Jan 31, 2010 Indicant Weekly Stock Market Report

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

Status Overview of the Current Bull Market

Fundamentally, an expanding economy is bullish. Economic expansion exceeding normalcy, though, can be bearish. Economic factors do not stimulate such “expansionary” bearishness. Prevailing monetary policy by governments is usually the culprit. China’s recent hike in interest rates suggests a perception of excessive economic expansion. Bearish behavior the past several days followed China’s rate hike.

The unprecedented rise in stock prices since the early 1990’s correlates with population increases in capitalistic minded people. Capital markets become aggressively bullish with the idea of new products and increasing revenues and profits from an increasing number of sources of creativity and productivity; that is capitalists. The other two major groups, socialists and communists, are mere leeches to any economic activity. The U.S. capitalistic system has a growing number of economic overhead groups that drain economic activity. Many of these members of economic overhead are the ones you hear on the news and other commonly heard pontificators.

The interest rate hikes in China are typical. Their design is to keep the economy from overheating, which is commonly justified by fending off inflationary threats. At least that has been the common claim by government bureaucrats affecting those increases for nearly one-hundred years. The world’s most rapidly growing economy, China, is being told by their intellectual elites to “slow down.”

Strategically, the Chinese could be strengthening their currency, as they, like anyone, can see the dollar eroding in value at some future point. Strengthening their currency will allow them to accumulate more U.S. asset value with their currency being stronger than the current exchange rate. This creditor-debtor relationship will adjust the international balance of “political power.” U.S. political leadership is not gifted with sufficient math skills and surrounding themselves with “socialist economists” will not be a source of good advice. U.S. politicians may be in the process of being defeated in the international arena and blind to it.

The reduction of economic growth potential at a relatively low worldwide GDP, albeit rising, is not bullish. During most of 2009, the capital markets were hoping worldwide GDP would return to previous levels, such as 2006. That is why the stock markets have been climbing toward that goal since last March. It is a goal of underachievement; that is a return to where the markets once were, as opposed to setting new records. China’s behavior suggests there is no rush to return to previous worldwide GDP levels.

Hypothetically, a worldwide GDP growth rate of say, 5%, would yield X earnings. Cutting the GDP growth rate by, say, one-half, would yield .5X-earnings, all other things being equal and with strict lineal thinking. Of course, linearity seldom reflects reality. Earnings typically drop disproportionately to a reduction in GDP. This is especially true for high fixed costs companies; those with high capital costs and those burdened with overpaid executives or both.

The bull market, originating in March 2009, was behaving on the assumption of X-earnings based, in part, on prevailing projections of GDP. China’s decision to increase interest rates set the stock market’s perception of future earnings at less than X. The markets do not know if the result will be .5X or some other fractional amount of X. All it knows that X-earnings will not manifest due to China’s rate hike. The bull does not take a stand when X may become Y with Y being smaller than X, while the bear finds glory in such projections.

Volume surged on aggressive bearish behavior shortly after China announced their rate hike several days ago. Adding bearish energy was President Barack Obama’s attack on banks. Although there may be some justifications for bank attacking, the markets interpret that as a form of communism. That, of course, is bearish. Nothing is more bearish than the idea of government bureaucrats controlling the flow of money. The inefficient use and misuse of such money will cause even a bull to hibernate like a bear.

Last Wednesday’s State of the Union address was followed by more bearishness last Thursday and Friday, although with normal volume. The capital markets hear leadership and assign theoretical projected earnings via GDP estimates. It is apparent those assignments to future earnings leaned more toward the expectations of Y-earnings, which is less than X-earnings. The bear was delighted with that prognosis.

China’s communistic government will not be very sensitive to capitalistic needs. The capital market’s perception of the United States government appears to be following along the same lines as not being sensitive to the needs of capitalists; at least on the immediate regressive horizon. Recent populist movements suggests U.S. political leadership should move toward capitalistic favored actions, but the State of the Union address suggested “staying the course,” for the most part, toward a socialistic course of action.

The arrogance of the political elite have a long history of “thinking they know what is best” even in the face of defeat. The arrogant do not have an ability to anticipate defeat; even after being defeated, it is unrecognizable to those sort of people. Their brains remain fixated on their self-aggrandizement even if reduced to dire situations.

Aggressive volume on bearish aggression occurred twice in the past two weeks. Although volume indicators can be misleading and sometimes inaccurate, this particular relationship is of a major concern. All the major indices fell below their NTI Bearish Green curves the past few days. That, coupled with bearish volume attributes, increases the probability of dynamic bearishness on the near-term horizon.

Historical standards add credibility to conjuring up a bearish outlook for the next several months. Mid-term election years typically find market bottoms. Such bottoms usually occur in the third or fourth quarter. The capital markets start projecting values closer to X-earnings if the balance of political power shifts closer to a do-nothing sort of government, which is bullish. Since the national elections occur in November, the stock market typically finds a bottom ahead of those elections.

Incumbent politicians, quite often, take a political hit in mid-term election years, which is bullish and thus the reason for a solid history of finding market bottoms in mid-term election years. The populace typically discovers what they should have known in the first place; that is, politicians add nothing to the economy. The only thing they can do is lessen the damage of their predecessors and/or their prior actions of draining economic activity. Of course, egotistical maniacs hardly ever reduce their influence. So, the populace does this for them by electing other egotistical maniacs who will most likely disagree with the remnant post-election incumbents. Such disagreement within the ranks of the political elite is generally bullish for the capital markets.

Unfortunately, this cycle is slow moving. It is so slow, the accumulation of political damage is somewhat scary. The U.S. national debt is approaching unprecedented levels. U.S. economic activity remains at low levels. Revenues to help offset massive debt will remain depressed. Conventionally thinking economists are having more headaches as their models of normalcy are obsolete.

Historical standards were abandoned in the 2008-presidential election year with record setting bearishness. Although there was a republican president and a democratic congress in 2008, then President George W. Bush behaved as if he was democrat. He erred when he lost Congress to the democrats in the 2006-elections, saying to the populace, “I hear you.” The stock market peaked in 2007 at a time when there was no political check and balance due to the executive and legislative branches of government “getting along with one another.” That was bearish and the accumulation of political destruction led to the Great Recession. Some continue to argue, it is not over. There is merit to that argument as the national debt and threatening socialism is certainly bearish if not checked.

The stock market usually prognosticates higher earnings sometimes through what is seemingly unrelated. The current bull market originated last March. Nine months later, the U.S. Senate’s democratic super-majority was upset in the aftermath of the Massachusetts election. However, the checks and balances are not complete even with the filibuster potential in the Senate. It is interesting that the stock market accurately projected somewhat of a return to politically balancing the power in government. This is arguable, but the stock market has a penchant for predicting many big pictures. It sometimes gets surprised, but it is amazing how often it accurately projects big picture developments.

The 2009-stock market bull was also contrarian to historical standards. Post election years are classically bearish. The 2009-bull paralleled the tea party movement, which was an unprecedented attack by the populists against the increasing size and influence of the U.S. government. That was indeed bullish and justification for the capital markets forecasting earnings closer to X throughout most of 2009.

If the mid-term election year hypothesis holds true in 2010, which is finding a market bottom, then one could surmise the bottom of this bear market did not occur in February 2009. That is, the stock market may fall to levels lower than they were about one year ago in 2010. If that holds up, then the bull we have enjoyed since March 2009 will be viewed as a mere bullish spurt by historians at some future point.

Fundamentals, technical relationships, and historical standards are offering evidence supporting bearish outlook in the face of the current bull market. The average life cycle of short-term bulls ranges from ten to fourteen weeks. This one is nearing one year old.

However, there are always two or more sides to any story. There remain some bullish attributes by the Mid-term Indicant. Clicking this sentence will show you comparisons between the first major bull cycle following the crash of 1929 and the current bull cycle. You should notice the 1930-pressure penetrated bullish domains for a short period before succumbing to the bear’s ambition for the next two years, 1931 and 1932. You will need to scroll down to see that chart. The top chart, 2009, shows much higher pressure, which is the current case. It remains non-bearish. This contemporary high pressure is the prime source of a mild probability of bullish continuation or at worse, mild bearishness in 2010. If pressure succumbs to bearish desires and falls into bearish domains, then the prognosis of a dynamic bear will be with a much higher probability of the stock market falling to and approximating Feb 2009 levels before the end of this year. In other words, there are some justifications for projecting the 2009-bull being wiped out this year.

The current bull has not expired in all of the various configurations. The Mid-term Indicant continues signaling bull. Keep in mind, the Mid-term Indicant is designed to beat buy and hold and is not as nervous about short-term market action as the shorter-term models. It will patiently wait for pressure falling into bearish domains and prices falling below the bearish yellow curve.

A few short-term attributes are offering some support for the Short-term Indicant bull, albeit by miniscule values. You should have noticed several sell signals this past week for ETF’s, where those miniscule values shifted to offering no bullish support. However, a few hold signals remain. Those ETF’s retaining hold signals are those still enjoying significant gains from their March/April buy signals. Major convergences are expected early next week. When they occur, an improved measure of obviating directional intensity will be available. If bearish, most of the few remaining ETF’s with hold signals will receive sell signals. If bullish, recent sell signals will be reversed to buy signals by the short-term models.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 223 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 22.4%. That annualizes to 34.7%. The Mid-term Indicant has been signaling hold for these 223-stocks and funds for an average of 33.6-weeks.

The Mid-term Indicant is avoiding 91-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 45.8% since the Mid-term Indicant signaled sell an average of 99.8-weeks ago.

One year ago, on Jan 30, 2009, the Mid-term Indicant was holding 19-stocks and funds out of 344 tracked for an average of 101.3-weeks. They were up by an average of 134.9% (annualized at 69.3%). There were 320-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 35.3% since their respective sell signals an average of 35.6-weeks earlier.

The Mid-term Indicant was signaling hold for 149-stocks and funds of the 345-tracked two years ago on Feb 1, 2008. They were up by an average of 183.7% (annualized at 60.9%) since their respective buy signals an average of 157.0-weeks earlier. The Mid-term Indicant was avoiding 189-stocks and funds at that time. They were down an average of 12.8% since their respective sell signals an average of 12.8-weeks earlier.

There were 307-stocks and funds with hold signals on Jan 26, 2007 since their buy signals an average of 92.2-weeks earlier. They were up by an average of 107.2% (annualized at 60.5%). There were 31-avoided stocks and funds at that time. They were down by an average of 12.8% from their respective sell signals an average of 21.3-weeks earlier.

On Jan 27, 2006, the Mid-term Indicant was signaling hold for 280-stocks and funds out of 320-tracked. They were up by an average of 118.7% (annualized at 66.9%) since their 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 by an average of 8.7% since their sell signals an average of 21.3-weeks earlier.

Five years ago, on Jan 28, 2005, there were 230-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 90.5% (annualized at 64.5%) since their respective buy signals an average of 72.6-weeks earlier. There were 90-avoided stocks and funds then. They were down an average of 22.8% since their respective sell signals an average of 49.1-weeks earlier.

On Jan 30, 2004, there were 282-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 67.1%, annualizing at 88.0%, since the buy signals an average of 39.7-weeks earlier. There were six-avoided stocks and funds then. They were down by an average of 27.9% since their sell signals an average of 42.4-weeks earlier.

