Jan 2008 Indicant Weekly Stock Market Report

January 27, 2008 Indicant Weekly Stock Market Report

Volume 01, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Political Election-Year Meddling

As stated many times in the past, the only economic contribution by politicians is to undo their prior damage. In the face of free-market recession-concerns, politician’s vote-getting gluttony are about to flood the market with more “milk and bread” U.S. dollars. The Federal Reserve Board, under political pressure, has slashed interest rates. Politicians are sending you a check in the mail. It will not help you pay off your house or buy a new car, but it may put some food on the table.

Once the vote-getting gluttony becomes irrelevant, most politicians become concerned with their legacies. They want an endearing legacy. Few get it because they are politicians. Vocational paradigms are more powerful than individualistic desires. Regardless of the substance of the person behind the politician, the legacy evidence is left to the interpretation of historians, who may or may not be capable of serving logic and honesty.

Last Monday, when the U.S. Markets were asleep with a holiday interruption, international markets succumbed to deep bearish influences. The Federal Reserve woke up last Tuesday morning. They were bent on stopping the perception of economic-bleeding. Interest rates were slashed and it was not a mere gesture. They were cut by three-quarters of a point. That is huge.

By mid-week, Democrats, who resumed control of Congress in 2006 for the first time in several years, became concerned about their tenure. The probability of re-election is low for incumbents during economic hardship, regardless of party. Therefore, Congress was eager to spend the money in hopes of garnishing re-election votes later this year.

The president’s motive to work with the “other party” had nothing to do with votes, as lame duck terms are not concerned with matters, such as getting votes. However, speculation regarding normal ego suggests lame ducks prefer their last year in office not be with recession or deep bear markets.

Although the executive office does absolutely nothing to build/grow economies, its policies can be destructive. The only positive contribution is to undo prior damage. This is not an individual element, but the accumulation of badness over a long period. Tax rebates can be interpreted as taking too much in the first place. The problem is, “where are the government budget cuts to offset these tax rebates?” Rest assured there are none and the consequential economic erosion will continue. There will be a price for political stupidity someday. At some point, the fakeness of it all will breech whatever accommodating capacity there is. The problem with accommodating capacity is that it is finite, but until breeched, the false assumption of infinity prevails.

The current administration, like most, did not contribute to the impending economic downturn on a relativistic scale. A relativistic scale suggests an accumulation of bad practices over a long period, as opposed to a single act by an individual or a group of people. The bull market of 2003 was extraordinary and countered historical standards of bearishness. The meandering bear of 2005’s presidential-post-election-year was bullish. Historical standards result in bearish conclusions. From a historical perspective, the current administration can relate legacy desires to economic robustness. However, that can be wiped out in the lame-duck year and that is the concern of the current administration.

Political leadership’s dilettante brethren contributed significantly to the threat of economic downturn. Specifically, those who lead financial institutions and especially those related to the mortgage industry, contributed to the threatening recession and directly to the bearish expressions in the stock market. In 2006, most of those folks in the financial/mortgage industry rose up from a good nights sleep thinking there was no problem.

Not knowing there is a problem when there is one is unforgivable in most management circles. The free-markets always punish, as they should. Punishment is one of the elements of economic optimization. Politicians want the votes of the punished and the votes of the victims of stupidity and everyone else not in those two groups. They get on their “give-away” bandwagons and tyranny by the majority takes hold, furthering the cause of economic hardship in the face of political interference.

If it were not for the hard-working people around the world, political interference would cast this planet into worldwide recession/depression/economic collapse/civil chaos.

The gradual decline in the western hemisphere’s organizational abilities to compete continues. From cars to televisions, the west continues to weaken in competitiveness. The overpaid white collar management continues to point at the high wages in the U.S. while foreign manufacturers continue to expand manufacturing in the U.S. and Canada. However, the rate of production reduction moves much faster than production acceleration. It only takes a few days/weeks to shut down a plant. It takes months/years to build a new one. This dynamic continues to impose economic degradation on the middle class, while politicians jawbone the middle class, since that is where the most votes are. This political mantra imposes economic hardship on developing economies in the short-run, but they will recover as a function of hard work; not attending rallies by politicians looking for votes. The middle class will attend those rallies because…..well, they are middle class.

The U.S. Dollar is already weak. Supply and demand always works. Rising productivity in the 1980’s/1990’s contributed significantly to the strong dollar. Politicians had nothing to do with that with the possible exception of those that facilitated entrepreneurialism, which is the prime source of productivity gain. It certainly does not come from the halls of Fortune 500, which is the weakest index.

The combination of flooding the U.S. with more dollars and the Federal Reserve interest rate reductions will have an adverse impact on the U.S. Dollar. Although that may help exports, there are not too many manufacturers left in the U.S. capable of exporting a cost/quality competitive product. That old line of thinking is becoming obsolete.

The problem with the weak dollar is inflationary since most good products are manufactured abroad, from automobiles to television sets. The weak dollar will make those products more expensive. It will help domestic manufacturers sell their products. Western organization’s unfavorable market share losses will not be disrupted, as consumers for the most part, simply want value for their money. In the end, people buy for the greatest value; not the source of production. More and more will be foreign-made products sold in the West, but inflationary forces will soften that activity and thus the perception of recession. The result is slow to no-growth and/or inflation. Keep in mind that cultures, who can manufacture the most and best have always ruled over those that could not.

Regardless of all this concern regarding fundamentals, the stock market can enjoy bullish cycles even in the face of political stupidity and middle class gullibility. It is okay to make money on an emotionally charged bull market, regardless of its short life. If fundamentals shift in favor of bullish behavior during an emotionally charged rally, you are already enjoying hold positions. If fundamentals do not manifest to sustain the bull market, the various Indicant models will spot that deficiency and you will be among the first to enjoy cash positions or growth in the contrarian securities.

Be aware of stock market fluttering. This configuration is common to market uncertainty. Some rallies are extremely short-lived with tremendous volatility. The market always eventually finds its trading range and its preferred trend in support of whatever fundamentals are driving it. The various Indicant models will spot that moment, like it did in October 2002 and again in March 2003.

Do not speculate. Keep your eye on the Indicant’s daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

Although there were no buy signals, the Mid-term Indicant is signaling hold for 149 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 173.9%. That annualizes to 58.0%. The Mid-term Indicant has been signaling hold for these 149-stocks and funds for an average of 156.0-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 192-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 13.7% since the Mid-term Indicant signaled sell an average of 13.5-weeks ago.

One year ago, on Jan 26, 2007, the Mid-term Indicant was holding 307-stocks and funds out of the 345 tracked for an average of 92.2-weeks. They were up by an average of 107.2% (annualized at 60.5%). There were only 31-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 12.8% since their respective sell signals an average of 21.3-weeks earlier.

The Mid-term Indicant was signaling hold for 280-stocks and funds of the 345-tracked two years ago on Jan 27, 2006. They were up by an average of 118.7% (annualized at 66.9%) since their respective buy signals an average of 92.3-weeks earlier. The Mid-term Indicant was avoiding 58-stocks and funds at that time. They were down an average of 8.7% since their respective sell signals an average of 19.3-weeks earlier.

There were 230-stocks and funds with hold signals on Jan 29, 2005 since their buy signals an average of 49.1-weeks earlier. They were up by an average of 90.0% (annualized at 64.5%). There were 90-avoided stocks and funds at that time. They were down by an average of 26.8% from their respective sell signals an average of 49.1-weeks earlier.

On Jan 17, 2004, the Mid-term Indicant was signaling hold for 288-stocks and funds out of 296-tracked. They were up by an average of 68.6% (annualized at 92.9%) since their buy signals an average of 41.4-weeks earlier. The Mid-term Indicant was avoiding only eight-stocks and funds. They were down by an average of 28.7% since their sell signals an average of 38.4-weeks earlier.

Five years ago, on Jan 25, 2003, there were 194-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 22.0% (annualized at 61.2%) since their respective buy signals an average of 18.7-weeks earlier. There were only seven avoided stocks and funds then. They were down an average of 24.0% since their respective sell signals an average of 16.6-weeks earlier.

