January 2006 - Indicant Weekly Stock Market Report

January 29, 2006 Indicant Weekly Stock Market Report

Volume 01, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bullish Convergence Returns – On a Short-term Basis

As stated after last week’s profound contrarian bullish behavior in the energy sector, one should not overreact. Three or four weeks of bearish divergence would set off a deep bear cycle. However, this past week demonstrated a mild bullish convergence with the exception of utilities.

There are conflicting paradigms tugging at the market. One prognosis is the market is primed to emulate a 1970’s type of market with deep bearish expressions. This view is supported by rising interest rates, rising oil prices, and rising gold prices. It makes sense. As most of you know, the market does not always make sense with current frames of reference. Recent behavior suggests the market’s anticipation of declines oil, interest rates, and precious metals.

Another view is bullish. It is supported by “where else are you going to put your money?” Stock prices rise and fall under the simple influence of supply and demand. Prices rise when the demand for stocks is higher than the supply. This is influenced by expected corporate earnings, which is a derivative of the economic outlook. Right now, the economic outlook is so-so. And the market has been so-so for nearly two years with the exception of the standard performance during the heart and soul of bullish seasonality.

The market seldom dwells on the “now.” It attempts to gauge economic activity well into the future by about six to nine months. Extreme volatility occurs when it recognizes its prior economic prognosis was fraught with error. Rapid dynamic bearish expressions can deflate the demand for stocks and exacerbate declining stock prices. In other words they can move down more than economically justified. That is supply and demand at work. Sellers have to really lower than price offering during deep bear cycles just to get a nimble.

Those that faithfully hold onto their possessions during deep bearish cycles eventually sell. They typically do that near the bottom of the cycle. A critical mass of investors typically adopts a zero trust tolerance of the stock market and its shenanigans during such times. If that critical mass of investors remains on the sidelines for lengthy periods, the demand for stocks will remain depressed. Long bearish cycles ensue when that happens.

The NASDAQ is an excellent example of that. During its dynamic bearish behavior in 2000-2002, many investors were burned. They are now out of the market for life. That same thing occurred in the 1930’s, keeping a lid on stock prices for an entire generation. The crash of 1987 was a little different in that many who tried to escape of pains of equity investments simply could not execute their desired transactions. The market began a slow incline shortly thereafter. Consequently, stock market investing came back as the thing to do by the early 1990’s. If you did not have a stock portfolio in the 1990’s, you were “a nobody” in most social settings. Unfortunately, nearly everybody was in the stock market by the end of last century and the stock market will not make everybody rich. It always punishes whenever that notion becomes pervasive. The stock market is shrouded in Darwinian principles.

The struggle between the two paradigms of bullish and bearish outlooks was obivous the past two weeks. The Dow was down 0.5% for the year a week ago. Last week’s extraordinary bullish behavior has pushed the Dow up 1.8% for the year. The Dow and S&P500 are more reflective of economic outlook, while many of the other indices contain elements of higher speculation. The Dow Utilities is also representative of general economic outlooks and it did not participate in last week’s bullishness. It moved somewhat aggressively to the south. That arouses some suspicion of the bull’s ability to continue last week’s victory over the bear in the immediate future.

The Dow is suppose to find a bottom in the presidential mid-term election year. Political activity in the presidential-post-election-year was consistent with political manipulation. Rising interest rates is a clear example of that. Rising interest rates began its aggressive movements out of historically depressed values just after the last election. Although it made economic sense to do that with the strong dollar and rising energy costs, the timing was perfect for the political cycle.

The problem confronting historical standards is that there is no bottom to be found in this mid-term election year. The market has not gone down enough to provide that neat little bottom that is typical of mid-term election years. The bottom of 2002 was right on par with historical standards and it was so much fun to be ready for it.

Unless there is increased bearish activity over the next few months, historical standards will be shattered. The bull that was born in late 2002 and early 2003 will continue, un-phased by historical standards. The Quick-term, Short-term, and Mid-term Indicants will keep you informed of this potential violation of historical standards. However, do not be surprised at aggressive bearish behavior between now and October.

As of today, none of the Indicant attributes suggests this. The meandering behavior of the market since early 2004 with the exception of normal bullishness in the heart and soul of bullish seasonality is a testament of the strength of this bull. Its standing up to record high oil prices, war, terrorism threats, and rising interest rates is indeed impressive. Much of that strength is tied to “where else are you going to put your money?” The market will punish that simplicity at some future point. It always does. That is why the Indicant was invented – avoid shenanigans and deep bearish expressions.

Weekly Buy/Sell Summary

The Mid-term Indicant generated five buy signals and two sell signals for stocks and funds.