There were 137-stocks and funds with hold signals on Jan 31, 2003. They were up by an average of 26.5%, annualizing at 62.2%, since their buy signals 22.2-weeks earlier. The 95-avoided stocks and funds were down an average of 6.8% since their respective sell signals an average of 5.3-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.

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

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

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

Access all updated information from the following link. You will need your login ID and password.

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

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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend remain bullish, but the Short-term Indicant Bull is under duress by the bear. Although the economy continues to improve, monetary tightening in China is suppressing bullish interest and stimulating the bear.

The Near-term Indicant generated several sell signals for ETF and bear signals for several major market indices this past week, while the Quick-term Indicant is maintaining several hold signals.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 38.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 92.7% and the S&P500 is up 38.2% since then. The small cap index, S&P600, is up 88.1% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to establish a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics supported by 100% accuracy the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 28.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 24.9% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 27.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past several months, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

The NASDAQ is down 57.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 29.7% since its similar secular peak on March 23, 2000. The Dow is down by 14.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2008 congressional and presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2008 majority.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bullish by 14.9% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 2.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 1.7%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 3.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 6.4% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 4.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 1.1% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 11.1% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

The NASDAQ was down 4.4% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. The Dow was down 7.1% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain for the years with post election bullishness.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates remain configured at cyclical minimums. As stated for several months, that would normally threaten the bull, as rate hikes typically follow cyclical minimums. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels. The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyper-inflation at some future point. That will eventually lead to a bear stock market and high commodity prices, including gold.

Furthermore, the Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, there are no solutions the Fed can offer. In essence, the Fed has laid all its cards on the table.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past several days, their underlying trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is being viewed as strategically bearish in the long-term.

Although bearish the past few days, gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world. A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

Recently softening gold prices is mere profit taking. The optimistic 2012 forecasted price of gold is $1680. The low cyclical forecast for gold is $1300. A “meandering” forecast has it at $1100. In other words, there are no quantifications suggesting a long-term decline in the price of gold.

As stated 70-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish behavior. (You may be witnessing the beginnings of this tormenting cycle right now). This cycle should endure a double dip. The heart and soul of bullish seasonality concluded a bit earlier this year. This pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality this past week with the president’s state of the union address.

The above and below paragraph may become obsolete, based on Blue Dog Democrats and a general populace movement against a singular political party voice, upsetting the assumed control of Congress by socialists, communists, and creeps. If the Blue Dogs and populist movement back down and join the evil ones, then the paragraphs remain in tact. The senatorial election in the state of Massachusetts revealed the genius of Thomas Jefferson, while exposing the stupidity of contemporary, soft-handed/slow thinking politicians and their academic brethren. That was bullish and potentially obsolete bearish commentary contained herein.

The question remains, is public resistance to healthcare reform really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few weeks/months.

As stated the past 22-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is down 6.1% since then, annualizing at -6.1%. It was bearish the past two weeks and challenging our position. This remains as a good hold for a long-term investment. This position still holds true, but getting off to a rough start.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is down 8.7% since then, annualizing at -8.7%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 7.3%, annualizing at 14.4% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is down 1.8% since that buy signal, annualizing at -1.8%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. It is down 13.1% since the Jan 8, 2010 buy signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 3.1% since its buy signal on Sep 11, 2009, annualizing at 8.0%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 6.0% since then, annualizing at 11.9%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. Unfortunately, the Near-term Indicant signaled sell for this ETF this past week.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 31.4% since that buy signal, annualizing at 27.1%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 18.1% since the Near-term buy signal, annualizing at 23.0%.

Most commodities were deeply bearish last week.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 8.3% since that bull signal. That annualizes at 16.6%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,914,000. That beats buy and hold performance of $1,532,000 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,695. That beats buy and hold’s $105,189 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $195,685. That beats buy and hold’s $74,457 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, 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 Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 49.5% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults, albeit by miniscule values. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 247.8% (annualized at 13.5%) since the Long-term Indicant signaled bull 952-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

The bull originating last March is nearing expiration. Bear signals continue. Sell signals were issued for ETF’s. Pressure is moving toward bearish domains and will converge in a few days. That has been a point for bullish response in this cycle. If the bull does not respond and pressure dips into bearish domains, this Short-term Bull will expire and be replaced with a bear with significant bearish potential.

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

The Near-term Indicant signaled no new bulls and one new bear.

The four bulls are up by an average of 35.5%, annualizing at 53.1%, since the NTI signaled bull an average of 34.8-weeks ago. The Near-term Indicant signaled bull for the VIX on Jan 28, 2010 and its performance is included in the statistics in this paragraph.

The VIX was passive on Thursday’s overall market bearishness. Its Force Vector is very high and suggests more cooling is in order. However, there is an “advantaged” probability of this price holding and rising. Thus, the reason for its bull signal on Thursday. It was up 3.2% today.

As you can see, by maintaining bull signals for some of the major indices, the Near-term Bear has not accumulated quite enough support for a complete victory. It is getting very close, though. The Near-term Indicant signaled bear today for the Dow Utilities, which is usually a laggard, but this particular index never did behave in a manner consistent with dynamic bullishness. Its pitiful gain of a little over 15% in this cycle was one of the reasons for today’s bear signal.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up by an average of 15.7%, annualizing at 24.5%, since their bull signals an average of 33.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The lone QTI bear, VIX, is down 31.3% since its bear signal 41.1-weeks ago.

The overall stock market is now configured with increasing potential for sustainable bearishness.

The weakest pressure is the Dow Utilities, which is has recently been a laggard in new bear cycles. The strongest non-contrarian pressure is the S&P600, which is typically one of the first to succumb to sustainable bearish cycles. All major indices are losing bullish pressure, but the pressure remains in bullish domains and in support of the short-term bull cycle and thus part of the reasons for limited bear signals the past two days. However, their rate of decline projects negative pressure by next Tuesday. If that occurs, the Short-term Bull will expire.

VIX pressure is now the highest and supports a bearish stock market.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      Quick-term Attributes (This is a longer cycle than Near-term cycles)

      QTI-Red Bull Count; None of the eleven non-contrarian are Red Bulls. Eleven trading days ago, we had eleven of eleven, which was soundly bullish. Now none, which threatens the Quick-term Bull.

      QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias. Recent bearish expressions have not yet shifted these cycles to the south, but that unfavorability should occur in a few days.

      QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias. Unfortunately, the VIX is also enjoying this configuration.

      QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without bearish bias on a Quick-term basis. Longer-term holders should focus on this attribute; especially if you enjoy the fundamentals of your holdings and have accumulated significant gains.

      Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

      NTI-Blue Bull Count; None of the eleven non-contrarian are blue bulls and thus no bullish support on a Near-term basis. Ten have been lost since Tuesday, Jan 19, 2010.

      NTI-Bullish Blue Curve Trend; None of eleven non-contrarian are in a bullish trend, offering no bullish support. The S&P400 collapsed last Thursday. Contrarian VIX is the only one moving north, which is bearish for the overall stock market.

      NTI-Bearish Green Curve Trend - None of eleven non-contrarian indices in bullish trend, no longer supporting near-term non-bearishness.

      Short-term Force Vectors and Pressure Attributes

      STI-Force Vector Position – All eleven of the non-contrarian are in bearish domains offering the bear immediate support. None of the non-contrarians are in bullish domains, offering the bull no support. However, several of them are at cyclical lows since this bull cycle began last March. Last Wednesday that suggested, at best, a bullish response and at worse a non-bearish bias for the next two to four days. That was wrong as the bear dominated Thursday’s market. An error such as that suggests the bear has more energy than measured.

      STI-Vector Pressure Trend-None of the non-contrarian are moving bullishly, offering the bear support. Only VIX pressure is moving bullishly, which supports a stock market bear.

      Short-term Summary

      The expiration of several more bullish attributes triggered new bear signals last Thursday and Friday. However, keep in mind that all major indices remain above their QTI Bearish Yellow curves, suggesting potential for bearish shallowness and with limited breadth. If and when the indices interact with Yellow Bear curves, obviations of depth and breadth should unfold.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, NASDAQ100, and S&P400. The Dow Utilities is now eliminated from this protection. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines.

The other indices qualified for bear signals last Thursday and Friday because they fell below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal. Since March 2009, the bull has responded when attributes neared bear signal justifications. It is a little slower this time around due to the double digit gains, which is included in the algorithm.

-Political Climate – Nothing new, as bantering is loud and adding to bearish fundamentals. It is amazing how “book smart” people believe there is an economic advantage in shuffling money through the hands of federal bureaucrats. One can suppose their only experience is from reading and they apparently read the wrong books.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet completely expired, the following observations holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s and major indices will eventually fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves, and supported by bear/avoid signals. The stock market can climb by significant magnitudes before the execution of this phenomenon).

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the bull will continue dominance. That dominance is now being challenged by the bear.

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

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

Indicant Volume Indicators  

The NYSE and NASDAQ indicators continue configuring with potential robustness. Most of the burgeoning mini-cycle had been favoring the bull, but it now favors the bear and significantly so.

Jan 25, 2010-Mon-Volume was significantly light when compared to last week’s higher volume on bearish aggression. This “spurt correlation” favors the bear, but not enough weight to support the short-term bull’s expiration.

Jan 26, 2010-Tue-Volume was mild on mild bearishness with intraday indecisiveness. This is not supportive of current bullish bias and a bit more supportive of last week’s bearish ambition.  However, weight remains too light to signal bias shift from bull to bear.

Jan 27, 2010-Wed-Volume was relatively high on mild bullishness. However, it was not as robust as volume’s support for bearish aggression late last week. This remains noncommittal on obviating directional intensity, even though the bull remains in tact under significant bearish assaults.

Jan 28, 2010-Thu-Volume was above average on an aggressive bear, offering more support for additional bearishness. However, the volume relationship is not yet suggesting dynamic bearishness. Several of the indices received a Near-term Bear signal, as an expected bullish bounce was met with bearish aggression. This, along with weakening bullish attributes, suggests an increasing probability of dominance by the bear.

Jan 29, 2010-Fri-Volume was again aggressive; especially the NASDAQ, which was under significant bearish influences. This bodes well for the bear. The Short-term Bull appears nearing extinction.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and 19-sell signals.

The Near-term Indicant is signaling hold for 10-ETF’s. They are up by an average of 30.5%, annualizing at 42.0%, since their buy signals an average of 37.7-weeks ago.

In addition to the sell signals, the NTI is avoiding two-ETF’s. They are up 2.3% since their sell signals an average of 9.3-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 21.6% since their buy signals an average of 34.4-weeks ago. Those with hold signals are annualizing at 32.7%.

The two avoided ETF’s are down by an average of 26.7% since their sell signals an average of 26.1-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; minority of two, offering very limited bullish support. Lost twenty-four since Jan 19, 2010.

NTI Blue Curve Trend; only six are sloping north; very limited bullish support. Lost 25-bullish trends since Jan 18, 2010 and most have collapsed and evolving into negative trends.

NTI Green Curve Trend; Only six sloping north; no longer offering majority support for non-bearishness. This is a significant augmentation to bearish aspirations.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; Only one support Quick-term bullishness. It only takes one red bull to offer resistance to complete bearish dominance. The lone red bull is ETF#10-IBB-Biotech. It is non-contrarian and the only one that stands between a muted bear and an aggressive bear.