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 67.5% since its secular low on October 9, 2002. The NASDAQ is up 108.8% and the S&P500 is up 71.3%. The small cap index, S&P600, is up 110.9%. As stated the past several weeks, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 13.8% since its last weekly closing peak. The NASDAQ is down 18.6% since its last cyclical peak. The S&P600 is down 19.1% since its last closing weekly peak value. The Small Caps rebounded slightly from last week, when it was an official bear market. As stated the past few weeks, configurations remain in support of those that are consistent with a bear market.

The NASDAQ is down 53.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 12.9% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one, which may not occur until after 2025. The Dow is up 4.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 117.0% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The NASDAQ was up 11.5% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So, do not pay too much attention to those historical myths about how the market fares for the year based on January performance.

The NASDAQ was down by 0.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002. The NASDAQ YTD 2003 performance was up by 0.5%. It was again up on this weekend in 2004 by 6.0%, but down 7.1% in 2005. Both 2004 and 2005 were meandering bear markets. In 2006, it was again up by 2.5% and by 0.8% at this time last year. So far this year, the DOW30 is down 8.0% and the NASDAQ down 12.3%.

As you can see, this is the most bearish start of any year this century.

The bullish bias shift on August 15, 2006 expired on January 4, 2008. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%.

The presidential pre-election year of 2007 was below average (+10.5%) with the Dow gaining 6.4%. This was the smallest gain since Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in October of that year.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due increasingly bearish behavior.

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

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

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

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

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, they were included in this email message but now display them on the website. This is available to the public, while the specific buy and sell transactions are limited to members only. The below table is public information and not updated on a frequent basis.

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Commodity prices softened for the second consecutive week. Apparently, commodities’ traders sense a demand reduction with the perception of recession. However, gold did not move south. Propped up gold prices in the face of recession suggests some demand is based on economic turmoil, as opposed to a simple economic recession.

As stated the past eleven weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Interest rates fell sharply for the past two weeks with an obvious bias to thwart the so-called impending recession. Last week’s drop was to induced by the Federal Reserve Board’s emergency rate reduction. The Federal Reserve acted, not based on hard economic data, but crashing international stock markets.

The U.S. Dollar was mixed last week. Rest assured it will resume its cycle of weakness as the Fed has made dollars cheap with rate reductions. Politicians are in the process of legislating an increased supply of dollars with tax rebates. All of this “weak” behavior will weaken the dollar and foster bigger problems later on.

The typical short-term view is in place during this presidential election year. Rest assured, the price will eventually be paid. Keep your eye on the daily stock market report so you can be one of the first to know when that price is being paid.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 341.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 49.6%. It moved to the north in 44 of the past 72-weeks. It has been bullish in 15 of the last 23-weeks. It responded bullishly last week to extreme bearishness two weeks ago.

Fidelity Gold, Fund #28, is up 17.0% since its buy signal on September 7, 2007. It is annualized at 43.6% since that buy signal. This fund was also bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 275.4% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 49.9%. It was solidly bullish last week after two consecutive weeks of solid bearishness.

Vanguard Energy #18, VGENX, is up 207.6% (annualized at 42.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 186.1% (annualized at 44.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 164.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 36.5%.

These energy related funds were bullish last week in addition to precious metals. However, other commodities were bearish.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 107.4% since then. It is annualized at 42.7%. This fund has been bullish in seventeen of the past twenty-two weeks. It was mildly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 219.5% (annualized at 44.8%). It has been bearish the past three weeks.

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

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

The lone bull, Dow-Utilities, is up 16.4% since the Mid-term Indicant signaled bull on June 2, 2006. It is annualizing at 9.9%.

The Mid-term Indicant is signaling bear for nine of the ten major indices. They are down by an average of 5.1% since their bear signals an average of 4.0-weeks ago. The S&P600 is down 9.9% since its bear signal 11-weeks ago. It rebounded last week, but nowhere near receiving a bull signal.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,857,169 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $130,337 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $80,659 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,898.5%, 35.1%, and 159.8%, respectively, for these indices as of this past week.

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

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short last weekend. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund may not occur until 2009. However, the recent bear signal for several major indices facilitated an earlier buy signal. Do not be surprised if this buy signal is reversed ahead of seasonal normalcy.

At this time, this fund is up 6.0% (annualized at 310.6%) since the Mid-term Indicant signaled buy on January 18, 2008.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 321.7% (annualized at 19.8%) since the Long-term Indicant signaled bull 847-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty; None are non-contrarian. Zero bullish support.

Quick-term Yellow Bears/Threats: Twenty-four of thirty. Bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential -6.9%. A negative value is bearish bias.

Force Vectors: Zero in bullish domains. No bullish support.

Vector Pressure: Two in bullish domains. Twenty-eight in bearish domains. Bearish support.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Sell aggressively on signals.

Current Quick-term Bias: Configurations continue favoring the bear with near-term bullish spurt, like last Wednesday and Thursday.

Overall (Long-term) Market Status: 8/15/06 bullish bias expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Mixed configurations. Increasing obviation of bearish bias.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. The Dow is down 4.6% and the NASDAQ is down 7.1%, respectively, since that bear signal.

January 4, 2008-Unfortunately, natural market forces are backed by economic fundamentals. That is bearish at this time. The bullish bias since August 15, 2006 expired today (01/04/08).

January 8, 2008- Both major market indices are interacting with the recently developed lower trading range limit again. Each interaction this year was followed by bullish resurgence. Current configurations suggests this will not happen this time. The bear is gaining momentum and could fall to the older trading range limit. Please read on.

January 18, 2008-The NYSE is nearing the lower trading range limit, while the NASDAQ remains a healthy distance away. Either index falling below this limit will foster bearish sustainability and depth. Do not be surprised at bullish resistance to this threat. Although the bearish configuration may indeed occur, the bull should offer some resistance on a near-term basis. The NYSE is down 17.3% since its peak on October 31, 2007. That is within a couple of percentage points of a technical bear market. That suggests this bearish cycle “could” be nearing its conclusion. A solid bullish response with some short-term to quick-term Force Vector support should minimize speculation regarding bearish magnitude and depth.

January 22, 2008-The NYSE fell below the major lower trading range limit today. The NASDAQ continues hovering above its. The NYSE’s configuration is ominous. Depending on how the NASDAQ interacts with its lower trading range limit, for the time being anticipate deep and sustainable bearish behavior.

January 23, 2008-Today’s bullish response should be viewed as technical; not fundamental. The bullish response was not surprising with respect to a near-term expectation. Declining interest rates, although fundamental, do not stand alone. As long as inflationary threats remain passive, the bull should resume control. If the market returns to a perception of only two choices; recession or inflation, the bear will resume control. The bear delights with either choice.

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

Both Indicant Volume Indicator’s robustness continues accelerating. As stated the past several days, this is obviating increasingly bearish bias. As stated since January 18, 2008 beware of a technical bullish response, including governmental economic stimulants on a near-term basis. Bear markets do not dominate without bullish resistance, which is due. (This bullish resistance occurred on January 23 and 24 so far. There is technical room for a little more bullishness before solidification into a new trading range). Consider bullish expressions as mere spurts in the face of underlying bearish. Please read on.

January 23, 2008-Bullish resistance occurred with today’s Dow gaining 298-points. As you can see, this was expected. This should be viewed as technical, regardless of political, bureaucratic, and journalistic jawboning. Ignore the hype. The issue is clinical. Please read on.

January 24, 2008-Bullish resistance continued today with the Dow’s 108-point gain. Configurations suggest these gains are emotion/political based, which is the least substantive reason for gain. Do not be surprised with resumed bearishness in the next few days. Although not a forecast, it would not be surprising to see the Fed “disappoint” next week as a function of recent market bullishness.

January 25, 2008-As you can see, the prior two day’s bullishness was spurt behavior in the face of a bear market with today’s 171-point loss. However, expect more bullish spurts in the next few days, as the market’s bearish magnitude has been appropriate for the harshest of recessions. And it is debatable if a recession is in the offing. The problem is the market’s perception is always right even when its perception proves to be false. Right now the perception is recession and the market is bearish.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 12-ETF’s. They are up by an average of 46.3% (annualized at 15.2%) since their respective buy signals an average of 156.9-weeks ago. Although there were no sell signals, the SQI is avoiding 18-ETF’s at this time. They are down by an average of 5.1% since their sell signals an average of 5.0-weeks ago.

