annualizing at 102.2%.

The Quick-term and Near-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 36.8% since then, annualizing at 88.9%. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 64.1% since that buy signal, annualizing at 29.1%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It is up 0.9% since that sell signal. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010.

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

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

All the major indices are up by an average of 28.5% since their bull signals an average of 44.6-weeks ago. That annualizes at 33.3%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $32,188,223. That beats buy and hold performance of $1,867,223 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $157,079. That beats buy and hold’s $130,194 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $240,306. That beats buy and hold’s $97,415 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 76.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred last August, but quickly endured “fluttering” behavior, followed by bearish aggression. A sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being. It may not receive a buy signal until 2013, which is the next post election year.

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 324.0% (annualized at 16.7%) since the Long-term Indicant signaled bull 1,006-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Force Vectors appear to be peaking. Do not be surprised at non-bullishness to bearish expressions in the next few days. Stock market bearish expressions remain the same on the near-term horizon. They will be harmless and unsustainable. However, the expulsion of Egypt’s dictator generated a bullish response.

As stated last Wednesday, “on the other hand, international ETF’s are increasingly bearish.” ETF#13-EWH-Hong Kong, ETF#20-EEM-Emerging Markets, and ETF#21-EWZ-Brazil are being avoided by the Near-term Indicant. Although exchange rates could be contributing to their distress, the burning question is, “can these funds be bearish by themselves?”

ETF#06-EWJ-Japan remains with bullish configurations, while ETF#28-EWT-Taiwan took it on the chin last Thursday by the bear. However, it remains as a Red Bull and thus no sell signal, but getting close.

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

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

The Short-term Indicant is signaling bull for all eleven non-contrarian indices. These bulls are up 16.4% since the NTI signaled bull an average of 17.8-weeks ago. That annualizes to 47.7%. The lone bear is contrarian VIX. It is down 27.8% since its bear signal 21.1-weeks ago.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 27.8% since that bear signal.

The Quick-term Indicant is signaling bull for all eleven major non-contrarian indices. The eleven major indices are up by an average of 18.3% since their bull signals an average of 21.8-weeks ago, annualizing at 43.6%.

Short-term Market Summary

The majority of Force Vectors remain in bullish domains, supporting the bull. However, Force Vectors are tiring and some are shifting south with possible motivations for the bear to exert some influence. However, the stock market bull and populace rejoiced with the expulsion of a dictator. The expulsion of any dictator is always a positive, but celebrations are usually premature because the world’s populace continues replacing them with yet another.

Overall, most attributes support of the bull. Bearish pestering may renew. The VIX is poised for some bullish aggression in spite of it disappointing with today’s bearish expression. Much of that was also tied to events in Egypt.

Indicant Volume Indicators  

This has been a low volume bull since inception in May 2009 with occasional volume surges in support of the bull. It appears content in remaining as such for the time being and it has become even more depressed since the New Year. As stated the past several days, the Indicant Volume Indicator is returning to near holiday levels. Volume is nearing a cyclical bottom, which offers potential stock market interest. Unfortunately, that interest level remains subdued, but this apparently has not been discouraging to the bull.

Feb 11, 2011-Fri-Volume was again slightly above recent averages, but remaining well below historical averages on solid bullish behavior. Such behavior remains as stock market bias.

Feb 10, 2011-Thu-Volume was up a bit, but certainly without directional conviction. Flat behavior on aroused volume is a lot of guess work by many. Bullish bias prevails.

Feb 09, 2011-Wed-Again very low volume on flat behavior retains bullish bias.

Feb 08, 2011-Tue-Low volume continues pushing the stock market higher. That is a mild aura of suspicion surrounding that, but most of the other attributes strongly support the bull.

Feb 07, 2011-Mon-Below average volume on mild bullishness. Bullish bias prevails.

Feb 04, 2011-Fri-Mediocre volume on mixed stock market behavior does not disrupt prevailing bullish bias.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 25-ETF’s. They are up by an average of 19.5% since their buy signals an average of 20.9-weeks ago. This annualizes at 48.4%.

The NTI is avoiding seven ETF’s. They are down by an average of 16.0% since their sell signals an average of 9.9-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up 22.1% since their buy signals an average of 29.0-weeks ago. This annualizes at 39.7%.

The Quick-term Indicant is avoiding 3-ETF’s (QID, VXX, TLT). They are all contrarian ETF’s. They are down by an average of 44.5% since their sell signals an average of 43.2-weeks ago.

Short-term Summary: There are 24-Red Bulls (lost one on Fri), mitigating dynamic and sustainable bearish behavior. The 24-NTI Blue Bulls (flat on Fri) continue mitigating dominance by the stock market bear.

