Jul 2008 Indicant Weekly Stock Market Report

July 27, 2008 Indicant Weekly Stock Market Report

Volume 07, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

An Aberration

The year 1982 is a threshold one when it comes to the study of bull markets and the energy industry. Fortunes were made in the 1970’s for those who were invested in energy. Many of those fortunes were lost in the 1980’s when the petroleum industry’s trend shifted south. Oil prices peaked in late 1981 at around $36/barrel.

By March 1982, oil prices fell to around $27/barrel. That dip in prices was the first smell of a horrendous petroleum industry recession that persisted for nearly twenty years. The unemployment rate in Houston was over 30%, approaching the national average during the Great Depression of the 1930’s. Real estate prices in many parts of Texas plummeted by over 50% by 1983.

By 1985, oil prices had plummeted to around $9/barrel. U.S. Rotary Rig count fell to levels lower than that of the 1920’s. In the peak month of December 1981, U.S. Rotary Rig count was nearly 5,000. By 1985, it was less than five hundred. That would be like N.A. automotive production levels falling from 15-million cars to less than one million. It would be similar to Google only being able to sell advertising only to Northern CA businesses.

The 1980’s were difficult years for those who were attached to the petroleum industry. There was no help from the government, as it should be. People lost their homes and some even more than that. The suicide rate was up in those years. Government interference with the current crisis will lead to an increase in the misery rate. Buying votes by the politicians could backfire, as the majority may understand the immorality of providing “unearned” benefits. The salient term in the previous sentence is “may.” That will only be answerable on Election Day. Although the stock market may find it favorable for governmental help on a short-term basis, future stock market bullish slopes will be muted from that effort. The bearish trends in the future will be more southerly and longer lasting as “real wealth” will be diminished by such interferences. Reducing risks, whether perceived or real, will certainly dampen potential reward. In essence, the species weakens and its potential depressed.

During the early years of the Petroleum Industry’s depression of the 1980’s, considerable literature was published announcing the turnaround. Each little uptick in oil prices was justification for those erroneous claims by the pundits.

Now, we are hearing the same thing. Oil prices are falling. The threat of inflation is evaporating. All is going to be well. The stock market is ready to turnaround. Small movements tend to invigorate those keen on chest-pounding air-time. The pundits are usually wrong.

History repeats itself sometimes. The government bailed out Chrysler in the late 1970’s saving hundreds of thousands of jobs. Chrysler’s product/market mix was gas guzzling cars the last time oil prices hit record highs. The rising price of oil in the 1970’s dampened the demand for their products and losses were incurred. Since then the N.A. automobile industry has lost more job than the numbers saved in the 1979 bailout. In the twenty-eight years since that bailout their product quality remained poor. Foreign companies have beaten them. One even bought them and took a financial beating for doing so. The only solution for mature stupidity is extinction. Some may argue for training, but that was tried in the 1990’s and it failed.

So, what is the problem now with Chrysler? It is identical to that of 1979. They have the wrong product/market mix. This time around there should be no bailout. Allowing natural market forces to work and facilitating Chrysler’s extinction will allow others to have opportunities to better manage the remaining assets. The NA automobile industry would have been better off allowing its failure in 1979. Over a long period, jobs were not saved. The only retaining element was management stupidity.

In the event one of the major automakers collapses, the stock market will most likely endure a significant bearish jolt from that. The N.A. Big Three generally operate behind the demand curve. If the demand curve continues to plummet, there is not room for three of the old line participants; GM, Ford, and Chrysler. One has to go and when it does, the industry will only strengthen. Applying socialistic solutions will only worsen the industry. It will eventually result in quality deterioration from great companies, such as Toyota, Honda, etc.

The stock market’s trend remains bearish and the oil price trend remains bullish. Neither are near trend reversal. Fundamentally, the drop in oil prices may be economically substantive. The problem with that line of thinking is such economic behavior must be recessionary. That suggests a decline in corporate earnings and thus a bearish stock market. Corporate earnings are the primary thruster of stock market behavior.