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 eight 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 13-ETF’s. They are up an average of 124.3% (annualized 38.8%) since the STI signaled, buy, an average of 164.8-weeks ago. Although there were no sell signals, there are 17-ETF’s with avoid signals. They are down by an average of 5.4% since their sell signals an average of 5.3-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for only five-ETF’s. They are up by an average of 52.4% (annualized at 35.8%) since the QTI signaled buy an average of 75.3-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 25-ETF’s. They are down by an average of 5.8% since their sell signals an average of 4.0-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are eight conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This suggest market disharmony. The bullish bias shift on August 15, 2006 expired on January 4, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty-four of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.7%. This attribute is not providing any non-bearish support.

Only two of the ETF’s are above their respective bullish red curves. All thirty ETF average positions are 11.0% below their bullish red curves. None are non-contrarian. This attribute is offering no bullish support. Keep in mind QID is not included in this statistic. It is discussed near the end of this report.

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

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

One of the thirty ETF’s is contacting its breakout line. There is no bullish support from this attribute at this time. For the second consecutive day, it is contrarian ETF#11-GLD-Precious Metals

This was the fourteenth consecutive trading day of non-contrarian non-contact, which is a bearish attribute and increasing bearish intensity.

The average distance from breakout contact is 16.9%. Double digit variances from breakout contact for fifteen consecutive trading-days is not supportive of the bull.

None of the ETF’s are contacting their breakdown lines. This is due to bullish bounces last Wednesday and last Thursday. Non-contrarian contact in eleven of the last fifteen trading days is bearish.

The average distance from the price and breakdown is 10.1%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is a negative 6.9%. This supports bearish ambition in spite of recent bullish bounces. A negative value suggests bearish bias.

ETF Force Vector Configurations

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

None of the Force Vectors are in bullish domains. The configuration does not support bullish bias, which expired on January 4, 2008.

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 after Friday’s close. The total put option buy signals are twenty-eight in the last nineteen trading days, but there have been none since last Tuesday.

Only two of the thirty ETF Vector Pressures are in bullish domains. This is no longer providing near-unanimous or majority bullish support. These are contrarian funds and thus void of any bullish support.

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

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

Quick-term and Short-term Indicant Summary

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

Strategy from January 4, 2008. It is okay to write covered call options at this time. Be aware of periodic bullish bounces.

Strategy modification January 23, 2008. Although written cover calls have performed exceedingly well since January 4, 2008, you may want to wait for the ETF’s to start interacting with their bearish yellow curve. Right now, the bounce should take them back to the north (about 3.7%-gain) over the next few days. If this market retains its bearish ambition, the ETF’s will bounce back to the south off of bearish yellow. If the bull’s ambition allows its authority, then the January 4, 2008 strategy should be voided, as the bull will certainly garnish strength with such a victory. Right now, the market is configured with a bearish prognosis in the event there is interaction with the bearish yellow curve.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is now avoiding QQQQ. You will notice the Mid-term Indicant signaled buy for this fund last weekend. This buy may have been generated a week or two too early as the bull finally resisted the bearish onslaught. However, continue holding unless you see a buy signal for QQQQ or sell signal for ProFunds Ultra Short.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. This ETF is relatively new and has not yet developed enough data to formally track its outlook. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Quick-term Indicant signaled buy on January 8, 2008 for this ETF. It is up 13.4% since that buy signal (annualized at 284.1%).

QID is up 0.5% since the Short-term and Consolidated Indicant signaled buy on January 22, 2008. This is annualized at 63.9%.

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

Divergence versus Convergence

Bearish divergence occurred this past week. This follows bearish divergence and bearish convergence the past five weeks. Four consecutive weeks of bearish convergence obviates deep and sustainable bear markets. The market has endured four weeks of bearish convergence in the past six weeks. Last weeks bearish divergence is the second in this cycle. At least there has not yet been four consecutive weeks of bearish convergence. It is close. There is a glimmer of hope for those desiring bullish behavior.

As stated the past two weeks, there is an increasing probability of a solid bear market with the current configurations.

As expected, the bull announced it is not an extinct species last week. It demonstrated its weakness, but more importantly, it reminded us of its presence.

Indicant Conclusion

The major market indices continue configuring with bearish sustainability. The Federal Reserve lowered rates as expected and the market responded with bullish emotionalism. All forms of emotion are not sustainable. Only solid fundamentals sustain market bullishness.

As stated the past few weeks, the market’s perception is confrontation with only two choices; inflation or recession. The political establishment biased forces in favor of inflation. The only salvation to the short-term gluttony of politicians is massive increases in productivity to offset thee anti-economic growth posture of politicians.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/27/08

January 20, 2008 Indicant Weekly Stock Market Report

Volume 01, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Cyclical Bull Approaches Lower Trading Range Limit

As you can see from the below link, the NYSE index is approaching its lower trading range limit line.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

This line is significant since it is the lower base line of the bull cycle that originated in October 2002. It is the orange line on the chart.

Scrolling down on the same webpage, you will notice the NASDAQ has a bit more to travel before contacting its lower trading range limit line. The NASDAQ is more volatile than the NYSE. Its cyclical behavior has produced greater magnitude than that of the NYSE and thus the reason for the greater distance.

If the indices fall below these lower trading range limit lines, there will be little significance to this. A new bull could originate the next day. However, there will be an increased probability of bearish sustainability when indices fall below certain configurations of trading limit lines. This is one of those configurations, but keep in mind the salient point here is probability.

Presidential election year bear’s are rare. Since 1833, only fourteen post-election-years have been bearish. That contrast to the 29-bullish years. Presidential election year bears have been traditionally mild. Only six of them have been double-digit bears. That is when the market drops by ten or more percent. Only two of presidential election years have endured more than a 20% decline within the year.

This historical mildness does not mean this particular presidential election year will be a mild bear. On the contrary, there is no guarantee 2008 will even finish on a bearish note. However, current economic fundamentals favor a bearish prognosis.

The deepest presidential election year bear since 1833 occurred in Woodrow Wilson’s second term in 1920. The Dow fell by 32.9% in 1920, which is the worse performing presidential election year on record. Click on the following link to view the chart.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1916-1920.htm

As you can see, it began its trip to the deep south near the conclusion of the pre-election year in 1919, where a strong bullish cycle had just completed. That bull cycle in 1918-1919 had followed a significant and crisp bear market in the mid-term election year of 1917. That particular bearish cycle in 1917 was well ahead of the short recession of 1918. Argumentatively, the 1917-bear-cycle contributed to the recession of 1918.

Some of you will want to compare Wilson’s bear market to the current situation. So, click the following link to view its chart.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-01-DJIA-Curr.htm

As you can see, predecessor years to George W. Bush’s final year of his second term were more stable than Wilson’s. Many of you recall the meandering bear markets of 2004 and 2005. Although that meandering bear was painfully boring, it provided market stability. The galloping bull of 2006 and 2007 has nearly been wiped out. However, you do see some similarity in the stock market’s early bearish behavior in 2008 and 1920. Rest assured there is no connection; just coincidental similarities.

Keep in mind, presidents have zero influence on bullish stock market behavior. Their only influence is bearish. The only positive contribution any politician can offer the stock market is undoing their prior damage or that of their predecessors. The only reason president’s names are used is for a relative reference point and occasionally to relate to tremendous economic damage they impart on the free-markets from time to time.

Those desiring bullish behavior wish for no similarity between Wilson’s and Bush’s last year in office.

Do not speculate. Keep your eye on the Indicant’s daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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 19-sell signals.

In addition to the buy signal, the Mid-term Indicant is signaling hold for 152 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 167.2%. That annualizes to 56.7%. The Mid-term Indicant has been signaling hold for these 152-stocks and funds for an average of 153.3-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 173-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 17.2% since the Mid-term Indicant signaled sell an average of 14.8-weeks ago.