Bearish spurt potential remains. Configurations are shifting again in favor of the bear. The absence of bullish unity remains with some non-contrarian ETF’s still lacking bullish configurations; mostly international related funds. Bearish unity does not exist. Therefore, the bear cannot dominate.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 36.8%, annualizing at 88.9%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. The “energy bear” cannot find sustainable forces with current bullish attributes. This remains solidly bullish in spite of the late week bear attacks in two of the prior four weeks. Even with those attacks, it remains as a NTI Blue Bull. Force is approaching bearish domains. Friday’s bearishness is derived from Mubarak’s expulsion from Egypt’s leadership position.

ETF#11-Gold and Precious Metals  is up 64.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.1%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $123.02 and still rising, albeit slowing down. Being patient here is important since your buy price approximates $80.65.

The Near-term Indicant signaled sell on Jan 20, 2011. It is up 0.9% since that sell signal.

It fell below NTI Green on Jan 20, 2011. Its Force Vector dipped deeper into bearish domains on the same day. Vector Pressure remains in bearish domains, which adds bearish support in spite of bullish aggression the past few days. Configurations do not justify continued holding along the Near-term Indicant cycle and thus the avoid signal. Keep in mind the Quick-term Indicant should be your model of choice if you bought in Dec 2008.

The Near-term Green curve continues moving south. Force shifted south this Friday. That should invigorate the gold bear.

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

As stated since late 2008, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring. Keep in mind, GLD tracks the price of gold in U.S. dollars. A strengthening dollar will have a depressing effect on the price of gold. Please read on, as this paragraph is now being challenged.

Interestingly, gold appears to be in trouble along the near-term cycle. In reference to the Indicant Weekly Report of January 16, 2011, political influences may be gold’s worst enemy, as it is approaching its prior peak from 1492. If political forces result in shifting sovereign debt loads to the south, currencies will strengthen, dampening the “emotional” value of gold. The Tea Party movement may invoke this shift, as that political pressure strongly supports dynamic cuts in Federal spending. Perceptions hold that will dampen inflationary threats and thus depress the price of Gold in U.S. dollars.

ETF#14-TLT-Long Government  received a sell signal from Quick-term Indicant on Nov 15, 2010, as price fell below QTI-Yellow. It is down 3.3% since that sell signal. It is a Yellow Bear, which offers no bullish support.

The Near-term Indicant signaled sell on Oct 14, 2010. It is down 10.4% since then. It was aggressively bearish in four of the past seven trading days. It was not contrarian this Friday, paralleling stock market bullishness.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 37.2% since then. Without a reverse split, this ETF appears to be in search of single digit status. It is now at $10.02. All that is needed for single digit status is three more pennies down. All attributes are no longer solidly bearish, while not yet strongly supporting the “short-bull.” The overall stock market is not yet supportive of QID’s bullish desires.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 65.1% since then.  Pressure remains low and not capable of extensive bullish behavior.

Major ETF Events

Feb 11, 2011-Fri-Oil down, gold down, energy sector down while stock market was up. This all relates to Mubarak’s resignation as Egypt’s dictator. This configurations also parallel the 1970’s stock market.

Feb 10, 2011-Thu-Although there was no sell signal, ETF#28-EWT-Taiwan fell significantly today. It endured the largest price decline today, but it remains as a Red Bull.

Feb 9, 2011-Wed-Another international ETF, #13-EWH-Hong Kong, received a sell signal today.

Feb 8, 2011-Tue-None

Feb 7, 2011-Mon-Contrarian indices VIX and TLT were not contrarian.

Feb 4, 2011-Fri-GLD did encounter additional bearishness as expected. VIX Force dipped into bearish domains and fell below Pressure. A non-bullish response by the VIX early next week would be surprising. That suggests some stock market bearishness, which would be configured as a mere spurt.

Current Strategy-Short-term Indicant- Feb 11, 2011-Holding remains safe, relative to NTI Green prices. Prices remain above Green, for the most part, and Green is well above the buy prices. Falling below Green with minimal Force will trigger the next sell signals. Internationally related ETF’s remain configured with weak bullish support. Some have endured a sell signal and being avoided. For those of you who bought GLD on Dec 2008 buy signal, wait for the price to fall below Yellow before selling, even though it is now enduring a Near-term avoid signal.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence last week and the week before last. That follows two consecutive weeks of bearish divergence. Combined bullish convergence/divergence in eight of the prior ten weeks conforms to pre-election year stock market bullish behavior. Configured attributes within the long-term and mid-term modeling do not offer any evidence of dynamic and sustainable bearish behavior.

Indicant Conclusion

The presidential pre-election year stock market bullishness remains in tact as it has now entered into the strongly bullish pre-election year. Technical support for the bull continues to wane by the Near-term Indicant, but without bearish breadth. There is no technical support for stock market bearish behavior.