QTI Bullish Red Curve Trend; 29-sloping north in solid majority support for Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority supporting Quick-term non-bearishness.

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting non-bearishness.

The Short-term Indicant ETF Key Attributes:

Vector Pressure Bullish Domain Occupancy; majority of 23 in bullish domains, supporting bull. That is down by four from Jan 25, 2010. Several are nearing convergence which will either inspire the bull to respond or promote greater bearish aggression.

Pressure Slope Relative to Vector Pressure: 21-in bullish position. Divergent patterns continue to exist, but several are nearing convergence. Convergence will highlight directional intensity in either direction.

Vector Pressure Trend; minority of only two moving in bullish direction with miniscule support for the bull. Twenty have reversed direction from bullish to bearish since Jan 14, 2010. This is discerning and actionable with the large number of Friday’s sell signals.

Short-term Summary: Volume is suggesting increasing support for the bear. Vector Pressure is directionally supporting the bear, but still holding in bullish domains and thus preventing some sell signals. Fundamentals are setting up to support bear and technical configurations are acquiescing to those fundamentals.

Contrarian Funds

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled sell today. The NTI Bearish Green curve shifted south. This fund is not behaving in a contrarian manner at this time.

ETF#11-Gold and Precious Metals  is up 31.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 23.3%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $97.38 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 18.1% since then, annualizing at 23.3%.

Gold is under a gold-bear assault with its price approaching NTI Green. The NTI Bullish Blue Curve collapsed this past week. It is nestling on a major resistance point; the NTI Bearish Green Curve. Pressure remains positive with underlying support for its bullish potential, albeit moving bearishly. Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government  received a sell signal on Dec 4, 2009 from both the Near-term and Quick-term Indicant. It is down 0.7% since that sell signal. All TLT attributes remain bearish. It is mounting a charge, but as long as Vector Pressure and its slope remain in bearish domains, there will be no buy signal. Pressure is nearing bullish domains. Fundamentally, it will be appealing as a safety-net in the event the stock market bear accelerates aggression. Notice that it is finding resistance to eclipsing the QTI Bearish Yellow Curve. It has been behaving in a contrarian manner the past few days.

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is up 5.4% since that sell signal. It remains solidly bearish in spite of NASDAQ and overall stock market bearishness. Notice its Pressure Curves remain in bearish domains, although moving toward bullish domains.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 52.6% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $26.15 and still falling.

Major ETF Events

Jan 25, 2010-Mon-There were no major events.

Jan 26, 2010-Tue-ETF #20, EEM, was down during intraday overall market bullishness. Selling emerging markets, including China, continues to gain momentum. Also, several major indices NTI Bullish Blue Curves collapsed today. Several ETF’s are doing the same. The primary element justifying holding is bullishly positioned pressure, albeit some are razor thin.

Jan 27, 2010-Wed-ETF #11-GLD, Gold NTI Bullish Blue collapsed. However, pressure remains in bullish domains.

Jan 28, 2010-Thu-Bearishness occurred with most ETF’s and major indices below NTI Bearish Green curve. The bear is finding inspiration with the bull’s inability to respond. The primary attribute offering bullish hope is bullish pressure, which remains in bullish domains.

Jan 29, 2010-Fri-The Dow Utilities received a bear signal after lackluster performance in the Short-term Bull that started last March. There were several sell signals for ETF’s. Many NTI Green curves shifted south, removing resistance from bearish aggression.

Current Strategy-Short-term Indicant- Jan 29, 2010-Sell where sell signals occurred. If pressure falls into bearish domains, which should occur early next week, the probability of complete bearish dominance will be high. Jan 28, 2010-The bull is very near expiration. Jan 27, 2010-Same as yesterday. Jan 26, 2010-Holding remains safe, but prepare your selling trigger finger for near-term positioning. Political rhetoric is increasingly nonsensical from home and abroad. Threats to rationale is fundamentally bearish. Also, China is tightening credit, conflicting with the bull’s inspiration for that country’s growth potential.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence has occurred the last three weeks. Four consecutive weeks will obviate bearish bias. Next week’s behavior will be telling.

Indicant Conclusion

As stated the past sixteen weeks, low interest rates offer narrowed alternative investment opportunities. The argument holds that sideline cash is not smart. As long as this perception prevails, the bull cycle should continue.

However, there may be a strategic view that China may tighten too much and that many may leave China. That suggests a heightened concern regarding interest rates and/or inflation.

Configurations no longer remain supportive of the current Short-term bull. There are a few remnant attributes supporting the Short-term bull, but under duress. A major convergence will occur early next week, which will add to obviations of directional intensity.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/31/2010

Jan 24, 2010 Indicant Weekly Stock Market Report

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

Stock Market and Political Emotions This Past Week

It was a dizzying week for incumbent politicians in the U.S. Those rascals are in retreat, confused, and some are even depressed. Although most have egos that disallow a sensation of intellectual defeat, many do recognize they may be on the short side of votes in their next election. Their brains will not recognize their own deficiencies, but they do know how to understand who has the most votes.

Scott Brown’s election in Massachusetts was decidedly bullish last Tuesday. It was one of those buy on the rumor; sell on the news events.

The election of Scott Brown was one of those “least-worse” phenomena. Keep in mind that Mr. Brown is a politician and most likely encumbered by the same disease that most politicians endure. Do not be surprised at disappointment in his future behavior even though his election enhanced Congressional checks and balances, which is bullish. There is a good chance he will disagree with his Congressional colleagues in Washington D.C., as he campaigned to do so. Such disagreement, coupled with the absence of political bi-partisanship, is generally bullish for the stock market. A do-nothing government is always bullish.

The day after the election, the stock market was bearish. It suddenly became a trader’s market, as emotion-based issues garnished more weight than fundamental ones. The prognosis of future fundamentals based, in part, on political jibber-jabber stimulated significant “bearish emotion.”

One of the primary reasons for last Wednesday’s bearishness was China’s threat to Google’s profitability even in the face of Google beating estimates and reporting healthy earnings. Keep in mind that the Chinese government is communistic; the ultimate creation for the politically inclined. Such governments are comprised of people, who think they know what is right and wrong for everyone else while they live the nice life, even though history consistently demonstrates their wrongness. Oh well, a population stupid enough to acquiesce to that sort of existence deserves what they get; very little.

Furthermore, not only the communist control freaks want to control internet accessibility and content, the Chinese government was accused of using their unchecked power to infiltrate critical operating systems just as a common thief would do. Communist leaders produce the same details of a common thief, albeit with significant massive magnitude.

Last Thursday was also bearish. Accelerating the bear’s ambition was China’s credit tightening. Reducing money supply and discouraging capitalistic-based organizations is bearish. Google threatened to abandon business in China. This is making others rethink their strategic direction toward China. China’s expansion and creeping bias toward capitalism has been a significant contributor to the stock market bull for the past fifteen to twenty years. It would be interesting to see where it would have been without China’s expansion and economic successes. One could ask, who would be buying U.S. Treasuries for the past ten years without China. How bad would the Great Recession have been without China’s purchase of U.S. Treasuries?

A capitalistic exodus from China suggests far-reaching implications. That would slow the Chinese economy. That would hamper Chinese capability of buying U.S. Treasuries. That would foster increased interest rates to make them more attractive to other potential “foreign” investors since more Americans are poorer than before because of political and governmental intervention in the housing market. Governments have a long track record of screwing up any market. The healthcare market, for the time being, is enjoying a delay to governmental intervention and its subsequent decay.

Capitalistic compression in China could induce deflation. Bearish behavior, fed off this line of thinking, has a substantive basis. Inflation is inevitable in the nearer term than the threat of deflation. If inflation unleashes its nastiness, selling U.S. debt would require significant increases in interest rates. Inflation would be worse than it would otherwise be if rates remain low. High interest rates, high inflation, or any combination thereof, will arouse the stock market bear.

There is increasing interest in shorting the Chinese markets. Click this sentence for one of the more popular ETF’s that shorts the Chinese market.

It is unlikely those things will happen, but big money and fund managers are thinking about it. Furthermore, high volume on the last two trading days last week, which were bearish, supports the idea big money acted on the possibility of a bearish China, inflation, and or rising interest rates.

Coupled with a strategically bearish outlook for China, U.S. politicians attacked the large banks.  This attack was directed at Wall Street. Negative emotions swept through the markets last week, delighting the bear. The action last week started with tight concentration, but as the week wore on, bearish influences became more expansive.

The primary reason for this political attack was to garnish more votes for the incumbents this coming November. They believe it will be popular to bad-mouth Wall Street and big banks for the next eight months. We will see if this pans out for them, but the rhetoric will most likely be frightening to the capitalistic minded people.

Politicians care little about causative factors to problems. When listening to politicians from time to time, you recognize they do not even understand the concept of root cause analysis. Their only motive is directed at getting more votes; absolutely nothing else. This is the basic nature of self-aggrandizement, garnished from the large crowds of empty souls that applaud their chitchat. In essence, politicians rise every morning thinking of what they could pontificate that will attract plenty of stupid people to clap their hands and pound their feet to the political drumbeat.

However, with the negative commentary about politicians, there is a legitimate reason for the big-bank attack. Organizations perceived, as being too big to fail, by default, should not exist. Antitrust legislation has been invoked in the past and should be done again if the only other “perceived” alternative is taxpayer bailouts. In this particular case, the attack may indeed be an accurate one, regardless of motive. Sometimes politicians actually get the right thing done in spite of the reasons why. The concern is overkill on the issue. Much depends on crowd noise at their rallies.

Politicians will be slow about “too big to fail banks.”  That would threaten many of their campaign finances. Significant political contributions are traced from Wall Street and other big banks.

Politicians’ hands will be tied, as they will most likely do nothing about Fannie Mae and Freddie Mac, who are major contributors to politicians. Those two large “government” institutions should not exist, as they were central to the housing bubble. Fannie Mae, Freddie Mac, and U.S. politicians caused the housing bubble and the Great Recession of 2008-09, just as the Great Depression was caused and extended by U.S. politicians in the 1930’s. The 1930’s group of politicians needed a world war to disguise their ineptness.

The Supreme’s Court Citizen’s United decision late last week would have normally been bullish. In effect, the Supreme Court stated that anyone, including large corporations, could orchestrate and manage political advertisements. Politicians reacted negatively to this, as they prefer the “liberal” media having very limited competition in political jibber-jabber. Now, anyone can jibber-jabber about any “political inclination.” That is a serious threat to the political minded. Rather than politicians being the sole source of duping society, others can do it as well. That does seem fair since advertising seems to trick a lot of people on how to think and act. So, it may be good to have two or more viewpoints directed at society.

The harsh reaction by the President Obama added a bit more energy to the bear. Politicians only want their voices and their puppets voices heard. They feel threatened when confronted by the likes of Exxon, IBM, Walmart, etc. Interestingly, it would be surprising if large corporations openly campaigned against any politician. Just as any politician clamors for votes, private sector organizations clamor for customers. Open political advertising could cause a lost customer or two, unless that customer is the U.S. Government. That is what makes the issue complicated.

Politicians will use this to point to corporations as being evil enterprises. Implicit in that is somehow governmental organizations are not evil. That may very well be the case right now, but history clearly demonstrates when the predominant organization in any culture is government, the populace is reduced to pauper status. Politicians hope that at least 51% of the voting public does not know this fact.