However, on a longer-term basis, the recent decline in oil prices is most likely an aberration. Americans are conserving, as the $4.00/gallon price of gas was enough to stimulate a reduction in demand. The worldwide economy is slowing, which is also introducing a demand depressant. This economic slowness is not limited strictly to the excessive consumption of personal disposal income at the gas pump. Much remains related to the subprime lending crisis and the ineptness and incompetence of the financial industry. Rising oil prices have been a mere part of the problem and not the sole contributor to economic slowness.

Rest assured, once the economies turnaround, the laws of supply and demand will prevail, as they are now doing. Those one billion Chinese are going to resume consumption. If the supply chain of oil remains relatively static, do not be surprised $200/barrel and higher.

State coffers are shrinking from a sharp reduction in sales tax revenue. Reduced sales tax means reduced consumer spending. Reduced consumer spending means reduced volume in the retail sector. That always eventually cascades to recessionary behavior in other sectors. Although recent capital spending reports were encouraging for those desiring bullish behavior, keep in mind of that being a potential spurt. Similar reports were published in January 2008 and the stock market is down by double-digit amounts since then.

All trends are surrounded by bullish and bearish cycles. Each cycle’s magnitude and breadth vary. Until enough cycles no longer interact with the trend, it continues with its underlying directional intensity. Such cyclical departures from trend have not yet occurred. Therefore, the trends remain in tact. As the old saying goes, do not fight the trend. The trend for the price of a barrel of oil remains up and the stock market’s trend remains down. Ignore the pundit’s chest pounding at each cyclical aberration. Wait for the trend shift for those who prefer riding trends.

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

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

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

The Mid-term Indicant generated nine buy signals and no sell signals. There have been 104-buy signals since February 1, 2008. There have been 335-sell signals since October 26, 2007.

These buy signals were entirely technical. The prices rose above bullish red. The Mid-term Indicant with very few exceptions will signal buy for such stocks. Even during bear markets, some of these will continue to rise, while most will receive a sell signal after the expiration of the spurt that propelled them above red.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 82 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 241.3%. That annualizes to 67.7%. The Mid-term Indicant has been signaling hold for these 82-stocks and funds for an average of 185.3-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 254-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 13.0% since the Mid-term Indicant signaled sell an average of 22.3-weeks ago.

One year ago, on July 27, 2007, the Mid-term Indicant was holding 283-stocks and funds out of the 345 tracked for an average of 117.0-weeks. They were up by an average of 140.1% (annualized at 62.2%). There were 26-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 18.9% since their respective sell signals an average of 31.7-weeks earlier.

The Mid-term Indicant was signaling hold for 171-stocks and funds of the 345-tracked two years ago on July 28, 2006. They were up by an average of 151.8% (annualized at 66.3%) since their respective buy signals an average of 119.0-weeks earlier. The Mid-term Indicant was avoiding 168-stocks and funds at that time. They were down an average of 4.2% since their respective sell signals an average of 15.0-weeks earlier.

There were 224-stocks and funds with hold signals on July 29, 2005 since their buy signals an average of 89.1-weeks earlier. They were up by an average of 105.0% (annualized at 61.3%). There were 91-avoided stocks and funds at that time. They were down by an average of 16.5% from their respective sell signals an average of 18.9-weeks earlier.

On July 23, 2004, the Mid-term Indicant was signaling hold for 166-stocks and funds out of 296-tracked. They were up by an average of 80.7% (annualized at 67.5%) since their buy signals an average of 62.2-weeks earlier. The Mid-term Indicant was avoiding 83-stocks and funds at that time. They were down by an average of 26.3% since their sell signals an average of 41.8-weeks earlier.

Five years ago, on July 26, 2003, there were 265-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 46.2% (annualized at 92.9%) since their respective buy signals an average of 25.9-weeks earlier. There were only 16-avoided stocks and funds then. They were down an average of 29.1% since their respective sell signals an average of 30.2-weeks earlier.

On July 26, 2002, there were only 24-stocks and funds with hold signals from the listing of 294-tracked by the Mid-term Indicant at that time. They were up 54.0%, annualizing at 57.3%. There were 255-avoided stocks and funds then. They were down by an average of 29.0%.

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

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

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

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

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

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

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

The major indices remain with bearish attributes. The Dow Utilities continued with its expected continuation of bearish behavior with a 2.9% drop last week. The major indices were mixed last week with some bullish and some bearish.