As stated the past two weeks, meandering behavior may be confronting the stock market bull. The Indicant Volume Indicator remains depressed, as the post holiday sessions did not introduce significant increases in volume. Volume should increase in coming weeks and months, offering additional obviations of directional intensity. The absence of that expectation is somewhat discerning, as the bull will require significant increases in volume to sustain itself. At least that is the norm. Regardless, though, of these extraneous attributes, one cannot argue with a low volume bull.

As stated the past 71-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena in the U.S., coupled with low interest rates, continue in support of the bull. That political phenomenon extended from Egypt late last week, where another among the corrupt class fell. Inflation has not yet threatened the bull. Keep in mind, though, it will in the future unless Congress is successful in reducing 2.5-trillion dollars from the national debt.

Middle Eastern politics remains threatening to the bull at this time. Longer-term issues will become more pronounced during the post-bickering period. If Egyptians allow a dictator or religious fanaticism to rule them, there could be a prolonging bearish influence. Much of that will depend on the supply reliability of petro and the state of Israel. International war, though, would be a more likely outcome. The target will be most Middle Eastern countries. Depending on damage and impact to the supply of petro, a bullish response would be likely. A philosopher of wrong will not adjust just because someone else tells them it is wrong. Chit-chat accomplishes nothing when engaging the irrational.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/13/2011

Feb 6, 2011 Indicant Weekly Stock Market Report

Volume 02, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

Energy and the Strait of Hormuz

Oil companies and their multi-tiered suppliers’ strategic plans have long desired military conflict in the Middle East. Real or perceived disruptions to supply lines through the Straight of Hormuz generate a bullish synergy within the petroleum industry. About 40% of world oil consumption passes through the Strait of Hormuz on a daily basis.

This is not implying that petroleum industry strategic planners are wrong or evil. Like anyone else, they simply enjoy environments that are friendly to their business and profits. So, military conflict around the Strait of Hormuz is generally viewed as a positive environment for the health of the industry.

U.S. politicians add some pizzazz to that potential constrictive element with their drilling and production restrictions in the U.S. Such restrictions do not depress the demand for oil, but it certainly tightens the supply. As a result, prices increase. That is good for the industry, as equipment and specialists move to where there are fewer constraints. Stock prices in those companies skyrocket. For example, ETF#03-XLE has outperformed every other sector tracked by the Indicant since September 2010. It is interesting that this sector started its strong bullish movement well ahead of the Egyptian riots.

The Strait of Hormuz is a narrow strip of water connecting the Persian Gulf and the Arabian Sea. All of this is to the east of Saudi Arabia. Iran’s border connects to the west side of the Strait of Hormuz. Iran, alone, can threaten the Strait of Hormuz at any time. They have demonstrated that a few times in the past couple of years. Geographically, Egypt is to the east of Saudi. Egypt’s geography does not offer any direct connection to the Strait of Hormuz.

However, religious fanaticism spans the entire Middle East, indirectly offering abstract contiguity with the Strait of Hormuz and Egypt.

Viewing recent television news reveals there are two groups of Egyptians throwing rocks at one another. Technology has not advanced enough to determine the real reason for throwing rocks. The news reporters suggest there are two broad groups among the rock throwers; one group is against the local chief, Mubarak, and another group supports the chief.

If this is truly local to Egypt, then the Strait of Hormuz should not be threatened with military conflicts. If this turns out to be Iranian influenced, then the Strait of Hormuz as a major resource to petro supply line will be seriously threatened. An Iranian controlled Egypt would, in effect, be positioned with massive controls on the far east and far west ends of the Middle East.

The writer has no inside information on this theory, other than history. Middle Eastern countries have been attempting to conquer each other for thousands of years. Interestingly, the map shows the culmination of constant failures to do so. The smaller and more vulnerable countries have been savvy enough to round up support from others every time one of the big bullies attempted to conquer. For example, Kuwait summoned the United States to oust Iraq in the early 1990’s.

Technological advances the past three hundred years have designed products that use petroleum in vast amounts. This has resulted in an increased international dependency on Middle Eastern oil. The magnitude of that dependency was sharply displayed in the early 1970’s when the Middle East imposed an embargo on oil consuming nations. Oil prices skyrocketed with that embargo. The petroleum industry rejoiced while long lines at gasoline retailers manifested.

From the early 1980’s through 2004, oil prices were low and stable. Expanding worldwide economies drove more demand for petroleum. The failures of communism shifted more toward capitalism and with that, petroleum prices skyrocketed from 2005-2008. The recession of 2008, however, reversed prices back to the south.

Rather than enduring multi-generational depressions that are causative from communism, a more capitalistic worldwide economy recovered quickly. Political leaders around the world are increasingly being recognized as economically insignificant. With that, economic recovery is not as slow as it was in the 1930’s when FDR had no political competition on the radio. Unfortunately, most of the populace listened to him and paid the price for doing so.