In addition to the sell signals, the Mid-term Indicant is avoiding 58-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 8.7% since the Mid-term Indicant signaled sell an average of 19.3-weeks ago.

There were 90-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 26.8% since their respective sell signals an average of 49.1-weeks earlier. Two years ago, on January 31 2004, the Mid-term Indicant was avoiding only eight stocks and funds that were down an average of 27.9% since their respective sell signals an average of 42.4-weeks earlier. Three years ago on January 31, 2003, there were only eight avoided stocks and funds. They were down 6.8% from their respective sell signals an average of 5.3-weeks earlier. There were 57-sell signals in 2003 on this weekend.

In addition to the buy signals this weekend, the Mid-term Indicant is signaling hold for 280 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 118.7%. That annualizes to 66.9%. The Mid-term Indicant has been signaling hold for these 280-stocks and funds for an average of 92.3-weeks.

One year ago on January 28, 2005, the Mid-term Indicant was holding 230-stocks and funds out of the 320 tracked at that time for an average of 72.6-weeks. Those 230-stocks and funds were up 90.0% (annualized at 64.5%). The Mid-term Indicant was signaling hold for 282-stocks and funds of the 296 tracked two years ago on January 31, 2004. They were up by an average of 67.1% (annualized at 88.0%) since their respective buy signals an average of 39.7-weeks earlier. There were 137-stocks and funds with hold signals on January 31, 2003 since their buy signals an average of 19.3-weeks earlier. They were up 26.5% (annualized at 62.2%).

Quick/Short-term Indicant Stock Market Report - Punch Lines

NYSE Indicant Volume Indicator: Bullish bias strengthening.

NASDAQ Indicant Volume Indicator: Not yet obviating market intention; slight bullish bias.

DJIA Short-term Indicant: Bullish

NASDAQ Short-term Indicant: Bullish

Consolidated Quick-term/Short-term Indicant ETF: Bullish bias.

Short-term Indicant: ETF: Bullish bias.

Quick-term Indicant ETF: Bullish bias.

Quick-term Bearish Yellow: High non-bearishness.

Quick-term Bullish Red: Several red bulls. Bullish bias continues.

Quick-term and Short-term Conflicts: Bullish harmony.

Robust Force Vectors: Still mixed. Early movement toward bullish domains.

Vector Pressure Position: Bullish domains.

Short-term Indicant Breakout (Bullish) Configuration: Converging bullish movement.

Short-term Indicant Breakdown (Bearish) Configuration: Strengthening non-bearishness.

Vector Pressure Crossings Put Option Activity: No signals today.

Vector Pressure Crossings Call Option Activity: No signals today.

Writing Covered Call Options: Not recommended.

Overall Quick-term Market Bias: Bullish bias improving.

Overall Short-term Market Bias: Bullish bias improving.

Quick-term Short-term Indicant Stock Market Report Details

Volume was significantly higher on Friday’s bullish expression. The Indicant Volume Indicator continues in a robust cycle. The configurations had been elusive in obviating bias, but after a shaky start to the year, this configuration is suggesting bullish expectations on a quick-term basis. As stated last Thursday, the immediate interpretation is a shift to bullish bias, but don’t get too anxious until the Indicant Volume Indicator obviates the market’s intention. It eventually will do that.

The DJIA is up 0.9% since the Short-term Indicant signaled bull on January 26, 2006.The NASDAQ is up 7.5% (annualized at 31.7%) since the Short-term Indicant signaled bull on November 2, 2005. This remains configured in support of the Short-term Bull for the NASDAQ and again for the Dow30. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals today. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 65.5% (annualized at 35.3%) since their respective buy signals an average of 95.4-weeks ago. The SQI is not avoiding any of the ETF’s at this time.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 67.5% (annualized 37.8%) since the STI signaled, buy, an average of 91.8-weeks ago. The Short-term Indicant is not avoiding any of the ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals today. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up 37.2% (annualized at 38.9%) since the QTI signaled buy an average of 49.1-weeks ago.

Quick-term Indicant Bull/Bear Health Report

All 30-ETF’s are above their respective bearish yellow curves by average of 12.5%. That is up from significantly yesterday. This attribute remains non-bearish and now has strong non-bearish configurations.

Twenty-six ETF’s are above their respective bullish red curves by 4.1%. The number of ETF’s with red bull status is up by three from yesterday. This attribute remains with bullish bias and no longer weakening.

Keep in mind as long as there is one Red Bull, other than contrarian sectors, the market will not move into a deep bearish slide.