As politicians play their vote-getting jibber-jabber by attacking big banks and other large corporations, there will be an underlying fear in the capital markets that could lead to stock market bearishness. Historical standards support this. Markets tend to find cyclical bottoms during mid-term election years. For that to hold true, another bear leg would have to unfold this year. In essence, political behavior is elevating its classical support for this phenomenon to unfold this year. That suggests a major bear cycle may indeed be starting.

The attack on Wall Street, China’s control freak behavior, negative capitalistic emotion, and negative political emotion accelerated stock market bearishness as the week wore on.

This negativity indeed contributed to significant stock market bearishness last week, but it did not cause the short-term or mid-term bulls to expire. Although the bull is wounded and definitely under serious threat, attributes continue in their support of stock market bullish ambition. Optimism could again surface and foment a return to dominance by this dynamic bull. If not, the short-term indicators will advise.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 226 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 24.0%. That annualizes to 39.6%. The Mid-term Indicant has been signaling hold for these 226-stocks and funds for an average of 31.5-weeks.

The Mid-term Indicant is avoiding 91-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 44.8% since the Mid-term Indicant signaled sell an average of 98.8-weeks ago.

One year ago, on Jan 23, 2009, the Mid-term Indicant was holding 23-stocks and funds out of 344 tracked for an average of 69.1-weeks. They were up by an average of 101.8% (annualized at 76.6%). There were 310-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 36.5% since their respective sell signals an average of 35.5-weeks earlier.

The Mid-term Indicant was signaling hold for 149-stocks and funds of the 345-tracked two years ago on Jan 25, 2008. They were up by an average of 173.9% (annualized at 58.0%) since their respective buy signals an average of 156.0-weeks earlier. The Mid-term Indicant was avoiding 192-stocks and funds at that time. They were down an average of 13.7% since their respective sell signals an average of 13.5-weeks earlier.

There were 313-stocks and funds with hold signals on Jan 19, 2007 since their buy signals an average of 90.9-weeks earlier. They were up by an average of 105.8% (annualized at 60.6%). There were 32-avoided stocks and funds at that time. They were down by an average of 13.5% from their respective sell signals an average of 21.2-weeks earlier.

On Jan 20, 2006, the Mid-term Indicant was signaling hold for 279-stocks and funds out of 320-tracked. They were up by an average of 116.9% (annualized at 60.6%) since their buy signals an average of 90.9-weeks earlier. The Mid-term Indicant was avoiding 52-stocks and funds at that time. They were down by an average of 11.4% since their sell signals an average of 24.7-weeks earlier.

Five years ago, on Jan 21, 2005, there were 230-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 88.6% (annualized at 64.6%) since their respective buy signals an average of 71.6-weeks earlier. There were 85-avoided stocks and funds then. They were down an average of 27.5% since their respective sell signals an average of 48.7-weeks earlier.

On Jan 23, 2004, there were 288-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 68.6%, annualizing at 92.9%, since the buy signals an average of 38.4-weeks earlier. There were eight-avoided stocks and funds then. They were down by an average of 28.7% since their sell signals an average of 41.4-weeks earlier.

There were 194-stocks and funds with hold signals on Jan 24, 2003. They were up by an average of 22.0%, annualizing at 61.2%, since their buy signals 16.6-weeks earlier. The seven-avoided stocks and funds 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.

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

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

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

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

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

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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend remain bullish. The economy is on the mend and earnings should improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset, yet. The biggest threat on the immediate horizon continues to be Congressional action. The bull prefers governmental inaction.

The bull’s duration is not known. There are no indications it is ready to expire.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also favoring bullish expectations.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 39.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 97.9% and the S&P500 is up 40.6% since then. The small cap index, S&P600, is up 92.7% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to establish a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics supported by 100% accuracy the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 28.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 22.9% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 26.1% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past several months, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

The NASDAQ is down 56.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.5% since its similar secular peak on March 23, 2000. The Dow is down by 13.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2008 congressional and presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bullish by 11.6% through this week in 2001. (Last weeks weekly report erred when stating the NASDAQ was bearish at this point in time). The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 3.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 1.8%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 5.8% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 6.5% in 2005’s post election year, which contradicted historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 1.9% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 0.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 13.6% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

The NASDAQ was down 7.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. The Dow was down 7.4% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain for the years with post election bullishness.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates remain configured at cyclical minimums. As stated for several months, that would normally threaten the bull, as rate hikes typically follow cyclical minimums. However, they are so low a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels. The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyper-inflation at some future point. That will eventually lead to a bear stock market and high commodity prices, including gold.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world. A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

Recently softening gold prices is mere profit taking.

As stated 69-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish behavior. This cycle should endure a double dip. However, the second dip may not occur until after the “heart and soul” of bullish seasonality concludes around Feb 2010. That is a few weeks from now. Politicians are attempting to accelerate this the conclusion of the heart and soul of bullish seasonality.

The above and below paragraph may become obsolete, based on Blue Dog Democrats and a general populace movement against a singular political party voice, upsetting the assumed control of Congress by socialists, communists, and creeps. If the Blue Dogs and populist movement back down and join the evil ones, then the paragraphs remain in tact. The senatorial election in the state of Massachusetts revealed the genius of Thomas Jefferson, while exposing the stupidity of contemporary, soft-handed/slow thinking politicians. That was bullish and consequently obsolete bearish commentary contained herein.

The question remains, is public resistance to healthcare reform really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few weeks/months.

As stated the past 21-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is down 0.9% since then, annualizing at -0.9%. It was bearish last week and challenging our position this should be a good hold for a long-term to come. This position still holds true, but getting off to a rough start.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is down 2.3% since then, annualizing at -2.3%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 10.6%, annualizing at 21.8% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 1.8% since that buy signal, annualizing at 5.1%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. It is down 8.1% since the Jan 8, 2010 buy signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 7.5% since its buy signal on Sep 11, 2009, annualizing at 20.3%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 9.5% since then, annualizing at 19.6%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 32.9% since that buy signal, annualizing at 28.9%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 19.4% since the Near-term buy signal, annualizing at 25.4%.

Most commodities were deeply bearish last week.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 10.6% since that bull signal. That annualizes to 22.0%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,217,819. That beats buy and hold performance of $1,547,692 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $142,022. That beats buy and hold’s $106,941 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $200,965. That beats buy and hold’s $76,466 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, 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 Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 52.3% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 251.4% (annualized at 13.7%) since the Long-term Indicant signaled bull 951-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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 included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Short-term attributes remain in support of the overall stock market bull. Communistic disruptions to Google’s profit potential in China could depress bullish ambition. Communistic disruptions by U.S. politicians add to the threat. In spite of today’s bearish behavior, there are no indications the current Short-term bull is ready to expire. So far, short-term attributes suggest a bearish spurt. However, contact with bearish green and negative pressure will identify the Short-term Bull’s expiration.

ETF#21-Brazil endured extreme bearish aggression. Its NTI Bullish Blue curve collapsed last Thursday. It even fell below the NTI Bearish Green curve on bearish aggression. It did not receive a sell signal since Vector Pressure remains positive. This particular ETF has been one of the most bullish since 2003, but took it on the chin the past three days. It is up 64.5% since the Quick-term Indicant signaled buy on April 3, 2009. The Quick-term Indicant will not signal sell until it contacts the bearish yellow curve, which continues to rise. The Near-term Indicant will signal sell when Pressure falls into bearish domains. Do not be surprised at volatility between now and the potential sell signal.

Unfortunately, several other ETF’s NTI Bullish Blue Curves collapsed on Friday under the weight of recent bearish behavior. Vector Pressure remains in bullish domains and the NTI Bearish Green Curve continues to rise. Political and fundamental forces are forging support for significant bearish potential, but technical configurations mandate discipline in holding until the bear’s sustainability is obviated.

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

The Near-term Indicant signaled no new bulls and no new bears.

All eleven major non-contrarian indices are up by an average of 24.4%, annualizing at 38.5%, since the NTI signaled bull an average of 33.0-weeks ago. The lone bear is the VIX and it is up 29.4% since its bear signal 7.3-weeks ago. The VIX was solidly bullish today, but not yet configured for a bull signal. Pressure remains too negative to justify a bull signal. It has gained over 40% in the past three days. It also garnished red bull status with this sudden spurt in value.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up by an average of 18.2%, annualizing at 29.3%, since their bull signals an average of 32.3-weeks ago.

The lone QTI bear, VIX, is down 23.8% since its bear signal 40.1-weeks ago.

The overall stock market remains configured without sustainable bearish threats. However, Force Vectors dipped into bearish domains with Thursday’s bearish behavior and dove deeper on Friday’s similar bearishness. So far, the support is for no more than a bearish spurt.

Recent bearishness is localized to investment banking. Emotional bearishness has been triggered, but somewhat irrational. Investment bankers do not create wealth. They are members of the economic overhead group. Political bashing of Wall Street is enhancing this bearish emotion.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      QTI-Red Bull Count; Five of eleven strongly supporting bullish bias. Lost six Red Bulls on Friday.

      QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

      QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

      QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without bearish bias.

      NTI-Blue Bull Count; None of the eleven non-contrarian and thus no bullish support on a Near-term basis. Nine has been lost since last Tuesday.

      NTI-Bullish Blue Curve Trend; Only three of eleven non-contrarian in bullish trend offering limited bullish support. (Seven shifted south on Friday, following three consecutive days of bearish behavior).

      NTI-Bearish Green Curve Trend - Non-bearish unanimity with eleven of eleven non-contrarian indices in bullish trend, supporting near-term non-bearishness.

      STI-Force Vector Position – Ten of the non-contrarian are in bearish domains offering the bear some near-term support. None of the non-contrarians are in bullish domains, offering the bull no support.

      STI-Vector Pressure Trend-None of the non-contrarian are moving bullishly, offering the bear support.

      Short-term Summary-Overall-Most attributes remain supportive of the Short-term Bull, even though several have weakened in that support. Negatively sloping (bearish) Vector Pressure is a source of concern at this time, but still remains in bullish domains. None of the NTI Green curves have shifted south, which is a major supporter of the Near-term Bull. It is troublesome, though, that most of the major indices penetrated the NTI Bearish Green curve. That penetration may inspire the bear, but there are enough bullish resistant forces remaining in tact to fend off the bear at this time.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, Dow Utilities, NASDAQ100, and S&P400. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines. The other indices will most likely receive bear signals when they fall below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal. Since March 2009, the bull has responded when attributes neared bear signal justifications.

-Political Climate – Tuesday’s bullish aggression was anticipatory of a victory by anti-socialist candidate Scott Brown of Massachusetts. The check-and-balance vote is fundamentally bullish. Wednesday’s bearish aggression was stimulated, in part, by the Chinese communists to Google’s internet business. Thursday’s bearish expression was stimulated by U.S. politicians attacking the capital markets; not too dissimilar to Chinese communistic behavior. Today’s bearishness is based on similar “politically” inspired concerns with respect to the capital markets. The sell off is localized to Wall Street.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The stock market can climb by significant magnitudes before the execution of this phenomenon).

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year at this time. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the bull will continue dominance.