Contemporary politicians endure significant indirect and direct competition in gaining an ear to penetrate. Indirectly, ESPN, HBO, etc. has distracted significantly from political listeners. That distraction dampens the influence of political leaders. Directly, conservative talk radio counters political commentary. Consequently, the worldwide economy continues expansion. As a result, the price of oil has risen from natural market forces, for the most part, other than periodic political interferences to the efficiencies of extraction.

The King of Saudi Arabia determines the price of oil. He prefers stability above all else. He wants his customers to not be disrupted too much with terrorism and/or inflationary pressures. A little bit here and there maybe okay with the king, but excessive terrorism and/or inflation in customers’ countries is not acceptable. The king is no different from anyone else; that is, preserve thy comforts and expand on them as much as possible. Excessive terrorism and/or inflation could disrupt the flow of money to his comfort needs.

However, religious fanaticism is a different element. Freaks and craziness do not fear political threat. They do not respect human life, as it is just a very small part of their so-called “big picture.” The king may not have as much influence as he would like. A religious fanatic runs Iran. That silly character, Ahmadinejad, who talks to the cameras, is a mere puppet.

If Iran’s Ali Khamenei, who is Iran’s supreme leader, assumes direct or indirect influence in Egypt, Saudi Arabia would be threatened. Constricting the Strait of Hormuz would be strategically easier for Iran if Egypt was an ally to Iran. That would add to the instability factor and facilitate yet more upward pressure on the price of petro.

Since September 2010, ETF#03-XLE, has outperformed all other sectors tracked by the Indicant. It is up 36.8% since the Short-term Indicant buy signal on September 15, 2010. After clicking the link, you will notice the chart to the right, ETF#04-IWM, which represents the Russell2000. It has also performed well since the Short-term Indicant signaled buy also on September 15, 2010. During the past several days, though, you should notice IWM, like most general sectors, has been vacillating while XLE continues to skyrocket. This is interesting, since the price of oil has been relatively stable. Currently, the capital markets are anticipating either significant increases in demand for oil and/or supply disruptions in the Middle East. If the latter manifests, XLE and similar such investments will continue with bullish behavior, while other sectors would fall prey to bearish ambitions.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 291 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 46.1%. That annualizes to 48.4%. The Mid-term Indicant has been signaling hold for these 291-stocks and funds for an average of 53.4-weeks.

The Mid-term Indicant is avoiding 44-stocks and funds of 340-tracked by the Indicant. The avoided stocks and funds are down an average of 46.1% since the Mid-term Indicant signaled sell an average of 115.3-weeks ago.

One year ago, on Feb 5, 2010, the Mid-term Indicant was holding 218-stocks and funds out of 333 tracked for an average of 34.5-weeks. They were up by an average of 21.7% (annualized at 32.7%). There were 94-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 43.0% since their respective sell signals an average of 91.2-weeks earlier one year ago. There were no buy signals but there were five sell signals on this weekend last year in addition to three sell signals in the prior week.

The Mid-term Indicant was signaling hold for only 18-stocks and funds of the 344-tracked two years ago on Feb 6, 2009. They were up by an average of 141.6% (annualized at 72.3%) since their respective buy signals an average of 101.9-weeks earlier. The Mid-term Indicant was avoiding 321-stocks and funds at that time. They were down an average of 31.9% since their respective sell signals an average of 36.1-weeks earlier. There were four buy signals and one sell signal on this weekend in 2009. The stock market bear continued dominating on this weekend in 2009.

There were 149-stocks and funds with hold signals on Feb 1, 2008 since their buy signals an average of 157.0-weeks earlier. They were up by an average of 183.7% (annualized at 60.9%). There were 189-avoided stocks and funds at that time. They were down by an average of 11.1% from their respective sell signals an average of 13.2-weeks earlier. There were seven sell signals on this weekend in 2008 in addition to the 196-sell signals in the prior 12-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were beginning to display souring configurations.

On Feb 2, 2007, the Mid-term Indicant was signaling hold for 308-stocks and funds out of 345-tracked. They were up by an average of 109.2% (annualized at 61.1%) since their buy signals an average of 93.0-weeks earlier. The Mid-term Indicant was avoiding 32-stocks and funds at that time. They were down by an average of 11.1% since their sell signals an average of 18.9-weeks earlier. There were five buy signals and no sell signals on this weekend in 2007.

Five years ago, on Feb 6, 2006, there were 280-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 114.5% (annualized at 65.5%) since their respective buy signals an average of 90.9-weeks earlier. There were 58-avoided stocks and funds then. They were down an average of 10.4% since their respective sell signals an average of 19.6-weeks earlier. There were two buy signals and two sell signals on this weekend in 2006.