Short-term Indicant Bull/Bear Health Report

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

Ten of the 30-ETF’s are contacting their breakout lines (bullish). That is up by three from yesterday and up by seven since last Monday. This has resumed a strong bullish bias on a short-term basis.

The average distance from breakout contact is 1.3%, which is 0.5% more bullish than yesterday. This significantly favors a bullish bias on a short-term basis.

The average distance from the price and breakdown is 24.4%, which is 3.0% more bullish from last Thursday. None of the ETF’s are contacting their respective breakdown lines. That is exceedingly non-bearish even in the face of a weakening bull. The probability of immediate contact remains low and thus a significant non-bearish bias prevails. Although the market can be bearish in the immediate future, this non-bearish bias mitigates threats of dynamic bearishness (like the 1970’s).

Overall, there is much more gravitational force from bullish domains than bearish domains on a Short-term Indicant basis. The Short-term perspective remains bullish for these ETF’s and the overall stock market. However, as we near the conclusion of the heart and soul of bullish seasonality, do not be surprised at reduced bullishness and an increase in bearish expressions in the next few weeks. However, none of the Quick-term and Short-term attributes support that prognosis at this time.

Contact with the breakdown lines will induce dynamic bearish behavior. Keep your eye on this attribute.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicting signals between the Quick-term and Short-term Indicant. Quick cycles and Short-term inclinations are in harmony with bullish bias.

ETF Robust Force Vector Configurations

You can scan the Quick-term Indicant for Exchange Traded Funds table and click on the charts to observe Force Vector configurations. Scroll down each of the charts, where a quick link has been added to take you to the next series of Quick-term ETF charts. Use you back arrow on your browser in the event you want to return to the previous page. As stated last week, Force Vectors are topped out with some turning to the south. That does not necessarily mean the market is about to turn bearish, but it does support some selling off and profit taking. That is exactly what happened today and late last week.

A robust and deep movement to the south suggests severe bearish expressions. A protected movement to the southeast as opposed to due south suggests minor corrections to the underlying bull market.

Force Vectors movement is now mixed, but more have shifted back to the north, supporting bullish bias.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today. Yesterday’s report erroneously stated there were two put option buy signals. The table on the website was accurately updated.

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

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

Quick-term and Short-term Indicant Summary

As stated the past several weeks, discontinue writing covered call options. The market’s bullish bias, although declining, has increased too much risk for this tactic.

This paragraph will remain unchanged until conditions warrant modifications. The Quick-term Bull remains in tact but severely weakening. As stated for the past several weeks, do not expect dynamic bullishness like the past three years during the heart and soul of bullish seasonality, which is now underway. There are too many issues, both fundamental and historical, to assume aggressive bullishness. Regardless, a bull is a bull without regard to magnitude.

Continue avoiding ProFunds Ultra Short mutual fund. Remember, it moves inversely to the QQQQ by exponential amounts.

Overall, the bullish bias on a Quick-term and Short-term basis continues, but not as strongly as it was in early January.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

The Indicant Stock Market Report’s Secular Market Blend

This section is a repeat from the last several months with a few modifications, reflecting recent secular influences. Although appearing redundant at times, it is important to read this section each week to keep abreast of secular market shifts. Remember, secular shifts can last twenty-five or more years. Fortunately, secular market movements do not deter mid-term, short-term, and quick-term profit opportunities. However, they can wreak havoc to the long-term investors’ plans.

The current Mid-term Bull market and buying barrage started over three years ago in late 2002, the last mid-term election year. We are again inside mid-term election year. The last one followed the predicted market bottom in 2002. The mid-term presidential election year phenomenon was consistent with history in 2002. Will it be consistent in 2006? The last mid-term election year, 2002, found a cyclical bottom, which is a common attribute in presidential mid-term election years. Doing so this year, will require bearish behavior before October.

Even more impressive was how the market synchronized with near perfection to normal seasonality in 2002. The April-October period was typically bearish. The 2002 season bear leg was dynamic. The current mid-term election year of 2006, fundamentally, supports historical standards. In other words, expect no bullish enthusiasm in the first half of 2006 with rising interest rates and rising energy costs. The political establishment and its ugly influence on economic activity are typically at its worse in presidential post election years, which just concluded with large cap meandering behavior with a slight bearish bias.

The current Mid-term Bull has been surprisingly strong with weak fundamentals and the normal political threat of post-election-year traditions. The market was mixed in 2005 with some bearishness and bullishness in the broader indices. The lack of dynamic bearishness imposes a historical need to induce bearishness in the first half of 2006.