A few stocks crossed above their bullish red curves. Some of them will amount to spurts, but a few continue to rise even during bear markets. Some companies do an outstanding job in aligning spending to revenue and others may have product/market mixes that are immune to economic recession. Regardless of the cause, the Mid-term Indicant with very few exceptions always signals buy when a stock crosses above its bullish red curve. None of the Mutual Funds that are currently avoided enjoyed breaching bullish red last week.

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 56.1% since its secular low on October 9, 2002. The NASDAQ is up 107.4% and the S&P500 is up 61.9% since then. The small cap index, S&P600, is up 116.7%. All major indices are configured with bearish bias.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 19.7% since its last closing peak on Oct 9, 2007. The NASDAQ is down 19.2% since its last peak on Oct 31, 2007. The S&P600 is down 16.9% since its last closing peak value on Jul 19, 2007.

The S&P600 was the most bullish last week with a 1.8%-gain. The previous weeks biggest gainer was the Dow Transports and as expected much of that gain was wiped out last week. Three of the ten major indices were bullish last week, while six were bearish and the S&P100 was flat. At any rate, this mixed behavior suggests market indecisiveness and certainly not an attribute consistent with market turnarounds.

The NASDAQ is down 54.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.7% since its similar secular peak on March 23, 2000. The Dow is down by 3.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. The Dow had been expressing no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to non-bullish influences and recently to bearish influences. The Dow is now into bearish territory since March 9, 2000, along with the other major market indices. The NASDAQ needs to climb 118.5% to achieve a new record high. As stated the past several years in this report, do not be surprised if this occurs after the year, 2025.

The Dow is down 14.3% so far this year. The NASDAQ is down 12.9% this year. These conditions are incongruent with historical standards. This year should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle, ending seven weeks ago, had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. Recent bearishness is a testament to that. Summer is now here and with full bearish support. Some unbelievable economic fundamentals are also wreaking havoc in addition to this seasonal behavior.

The NASDAQ year-to-date performance was bearish by 19.7% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 23.3%. This year is again configuring with 2001 similarity.

The NASDAQ was down by 36.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 29.6%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 7.7%. It was down by 0.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was down by 6.0% and up by 9.6% at this time last year.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees did their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers, who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. However, rising commodity prices could dampen that potential bullish effect. (July 27-recent bearishness in commodities is a mere spurt).

May 2, 2008 comment regarding the previous paragraph. The Fed’s “mild” interest rate adjustment to the south indeed strengthened the dollar. Keep in mind the U.S. is a net importer. This increases the supply of dollars abroad. As long as the U.S. is a net importer, there will be a continuing increase in supply of dollars, which will continuously keep a “real economic” lid on its value.

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

As you can see, most of those gains from August 2006 have been wiped-out by the newly evolving bearish trend, originating in October 2007 and confirmed on January 4, 2008.

A Short-term Indicant’s Tangential Model identified a bearish bias on June 11, 2008. Since then, the Dow is down 5.9% and the NASDAQ down 3.5%.

The Quick-term Indicant signaled sell for ETF’s that correlate with blue chips and large caps several weeks ago in anticipation of increasing bearish bias. It signaled sell for all non-contrarian ETF’s to major market indices in anticipation of increased bearishness six weeks ago. This could be reversed, quickly, depending on economic fundamental in addition to technical data. The daily stock market report will keep you informed.

As stated last week, the presidential pre-election year of 2007 was below average (+10.5%) with the Dow gaining 6.4%. This was the smallest gain since Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in October of that year. These seasonal standards appear to be losing their influence due to the phenomenon of commonality.

The CPI and PPI were published last week. The reaction is sequential. The theory holds this announcement leads to anticipated interest rate hikes, which will strengthen the dollar. This will lower the price of oil, which is believed to minimize inflationary threats. After awhile, this fictional thinking will wane and the stock market will react appropriately to the CPI and PPI; that is bearish.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to increasing bearish influences for the longer-term holdings. You should set them higher for any recent non-contrarian buys, such as 5% or enough to protect reasonable gains.