On Feb 4, 2005, there were 228-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 97.0%, annualizing at 68.3%, since their respective buy signals an average of 73.9-weeks earlier. There were 71-avoided stocks and funds then. They were down by an average of 28.6% since their sell signals an average of 50.7-weeks earlier. There were 19-buy signals and two sell signals on this weekend in 2005.

There were 281-stocks and funds with hold signals on Feb 6, 2004. They were up by an average of 67.5%, annualizing at 86.2%, since their buy signals 40.7-weeks earlier. The 12-avoided stocks and funds were down an average of 27.4% since their respective sell signals an average of 41.6-weeks earlier. There were no two buy signals and one sell signal on this weekend in 2004.

On Feb 7, 2003, there were 112-stocks and funds with a hold signal, enjoying a 24.5% gain since their respective buy signals an average of 24.9-weeks earlier. That annualized at 51.2%. There were 150-avoided stocks at that time. They were down by an average of 8.9% since their sell signals an average of 5.4-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds in 2002-late 2004. There were two buy signals on this weekend in 2003. However, the stock market began an early dip that year ahead of the nice 2003 bull leg, incurring 32-sell in addition to the 156-sell signals in the prior two weeks in 2003.

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.

Click this link to this week’s buy and sell signals.

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

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

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

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

The Mid-term and Short-term Indicant continue with support for the bull. The mid-term election year gained traction toward stock market bullishness. Much of this gain correlated with political dynamics. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011, albeit with potential near-term bearish expressions. Keep in mind configurations do not yet support such bearishness. That prognosis rests on political dynamics and historical standards

The current stock market bull originated in anticipation of stalemated politicians. That has been the historical standard. Partisanship is expected to heighten and that remains in effect and therefore bullish in spite of potential for near-term bearish behavior. Mid-eastern unrest is threatening the economy by virtue of high-energy prices.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest, but they should be tight. Right after buying, set the stop loss at the lesser value of 8% or green curve values.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 66.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 148.6% and the S&P500 is up 68.8% since then. The small cap index, S&P600, is up 148.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current configurations. Historical standards and political climate support continued bullishness during 2011. Much of that depends, however, on the Middle Eastern riots.

The NASDAQ is down 45.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 14.2% since its similar secular peak on March 23, 2000. The Dow is up by 3.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulations shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bullish by 7.7% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 4.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was down 2.2%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 0.5% and finishing up for that year by 1.4%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.1% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up 2.6% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 2.5% at this time in 2007, finishing up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 10.2% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was down 3.5% on this weekend in 2009. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was down 6.3% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 14.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 3.1% since its last peak on Oct 31, 2007. The S&P500 is down 16.2% since its Oct 9, 2007 peak. The S&P600-small cap index is down 4.7% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Interestingly, the NAS100 topped its pre-crash highs of 2007/8 a few weeks ago.  It continues maintaining that lofty achievement. It is up by 4.4% since its Oct 31, 2007 peak. The S&P400 is the other major index tracked by the Indicant that is also above pre-2008-crash levels. It is up by 2.0% since its prior peak on 7/13/2007. The remaining indices are down since their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 19.2% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks. The Nov 14, 2010’s weekly report discussed this phenomenon.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its last weekly cyclical bottom on November 20, 2008.

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

The Dow is up 84.7% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 118.3% and the S&P500 is up 93.8% since then. The S&P600, Small Cap Index, is up 133.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The Mid-term Indicant is suggesting potential meandering behavior, but not yet strongly so. The Near-term Indicant is configuring with potential bearish behavior by the S&P600 Index.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the shorter near-term cycle is not as supportive of the bull. Middle Eastern unrest, although, is a bit threatening to the stock market bull. However, the stock market bull tended to ignore that last week. It apparently does not find fear in rock throwing episodes by the masses. Watch out, though, if missiles are launched.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As promised by Bernanke over a year ago, the discount rate (and prime) rate are holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time. However, the 6-month CD yield increased significantly eight weeks ago, suggesting desired longer-term upward pressures. Even with this new development, it remains depressed and has been flat since then. Anyone buying a 6-month CD at 0.41% with 2+% CPI is heading to the poor house unless deflationary pressures manifest. At any rate, all CD’s remain as Yellow Bears.

The Euro jumped to Red Bull status two weeks ago, but remains with weakening trend and weakening mid-term cycle. There is no good reason to assume its long-term cyclical decline will reverse. The Canadian dollar, like the Yen, has been stable the past several weeks, but with a mild strengthening bias. Its cyclical direction and trend remain bullish. The CA$ tends to parallel oil prices, but the forecast for the CA$ continues with projected strengthening. The Japanese Yen trend and mid-term cycle continues with strengthening trend, but has been trading in a shallow zone the past several weeks.