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

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

The NYSE and NASDAQ Indicant Volume Indicators  continue configuring with potential robustness. Tuesday’s volume was below recent averages on solid bullish stock market behavior. Last Wednesday’s volume was about the same as Tuesday’s volume on bearish aggression. In spite of wishy-washy volume performance the past two days, there is no evidence the short-term bull is under a bear attack that could be successful. Thursday’s volume, on the other hand, is ominous to the bull’s longevity. Volume was aggressive on bearish aggression. It has been several months since such relational magnitudes have been observed. Friday’s volume was also aggressive on bearish aggressions. This sort of misbehavior is indeed encouraging to the bear.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 14.7%, annualizing at 34.2%, since their buy signals an average of 22.4-weeks ago.

The NTI is avoiding two-ETF’s. They are down 0.9% since their sell signals an average of 8.3-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 24.3% since their buy signals an average of 33.4-weeks ago. Those with hold signals are annualizing at 37.8%.

The two avoided ETF’s are down by an average of 28.2% since their sell signals an average of 25.1-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; minority of two, offering limited bullish support. Lost twenty-three the past three days.

NTI Blue Curve Trend; only nine are sloping north; very limited bullish support. Sixteen collapsed on bearish aggression the past three days.

NTI Green Curve Trend; 29-sloping north; strong majority support for non-bearishness. The bear cannot dominate with this configured attribute. This attribute is nearing a bearish threat, but has not yet succumbed.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; a minority of 13-support Quick-term bullishness. The bear cannot dominate with this attribute, either. However, 16-Red Bulls have been lost the past three days.

QTI Bullish Red Curve Trend; 29-sloping north in solid majority support for Quick-term bullishness.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority supporting Quick-term non-bearishness.

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting solid non-bearishness.

The Short-term Indicant ETF Key Attributes:

Vector Pressure Bullish Domain Occupancy; majority of 29 in bullish domains, supporting bull.

Pressure Slope Relative to Vector Pressure: 29 in bullish position.

Vector Pressure Trend; minority of only four moving in bullish direction with miniscule support for the bull. Twenty have reversed direction from bullish to bearish the past four days. This is discerning, but not yet actionable.

Short-term Summary: Volume is suggesting increasing support for the bear. Vector Pressure is directionally supporting the bear, but still holding in bullish domains and thus preventing sell signals. Fundamentals are setting up to support bear, but technically the short-term bull remains in tact.

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is down 0.7% since that sell signal. It remains solidly bearish in spite of NASDAQ and overall stock market bearishness.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 55.3% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $26.56 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 9.5% since those buy signals, annualizing at 19.9%. Its NTI Bullish Blue Curve collapsed on Dec 8, 2009. A sell signal will be released in the event NTI Green shifts to the south. That had been unlikely, as the oil bull reacted violently to last December’s bear attack. However, price is setting right on the NTI Green, but Pressure remains in bullish domains. It is being testy right now to the hold position.

ETF#11-Gold and Precious Metals  is up 32.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.1%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $96.90 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 19.4% since then, annualizing at 25.6%.

Gold is under a gold-bear assault with its price approaching NTI Green. Pressure remains positive with underlying support for its bullish potential. Click this sentence for charting and current forecasting of the actual price of gold.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government  received a sell signal on Dec 4, 2009 from both the Near-term and Quick-term Indicant. It is down 1.1% since that sell signal. All TLT attributes remain bearish. It is mounting a charge, but as long as Vector Pressure and its slope remain in bearish domains, there will be no buy signal. Fundamentally, it will be appealing as a safety-net in the event the stock market bear accelerates aggression.

Major ETF Events

Jan 22, 2010-Fri-Aggressive bearishness for three consecutive days have not disrupted support for the Short-term Bull, but several NTI Bullish Blue Curves collapsed today. Even with that, there were no sell signals as the lower limit NTI Green Curve continues rising and Vector Pressure remains in bullish domains.

Jan 21, 2010-Thu-Politicians are now attacking banks. Although banks are a problem, politicians will only worsen it. The political attack will no doubt have a sinister angle and thus damaging to the capital markets.

Jan 20, 2010-Wed-Just as the Massachusetts’ senatorial election excited the bull, communists threaten Google’s profit potential in China. The control freak phenomenon is worldwide. When the freaks exert their authority, the bear responds gleefully and aggressively, which is what occurred.

Jan 19, 2010-Tue-The Election of Republican Scott Brown in Massachusetts is fundamentally bullish as this should slow the process of socialism and other stupid ideas from the social elite.

Current Strategy-Short-term Indicant- Jan 19, 2010-Holding remains safe.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence occurred the last two weeks, following bullish convergence three weeks ago. Two out of the last five weeks have enjoyed bullish convergence, while bullish convergence has occurred in two of the last three weeks. The underlying bullish bias is now being threatened.

Indicant Conclusion

As stated the past fifteen weeks, low interest rates offer narrowed alternative investment opportunities. The argument holds that sideline cash is not smart. As long as this perception prevails, the bull cycle should continue.

However, there may be a strategic view that China may tighten too much and that many may leave China. That suggests a heightened concern regarding interest rates and/or inflation.

Configurations remain supportive of the current Short-term bull. As long as the Short-term bull remains in tact, there is no threat to the Mid-term Bull. The bull is again being tested on both a technical and fundamental basis.

One fundamental threat can be traced to the “political elite.” If they continue eroding the potential of the productive, the bear will be aroused and severely so. The economy has been severely shaken by excessive intellectualism by those who think they know what is best, but those same so-called intellectuals have never produced anything of value. Adding to this concern is now originating in China.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/24/2010

Jan 17, 2010 Indicant Weekly Stock Market Report

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

This Week’s Report

Massachusetts vs. the Intellectual Elite

The Senatorial Election in Massachusetts may offer fundamental support for continuing stock market bullishness. The election of a politician, who has campaigned on a vote of “no” on healthcare reform, would be bullish for the stock market. The intellectual elite will endure what should feel like a slap in their face with the election of a naysayer politician to healthcare reform.

Unfortunately, the intellectual elite will not feel any “emotional” pain from such a defeat. They are incapable of such feelings, as their ego-based value system is blinding. The intellectual elite has been wrong most of the time since the beginning of time. They are always overrun by the masses because they add zero value and have a tendency to take more and more from the masses. They think of themselves as being smarter than everyone else is. After all, they attended the so-called finer colleges and educational institutions. They made good grades, while the rest of us, for the most part, were proud of B and C averages from public institutions.

When the masses disagree, intellectual elites assume the masses are wrong. After all, the intellectual elite have demonstrated with great clarity that they can read something that someone else wrote and repeat it with near absolute perfection on their tests. The intellectual elite can point to their transcripts proving that they could repeat almost verbatim what some college professor pontificated in the classroom, regardless of the degree of irrelevance or wrongness of the subject matter.

The intellectual elite view the rest of us biasing toward the moronic positions along the intellectual spectrum, while positioning themselves more closely to the genius position.

If the naysayer politician from Massachusetts wins the election in the next few days, the intellectual elite will conclude they need to try harder to save the masses from their stupidity. If the naysayer loses, the intellectual elites will widen their pontifications of “we told you so.”

The intellectual elite understand numbers even though very few of them took higher math, such as calculus. The intellectual elite do not like subjects where right or wrong is clear and inarguable. That reduces the importance of their treasured skill set, which is eloquent speaking and command over the art of language. Those strong skills add no value to anything.

Fortunately, for the intellectual elite, vote counting only requires only a third grade level understanding of arithmetic. They know that bigger numbers are better than smaller numbers when it comes to a voting populace. At times in the past, intellectual elites expanded their influence to the point of disallowing votes. Why run the risk of losing, they have reasoned? Karl Marx once said, “the ones counting the votes are the ones who garnishes the power.” You may have noticed in recent elections in the U.S. where vote counting and voter fraud has been an object of concern and in some cases producing questionable results. That is part of the movement of intellectual elites. They work hard at cheating since they produce nothing of value. That has been an increasing concern in the past few elections. History suggests the desire to control votes by the intellectual elite is not a new concept.

To garnish enough votes for their causes, intellectual elites promote and take extreme care of unions. FDR was one of the first to recognize this in the U.S. FDR led the masses through the Great Depression and concluded his intellectual elitism through world war, where millions were killed. Of course, FDR, like most intellectual elites, never recognized his errors and when things did not seem right, the populace and their stupid ways were the source of wrong. FDR promoted union strength in unison with the expansion of communism. Communism and unionism were established at about the same time and with the exact same set of principles. The intellectual elite loves the idea that everyone “below them” are the same and an inferior bunch at that. They love the middle class and take a claim on the existence of the middle class. They view the middle class as their slaves. That is the same philosophy promoted by unions, which grew in power in direct unison with the expansion of communism. Individuality and related merits are not welcome by the intellectual elite.

Contemporary politicians jet set around the world, living a life of comfort, after having successfully promoted an unemployment rate in excess of 10% (more closely to 20%). Social unrest will eventually follow and with that, the intellectual elite can use their solutions to garnish yet more power. There is some truth in their views of the masses; from time to time, the masses are not that bright.

With that, it is possible the populace can be wrong. History suggests others, who disagreed with their belief systems, have wiped out other culture groups. Intellectual elites led those wiped out cultures. The intellectual elite are always the worse of leaders. Their thinking is egotistically based, as opposed to value based. Ego driven behavior drives their course of thought and action but is also the prime source of their ultimate failure. Most people really do not find solace and comfort in catering to the ego of another. The intellectual elite, in spite of their misplaced intelligence, have never understood that. Excessive egotism is blinding. Many in their final moments still do not see the problem they created. Even in those final moments, the victors of their defeat are wrong in their egotistical brains.

Intellectual elites have never been the victor in anything. Rising from the populace are many that were winners. Henry Ford, Earle P. Halliburton, and Michael Dell are just a few from a long list. The first two never finished high school and none of them finished college. Their efforts produced tens of thousands of millionaires, while FDR and those like him, never produced even one.

On the contrary, FDR maximized poverty and supported the same views and value systems as the communists. The populace shares equally in the blame. They were just as wrong since they kept on reelecting him and his views and they suffered appropriately for their stupidity.

FDR received support from the unions only because he applied third grade arithmetic and figured out that his support of the unions meant more votes. More votes allowed FDR to continue in his glorious fulfillment that he knew what was best for all his contemporaries. It is even simpler. FDR, like most intellectual elites, enjoyed hearing his own pontifications and thus satisfying his ego without ever having to endure any threat of being right or wrong. When history is accurately written and documented into an accurate context, FDR and those like him, will be recognized as pure economic leeches and for the most part, evil.

Recently, the intellectual elite have cut deals with unions; much like FDR did. It has been reported that unions were offered exclusions to some elements in the healthcare reform legislation. This is for one and only one reason; more votes for the intellectual elite. That will foster a continuation of satisfying their egotistical needs.

Authors of the United States Constitution understood the core nature of elitism. They developed a system to hold the elites at bay. This does not always work, which was the case during the Great Depression and just before World War II. If the people of Massachusetts do not do as the authors of the U.S. Constitution granted them, then the Senate seat of Massachusetts was and remains indeed that of Edward Kennedy, who by the way, bought himself into the status of an intellectual elite with his daddy’s money. He was not too good at test taking.

In a recent debate, the intellectual elite hosts asked the naysayer politician, “how can you vote no on healthcare legislation from Senator Kennedy’s senate seat? The politician, who has not yet been corrupted, responded with some class and a good understanding of the system. He said, “the Senate seat belongs to the people of Massachusetts.” The intellectual elite were surprised at that response. It did not fit with their views of their superiority over the masses.