One year ago, on Jan 19, 2007, the Mid-term Indicant was holding 313-stocks and funds out of the 345 tracked for an average of 90.9-weeks. They were up by an average of 105.8% (annualized at 60.6%). There were only 32-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 13.5% since their respective sell signals an average of 21.2-weeks earlier.

The Mid-term Indicant was signaling hold for 279-stocks and funds of the 344-tracked two years ago on Jan 20, 2006. They were up by an average of 116.9% (annualized at 65.3%) since their respective buy signals an average of 93.1-weeks earlier. The Mid-term Indicant was avoiding 52-stocks and funds at that time. They were down an average of 11.4% since their respective sell signals an average of 24.7-weeks earlier.

There were 230-stocks and funds with hold signals on Jan 22, 2005 since their buy signals an average of 48.7-weeks earlier. They were up by an average of 88.6% (annualized at 64.4%). There were 85-avoided stocks and funds at that time. They were down by an average of 27.6% from their respective sell signals an average of 40.4-weeks earlier.

On Jan 17, 2004, the Mid-term Indicant was signaling hold for 288-stocks and funds out of 296-tracked. They were up by an average of 67.5% (annualized at 93.8%) since their buy signals an average of 37.4-weeks earlier. The Mid-term Indicant was avoiding only eight-stocks and funds. They were down by an average of 28.9% since their sell signals an average of 37.4-weeks earlier.

Five years ago, on Jan 18, 2003, there were 289-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 19.6% (annualized at 63.4%) since their respective buy signals an average of 16.1-weeks earlier. There were only six avoided stocks and funds then. They were down an average of 33.8% since their respective sell signals an average of 25.8-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 66.1% since its secular low on October 9, 2002. The NASDAQ is up 110.0% and the S&P500 is up 70.6%. The small cap index, S&P600, is up 105.4%. As stated the past several weeks, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 14.6% since its last weekly closing peak. The NASDAQ is down 18.2% since its last cyclical peak. The S&P600 is down 21.2% since its last closing weekly peak value. The Small Caps is now an official bear market. Configurations remain in support of those that are consistent with a bear market.

The NASDAQ is down 53.7% since its last weekly secular peak on March 9, 2000. The S&P500 is down 13.2% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one, which may not occur until after 2025. The Dow is up 3.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 115.8% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The NASDAQ was up 12.1% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So, do not pay too much attention to those historical myths about how the market fares for the year based on January performance.

The NASDAQ was down by 1.0% through this weekend in 2002. Some of you recall the dynamic bear market in 2002. The NASDAQ YTD 2003 performance was up by 3.0%. It was again up on this weekend in 2004 by 6.8%, but down 3.2% in 2005. Both 2004 and 2005 were meandering bear markets. In 2006, it was again up by 3.4% and by 1.2% in 2007. So far this year, the DOW30 is down 8.8% and the NASDAQ down 11.8%.

As you can see, this is the most bearish start of any year this century.

The presidential pre-election year of 2007 was below average (10.5%) with the Dow gaining 6.4%. This was the smallest gain since Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in October of that year.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due increasingly bearish behavior.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Commodity prices softened last week. Gold, oil, and some of the major indices fell. This is most likely due to a prognosis of recession, where demand falls and prices follow.

As stated the past ten weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior.

Interest rates fell sharply last week with an obvious bias to thwart the so-called impending recession.

Surprisingly, the U.S. Dollar configured with strength the past two weeks. That is most likely an aberration. If the Fed cuts interest rates by a half a point in a few weeks, rest assured the U.S. Dollar will resume its cycle of weakness.

These dynamics took their toll on the bull last week, feeding the bear with fuel to sustain its ambition.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 331.2% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 48.8%. It moved to the north in 43 of the past 71-weeks. It has been bullish in fourteen of the last twenty-two weeks. It was very bearish last week.

Fidelity Gold, Fund #28, is up 12.8% since its buy signal on September 7, 2007. It is annualized at 34.8% since that buy signal. This fund was solidly bearish last week, following three consecutive bullish weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 259.0% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 47.1%. It has been solidly bearish the past two weeks.

Vanguard Energy #18, VGENX, is up 208.1% (annualized at 42.8%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 160.8% (annualized at 35.8%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 160.8% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 35.8%.

These energy related funds were bearish last week while precious metals and other commodities were bullish.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 100.8% since then. It is annualized at 40.4%. This fund has been bullish in sixteen of the past twenty-one weeks. It was mildly bearish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 220.5% (annualized at 45.1%). It has been bearish the past two weeks.

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

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

This lone bull is up 21.2% since the Mid-term Indicant signaled bull on June 2, 2006. It is annualizing at 12.9%.

The Mid-term Indicant is signaling bear for nine of the ten major indices. They are down by an average of 6.3% since their bear signals an average of 2.9-weeks ago. The S&P600 is down 12.3% since its bear signal ten weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,840,758 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $129,806 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $81,138 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,916.4%, 35.7%, and 158.3%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short this weekend. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund may not occur until 2009. However, the recent bear signal for several major indices facilitated an earlier buy signal. Do not be surprised if this buy signal is reversed ahead of seasonal normalcy.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 318.0% (annualized at 19.5%) since the Long-term Indicant signaled bull 846-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty; None are non-contrarian. Zero bullish support.

Quick-term Yellow Bears/Threats: Twenty-two of thirty. Bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential -8.5%. There is no non-bearish support and increasing bearish support.

Force Vectors: Zero in bullish domains. No bullish support.

Vector Pressure: Three in bullish domains. Minimal bullish support.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Sell aggressively on signals.

Current Quick-term Bias: Configurations continue favoring bear.

Overall (Long-term) Market Status: 8/15/06 bullish bias expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Mixed configurations. Increasing obviation of bearish bias.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. The Dow is down 5.5% and the NASDAQ is down 6.6%, respectively, since that bear signal.

January 4, 2008-Unfortunately, natural market forces are backed by economic fundamentals. That is bearish at this time. The bullish bias since August 15, 2006 expired today (01/04/08).

January 18, 2008-The NYSE is nearing the lower trading range limit, while the NASDAQ remains a healthy distance away. Either index falling below this limit will foster bearish sustainability and depth. Do not be surprised at bullish resistance to this threat. Although the bearish configuration may indeed occur the bull should offer some resistance on a near-term basis. The NYSE is down 17.3% since its peak on October 31, 2007. That is within a couple of percentage points of a technical bear market. That suggests this bearish cycle “could” be nearing its conclusion. A solid bullish response with some short-term to quick-term Force Vector support should minimize speculation regarding bearish magnitude and depth.

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

Both Indicant Volume Indicator’s robustness is again accelerating. This is obviating increasingly bearish bias. Please beware, though, of a technical bullish response, including governmental economic stimulants on a near-term basis, like next week. Bear markets do not dominate without bullish resistance, which is due.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 13-ETF’s. They are up by an average of 46.4% (annualized at 15.6%) since their respective buy signals an average of 152.7-weeks ago. Although there were no sell signals, the SQI is avoiding 17-ETF’s at this time. They are down by an average of 7.2% since their sell signals an average of 4.3-weeks ago.

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 14-ETF’s. They are up an average of 117.3% (annualized 37.7%) since the STI signaled, buy, an average of 160.3-weeks ago. Although there were no sell signals, there are 16-ETF’s with avoid signals. They are down by an average of 7.5% since their sell signals an average of 4.6-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for eight-ETF’s. They are up by an average of 40.5% (annualized at 28.3%) since the QTI signaled buy an average of 73.6-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 22-ETF’s. They are down by an average of 7.6% since their sell signals an average of 3.5-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are six conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This is no longer harmonious. The bullish bias shift on August 15, 2006 expired on January 4, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty-two of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 4.6%. This attribute is not providing any non-bearish support.

Only two of the ETF’s are above their respective bullish red curves. All thirty ETF average positions are 12.0% below their bullish red curves. None are non-contrarian. This attribute is offering no bullish support. Keep in mind QID is not included in this statistic, but it is also in bullish domains.

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

None of the thirty ETF’s are contacting their breakout lines. There is no bullish support from this attribute at this time. Last Wednesday was configured with complete bearish convergence. Last Thursday and Friday were configured with near-complete bearish convergence. This has been providing no bullish support.