Overall, the US dollar threatens to continue strengthening, but continues to weaken against the Japanese Yen (high productivity) and the Canadian dollar (resource rich).

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot in spite of near-term cyclical bearishness. The prior $2,000/oz-forecast by 2014 is now being challenged based on political dynamics. However, statistical bullishness remains in tact. At the same webpage, you will notice oil is less stable.

As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. It has been nudging a bit higher than that for the past several weeks. The high end forecast, though, projects $120/bbl by 2012. The Saudi Kingdom will have to approve that, though. Reports suggest the kingdom is now comfortable at $100/bbl. It has been vacillating around $90/bbl the past several weeks with some speculative bullishness and solid economic reasons for that bullishness. The Egyptian routs have offered some additional pizzazz to its recent bullishness.

Commodity price’s quick-term cycle continues increasing.  Significant bullish behavior continues. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish. Spot prices have expressed stability for the past few weeks.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. It continues to skyrocket, setting a new all time high during the week of November 8, 2010 and continues to set new highs. It remains economically bullish with inflationary considerations later. The CRB Bridge Futures continues its shift from waffling to more bullish aggression. It is also a solid Red Bull.

Commodities, overall, discontinued behavior consistent with uncertainty in favor of outright bullishness. “Extract baby extract” seems to be an evolving theme as more people around the planet are moving toward capitalistic progressions in spite of American waffling.

Mortgage rates were a bit bearish the past few days, aligning with its cyclical and longer-term trend. They did not find comfort at their first Red Curve interaction since late 2008 this past week.

The consumer price index and producer price index continue to be relatively stable.

Overall, hard economic data is stabilizing, albeit with increasing commodity prices. That is non-bearish, but lending support to longer-term inflationary potential. However, rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. 

At some point, the U.S. Congress will learn they have no influence on how China, India, and other countries manage their economies; both of which will enjoy larger economies than the U.S. at some point. If those rapidly developing economies retain a penchant for capitalism, rest assured prices for all commodities will escalate. However, rising productivity associated with capitalists could dampen the effects on consumers. These potential economic shifts are unparalleled in the annals of history.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 12.1%, annualizing at 31.1% since then. It was significantly bullish last week, following strong bearishness in the prior two weeks. As stated last week, gold could be in trouble.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 17.5% since then, annualizing at 12.1%. This lazy fund has been solidly bearish in three of the past five weeks. It was bullish the past two weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 26.7%, annualized at 68.6% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 44.7%, annualized at 115.0%, since its Sep 17, 2010 buy signal. This was solidly bullish the past two weeks on Middle Eastern unrest.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is up 29.5% since then, annualizing at 89.3%.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 40.7% since that buy signal, annualizing at 104.6%.

The Quick-term and Near-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 36.8% since then, annualizing at 93.4%. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 63.2% since that buy signal, annualizing at 29.0%. 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 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal last week on Jan 20, 2011. It is up 0.4% since that sell signal. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010.

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

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

All the major indices are up by an average of 26.1% since their bull signals an average of 43.6-weeks ago. That annualizes at 31.1%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,713,322. That beats buy and hold performance of $1,839,670 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $154,919. That beats buy and hold’s $128,403 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $236,783. That beats buy and hold’s $96,023 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 75.5% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred last August, but quickly endured “fluttering” behavior, followed by bearish aggression. A sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being. It may not receive a buy signal until 2013, which is the next post election year.

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 317.7% (annualized at 16.4%) since the Long-term Indicant signaled bull 1,005-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

The stock market remains subject to bearish pestering in spite of bullish behavior the past three days.

Any initial bearish behavior will be classified as a bearish spurt until prices fall below the Near-term Green curve. Several short-term attributes continue with up/down movements. This fluttering behavior identifies the absence of directional bias, which means prevailing bullish bias has not yet been disrupted in spite of the bull’s recent laziness.

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

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

The Short-term Indicant is signaling bull for all eleven non-contrarian indices. These bulls are up 14.3% since the NTI signaled bull an average of 16.8-weeks ago. That annualizes to 44.2%. The lone bear is contrarian VIX. It is down 26.7% since its bear signal 20.1-weeks ago. The VIX endured a dramatic decrease the past four days, following its mirrored bullish behavior last Monday.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 26.7% since that bear signal.

The Quick-term Indicant is signaling bull for all eleven major non-contrarian indices. The eleven major indices are up by an average of 16.2% since the bull signal an average of 20.8-weeks ago, annualizing at 40.5%.

Short-term Market Summary

The majority of Force Vectors remain in bullish domains, supporting the bull. Some Force Vectors shifted from lateral behavior to a more bullish configuration. However, they remain mixed with a combination of lateral movement.  Bullish synergy remains absent. That with a bit of concern. However, there is no bearish synergy, either.