Keep in mind, the heart and soul of bullish seasonality (Nov-Jan) is historically bullish regardless of fundamental reason. The market can find a cyclical bottom in this year’s mid-term election year after the heart and soul of bullish seasonality elevates it. The market, so far, has accommodated with typical bullishness since last October. As stated for several weeks, it would not be surprising for a nice rise during the current heart and soul of bullish seasonality only to be followed with bearish expressions after January 2006. So far, so good. The current heart and soul of bullish seasonality has demonstrated normalcy so far with an extremely bullish November. However, December finished with a bearish conclusion. The omission of a solid Santa Claus rally this past year is somewhat ominous. Last week’s bullishness was normal in continuing bullishness during the heart and soul of bullish seasonality.

January has been demonstrating a tug-of-war between bull and bear paradigms. So far, the bull is winning, but it is a healthy battle. The battle is in bullish domains. The bear needs more energy than the bull to become victorious. So far, it has not been able to muster up a higher energy level than the bull. The heart and soul of bullish seasonality has produced gains of 3.2%, 4.5%, and 7.1% for the Dow, S&P500, and NASDAQ so far. The heart and soul of bullish seasonality has only a few days remaining.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7286.27. The NASDAQ found bottom on the same day at 1114.11.Finding cyclical bottoms in mid-term election years is common. The Dow is up 49.7% from the last presidential election year bottom. The NASDAQ is up a whopping 106.8% since October 9, 2002.

Interestingly, the NASDAQ is down 54.4% from its historical high of 5048.62 on March 9, 2000. The Dow is down 7.0% from its historical high of 11723 on January 13, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. Historical standards suggest the NASDAQ will not return to historical high until 2025 or so. Many left the market and will never return. Those of you still participating avoided the losses earlier this century and reinvested in late 2002. Your retirement plans or desire for money is in good shape.

The stock market’s meteoric rise since 1990 was not supported by economic or corporate earnings fundamentals. It was stimulated by an unprecedented demand for stocks. The simple laws supply and demand propelled stock prices dynamically to the north. The great bear leg of 2001 and 2002 has permanently depressed sources of demand. The market now has to wait for a new generation of investors to enjoy dynamic bullish growth. The great bull leg of 2003 was a relatively short bullish spurt that has not enjoyed follow-on bullish behavior due to this lack of demand. The market has been slightly bullish since late 2003 with pronounced meandering behavior. The only significant bullish expressions not followed by bearish expressions occurred in the heart and soul of bullish seasonality in 2003, 2004, and 2005. Other than those bullish cycles, the market has been flat since early 2004.

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

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

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

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

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

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

As stated since late October 2005 and early November 2005, do not be surprised at increasing quick-term and short-term bullish expressions in the immediate future, followed by increased bearish expressions early next year. So far, this prognosis is at par with those expectations. It is time for the market to turn bearish. Fundamentals and historical standards support that scenario.

The magnitude of early 2006 bearishness is not predictable. Also, simply wait for the various Indicant model’s advisement of bull/bear status, as forecasting the market is a waste of time. However, it is appropriate to anticipate fundamental shifts before they happen. Keep a close eye on the Fed. It can damage the underlying bull.

November was exceedingly bullish and consistent with historical normalcy. The November – January rolling quarter is the heart and soul of bullish seasonality. However, December 2005 expressed contrary behavior to historical standards with a bearish conclusion. January 2006 started off with an aggressive bullish response to December’s bearishness, but it appears January is threatened with yet more bearish energy.

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

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

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Bull.

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

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

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

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

Stock and Fund Update

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

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

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

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

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

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

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

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

Divergence versus Convergence

As stated the past eleven weeks, there is no bullish convergence, until last week. There was solid bullish convergence, which followed the prior week’s solid bearish divergence. This is reflective of tug-of-war battling between bullish and bearish paradigms. Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

There is little difference from the last few weeks. Most world currencies continue in their cyclical shift in support of a strengthening U.S. Dollar. Although the cyclical direction remains in favor of a strengthening U.S. Dollar, behavior the past few weeks has been of a meandering nature. However, continued strengthening is expected as long as interest rates continue rising.

There is nothing new. This paragraph remains unchanged from the past few weeks. As repeatedly stated, the only exception to this is the Canadian Dollar. It has not yet made this cyclical mid-term commitment to weaken against the greenback. It continues to strengthen against the U.S. Dollar. As stated the past several months and first mentioned in 2003, the Athabasca Tar Sand Oil potential continues to threaten the Canadian cost advantage. The perception of huge imports to the U.S. and around the globe will provide increased difficulty for the Canadian Dollar to weaken. This should hurt Canadian manufacturing. The Canadian government is going to attempt to weaken the Canadian dollar, most likely at the request of General Motors, but $60+ oil will make that difficult. General Motors can benefit tremendously with a weaker Canadian dollar with their massive manufacturing capacity in Oshawa, Ontario, Canada. Unfortunately, the strengthening Canadian dollar has hurt GM’s bottom line and consequently, much of the Canadian capacity is earmarked for closure. This paragraph will remain unchanged until such time conditions change. The folks in Oshawa do not believe their manufacturing capacity will be closed.