This was the twenty-seventh consecutive trading day of non-contrarian non-contact. As stated earlier this past week, this is leaning toward bearish bias.

The average distance from breakout contact is 17.5%. Double digit variances from breakout contact for eleven consecutive days is not supportive of the bull.

Twelve of the ETF’s are contacting their breakdown lines. This is supportive of bearish ambition. Non-contrarian contact in eight of the last eleven trading days is bearish.

The average distance from the price and breakdown is 9.0%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is a negative 8.5%. This supports bearish ambition.

ETF Force Vector Configurations

None of the Force Vectors are moving bullishly. The configuration no longer supports bullish bias, which expired on January 4, 2008.

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 was one put option buy signal after Friday’s close. The total put option buy signals are twenty-seven in the last fifteen trading days.

Three of the ETF Vector Pressures are in bullish domains. This is no longer providing near-unanimous or majority bullish support. This offers minimal bullish support.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

Strategy from January 4, 2008. It is okay to write covered call options at this time. Be aware of periodic bullish bounces.

The Quick-term Indicant signaled buy on January 8, 2008 for this ETF. It is up 7.1% since that buy signal.

QID is down 33.4% since the Short-term Indicant and Consolidated STI/QTI signaled sell 79.1-weeks ago.

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

Divergence versus Convergence

Bearish convergence occurred this past week. This follows bearish divergence and bearish convergence in the past four weeks. Four consecutive weeks of bearish convergence obviates deep and sustainable bear markets. The market has endured four weeks of bearish convergence in the past five weeks. There was one week of bearish divergence.

As stated last week, there is an increasing probability of a solid bear market with the current configurations.

Keep in mind, the bull should be getting angry and should announce it has not become extinct in the near-term. That does not mean it will resume dominance. But it is nearing that time when it at the very least lets one know that it has not become extinct-just losing a few battles.

Indicant Conclusion

The major market indices continue configuring with bearish sustainability. The impending interest rate reductions by the Federal Reserve could reverse this. A bullish response to that would most likely be short-lived. Inflationary pressures are depressing bullish trend desires.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/20/08

January 13, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Only Two Options: Inflation or Recession

The impending Federal Reserve Board’s interest rate reduction should spark bullish behavior within a few days. Current configurations suggest such a bullish response would be short-lived. This is due to inflationary threats.

Reduced consumer spending should facilitate demand reductions and dampen inflationary fears. This consumption reduction depends on the depth of the impending recession that is driving bearish ambition. The stock market smells a recession in the offing and thus one reason for its bearish behavior.

Right now, it looks as if there are only two options confronting the economy; recession or inflation. Either scenario will stimulate stock market bearishness. It appears economic robustness is not an option at this time.

If there is no recession, oil prices will continue to move north. That supports inflation, which will impose a depressant to the stock market. If there is a recession, demand for oil should drop, relieving inflationary pressures. Unfortunately, the stock market would continue following bearish influences similar to what transpired in the 1970’s.

Fundamentally, a bullish stock market is not finding fundamental support to justify its existence. On the contrary, fundamentals are supporting bearish sustainability.

Technically, several Indicant configurations and detailed attributes suggest an increasing probability of bearish sustainability. One such attribute is bearish convergence and bearish divergence. Bearish convergence/divergence has been increasing its density. Bearish divergence occurred last week, which offers support for the prognosis of recession. That is the fourth consecutive week of the combination of bearish divergence and bearish convergence. Four consecutive weeks of bearish convergence obviates bear markets. That has not occurred but it has been close. A bullish bounce is needed to offset these configurations to prevent the stock market from self-perpetuating doom and gloom.

Do not speculate. Keep your eye on the Indicant’s daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated no buy signals and 15-sell signals.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 171 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 170.7%. That annualizes to 60.7%. The Mid-term Indicant has been signaling hold for these 171-stocks and funds for an average of 146.1-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 159-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 15.6% since the Mid-term Indicant signaled sell an average of 15.3-weeks ago.

One year ago, on Jan 12, 2007, the Mid-term Indicant was holding 313-stocks and funds out of the 345 tracked for an average of 89.9-weeks. They were up by an average of 105.7% (annualized at 61.2%). There were only 32-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 13.3% since their respective sell signals an average of 20.6-weeks earlier.

The Mid-term Indicant was signaling hold for 290-stocks and funds of the 320-tracked two years ago on Jan 13, 2006. They were up by an average of 113.0% (annualized at 67.1%) since their respective buy signals an average of 87.6-weeks earlier. The Mid-term Indicant was avoiding 53-stocks and funds at that time. They were down an average of 10.6% since their respective sell signals an average of 23.7-weeks earlier.

There were 236-stocks and funds with hold signals on Jan 15, 2005 since their buy signals an average of 48.1-weeks earlier. They were up by an average of 89.2% (annualized at 66.6%). There were 84-avoided stocks and funds at that time. They were down by an average of 28.2% from their respective sell signals an average of 48.1-weeks earlier.

On Jan 10, 2004, the Mid-term Indicant was signaling hold for 288-stocks and funds out of 296-tracked. They were up by an average of 63.5% (annualized at 90.8%) since their buy signals an average of 36.4-weeks earlier. The Mid-term Indicant was avoiding only six-stocks and funds out of 296-tracked at that time. They were down by an average of 29.0% since their sell signals an average of 39.4-weeks earlier.

Five years ago, on Jan 11, 2003, there were 284-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 22.2% (annualized at 76.6%) since their respective buy signals an average of 15.0-weeks earlier. There were only six avoided stocks and funds then. They were down an average of 31.6% since their respective sell signals an average of 24.9-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 73.0% since its secular low on October 9, 2002. The NASDAQ is up 119.0% and the S&P500 is up 80.4%. The small cap index, S&P600, is up 101.9%. As stated the past several weeks, the secular bull that originated on October 9, 2002 no longer remains solid. The small caps lost nearly twenty percentage points of gain this past week.

The Dow is down 11.0% since its last weekly closing peak. The NASDAQ is down 14.7% since its last cyclical peak. The S&P600 is down 18.1% since its last closing weekly peak value. It only needs to fall another 1.9% to be an official bear market for small caps. Configurations are currently supporting those that are consistent with a bear market.

The NASDAQ is down 51.7% since its last weekly secular peak on March 9, 2000. The S&P500 is down 8.3% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one, which may not occur until after 2020. The Dow is up 7.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 106.9% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The NASDAQ was up 6.9% through this week in 2001. It was up again by 3.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002. This early bullishness in 2002 was certainly misleading. The NASDAQ YTD 2003 performance was up by 8.4%. It was again up on this weekend in 2004 by 4.2%, but down 4.4% in 2005. Both 2004 and 2005 were meandering bear markets. In 2006 it again up by 5.7% and by 2.9% in 2007.

This year’s heart and soul of bullish seasonality disappointed. The Dow was down 4.5% since the heart and soul of bullish seasonality began on September 17, 2007. The S&P500 was down 4.4% and the NASDAQ down by 3.0%. That is the first time this century the heart and soul of bullish seasonality abandoned historical standards.

Where is the market headed in 2008, the presidential election year? Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due increasingly bearish behavior.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Commodities were mixed last week. Oil prices fell. Golf moved north. Most of the major commodity indices continued hovering near their peaks or set new peaks.

As stated the past nine weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior.

Interest rates were mixed again last week with some moving north and come moving south. However, the current southerly trend is not threatened. As stated last week, rising commodity prices and falling interest rates will invigorate inflation.

Surprisingly, the U.S. Dollar configured with strength last week. That is most likely an aberration. If the Fed cuts interest rates by a half a point in a few weeks, rest assured the U.S. Dollar will resume its cycle of weakness.

Overall, the stock market is holding up fairly with economic elements that tend to depress it.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 357.3% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 52.2%. It moved to the north in 43 of the past 70-weeks. It has been bullish in fourteen of the last twenty-one weeks.

Fidelity Gold, Fund #28, is up 22.5% since its buy signal on September 7, 2007. It is annualized at 64.4% since that buy signal. This fund was solidly bullish the past three weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 290.4% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 53.0%. It was bearish last week.