Vector Pressure is imposing a downdraft on the bull. This is a bit inspirational to the bear. However, any bearish behavior should be viewed as unsustainable until all major indices are below NTI Green and Pressure falls into bearish domains.

The weakest index on a Near-term basis is the Dow Transports, which had been among the strongest in 2010. It is below NTI Blue and NTI Green. Force remains bearish domains. There are two reasons for not receiving a bear signal; 1) Pressure remains in bullish domains and 2) most of the other indices remain with significantly more bullish attributes. In other words, Transports cannot be bearish all by itself. More must join in the cause of the bear.

Other than Force remaining less than Pressure and Pressure sloping south, most other attributes remain supportive of the bull.

The VIX’s Force Vector fell below Pressure and into bearish domains this past Friday, while its price is nestled just above NTI Green. That combination typically invokes a bullish response by the VIX and a bearish spurt by the stock market. Do not be surprised at stock market bearishness early next week.

Overall, stock market directional intensity remains indecisiveness.

Indicant Volume Indicators  

This has been a low volume bull since inception in May 2009 with occasional volume surges in support of the bull. It appears content in remaining as such for the time being and it has become even more depressed since the New Year. As stated the past few days, the Indicant Volume Indicator is returning to near holiday levels. Volume is nearing a cyclical bottom, which offers potential stock market interest. Unfortunately, that interest level remains subdued.

Feb 04, 2011-Fri-Mediocre volume on mixed stock market behavior does not disrupt prevailing bullish bias.

Feb 03, 2011-Thu-Flat volume on mild bullishness continues in support of bullish bias.

Feb 02, 2011-Wed-Flat volume on flat behavior cannot argue with bullish bias with same conclusion on bearish pestering. The stock market appears to be enduring a near-term cyclical top. That is not threatening to the bull, while interfering with desired relaxed posturing.

Feb 01, 2011-Tue-Volume was slightly milder on today’s bullish aggression that last Friday’s bearish aggression, whereby bullish and bearish magnitude were offsetting. In essence, this washing effect suggests a continuation of bullish bias, while the bull remains a bit troubled by bearish pestering.

Jan 31, 2011-Mon-Passive volume on mild bullishness did not offer follow-on support for last Friday’s bearish aggression. In essence, Egypt is not Russia, China, or even Saudi Arabia.

Jan 28, 2011-Fri-Big board volume was aggressive on today’s bearish aggression. That supports bearish inclinations, but a few more similar trading days are required before the bear can dominate. The NASDAQ volume was up a bit off recent averages. In other words, it was not robustly supportive of the bear’s ambition.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 26-ETF’s. They are up by an average of 17.9% since their buy signals an average of 20.1-weeks ago. This annualizes at 46.3%.

The NTI is avoiding six ETF’s. They are down by an average of 17.9% since their sell signals an average of 10.5-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up 21.0% since their buy signals an average of 28.0-weeks ago. This annualizes at 39.0%.

The Quick-term Indicant is avoiding 3-ETF’s (QID, VXX, TLT). They are all contrarian ETF’s. They are down by an average of 43.8% since their sell signals an average of 42.2-weeks ago.

Short-term Summary: There are 26-Red Bulls (flat the past three days), mitigating dynamic and sustainable bearish behavior. The 24-NTI Blue Bulls (lost six last Wed-Thu, but flat on Fri) continue mitigating dominance by the stock market bear.

Bearish spurt potential continues pestering the bull. Some all non-contrarians Force Vectors are moving south and some laterally. However, a few shifted north and some even crossed above Vector Pressure on Friday. However, this pestering element remains, but not as severe. Also, as stated the past few days, as long as Pressure remains in bullish domains, the bear can only pester; not dominate.

The bull remains dominant and doing a pretty good job countering the bear’s pestering behavior. However, several attributes support continuation of bearish pestering.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 36.8%, annualizing at 93.4%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. The “energy bear” cannot find sustainable forces with current bullish attributes. This remains solidly bullish in spite of the late week bear attacks in two of the prior three weeks. Even with those attacks, it remains as a NTI Blue Bull.

ETF#11-Gold and Precious Metals  is up 63.2% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.0%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $122.76 and still rising, albeit slowing down. Being patient here is important since your buy price approximates $80.65.

The Near-term Indicant signaled sell on Jan 20, 2011. It is up 0.4% since that sell signal.

It fell below NTI Green on Jan 20, 2011. Its Force Vector dipped deeper into bearish domains on the same day. Vector Pressure remains in bearish domains, which adds bearish support in spite of bullish aggression the past few days. Configurations do not justify continued holding along the Near-term Indicant cycle and thus the avoid signal. Keep in mind the Quick-term Indicant should be your model of choice if you bought in Dec 2008.