Commodity prices continue rising. Some are vacillating around all time peaks. Overall, this behavior will eventually induce bearishness on the stock market. Again, this paragraph will remain unchanged until conditions change. The rise in commodity prices is unprecedented.

As stated the past few weeks, OPEC does not want encourage Athabasca Tar Sand Oil competitiveness. They also do not want to see dynamic energy conservation measures in the Western Hemisphere. OPEC will not consider a long-term strategy due to their inherent incapability to do so. Consequently, it is possible, although not likely, OPEC will force oil price reductions to mitigate growing competitiveness. Even OPEC cannot alter the dynamics of supply/demand laws. Keep your eye on this, as rapidly declining oil prices will catapult the market into another strong bull leg. Equally, do not be surprised at a dynamic bear in the event that high oil prices penetrate the consumer price index.

Nothing has changed here. The trend in interest rates continues in an unfavorable direction for the stock market. Interest rates continue their incline, which is politically congruent. Even a lame duck president wants his party to retain power after his departure. President Bush’s job is to gain seats in Congress right now. Do not be surprised at economically friendly policies in the second half of this year. Expect accelerated troop reductions in Iraq, as well.

The market’s bullishness so far this year is due, in part, to a “perception” of slowing in the Federal Reserve Board interest rate hikes. That makes the market vulnerable in the event the Fed “disappoints” with a rate hike in excess of the market’s speculation. Such disappointment would result in a sharp decline in stock prices. This scenario is congruent with historical standards.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% one-hundred and eighty-eight weeks ago since the MTI buy signal on April 13, 2001. One-hundred and eighty-one weeks ago, it closed up 30.1%. Last week it closed up 264.0%. The current annualized growth rate since the April 13, 2001 buy signal is 54.3%. After falling sharply 32-weeks ago, it bounced north in 26-weeks of the past 32-weeks. This fund moved aggressively to the north last week after posting solid gains in the previous three weeks.

Fidelity Gold, Fund #28, is up 48.6% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 113.5%, which is not an impossible performance level if oil prices resume their advance. This fund should do well in the event this market turns into a 1970’s type of market. This moved solidly to the north last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 275.6% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 78.7%. This fund moved north the past four weeks after falling sharply in four of the last nine weeks.

Vanguard Energy #18, VGENX, is up 169.0% (annualized at 59.2%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 154.8% (annualized at 71.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 141.1% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 56.9%. All energy related funds moved north the last four weeks after falling in four of the last nine weeks. They are paralleling gold and precious metals. Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times.

These funds should do well even if the market turns extremely bearish. Continue to hold them until the Mid-term Indicant signals sell.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 27.8% since then. It is annualized at 56.5%. This ETF continues to be bullishly biased.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 163.5% (annualized at 56.7%). This fund moved solidly north last week after expressing bearishness in three of the seven preceding weeks.

The contrarian sector, commodities and petroleum, were up last week while general equities were also up. That suggests bullish convergence which is opposite from last week’s bearish divergence. The battle between bull and bear is heating up.

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

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

All ten major indices are bulls. They are up by an average of 45.4% since the MTI-RYS signaled bull an average of 100-weeks ago. That annualizes to 23.6%, which is up from last week. The strongest bull is the Dow Utilities. It is up 118.6% since the October 25, 2002 bull signal. The utilities moved slightly south last week even though general equities moved sharply to the north. Your utility hold positions remain safe, but keep your eye on this particular index. Severe bears show little mercy, regardless of dividend yields.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $33,040,553. That beats buy and hold performance of $1,669,396 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $165,476. That beats buy and hold’s $125,744 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $192,797. That beats buy and hold’s $79,897 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,879.0%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the MTI-RYS model avoids bear markets. The only purpose of the MTI-RYS model is to avoid the bear markets. That is why it beat buy and hold by nearly 2000% over the past 100+ years.

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 the following link to view this group of stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short due, in part, to the Quick-term Indicant’s bull signal and the heart and soul of bullish seasonality. The SQI (Consolidated Quick-term and Short-term Indicant) is signaling hold for the QQQQ, which is why ProFunds Ultra Short is avoided. It is down 10.6% since the Mid-term Indicant signaled sell on November 11, 2005. This fund may show some significant promise this year. The last time this fund was very profitable was in the first half of 2002, which was also a mid-term election year. This fund disappointed in the meandering markets of 2004 and 2005.