Vanguard Energy #18, VGENX, is up 237.5% (annualized at 49.1%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 221.7% (annualized at 53.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 186.9% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 41.8%.

These energy related funds were bearish last week while precious metals and other commodities were bullish.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 103.5% since then. It is annualized at 41.8%. This fund has been bullish in sixteen of the past twenty weeks. It was bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 252.3% (annualized at 51.8%). It was bearish last week.

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

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

Last week’s report erroneously indicated the Dow Utilities was a bear. The chart continued indicating it as a bull. This lone bull is up 30.7% since the Mid-term Indicant signaled bull on June 2, 2006.

The Mid-term Indicant is signaling bear for nine of the ten major indices. They are down by an average of 2.5% since their bear signals an average of 1.9-weeks ago. The S&P600 is down 8.8% since its bear signal nine weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,116,204

That beats buy and hold performance of $1,917,891 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $137,234 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $84,603 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,835.3%, 23.7%, and 147.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009. However, the recent bear signal for several major indices suggest an increasing probability of this funds profit production before 2009.

Do no buy it just yet. Wait for the Quick-term Indicant to offer support.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 335.5% (annualized at 20.6%) since the Long-term Indicant signaled bull 845-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Three of thirty; only is non-contrarian. Minimal bullish support.

Quick-term Yellow Bears/Threats: Twenty of thirty. Bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential -0.1%. Minimal bearish support.

Force Vectors: Zero in bullish domains. No bullish support.

Vector Pressure: Five in bullish domains. Minimal bullish support.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Sell aggressively on signals.

Current Quick-term Bias: Configurations continue favoring bear.

Overall (Long-term) Market Status: 8/15/06 bullish bias expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Mixed configurations. Minimal obviation with slight bearish bias.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. The Dow is down 0.5% and the NASDAQ is down 2.6%, respectively, since that bear signal.

January 4, 2008. Unfortunately, natural market forces are backed by economic fundamentals. That is bearish at this time. The bullish bias since August 15, 2006 expired today (01/04/08).

January 8, 2008. Both major market indices are interacting with the recently developed lower trading range limit again. Each interaction this year was followed by bullish resurgence. Current configurations suggests this will not happen this time. The bear is gaining momentum and could fall to the older trading range limit. Please read on.

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

Both Indicant Volume Indicator’s are rapidly developing into robust cycles. The configuration is mixed right now. Last Wednesday’s and Thursday’s volume on bullish behavior was high, which is supportive of the bull. However, this robust cycle originated with aggressive bearish behavior. Reports of a half point interest rate reduction last Wednesday during bull or even meandering markets usually stimulate more dynamic bullish behavior than Thursday’s mild bullish expression. As stated last Thursday, a slight edge remains in favor of the bear on a near-term basis.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 17-ETF’s. They are up by an average of 60.2% (annualized at 21.6%) since their respective buy signals an average of 143.1-weeks ago. Although there were no sell signals, the SQI is avoiding 13-ETF’s at this time. They are down by an average of 4.9% since their sell signals an average of 4.5-weeks ago.

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 17-ETF’s. They are up an average of 118.2% (annualized 39.4%) since the STI signaled, buy, an average of 154.3-weeks ago. Although there were no sell signals, there are 13-ETF’s with avoid signals. They are down by an average of 5.0% since their sell signals an average of 4.6-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for eight-ETF’s. They are up by an average of 49.4% (annualized at 35.0%) since the QTI signaled buy an average of 72.6-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 22-ETF’s. They are down by an average of 3.5% since their sell signals an average of 2.5-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are nine conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This is no longer harmonious. The bullish bias shift on August 15, 2006 expired on January 4, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is equal to bearish yellow. Again, this is not supporting the bull.

Three of the ETF’s are above their respective bullish red curves. All thirty ETF average positions are 7.8% below their bullish red curves. Only one is non-contrarian. Keep in mind QID is not included in this statistic, but it is also in bullish domains.

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

One of the thirty ETF’s is contacting its breakout line. There is no bullish support from this attribute at this time. It was contrarian ETF#11-Precious Metals. This is for those with inflationary outlooks.

This was the twenty-second consecutive trading day of non-contrarian non-contact. As stated earlier this past week, this is leaning toward bearish bias.

Prior non-contrarian contact is now irrelevant. The metric underway will monitor bearish attributes.

The average distance from breakout contact is 13.3%. Double digit variances from breakout contact for six consecutive days is not supportive of bull.

Three of the ETF’s are contacting their breakdown lines. The ten making contact last Tuesday is the largest number of breakdown contact since 2002. This is supportive of bearish ambition. Non-contrarian contact in four of the last six trading days is bearish.

The average distance from the price and breakdown is 13.2%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is a negative 0.1%. The coupled with last Tuesday’s negative differential supports the bear.

ETF Force Vector Configurations

None of the Force Vectors are moving bullishly. The configuration no longer supports bullish bias, which expired on January 4, 2008.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were two put option buy signals after Friday’s close. The total put option buy signals are twenty-two in the last ten trading days.

As stated last Wednesday, the bull reacted, which was unfavorable to Tuesday’s put option buy signals. However, its reaction was mild with respect to interest rate cuts. This supports near-term bearishness.

Friday’s bearish aggression, coupled with Wednesday’s and Thursday’s bullishness was favorable to your Friday put option sell orders.

Five of the ETF Vector Pressures are in bullish domains. This is no longer providing near-unanimous or majority bullish support. They continue to decline, providing bearish confidence.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

Strategy from January 4, 2008. It is okay to write covered call options at this time. Be aware there will be a bullish bounce on a periodic basis.

The Quick-term bull is no longer in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is not avoiding QQQQ, which does not support holding contrarian fund, ProFunds Ultra Short.

The Quick-term Indicant signaled buy on January 8, 2008 for this ETF. It is down 0.9% since that buy signal.

QID is down 38.3% since the Short-term Indicant and Consolidated STI/QTI signaled sell 78.1-weeks ago.

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

Divergence versus Convergence

Bearish divergence occurred this past week. This follows bearish divergence and bearish convergence in the past three weeks. Four consecutive weeks of bearish convergence obviates deep and sustainable bear markets. The bearish divergent configuration sandwiched between the three bearish convergent configurations leave a small opportunity for the bull to resume influence. However, there is an increasing probability of a solid bear market with the current configurations

Indicant Conclusion

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/13/08

January 6, 2008 Indicant Weekly Stock Market Report

This Week’s Report

October 25, 2002 Cyclical Bull Market Expires

The Dow Composite of Sixty-Five received a bear signal this weekend. That is the first signal since the bull signal on October 25, 2002. There will be more about that later.

As stated last week, the S&P600-Small Cap was tracking along southeasterly trading ranges. That was discerning to those desiring bullish stock market behavior. Click the following link to view its chart.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-10-S&P600-Curr.htm

As you can see, this index fell below the lower trading range limit. The problem with this index is that the trading range is sloping bearishly. Breaking below the lower trading range limit along a bearish trading range is exceedingly bearish. This bearish expression is dynamic.

The stock market is forecasting an economic recession. Small caps take it on the chin first and usually fall deeper than larger cap stocks. The S&P600 is down 6.6% since the Mid-term Indicant signaled bear on November 9, 2007.

The deep bearish expressions last week occurred with about four weeks of the heart and soul of bullish seasonality remaining. The heart and soul of bullish seasonality has also now expired.

Unfortunately, last week’s bearish behavior was not just limited to the small caps. The market endured bearish convergence with respect to major indices. That suggests the cyclical bull market that was born on October 25, 2002 has completed its term. The Long-term trend remains up on a secular basis. However, holding through a 20% to 50% decline is not appropriate for happy investing. Some of you get unhappy with a 1% decline. Attitudes sour deeply with double digit declines.

The Dow30 received a bear signal this weekend. Click the following link to view its chart.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-01-DJIA-Curr.htm

As you can see, the Dow fell below its lower trading range limit. It is also below the trip line and the bullish red curve. The market is behaving in a way that is consistent with its anticipatory skills of predicting recession.