A victory by the naysayer politician would add quite a bit of fundamental bullish stimulus to the stock market. That would foment more influence for those who have skills similar to that of Earl P. Halliburton, Henry Ford, and Michael Dell. That would be definitely bullish for the stock market.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 226 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 28.4%. That annualizes to 48.5%. The Mid-term Indicant has been signaling hold for these 226-stocks and funds for an average of 30.5-weeks.

The Mid-term Indicant is avoiding 91-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 42.6% since the Mid-term Indicant signaled sell an average of 97.8-weeks ago.

One year ago, on Jan 16, 2009, the Mid-term Indicant was holding 33-stocks and funds out of 344 tracked for an average of 41.9-weeks. They were up by an average of 59.1% (annualized at 61.7%). There were 308-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 35.4% since their respective sell signals an average of 34.9-weeks earlier.

The Mid-term Indicant was signaling hold for 152-stocks and funds of the 345-tracked two years ago on Jan 18, 2008. They were up by an average of 167.2% (annualized at 56.7%) since their respective buy signals an average of 153.3-weeks earlier. The Mid-term Indicant was avoiding 173-stocks and funds at that time. They were down an average of 17.2% since their respective sell signals an average of 14.8-weeks earlier.

There were 313-stocks and funds with hold signals on Jan 12, 2007 since their buy signals an average of 89.9-weeks earlier. They were up by an average of 105.7% (annualized at 61.2%). There were 32-avoided stocks and funds at that time. They were down by an average of 13.3% from their respective sell signals an average of 20.6-weeks earlier.

On Jan 13, 2006, the Mid-term Indicant was signaling hold for 292-stocks and funds out of 320-tracked. They were up by an average of 113.0% (annualized at 67.1%) since their buy signals an average of 87.6-weeks earlier. The Mid-term Indicant was avoiding 52-stocks and funds at that time. They were down by an average of 10.6% since their sell signals an average of 23.7-weeks earlier.

Five years ago, on Jan 14, 2005, there were 235-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 89.2% (annualized at 66.6%) since their respective buy signals an average of 69.6-weeks earlier. There were 84-avoided stocks and funds then. They were down an average of 28.2% since their respective sell signals an average of 48.1-weeks earlier.

On Jan 16, 2004, there were 288-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 67.5%, annualizing at 93.8%, since the buy signals an average of 37.4-weeks earlier. There were eight-avoided stocks and funds then. They were down by an average of 28.9% since their sell signals an average of 40.4-weeks earlier.

There were 289-stocks and funds with hold signals on Jan 17, 2003. They were up by an average of 19.6%, annualizing at 63.4%, since their buy signals 16.1-weeks earlier. The six-avoided stocks and funds 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.

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

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

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

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

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

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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend remain bullish. The economy is on the mend and earnings should improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset, yet. The biggest threat on the immediate horizon continues to be Congressional action. The bull prefers governmental inaction.

The bull’s duration is not known. There are no indications it is ready to expire.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also favoring bullish expectations.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 45.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 105.4% and the S&P500 is up 46.3% since then. The small cap index, S&P600, is up 98.3% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to establish a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics supported by 100% accuracy the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 25.1% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 20.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 24.0% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past several months, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

The NASDAQ is down 54.7% since its last weekly secular peak on March 9, 2000. The S&P500 is down 25.6% since its similar secular peak on March 23, 2000. The Dow is down by 9.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2008 congressional and presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 6.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was up by 2.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 7.7%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 5.3% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.0% in 2005’s post election year, which contradicted historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 5.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 3.6% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 8.8% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

The NASDAQ was down 4.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. The Dow was down 6.4% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain for the years with post election bullishness.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates remain configured at cyclical minimums. As stated for several months, that would normally threaten the bull, as rate hikes typically follow cyclical minimums. However, they are so low a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels. The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyper-inflation at some future point. That will eventually lead to a bear stock market and high commodity prices, including gold.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a solid cyclical shift to the north, supporting a solid bullish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world. A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

As stated 68-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish behavior. This cycle should endure a double dip. However, the second dip may not occur until after the “heart and soul” of bullish seasonality concludes around Feb 2010. That is a few weeks from now.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists, communists, and creeps. If they back down and join the evil ones, then the paragraphs remain in tact. Also, the senatorial election in the state of Massachusetts could very well reveal the genius of Thomas Jefferson, while exposing the stupidity of contemporary, soft-handed/slow thinking politicians. That would be bullish and consequently obsolete bearish commentary contained herein.

The question remains, is public resistance to healthcare reform really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few weeks/months.

As stated the past 20-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 9.0% since then, annualizing at 35.7%. The hold signal appears solid for a long time to come.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 5.4% since then, annualizing at 14.7%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 16.7%, annualizing at 35.8% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 9.1% since that buy signal, annualizing at 27.6%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. It is down 2.6% since the Jan 8, 2010 buy signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 14.1% since its buy signal on Sep 11, 2009, annualizing at 40.4%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 15.3% since then, annualizing at 32.7%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 37.5% since that buy signal, annualizing at 33.5%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 23.6% since the Near-term buy signal, annualizing at 31.5%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 14.8% since that bull signal. That annualizes to 32.1%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,471,979. That beats buy and hold performance of $1,614,126 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $147,781. That beats buy and hold’s $111,277 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $208,501. That beats buy and hold’s $79,334 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, 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 Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 55.6% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 266.5% (annualized at 14.6%) since the Long-term Indicant signaled bull 950-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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 included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Short-term attributes remain in support of the overall stock market bull. Reviewing the charts, you will conclude Friday’s bearish aggression is “normal.” As long as Near-term Blue Bulls remain in tact, the bull lives. If they all perish, the next step to monitor is interaction with the Near-term Bearish Green curve and they all continue moving north/northeast on the charts. Bullish Vector Pressure remains solidly in support of the Short-term Bull. Nearly all other configurations remain supportive of the bull.

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

The Near-term Indicant signaled no new bulls and no new bears.

All eleven major non-contrarian indices are up by an average of 29.2%, annualizing at 47.5%, since the NTI signaled bull an average of 32.0-weeks ago. The lone bear is the VIX and it is down 14.7% since its bear signal 6.3-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 22.7%, annualizing at 37.8%, since their bull signals an average of 31.3-weeks ago.

The lone QTI bear, VIX, is down 49.7% since its bear signal 39.1-weeks ago.

The overall stock market remains configured without bearish threats.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      QTI-Red Bull Count; Unanimity with eleven of eleven strongly supporting bullish bias.

      QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

      QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

      QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias.

      NTI-Blue Bull Count; Seven, offering solid majority support for the Near-term Bull.

      NTI-Bullish Blue Curve Trend; Eleven non-contrarian in bullish trend offering unanimous bullish support.

      NTI-Bearish Green Curve Trend - Non-bearish unanimity with eleven of eleven non-contrarian indices in bullish trend, supporting near-term non-bearishness.

      STI-Force Vector Position – None of the non-contrarian are in bearish domains offering the bear no support.

      STI-Vector Pressure Trend-A majority of seven non-contrarian moving bullishly, offering bullish support.

      Short-term Summary-Overall-Most attributes remain supportive of the Short-term Bull.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, Dow Utilities, NASDAQ100, and S&P400. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines. The other indices will most likely receive bear signals when they fall below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal. Since March 2009, the bull has responded when attributes neared bear signal justifications.

-Political Climate – Congress again barking about healthcare legislation. This is one reason for semi-passive bullish behavior. The Massachusetts’s senatorial election is of special interest. A check-and-balance vote will be fundamentally bullish.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The stock market can climb by significant magnitudes before the execution of this phenomenon).

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year at this time. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the bull will continue dominance.

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

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

The NYSE and NASDAQ Indicant Volume Indicators  continue configuring with potential robustness. Some of this bounce is due to elevating depressed holiday volume. Monday’s volume was mild on mild bullishness. Tuesday’s volume was somewhat aggressive on mild bearishness, depending on the index or funds you are interested in. You may recall this was the first data point describing potential volume support for bearish interest. Wednesday’s volume was mild on mild overall bullishness, while NASDAQ’s bull was a bit more aggressive than the other major indices. Thursday’s non-descriptive volume behavior, coupled with mild bullishness, supports continuing the theme of status quo, which is bullish. However, today’s bearish aggression was accompanied with volume aggression. That is the second time this occurred this week. There are now two data points suggesting an increase in bearish interest. Current configurations remain supportive of the bull, but do not be surprised at non-bullish behavior for a few more days.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 19.6%, annualizing at 47.7%, since their buy signals an average of 21.4-weeks ago.

The NTI is avoiding two-ETF’s. They are down 4.8% since their sell signals an average of 7.3-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 29.6% since their buy signals an average of 32.4-weeks ago. Those with hold signals are annualizing at 47.5%.

The two avoided ETF’s are down by an average of 30.2% since their sell signals an average of 24.1-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; majority of 21-offering bullish support.

NTI Blue Curve Trend; solid majority of 29-sloping north; strong bullish support.

NTI Green Curve Trend; 28-sloping north; strong majority support for non-bearishness. The bear cannot dominate with this configured attribute.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; solid majority of 28-support Quick-term bullishness. The bear cannot dominate with this attribute, either.

QTI Bullish Red Curve Trend; 29-sloping north in solid majority support for Quick-term bullishness.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority supporting Quick-term non-bearishness.

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting solid non-bearishness.

The Short-term Indicant ETF Key Attributes:

Vector Pressure Bullish Domain Occupancy; majority of 29 in bullish domains, supporting bull.

Pressure Slope Relative to Vector Pressure: 29 in bullish position.

Vector Pressure Trend; minority of 19-moving in bullish direction, supporting bull.

Short-term Summary: Attributes remain in support of the bull in spite of today’s bearish behavior.

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is down 7.4% since that sell signal. It remains solidly bearish.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 58.3% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $26.89 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 15.3% since those buy signals, annualizing at 33.3%. Its NTI Bullish Blue Curve collapsed on Dec 8, 2009. A sell signal will be released in the event NTI Green shifts to the south. That is unlikely, as the oil bull reacted violently to last December’s bear attack. It is cooling off a bit, but bullish attributes remain solid.

ETF#11-Gold and Precious Metals  is up 37.5% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $96.49 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 23.6% since then, annualizing at 31.9%.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government  received a sell signal on Dec 4, 2009 from both the Near-term and Quick-term Indicant. It is down 2.1% since that sell signal. All TLT attributes are solidly bearish.

Major ETF Events

Jan 15, 2010-Fri-Bearish aggression did not upset any Short-term attributes configured in support of the bull. Bearishness coincides with somewhat of an overbought configuration.

Jan 14, 2010-Thu-No major events on mild bullishness.

Jan 13, 2010-Wed-No major events on mild bullishness.

Jan 12, 2010-Tue-Bearishness coincides with configurations suggesting near-term cooling. None of the Short-term attributes configured in support of any sustainable bearish behavior.

Jan 11, 2010-Mon-Of minor concern with respect to an immediate horizon are maturing bullish Force Vectors. Although non-threatening to bullish bias, there is an increasing probability of non-bullishness in the face of expiring options this Friday. There is room for one or two more big bumps north, but increasingly improbable before Friday.