Click here to see all Mutual Funds tracked by the Mid-term Indicant.

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 276.8% (annualized at 19.4%) since the Long-term Indicant signaled bull 743-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Indicant Conclusion

The Quick-term Indicant and Short-term Indicant continues signaling bull for all major indices and related Exchange Traded Funds. Quick-term and Short-term attributes continue with a bullish bias. That bullish bias weakened two weeks ago, but reasserted its dominance last week.

As stated last week, do not be surprised at meandering behavior with possible bearish bias in the immediate future. The heart and soul of bullish seasonality is about to expire at January’s conclusion. The past two years heart and soul bullishness have been followed by pathetic meandering behavior. Historical standards and economic fundamentals do not support a repeat this year. On the contrary, there is much in favor of bearish dominance between now and October.

Keep in mind this is the mid-term election year, which historically finds a market bottom. Since predecessor years leading up to the upcoming presidential mid-term election year have not demonstrated dynamic bearishness, do not be surprised at a bearish cycle early this year. As always, await guidance from the various Indicant models. They will let you know when or if this expected bearishness occurs.

Read your daily reports, as quick-term attributes can shift quickly. As stated the past several weeks, the market lacks bullish convergence, even though last week expressed bullish convergence. A lack of consistent bullish convergence suggests the market is having trouble finding and making a directional commitment. Too many sectors are not participating in the current heart and soul of bullish seasonality. Gold’s strong bullish presence with mounting commodity prices and interest rates, if continued, will slap this bull out of influence.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/29/06

January 22, 2006 Indicant Weekly Stock Market Report

Dear Indicant Members:

This Week’s Report

1970’s Like Divergence Pattern – Do Not Overreact

Energy sector stocks and funds skyrocketed on Friday’s aggressive bearish expression. Do not overreact to this, as one day’s behavior is not a trend. One day’s behavior is not even a cycle or market spurt. It is just one day of fundamental interpretation and emotional follow-on to that interpretation. However, there is some substance to this pattern.

Rising oil prices and interest rates have been in clear view for quite some time. The market conformed to the heart and soul of bullish seasonality like clockwork. Friday’s bearish behavior brought the market back to the theme the Indicant has been advising of since late last year. That is, fundamentals and historical normalcy will prevent “heart and soul” aggressive bullishness that you have seen the past few years.

Historical standards require the market to express a cyclical bottom in mid-term election years. Several indices have been meandering since early 2004 with a slight bullish bias. That meandering behavior followed the explosive bullish leg that began in October 2002 and resumed in March 2003. Meandering behavior following an explosive bull disfigured the required cyclical bottom in the current mid-term election year. Therefore, the market appears to be priming to establish a historical standard. Of course, there are variances to historical standards from time to time, but the various Indicant models will detect those variances or identify conformance to standards.

Fundamentally, the stock market has never liked rising interest rates and rising energy costs. Both are unfavorable to corporate earnings. Larger companies tend to contain more debt and thus one possible reason for the blue chip sell off last Friday. Most large companies are inefficient, which means they are incapable of adjusting to rising energy costs. Their employees work at large companies, primarily for “perceived” security. That means they like comfort. That means the thermostats will be set at their desired temperature, regardless of energy costs.

Ominous attributes on Friday’s sell off include an obvious shift from general equities to petroleum related securities. That has a tinge of a 1970’s type of market. Although the current Mid-term Indicant Bull and Long-term Indicant Bull have expressed impressive tenacity in the face of rising energy costs, rising interest rates, terrorism, war, and a so-so economy, the market will quickly adjust its temperance and apply punishment for its prior tolerance to these sour fundamentals.

For example Schlumberger, Halliburton’s biggest competitor, skyrocketed last week. Its stock price moved up nearly 15-points or almost 14%, while general equities expressed aggressive bearishness. That has a 1970’s tinge to it.

Another ominous attribute confronting the bull was Friday’s volume. It was high on deep bearish expressions. Although one day will not tilt the Indicant Volume Indicator into a bearishly robust configuration, keep your eye on this. Although the Indicant Volume Indicator appears to be in the early stage of a robust cycle, some of that movement is coupled to recent bullish spurts that complied with seasonal expectations of bullish bias.

Why should you not overreact to Friday’s sell off? First, you must identify your relative frame of reference. Let’s use a couple of common mutual funds to understand this. Fidelity Contra (MF#12) is 16.4% above its long-term blue curve. The buy signal occurred on March 22, 2003, which coincides with most of the funds buy signals. The Indicant occasionally suggests the blue curve is a good point to sell, depending on the configuration of the other Indicant models. This is an easy decision for those of you who bought on the March 22, 2003 buy signal. You are up 71.1% since then. Most of you would not mind selling with a 45% profit in a few weeks if, in fact, the market simulates a 1970’s type of configuration.