The NASDAQ received its first bear signal this weekend since May 28, 2004 during the meandering bear market that year. Click the following link to view its chart.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-03-NASDAQ%20Curr.htm

You can quickly view all of the major index charts by clicking the following link. You may have to scroll downward to view the table that contains the links to the charts for each of the major indices.

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

There are links to historical charts at the top of the above page. Although the presidential election year is the second most bullish on the four-year cycle, your research into history will reveal that several bull markets have expired during the election year. The stock market endured a meandering, fluttering configuration in the last presidential election year with a lame duck incumbent. That was Bill Clinton’s 2000, which was his last year as president.

The sub-prime lending crisis and inflationary threats are too much for the bull to stomach. Last week’s unemployment report would have normally been bullish. Rising unemployment during economic normalcy is typically bullish. The political bent is applied to the Federal Reserve Board to lower interest rates to enhance voter’s pocket books. Lame duck politicians are no longer that interested in such matters and thus little political push during lame duck presidential election years.

Unfortunately, the stock market is reasoning that rising commodity prices and especially oil prices is a major inflationary threat. That threat will put a damper on lowering interest rates. The stock market will not respond bullishly to interest rate reductions if it sniffs inflationary pressures. The stock market does not like either; high interest rates or excessive inflation. The combine value of interest rates and a CPI exceeding 8%-age points is generally bearish. So, if interest rates are at, say 3%, and inflation is at, say 6%, the market has historically behaved bearishly. Although not relevant at this time, the CPI is an absolute value. That is, a CPI of negative 6% would stimulate an equally powerful bear. Some of you recall how deflation was a concern a few years ago.

T. Boone Pickens recently stated that oil prices would only go down with reductions in demand. The quickest method to reduce demand is worldwide recession. That recession must hit China as well. To jump-start the recessionary cycle, interest rates will most likely stabilize and may even start increasing to dampen demand for oil.

This recent bearish expression has significant merit with the bear signal for the Dow Composite Index. As you can see, it fell below its lower trading range limit. That is the first bull or bear signal since its last signal, which was a bull signal, on October 25, 2002. Click the following link to view its chart.

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

During this bull cycle from October 25, 2002 through January 4, 2008, this broadest representation of large caps increased by 80.5%. This is the most stable index. Signaling bear for this index suggests a very high probability this cyclical bull that began over five years ago has expired in favor of bearish influences.

To gain a little more perspective on this, click the 2000-2004-chart.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-08-DJC-2000-2004.htm

This particular index is an excellent broad gauge of projected economic health. This index fell from its 2001-peak valuation to its 2002-depth by approximately 35%.

There could be some stock market fluttering. An example of excessive fluttering was in 2000. Click the following link to view an example of stock market fluttering, which preceded the great bear market of 2001-2002. It coincided with the last lame-duck presidency.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1996-2000.htm

For those who prefer to take a long-term view of the stock market, fluttering is a favorable attribute. Fluttering prevents the bear from gaining complete influence over the market. As you noticed, though, the fluttering in 2000 preceded the bear market of 2001-2002. So, do not relax if you see fluttering in the next few weeks and months.

Do not speculate. Keep your eye on the Indicant’s daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated no buy signals and 57-sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding 102-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 13.9% since the Mid-term Indicant signaled sell an average of 19.6-weeks ago.

There were only 30-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 13.7% since their respective sell signals an average of 21.2-weeks earlier.

Two years ago, on Jan 6, 2006, the Mid-term Indicant was avoiding 53-stocks and funds that were down an average of 10.5% since their respective sell signals an average of 22.5-weeks earlier. Three years ago on Jan 7, 2005 there were only 15-avoided stocks and funds. They were down by an average of 41.1% from their respective sell signals an average of 61.1-weeks earlier. On Jan 3, 2004, the Mid-term Indicant was avoiding only six-stocks and funds out of 296-tracked at that time. They were down by an average of 28.6% since their sell signals an average of 38.6-weeks earlier. Five years ago on Jan 4, 2003, there were only 12-avoided stocks and funds. They were down an average of 25.9% since their respective sell signals an average of 23.0-weeks earlier.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 186 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 160.9%. That annualizes to 60.5%. The Mid-term Indicant has been signaling hold for these 186-stocks and funds for an average of 138.2-weeks.

One year ago, on Jan 5, 2007, the Mid-term Indicant was holding 312-stocks and funds out of the 345 tracked for an average of 89.0-weeks. Those 312-stocks and funds were up by an average of 110.8% (annualized at 66.8%). The Mid-term Indicant was signaling hold for 292-stocks and funds of the 320-tracked two years ago on Jan 6, 2006. They were up by an average of 110.8% (annualized at 66.8%) since their respective buy signals an average of 86.3-weeks earlier. There were 236-stocks and funds with hold signals on Jan 7, 2005 since their buy signals an average of 61.1-weeks earlier. They were up by an average of 86.7% (annualized at 65.9%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Jan 3, 2004, the Mid-term Indicant was signaling hold for 286-stocks and funds out of 296-tracked. They were up by an average of 57.7% (annualized at 83.9%) since their buy signals an average of 35.8-weeks earlier. Five years ago, on Jan 4, 2003, there were 277-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant. They were up an average of 19.1% (annualized at 69.3%) since their respective buy signals an average of 14.3-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 75.7% since its secular low on October 9, 2002. The NASDAQ is up 124.8% and the S&P500 is up 81.7%. The small cap index, S&P600, is up 118.9%. As stated the past several weeks, the secular bull that originated on October 9, 2002 no longer remains solid. However, its bullish trend has not been reversed.

Unfortunately, the bear signal for the Dow Composites this weekend suggests the bullish trend is threatened with a fairly solid bearish cycle. The S&P600-Small Caps is leading the way to the southeast. It is down by 16.1% since its peak valuation last year. Another 3.9% drop will officially be declared a bear market.

The NASDAQ is down 50.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 7.6% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one. The Dow is up 9.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 101.6% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow closed up 6.4% in 2007. The S&P500 closed up 3.5% and the NASDAQ up 9.8%. The Dow was up 16.3% in 2006, with the S&P500 up 13.6% and the NASDAQ up 9.5%. The major indices lagged last year’s performance due to recent bearish aggressions.

The NASDAQ 2001 performance was down 21.1%. It was down 31.5% in 2002. It recovered with a gain of 50.0% in 2003. After being down most of the year due to the meandering bear market, the heart and soul of bullish seasonality elevated it to being up by 8.6% in 2004. In 2005, it was up only by 1.4% due to the same meandering bear from 2004. In 2006 it again up by 9.5%. It closed up by 9.8% in 2007.

As you can see, the only years the NASDAQ has been up this century has been the presidential pre-election years (2003 and 2007) and last year’s mid-term election year (2006). This is compliant to historical standards, even though 2007 underperformed against those standards.

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 7.1% in 2001. In 2002, it was down by 16.8%, but with less severity than the NASDAQ’s 31.5% drop in 2002. In the last presidential election year of 2003, the NASDAQ’s 50.0% rise delivered more excitement than the Dow’s 25.3% increase.

The bullish bias shift on August 15, 2006 expired. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%. As previously stated that bias shift has expired.

Where is the market headed in 2008, the presidential election year? Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% due to bearish relaxation and configurations conforming to historical and seasonal standards.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Commodity prices continued their acceleration last week, which is not favorable to the cause of fending off inflation. Oil touched three digits and the only solution to that problem is a reduction in demand. Most of the time, the primary source of reduction is recession. Technology is always evolving, but too slowly. Recessions are a quicker toward affecting solution.

As stated the past eight weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior.

Interest rates were mixed last week with some moving north and come moving south. However, the current southerly trend is not threatened. Rising commodity prices and falling interest rates will invigorate inflation.

The U.S. Dollar continues to weaken and will continue to do so as long as interest rates are in decline.

Overall, the stock market is holding up fairly with economic elements that tend to depress it.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 351.9% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 51.6%. It moved to the north in 42 of the past 69-weeks. It has been bullish in thirteen of the last twenty weeks. It was solidly bearish the past four weeks.

Fidelity Gold, Fund #28, is up 16.3% since its buy signal on September 7, 2007. It is annualized at 49.3% since that buy signal. This fund was solidly bullish the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 301.7% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 55.2%.