Current Strategy-Short-term Indicant- Jan 15, 2010-Holding remains safe.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence was endure last week, following bullish convergence last week. Two out of the last four weeks have enjoyed bullish convergence. Also, bearish convergence has been endured in two of the past four weeks. The market is sort of wishy-washy right now. Overall, though, bullish bias continues.

Indicant Conclusion

As stated the past fourteen weeks, low interest rates offer narrowed alternative investment opportunities. The argument holds that sideline cash is not smart. As long as this perception prevails, the bull cycle should continue.

It has been reported, but not verified by the Indicant, that most of the cash infusion into the stock market since the bull began last March is from hedge funds. The individual investor has not yet returned to the stock market. There remains more bullish potential for the stock market from this “fundamental” perspective.

Configurations remain supportive of the current Short-term bull. As long as the Short-term bull remains in tact, there is no threat to the Mid-term Bull.

The only fundamental threat can be traced to the “political elite.” If they continue eroding the potential of the productive, the bear will be aroused and severely so. The economy has been severely shaken by excessive intellectualism by those who think they know what is best, but those same so-called intellectuals have never produced anything of value.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

01/17/2010

Jan 10, 2010 Indicant Weekly Stock Market Report

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

This Week’s Report

Katrina, Undie Bomber, Global Warming, Ben Hogan

Henry Ford, Thomas Edison, Nicola Tesla, Earle P. Halliburton, and thousands of others created tens of thousands of millionaires. The U.S. Government, all politicians, kings, queens, etc. created none. The communist governments around the world created maximum poverty. In essence, governments are incapable of any meaningful endeavor. Their achievement is zero.

Great industrial leaders of the past employed millions and created the middle class. Governments did not create the middle class. However, the middle class by virtue of Pareto’s law is the largest class and thus offers the most votes to politicians. Politicians cater to the middle class. The only purpose of a politician catering to the middle class is so they can get the most votes. Politicians do not care about the middle class, other than their ego gratification to look down on a huge mass of humanity.

Once they get the most votes, politicians enjoy living their lives in the upper class. It is quite the scam and unbelievable the populace cannot see through the farce. The pay scale for all politicians should not exceed the average of the middle class. That would elevate the quality of people running for office. Imagine a few truck drivers or rough necks dealing with terrorists threats.

Governments are needed. An unbiased organization is needed to write tickets and collect fines from those who run red lights. Keep in mind though, not all red light runners will get tickets and only a fraction of the fines will be collected. Why is this? It is the nature of a bureaucrat.

What is a bureaucrat? The dictionary contains definitions of little interest. The more pertinent question is what is the nature of a bureaucrat? The first descriptor is one that has little ambition. They like rules. They love winning an argument by pointing to paragraph nine, section four, point-number 5 in spite of volumes that offer contrarian views. Commonsense is hardly ever a consideration.

With that, one has to wonder why the aftermath of Hurricane Katrina continues in the press. Finger pointing, bickering, etc. continue. The failures involving Hurricane Katrina can be summed up in a short sentence. “Government bureaucrats cannot perform even at a low level of mediocrity.”

So, why all the surprises at the underwear bomber, who failed at blowing up a plane over Detroit on Christmas Day? Information, identifying that individual as a security threat was available. But government bureaucrats were doing what they do best; “yawning.”

Terrorism is here to stay. It will be around hundreds of years from now. Terrorists will enjoy success from time to time as long as any culture relies on “government bureaucrats” to protect them. There is little difference from the bureaucrats in the Securities and Exchange Commission, who allowed Bernie Madoff rip off billions, and those in national security. This all traces to the nature of a bureaucrat; yawners.

People of little ambition are economic leeches. They are paid to do a job, but with very few exceptions, do it poorly. The pay for these leeches is growing, many into the six-digit salaries. This will attract more with potential ambition, but once hired into government jobs, their ambition will drop and the performance will drop even further.

To help hide the above facts, politicians work hard at conveying voodoo concepts, ranging from FDR’s New Deal to Al Gore’s Global Warming. People will jump up and down and shout in gleeful aggression when politicians are spouting their voodoo magic. That is all the politician needs; his only motive in life is ego gratification and there are enough idiots around to grant them that.

Voodoo is a very popular concept. It conveys messages to masses that without any effort, one can benefit. If you do not like someone, all you have to do is stick a needle into a voodoo doll and invoke the desired degree of punishment. That takes ten calories of effort and zero mental skills.

The market for voodoo magic has been around for thousands of years and it is huge. The biggest promoters of voodoo are politicians, TV evangelists, radio talk hosts, clerics, etc. They offer nothing in manufacturing, agriculture, and extraction and thus nothing of value. The stage is the same for all these promoters of voodoo; a podium, a microphone, voodoo spewing, and gleeful crowd of people to pump up the ego of the speaker. Voodoo marketing success strikes at the basic core of human weakness. That is, personal gain with the least amount of effort. Grave sites are dotted with plenty who did not garnish the results as conveyed by their astrological signs.

The communist controlled about one-half of the planet for about three generations. No great individuals evolved from such cultures. The communists conveyed the concept that all are equal in capability, which is the same concept conveyed by unions. Unions are a politicians favorite due to the high number of bloc votes. The weak and dumb love the concept of sameness, as it lowers exposure to their ineptness. The lower classes saw that as an opportunity to substitute their envious views of the upper classes by joining them. Unfortunately, the weak and dumb did not elevate their economic well-being. In fact, the opposite happened. Their economic position was lowered linearly with the decline of the upper economic classes.

The weak and stupid, once in majority, threaten any culture. Since the beginning, there have always been a few to recognize this fallacy and dealt with it through wars. In essence, the weak and stupid threaten their own existence when expressing their opinions of how things should be. The strong and ambitious despise the mumbo-jumbo conveyed by the weak and stupid. The survival of the weak and stupid is contrary to human nature that would be support those they envy. If they did that, there would be no problems. Pareto laws suggest only a few among the weak and stupid will rise. However, what is not so clear is that those who remain in the lower economic classes will also elevate. In essence, the living standards elevate even to the point where the so-called poor enjoy a car, roof, and a big screen TV.

What does all of this have to do with Ben Hogan? As a young boy in Ft. Worth, Texas, he slept in sand traps at the golf club where he caddied. He was poor, as only his widowed mother raised him. He could not afford the bus ticket home on many days. So, he slept in sand traps.

His sleeping at night in sand traps was not without threats. Snakes, mountain lions, and other threatening creatures roamed that golf course at night. That provided him mental toughness that led to his achieving greatness later in life. Across the globe in Russia, not too many slept in sand traps. There weren’t any in Russia, as golf was not an approved game. Russia did not produce any Ben Hogans in the 1900’s.

Sleeping facilities in Russia were not much better than sand traps. Communists did provide a roof for nearly everyone. This provision minimized adversity and thus produced weakness in their culture. No great characters, such as Ben Hogan, evolved in communist societies. Millions subsisted in communist societies and died with no great characters or high performers in anything except hockey and even with that, a U.S. amateur team beat the best of Russia in an Olympic hockey game in 1980 as even their favorite sport fell victim to sameness and less than mediocrity. After all, the communist model suggests everyone is same, except for the superior positions of their politicians. As a result, all devolved to the level of their most stupid and weakest.

Ben Hogan was a great writer. The literary world, of course, does not recognize this. If you enjoy reading the works of geniuses, read Hogan’s books. Without the adversity he endured, he would not have accumulated the tremendous insights into the details of hitting a golf ball and more importantly, how one should think. Many today have benefitted tremendously to his teachings. Indirectly, many have benefitted from his adversity, just as all of us have benefitted from the adversity endured by Nicola Tesla.

Hogan is just an example. From an industrial viewpoint, there are hundreds of others, such as Henry Ford, Alfred P. Sloan, Thomas Edison, Steven Jobs, Michael Dell, Bill Gates, Earl P. Halliburton, K.T. Norris, etc. who created more wealth than all governments and politicians combined since the beginning of recorded history. If global warming ever becomes a real problem, rest assured the solutions to that will not be addressed by government or politicians. Someone, who endured adversity, who has industrial and personal ambition, and earned his or her way all of their life and without any “do-gooder” help, will resolve the problem.

Today’s U.S. culture has many who want to help and protect the weak. Greatness is never born out of coerced helping. Hogan got some help later in life from the Leonard family. That help was from the heart; not coerced through taxation. Greatness is born from adversity in most cases. Survival and prosperity requires greatness.

“Sameness” threatens the continuation of the increasing quality of life. Politicians and governments are increasingly envious of the highly successful. If they are successful in their destruction of those they envy, rest assured the bear market will return and with gusto. However, for the time being, grass root movements are holding the economic leeches at bay and thus the bull is motivated to continue dominance.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 214 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 30.9%. That annualizes to 52.7%. The Mid-term Indicant has been signaling hold for these 212-stocks and funds for an average of 30.5-weeks.

The Mid-term Indicant is avoiding 91-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 42.2% since the Mid-term Indicant signaled sell an average of 96.8-weeks ago.

One year ago, on Jan 9, 2009, the Mid-term Indicant was holding 36-stocks and funds out of 344 tracked for an average of 41.9-weeks. They were up by an average of 52.4% (annualized at 64.9%). There were 308-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 33.6% since their respective sell signals an average of 33.9-weeks earlier.

The Mid-term Indicant was signaling hold for 171-stocks and funds of the 345-tracked two years ago on Jan 11, 2008. They were up by an average of 170.7% (annualized at 60.7%) since their respective buy signals an average of 146.1-weeks earlier. The Mid-term Indicant was avoiding 159-stocks and funds at that time. They were down an average of 15.6% since their respective sell signals an average of 15.3-weeks earlier.

There were 312-stocks and funds with hold signals on Jan 5, 2007 since their buy signals an average of 89.0-weeks earlier. They were up by an average of 100.0% (annualized at 58.4%). There were 30-avoided stocks and funds at that time. They were down by an average of 13.7% from their respective sell signals an average of 21.2-weeks earlier.

On Jan 6, 2006, the Mid-term Indicant was signaling hold for 292-stocks and funds out of 320-tracked. They were up by an average of 110.8% (annualized at 66.8%) since their buy signals an average of 86.3-weeks earlier. The Mid-term Indicant was avoiding 53-stocks and funds at that time. They were down by an average of 10.5% since their sell signals an average of 22.5-weeks earlier.

Five years ago, on Jan 7, 2005, there were 236-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 86.7% (annualized at 65.9%) since their respective buy signals an average of 61.1-weeks earlier. There were 15-avoided stocks and funds then. They were down an average of 41.1% since their respective sell signals an average of 61.1-weeks earlier.

On Jan 9, 2004, there were 288-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 63.5%, annualizing at 98.0%, since the buy signals an average of 39.4-weeks earlier. There were six-avoided stocks and funds then. They were down by an average of 29.0% since their sell signals an average of 39.4-weeks earlier.

There were 284-stocks and funds with hold signals on Jan 10, 2003. They were up by an average of 22.2%, annualizing at 76.6%, since their buy signals 15.0-weeks earlier. The ten-avoided stocks and funds were down an average of 22.2% 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.

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

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

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

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

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

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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend are all bullish. The economy is on the mend and earnings should improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset, yet. The biggest threat on the immediate horizon continues to be Congressional action. The bull prefers governmental inaction.