Some of you are not positioned to enjoy that relative frame of reference. Suppose you bought Vanguard Growth, MF#4, on its last buy signal of July 15, 2005. This fund is up only 3.7% since then and it is above its long-term blue curve by 4.5%. If you wait for it to fall below its long-term blue curve, you will lose money. Although you made significant profit on the buy and sell cycles since March 2003 on this fund, you do not want to lose money on this cycle. For those of you in this short-term relative frame of reference, you need to look to the Quick-term and Short-term Indicant for guidance. It is discussed later in this report.

The decision is much easier for those of you who bought in November 1991 on the Indicant’s Long-term Bull Signal. You are up 268.5% since then. And the Long-term Indicant is nowhere near signaling bear.

Unfortunately, those November 1991 long-term investors are in a minority of investors. Also, those who are long-term oriented are not always successful. A 1900 long-term investor had to wait over twenty years to break even. A 1929 thirty-year old investor was in his late fifties before breaking even. A NASDAQ long-term investor is still down by 55.5% since their investments on March 9, 2000. That investment requires a NASDAQ bull leg of 124.6% to breakeven since their March 9, 2000 investment. It will take a long time for that to happen; most likely over twenty years.

Please read on to assess the market with respect to your individual relative frames of reference.

Weekly Buy/Sell Summary

The Mid-term Indicant generated two buy signals and eleven sell signals for stocks and funds.

In addition to the sell signals, the Mid-term Indicant is avoiding 52-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 11.4% since the Mid-term Indicant signaled sell an average of 24.7-weeks ago.

There were 85-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 27.5% since their respective sell signals an average of 48.7-weeks earlier. Two years ago, on January 17 2004, the Mid-term Indicant was avoiding only eight stocks and funds that were down an average of 28.9% since their respective sell signals an average of 37.4-weeks earlier. Three years ago on January 18, 2003, there were only six avoided stocks and funds. They were down 33.8% from their respective sell signals an average of 25.8-weeks earlier.

In addition to the buy signals this weekend, the Mid-term Indicant is signaling hold for 279 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 116.9%. That annualizes to 65.3%. The Mid-term Indicant has been signaling hold for these 279-stocks and funds for an average of 93.1-weeks.

One year ago on January 21, 2005, the Mid-term Indicant was holding 230-stocks and funds out of the 320 tracked at that time for an average of 71.6-weeks. Those 230-stocks and funds were up 88.6% (annualized at 64.4%). The Mid-term Indicant was signaling hold for 288-stocks and funds of the 296 tracked two years ago on January 17, 2004. They were up by an average of 67.5% (annualized at 93.8%) since their respective buy signals an average of 37.4-weeks earlier. There were 289-stocks and funds with hold signals on January 18, 2003 since their buy signals an average of 16.1-weeks earlier. They were up 19.6% (annualized at 63.4%).

Quick/Short-term Indicant Stock Market Report - Punch Lines

NYSE Indicant Volume Indicator: Bullish bias weakening and non bearish bias diminishing.

NASDAQ Indicant Volume Indicator: Bullish bias weakening and non-bearish bias diminishing.

DJIA Short-term Indicant: Signaled bear; bearish bias now dominant.

NASDAQ Short-term Indicant: Bullish bias continuing, but weakening.

Consolidated Quick-term/Short-term Indicant ETF: Bullish bias continuing, but weakening.

Short-term Indicant: ETF: Bullish bias continuing, but weakening.

Quick-term Indicant ETF: Bullish bias continuing, but weakening.

Quick-term Bearish Yellow: High non-bearishness, but diminishing.

Quick-term Bullish Red: Several red bulls. Bullish bias continues.

Quick-term and Short-term Conflicts: Bullish harmony.

Robust Force Vectors: Several moving south. Limited naked options opportunity.

Short-term Indicant Breakout (Bullish) Configuration: Bullish bias expired. Non-bearish bias continues, but weakening.

Short-term Indicant Breakdown (Bearish) Configuration: Diminishing non-bearishness.

Vector Pressure Crossings Put Option Activity: Five

Vector Pressure Crossings Call Option Activity: None

Writing Covered Call Options: Not recommended.

Overall Quick-term Market Bias: Bullish bias weakening.

Overall Short-term Market Bias: Bullish no longer exists. Only contrarian ETF contacting breakout.