Vanguard Energy #18, VGENX, is up 246.4% (annualized at 51.1%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 236.3% (annualized at 57.1%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 196.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 44.1%.

These energy related funds were bullish last week while precious metals and other commodities were mixed.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 95.5% since then. It is annualized at 38.9%. This fund has been bullish in fifteen of the past nineteen weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 262.6% (annualized at 54.2%).

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

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

None of the ten major indices with a bull signal.

In addition to the nine bear signals, the lone prior bear index was the S&P600. It is down by 6.6% since the Mid-term Indicant signaled bear eight weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,116,204

That beats buy and hold performance of $1,957,388 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $170,992. That beats buy and hold’s $138,273 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $88,846 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,796.2%, 23.7%, and 141.3%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 26.9% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009. However, the recent bear signal for several major indices suggest an increasing probability of this funds profit production before 2009.

Do no buy it just yet. Wait for the Quick-term Indicant to offer support.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 342.2% (annualized at 21.1%) since the Long-term Indicant signaled bull 844-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Three of thirty; none are non-contrarian. There is no bullish bias support.

Quick-term Yellow Bears/Threats: Eighteen of thirty. Attribute is no longer configured with non-bearish support, as the majority are below bearish yellow.

Quick-term Non-Bearishness: Weak; inflationary fears threaten the bull, but the slightest inflationary weakness will invite vigorous bullish responses. $90 oil would do that, but unfortunately triple digit pricing for a barrel of oil is underway.

Short-term Non-Bearishness: The lower trading range limit has not yet been penetrated. Therefore, there solid bearish bias is absent at this time.

Force Vectors: The bearish cycle continues.

Vector Pressure: Ten in bullish domains. They decreased for the third consecutive day.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Vector Pressure is no longer supporting aggressive buying.

Current Quick-term Bias: Configurations are favoring the bear.

Overall (Long-term) Market Status: Bullish bias from August 15, 2006 expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Configurations on Friday, January 4, 2008 support bearish ambition, even though the Indicant Volume Indicant has not yet obviated bearish sustainability.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. This was done with about four weeks of standard heart and soul of bullish seasonality remaining. Economic fundamentals are assuming control over the stock market’s direction. Inflation and/or recessionary behavior is too much for the bull to put up a fight against bearish ambition.

From Dec 11, 2007 daily stock market report, it was stated “a continuation of this bull cycle should test the upper trading range limit again. This should occur before the heart and soul of bullish seasonality concludes in late January 2008.” Very recent volume has been more supportive of the bear.

From Dec 20, 2007 daily stock market report. Configurations are suggesting increasing heart and soul of bullish seasonality influence.

From Dec 21, 2007. The Dow’s 200-plus point jump today substantiates the heart and soul of bullish seasonality influence.

From Dec 28, 2007. Lethargic volume due to holidays is generating unnatural market forces. This is common when a few traders are more likely to manipulate market values. The market should enjoy natural dynamics on January 3, 2008.

January 4, 2008. Unfortunately, natural market forces are backed by economic fundamentals. That is bearish at this time. The bullish bias since August 15, 2006 expired today (01/04/08).

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

Both Indicant Volume Indicator’s continue configuring lethargically. However, today’s volume was high on aggressive bearish behavior. That reinforces the robust volume that coupled to aggressive bearishness late last year. This supports bearish sustainability.

On January 2, 2008 there was a 76% probability of a bullish response within a few days. Unfortunately, the market fell by more than 0.5% today (January 4, 2008). There is an 82% chance of sustainable bearish behavior when the market responds bearishly with configurations greater than a 62.% chance of moving bullishly. Consequently, do not be surprised at continued bearishness. The heart and soul of bullish seasonality ended earlier than normal. It ended today (01/04/08).

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

There were no buy signals and one sell signal. Although there were no buy signals, the SQI is signaling hold for 23-ETF’s. They are up by an average of 59.5% (annualized at 25.2%) since their respective buy signals an average of 141.5-weeks ago. In addition to the sell signal, the SQI is avoiding six ETF’s at this time. They are down by an average of 10.3% since their sell signals an average of 8.3-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and one sell signal. Although there were no buy signals, the Short-term Indicant is signaling hold for 23-ETF’s. They are up an average of 91.8% (annualized 34.4%) since the STI signaled, buy, an average of 137.1-weeks ago. In addition to the sell signal, there are six ETF’s with avoid signals. They are down by an average of 10.6% since their sell signals an average of 8.3-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and twelve sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 12-ETF’s. They are up by an average of 36.9% (annualized at 28.4%) since the QTI signaled buy an average of 66.7-weeks ago. In addition to the sell signals, the Quick-term Indicant is avoiding ten ETF’s. They are down by an average of 7.2% since their sell signals an average of 4.5-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are eleven conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This is no longer harmonious. The bullish bias shift on August 15, 2006 has expired.

Quick-term Indicant Bull/Bear Health Report

Eighteen of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by a mere 0.6%. Non-bearish support is minimal.

Three of the ETF’s are above their respective bullish red curves. All thirty ETF average positions are 7.4% below their bullish red curves. None of these are non-contrarian, which means there is zero attribute support that prevents bearish dominance.

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

None of the thirty ETF’s are contacting their breakout lines. There is no bullish support from this attribute at this time.

This was the seventeenth consecutive trading day of non-contrarian non-contact. This non-bullish bias suggests shallower bull cycles on a near-term basis. This attribute is non supportive of the bull.

Prior contact is now irrelevant. The metric underway will monitor bearish attributes.

The average distance from breakout contact is 12.7%. Double digit variances from breakout contact for two consecutive days is not supportive of bull.

Eight of the ETF’s are contacting their breakdown lines. This is the largest number of bearish contact in several years. This is supportive of bearish ambition.

The average distance from the price and breakdown is 13.2%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is a meager positive 0.5%, which remains favorable to the bull, but ever so slightly. As stated on Thursday, January 3, 2008, it is nearing position where bullish responses have occurred in the recent past. Friday’s aggression by the bear does not bode well for those desiring bullish behavior. A negative differential will foster bearish aggression.

ETF Force Vector Configurations

Five Force Vectors are moving bullishly. The configuration no longer supports bullish bias, which expired on January 4, 2008.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were two put option buy signals after Friday’s close. This brings the total put option buy signals to sixteen in the last five trading days.

Unfortunately, bearish aggression on Friday prevented deeply discounted buy offers from being accepted. There was also no contrarian behavior to support discounted buy offers on Friday.

Ten ETF Vector Pressures are in bullish domains. This is no longer providing near-unanimous or majority bullish support. Configurations no longer support bullish bias, but ten in bullish domains prevents complete bearish dominance. Unfortunately, the number in bullish domains is shrinking.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

Strategy from January 4, 2008. It is okay to write covered call options at this time. Be aware there will be a bullish bounce in the not too distant future.

The Quick-term Bull remains in tact.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. This ETF is relatively new and has not yet developed enough data to formally track its outlook. It will be excluded on overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets.

QID inclusion in overall ETF analysis will distort observations of market divergence and convergence due to the nature of its design. For example, precious metals and energy are contrarian but can parallel market direction with synergistic relationships. That, quite often, relates to market convergence when some non-contrarian funds are paralleling the general markets.

QID will receive Quick-term and Short-term sell signals, but must mature more for independent near-term observations. This comment will be removed once that maturity is developed.

QID is down 40.9% since all three models signaled bear upon the initial offering of this ETF 77.1-weeks ago.

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

Divergence versus Convergence

Bearish convergence occurred this past week. This follows bearish divergence and bearish convergence in the past two weeks. Four consecutive weeks of bearish convergence obviates deep and sustainable bear markets. The bearish divergent configuration sandwiched between the two bearish convergent configurations leave a small opportunity for the bull to resume influence. However, there is an increasing probability of a solid bear market with the current configurations

Indicant Conclusion

The major market indices fell through their lower trading range limits on a Mid-term Indicant basis. The Indicant Volume Indicator’s Short-term lower trading range limit has not yet been breeched. That offers a small speck of bullish hope, but it is a dim speck.

There is now a minimal probability of upper trading range limit engagement with the major indices.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/06/08