As stated last Thu, do not be surprised at more bearish aggression. You saw some of that on Friday and more should not be surprising.

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

As stated since late 2008, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring. Keep in mind, GLD tracks the price of gold in U.S. dollars. A strengthening dollar will have a depressing effect on the price of gold. Please read on, as this paragraph is now being challenged.

Interestingly, gold appears to be in trouble along the near-term cycle. In reference to the Indicant Weekly Report of January 16, 2011, political influences may be gold’s worst enemy, as it is approaching its prior peak from 1492. If political forces result in shifting sovereign debt loads to the south, currencies will strengthen, dampening the “emotional” value of gold. The Tea Party movement may invoke this shift, as that political pressure strongly supports dynamic cuts in Federal spending. Perceptions hold that will dampen inflationary threats and thus depress the price of Gold in U.S. dollars.

ETF#14-TLT-Long Government  received a sell signal from Quick-term Indicant on Nov 15, 2010, as price fell below QTI-Yellow. It is down 4.0% since that sell signal. It is a Yellow Bear, which offers no bullish support.

The Near-term Indicant signaled sell on Oct 14, 2010. It is down 11.0% since then. It was aggressively bearish the past two days.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 34.8% since then. Without a reverse split, this ETF appears to be in search of single digit status. All attributes are no longer solidly bearish, while not yet strongly supporting the “short-bull.” The overall stock market is not yet supportive of QID’s bullish desires.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 63.6% since then.  Pressure remains low and not capable of extensive bullish behavior.

Major ETF Events

Feb 4, 2011-Fri-GLD did encounter additional bearishness as expected. VIX Force dipped into bearish domains and fell below Pressure. A non-bullish response by the VIX early next week would be surprising. That suggests some stock market bearishness, which would be configured as a mere spurt.

Feb 3, 2011-Thu-Gold’s strong bullish behavior should invoke a strong bearish response to GLD.

Feb 2, 2011-Wed-Fluttering among several short-term attributes continue. Although not necessarily a major event, it highlights absent commitments to stock market’s directional intensity.

Feb 1, 2011-Tue-The Dow Composites Force Vector fell into bullish domains, while the NASDAQ elevated into bullish domains. That supports meandering behavior.

Jan 31, 2011-Mon-Most Force Vectors moved laterally, implying Vector Pressure is limiting bullish aspirations.

Jan 28, 2011-Fri-The near-term lost 18-Blue Bulls today. The stock market is configuring with near-term “peaking.” There were also two Near-term Indicant sell signals on Friday for non-contrarian ETF’s; both international. However, this is offering minimal bearish support for the overall stock market at this time.

Current Strategy-Short-term Indicant- Feb 4, 2011-Holding remains safe, relative to NTI Green prices. Prices remain above Green, for the most part, and Green is well above the buy prices. Falling below Green with minimal Force will trigger the next sell signals. There were two such events one week ago for internationally related ETF’s. For those of you who bought GLD on Dec 2008 buy signal, wait for the price to fall below Yellow before selling, even though it is now enduring a Near-term avoid signal.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence last week, following two consecutive weeks of bearish divergence. Combined bullish convergence/divergence in seven of the prior nine weeks conforms to pre-election year stock market bullish behavior. Configured attributes within the long-term and mid-term modeling do not offer any evidence of dynamic and sustainable bearish behavior.

Indicant Conclusion

The presidential pre-election year stock market bullishness remains in tact as it has now entered into the strongly bullish pre-election year. Technical support is waning by the Near-term Indicant, but without bearish breadth.

As stated last week, meandering behavior may be confronting the stock market bull. The Indicant Volume Indicator remains depressed, as the post holiday sessions did not introduce significant increases in volume. Volume should increase in coming weeks and months, offering additional obviations of directional intensity. The absence of that expectation is somewhat discerning, as the bull will require significant increases in volume to sustain itself. At least that is the norm. Regardless, though, of these extraneous attributes, one cannot argue with a low volume bull.

As stated the past 70-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena in the U.S., coupled with low interest rates, continue in support of the bull. Inflation has not yet threatened the bull. Keep in mind, though, it will in the future unless Congress is successful in reducing 2.5-trillion dollars from the national debt.

Middle Eastern politics is a bit threatening to the bull at this time. Longer-term issues will become more pronounced during the post-bickering period. If Egyptians allow a dictator or religion fanaticism to rule them, there could be a prolonging bearish influence. Much of that will depend on the supply reliability of petro and the state of Israel. International war, though, would be a more likely outcome. The target will be most Middle Eastern countries. Depending on damage and impact to the supply of petro, a bullish response would be likely. A philosopher of wrong will not adjust just because someone else tells them it is wrong. Chit-chat accomplishes nothing when engaging the irrational.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

02/06/2011

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