Quick-term Short-term Indicant Stock Market Report Details

Volume was relatively healthy today’s aggressive bearish expression. That is slightly ominous to the underlying bullish theme. As stated since last Wednesday and appropriate again for today, the Indicant Volume Indicator robust movement with continuing bearish expressions will lead to an early expiration to the underlying Quick-term and Short-term Bulls. Fundamentals and historical standards support significant bearish behavior over the next few months. However, this is a mere observation; not a forecast. Simply wait for the various Indicant models to advise.

The Short-term Indicant signaled bear last Friday for the Dow Jones Industrial Average. Click here to see the Short-term Indicant’s history. The NASDAQ is up 4.8% (annualized at 22.3%) since the Short-term Indicant signaled bull on November 2, 2005. This remains configured in support of the Short-term Bull, although weakening somewhat.

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

There were no buy signals and no sell signals today. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 60.2% (annualized at 32.8%) since their respective buy signals an average of 94.4-weeks ago. The SQI is not avoiding any of the ETF’s at this time.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 62.1% (annualized 35.1%) since the STI signaled, buy, an average of 90.9-weeks ago. The Short-term Indicant is not avoiding any of the ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals today. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up 33.1% (annualized at 35.4%) since the QTI signaled buy an average of 48.1-weeks ago.

Quick-term Indicant Bull/Bear Health Report

All 30-ETF’s are above their respective bearish yellow curves by average of 9.8%. That is down significantly from last Thursday. This attribute remains non-bearish, but no longer exceedingly so.

Twenty-one ETF’s are above their respective bullish red curves by 1.8%, which down significantly from yesterday. The number of ETF’s with red bull status is down by five from last Thursday. This attribute remains bullish on a quick-term basis, but weakening considerably from two weeks ago.

Keep in mind as long as there is one Red Bull, other than contrarian sectors, the market will not move into a deep bearish slide.

Short-term Indicant Bull/Bear Health Report

Only one of the 30-ETF’s is contacting its breakout line. That is down by seven from last Thursday. This configuration no longer remains with a bullish bias since the only “contacting” ETF is a contrarian one. It is ETF#3, XLE, Natural Resources. That is an ominous configuration to the Short-term Bull now underway.

The average distance from breakout contact is 3.1%, which is 1.9% less bullish than last Thursday. As stated last Thursday, the perspective has shifted significantly, since fewer ETF’s are now making contact on bullish spurts. That does not bode well for the current Short-term bulls.

The average distance from the price and breakdown is 21.5%, which is down by 2.0% from last Thursday. None of the ETF’s are contacting their respective breakdown lines. That is exceedingly non-bearish even in the face of a weakening bull. The probability of immediate contact remains low and thus a significant non-bearish bias prevails.

Contact with the breakdown lines will induce dynamic bearish behavior. Keep your eye on this attribute.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicting signals between the Quick-term and Short-term Indicant. Quick cycles and Short-term inclinations are in harmony with bullish bias.

ETF Robust Force Vector Configurations

Nothing is different from yesterday. The configuration of this newly forming southerly movement will allow some prognosis of the impending bearish cycle. A robust and deep movement to the south suggests severe bearish expressions. A protected movement to the southeast as opposed to due south suggests minor corrections to the underlying bull market.

The majority of Force Vectors are moving south, some of which are expressing a robust configuration. Red bulls do not crash. However, they will collapse from bull to neutral. There is an increasing probability of this occurring. Positive Vector Pressure is protecting right now, but these declining Force Vectors are dragging Vector Pressure toward negativity (bearishness).

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were five put option buy signals this weekend, bringing the total to seven in the last two trading days. As stated in last Thursday’s daily stock market report, this is signaling growing bearish ambition. Red bulls minimize put option successes and that is the case right now. Put options are more profitable during yellow bears. Although last Thursday’s put option buy signals produced a nice profit, keep in mind there is a higher probability of put option profits during yellow bears.

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

Quick-term and Short-term Indicant Summary

As stated the past several weeks, discontinue writing covered call options. The market’s bullish bias, although declining, has increased too much risk for this tactic.

This paragraph will remain unchanged until conditions warrant modifications. The Quick-term Bull remains in tact but severely weakening. As previously stated for the past several weeks, do not expect dynamic bullishness like the past three years during the heart and soul of bullish seasonality, which is now underway. There are too many issues, both fundamental and historical, to assume aggressive bullishness. Regardless, a bull is a bull without regard to magnitude.

Continue avoiding ProFunds Ultra Short mutual fund. Remember, it moves inversely to the QQQQ by exponential amounts.

Overall, the bullish bias on a Quick-term and Short-term basis continues.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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