The bull’s duration is not known. There are no indications it is ready to expire. Vector Pressure is again rising and increasingly supportive of the bull.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also favoring bullish expectations.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed. Other previously strong companies, such as RIMM, are in trouble. The Mid-term Indicant continues avoiding RIMM.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 45.7% since its secular weekly low on October 9, 2002. The NASDAQ is up 108.0% and the S&P500 is up 47.4% since then. The small cap index, S&P600, is up 100.0% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to establish a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics supported by 100% accuracy the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 25.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 19.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 23.3% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past several months, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

The NASDAQ is down 54.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 25.0% since its similar secular peak on March 23, 2000. The Dow is down by 9.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2008 congressional and presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 3.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was up by 5.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 4.9%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 8.6% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.0% in 2005’s post election year, which contradicted historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 4.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 0.9% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 8.0% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

The NASDAQ was up 2.5% in the presidential post election year of 2009. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. The Dow finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain for the years with post election bullishness.

The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year. As the popularity of Congress and the U.S. President wane, the stock market senses a reduction in their power. That is bullish.

Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates remain configured at cyclical minimums. As stated for several months, that would normally threaten the bull, as rate hikes typically follow cyclical minimums. However, they are so low a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels. The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a solid cyclical shift to the north, supporting a solid bullish cycle. Continuation will eventually lead to inflation.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world. A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

As stated 67-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish behavior. This cycle should endure a double dip. However, the second dip may not occur until after the “heart and soul” of bullish seasonality concludes around Feb 2010.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists, communists, and creeps. If they back down and join the evil ones, then the paragraphs remain in tact.

The question remains, is public resistance to healthcare reform really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few weeks/months.

As stated the past 19-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 12.4% since then, annualizing at 53.0%. It was solidly bullish last week. The hold signal appears solid for a long time to come.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 10.0% since then, annualizing at 28.5%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 18.9%, annualizing at 42.4% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 12.0% since that buy signal, annualizing at 38.4%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the new buy signal this weekend.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 17.8% since its buy signal on Sep 11, 2009, annualizing at 53.8%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 17.3% since then, annualizing at 38.7%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 38.1% since that buy signal, annualizing at 34.6%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%.  The Near-term Indicant signaled buy on April 24, 2009. It is up 24.1% since the Near-term buy signal, annualizing at 33.2%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 15.7% since that bull signal. That annualizes to 35.4%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,496,506. That beats buy and hold performance of $1,615,425 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $148,945. That beats buy and hold’s $112,154 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $211,161. That beats buy and hold’s $80,346 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, 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 Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 55.2% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy this past year. The Short-term Bull displayed attributes of a thoroughbred and thus no opportunities were available to shorting the stock market since the sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 266.8% (annualized at 14.6%) since the Long-term Indicant signaled bull 949-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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 included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Short-term attributes remain in support of the overall stock market bull. Bullish pressure continues building.

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

The Near-term Indicant signaled no new bulls and no new bears.

All eleven major non-contrarian indices are up by an average of 30.2%, annualizing at 50.7%, since the NTI signaled bull an average of 31.0-weeks ago. The lone bear is the VIX and it is down 9.7% since its bear signal 5.3-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 23.7%, annualizing at 40.7%, since their bull signals an average of 30.3-weeks ago.

The lone QTI bear, VIX, is down 46.8% since its bear signal 38.1-weeks ago.

The overall stock market remains configured without bearish threats.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

      QTI-Red Bull Count; Unanimity with eleven of eleven strongly supporting bullish bias.

      QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

      QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

      QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias.

      NTI-Blue Bull Count; Ten, offering majority support for the Near-term Bull.

      NTI-Bullish Blue Curve Trend; Eleven non-contrarian in bullish trend offering unanimous bullish support.

      NTI-Bearish Green Curve Trend - Non-bearish unanimity with eleven of eleven non-contrarian indices in bullish trend, supporting near-term non-bearishness.

      STI-Force Vector Position – None of the non-contrarian are in bearish domains offering the bear no support.

      STI-Vector Pressure Trend-A majority of seven non-contrarian moving bullishly, offering bullish support.

      Short-term Summary-Overall-Most attributes remain supportive of the Short-term Bull.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, Dow Utilities, NASDAQ100, and S&P400. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines. The other indices will most likely receive bear signals when they fall below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal. Since March 2009, the bull has responded when attributes neared bear signal justifications.

-Political Climate – Congress again barking about healthcare legislation. This is one reason for semi-passive bullish behavior.

-Reverse Tangential Bearish Detection -  Although the current Near-term Bull has not yet expired, the following observations holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The stock market can climb by significant magnitudes before the execution of this phenomenon).

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year at this time. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the bull will continue dominance.

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

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

The NYSE and NASDAQ Indicant Volume Indicators  continue reflecting lethargic holiday trading. As stated on New Year’s Eve, light volume on bearish aggression was floor traders having some fun. Last Monday’s volume was normal, as well as a bullish stock market. Monday’s bullish aggression wiped out the bear party on New Year’s Eve. Tuesday’s volume was again normal on mixed behavior. This all supports status quo, which remains bullish. Wednesday’s volume was also normal on mixed behavior. Thus, all remains supportive of status quo; that is, bullish. Last Thursday’s volume was the same with the same conclusion; status quo, which remains bullish. Friday’s volume was mild on mild bullish behavior. All supports status quo.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 21.0%, annualizing at 53.4%, since their buy signals an average of 20.4-weeks ago.

The NTI is avoiding two-ETF’s. They are down 7.0% since their sell signals an average of 6.3-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 31.1% since their buy signals an average of 31.4-weeks ago. Those with hold signals are annualizing at 51.5%.

The two avoided ETF’s are down by an average of 31.8% since their sell signals an average of 23.1-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; strong majority of 26-offering bullish support.

NTI Blue Curve Trend; solid majority of 29-sloping north; strong bullish support.

NTI Green Curve Trend; 23-sloping north; strong majority support for non-bearishness. The bear cannot dominate with this configured attribute.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; solid majority of 29-support Quick-term bullishness. The bear cannot dominate with this attribute, either.

QTI Bullish Red Curve Trend; 29-sloping north in solid majority support for Quick-term bullishness.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority supporting Quick-term non-bearishness.

QTI Bearish Yellow Curve Trend;  29-sloping north, highlighting solid non-bearishness.

The Short-term Indicant ETF Key Attributes:

Vector Pressure Bullish Domain Occupancy; majority of 29 in bullish domains, supporting bull.

Pressure Slope Relative to Vector Pressure: 29 in bullish position.

Vector Pressure Trend; minority of 20-moving in bullish direction, supporting bull.

Short-term Summary: Attributes remain in support of the bull.

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is down 10.0% since that sell signal. It remains solidly bearish.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 59.5% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $27.33 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 17.3% since those buy signals, annualizing at 39.4%. Its NTI Bullish Blue Curve collapsed on Dec 8, 2009. A sell signal will be released in the event NTI Green shifts to the south. That is unlikely, as the oil bull has reacted violently to last December’s bear attack.

ETF#11-Gold and Precious Metals  is up 38.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $95.98 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 24.1% since then, annualizing at 33.5%.

You will notice its NTI Bullish Blue Curve collapsed on Dec 16, 2009 after being attacked by the Gold Bear. Vector Pressures remain in bullish domains and the dominant attribute that should minimize bearish damage to the Gold Bull. After this profit taking by the experts, taking money from advertising respondents, Gold should rebound, after the advertising respondents get scared and sell their losses. You should continue to hold.

You should also notice Vector Pressures were nearing bearish domains and now elevating in bullish domains. As stated last week, the bear cycle is mature, suggesting an increasing probability of bullish behavior in the next few days/weeks. You saw some of this strong bullish behavior for gold the past several days.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government  received a sell signal on Dec 4, 2009 from both the Near-term and Quick-term Indicant. It is down 4.0% since that sell signal. All TLT attributes are solidly bearish.

Major ETF Events

Jan 8, 2010-Fri-XLF was the only major ETF down today mostly due to profit taking.

Jan 7, 2010-Thu-XLF, Financials again outperformed today.

Jan 6, 2010-Wed-Although the stock market was mixed/flat today, several ETF’s set new cyclical highs, suggesting a continuation of the Short-term Bull.

Jan 5, 2010-Tue-XLF was one of the stronger bulls today.

Jan 4, 2010-Mon-VIX was not contrarian today or last Thursday.

Current Strategy-Short-term Indicant- Jan 8, 2010-Same! Jan 7, 2010-Same! Jan 6, 2010-Same as the past few days. Jan 5, 2010-There are no bearish threats. Holding remains safe. Jan 4, 2010 - Holding remains safe.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is down 6.8% since that sell signal. Its configuration does not support potential for its short-term bullishness in spite of today’s bullish behavior.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 58.1% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $27.78 and still falling.

ETF#03-Natural Resources   - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 10.9% since those buy signals, annualizing at 26.1%. Its NTI Bullish Blue Curve collapsed on Dec 8, 2009. A sell signal will be released in the event NTI Green shifts to the south.

ETF#11-Gold and Precious Metals  is up 33.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 30.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $95.46 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 19.6% since then, annualizing at 28.1%.

You will notice its NTI Bullish Blue Curve collapsed on Dec 16, 2009 after being attacked by the Gold Bear. Vector Pressures remain in bullish domains and the dominant attribute that should minimize bearish damage to the Gold Bull. After this profit taking by the experts, taking money from advertising respondents, Gold should rebound, after the advertising respondents get scared and sell their losses. You should continue to hold.

You should also notice Vector Pressures are nearing bearish domains. The cycle is mature, suggesting an increasing probability of bullish behavior in the next few days/weeks.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding.  The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government  received a sell signal on Dec 4, 2009 from both the Near-term and Quick-term Indicant. It is down 3.4% since that sell signal. All TLT attributes are solidly bearish. Do not be surprised at increased bearishness if and when it crosses above NTI Green.

Major ETF Events

Dec 31, 2009-Thu-TLT was bearish and not non-contrarian. The VIX index was flat on today’s stock market bearish aggression, suggesting phoniness in the stock market’s bearish behavior.

Dec 30, 2009-Wed-TLT was bullish without technical merit. It appears to be a bullish spurt with short-duration potential in its near-term bear cycle.

Dec 29, 2009-Tue-Omission of volatility on light volume supports continuation of bullish bias.

Dec 28, 2009-Mon-Light holiday volume has not been volatile.

Current Strategy-Short-term Indicant- Dec 31, 2009-Same, in spite of today’s bearish aggression. Dec 30, 2009-Same! Dec 29, 2009-Same as yesterday. A resting bull builds energy for future expressions. Dec 28, 2009-Bull remains solid. Holding remains safe.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bullish convergence was enjoyed last week, following bearish convergence in the prior week. Two out of the last three weeks have been converging bullishly. That supports continuation of same.

Indicant Conclusion

As stated the past thirteen weeks, low interest rates offer narrowed alternative investment opportunities. The argument holds that sideline cash is not smart. As long as this perception prevails, the bull cycle should continue.

It has been reported, but not verified by the Indicant, that most of the cash infusion into the stock market since the bull began last March is from hedge funds. The individual investor has not yet returned to the stock market. There remains more bullish potential for the stock market from this “fundamental” perspective.

Configurations remain supportive of the current Short-term bull. As long as the Short-term bull remains in tact, there is no threat to the Mid-term Bull.

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

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

The daily updates are on the following link.