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

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

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

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

Stock and Fund Update

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

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue configuring an unfavorable reversal. As stated the past few weeks in the weekly stock market report, the Fed will attempt to bias economic support until the election. After the election, the bias should shift drastically to fending off inflation.

As stated the past three weeks, the U.S. Dollar continues with stabilizing configurations with a mild bias toward strengthening. The underlying theme is the necessity to strengthen it to help soften the inflationary threat from its weakness. There appears to be a cyclical strengthening shift underway. Unfortunately, from an inflationary perspective, the weakening trend remains solidly in place.

Commodities have been aggressively bearish the past two weeks. Oil prices fell sharply, bringing other commodities with it. This is encouraging from an inflationary viewpoint but equally discerning from an economic view. Demand projections obviously are less than supply capacity, which suggests sour economic conditions.

As stated the past three weeks, the stock market will eventually respond bullishly to the idea the increasing number of capitalists in spite of the immediate inflationary threats imposed by the short-term inequality between supply and demand. Capitalist delivered all meaningful solutions to real problems since the beginning of commerce. No politician, dictator, or bureaucrat of any type has ever provided any solution to any economic problem. They have created many. There is one exception to this; Admiral Rickover of the U.S. Navy contributed significantly to the quality of products and thus to the quality of life for many around the world.

As stated last week, from a long-term perspective, even the in the face of a bearish stock market and short-term problems, it is comforting to know that there are now billions of potential solutions to all problems, as opposed to just a few hundred million.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 328.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 44.5%. It moved to the north in 57 of the past 98-weeks – a little over one-half the time. It has been bullish in 28 of the last 49-weeks. This fund has been bullish in 13 of the last 24-weeks. It was aggressively bearish the past two weeks.

Fidelity Gold, Fund #28, is up 7.3% since its buy signal on September 7, 2007. It is annualized at 8.2% since that buy signal. This fund was solidly bullish in 12 of the past 24-weeks. It was also solidly bearish the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 373.0% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 61.9%. This fund has been bullish in 10 of the last 22-weeks. It has been bearish the past four weeks, following five consecutive weeks of solid bullish behavior.

Vanguard Energy #18, VGENX, is up 229.2% (annualized at 42.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 231.5% (annualized at 49.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 176.8% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 35.3%.

Energy related funds were bearish the past four weeks, which conflicts with current fundamental requirements of bullishness. This bearishness is an adjustment from the anticipated $170-oil to a smaller number due to declining oil prices.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate. However, keep in mind OPEC can very quickly reverse this trend. They have done it before and remain capable of doing it again.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 109.3% since then. It is annualized at 36.4%. This fund has been bullish in 33 of the past 48-weeks. It has been bullish in 14 of the last 23-weeks. It was bearish the past two weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 242.4.7% (annualized at 44.8%). This fund has been bearish in 17 of the past 27-weeks and in six of the past seven weeks.

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 March 20, 2008 for all ten major indices. However, since then all major indices are now Mid-term Indicant bears.

The ten indices are down by an average of 3.7% since the Mid-term Indicant signaled bear an average of 5.1-weeks ago.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,661,279

That beats buy and hold performance of $1,729,909 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,217. That beats buy and hold’s $123,201 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $227,792. That beats buy and hold’s $80,115 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,109.3%, 46.3%, and 184.3%, respectively, for these indices as of this past week.

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

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.

Note from April 5, 2008: Enron will be removed from Indicant tracking later this year. It was removed from the Dow Utility Index several years ago. It is now a penny stock, but the Indicant kept tracking it at the request of members. Its low cost nature is not friendly to Mid-term Indicant assessment due to small price changes and corresponding large percentage impact. The Mid-term Indicant is not designed for penny stocks. Although recovery is always possible, this stock has become too busy to track. This position will be re-accessed based on member feedback as the year progresses.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009.

Uncharacteristically, the Mid-term Indicant again signaled buy for this fund five weeks ago. The Mid-term Indicant is influenced, in part, by seasonal and historical influences. This year should be bullish, based on historical standards, which would be bearish for this fund. However, the Tangential model is gaining influence and thus the reason for the buy signal. The Tangential model is bearishly biased now and will be more tolerate of fluttering behavior than the buy and sell signals earlier this year.

This fund is up 7.7% since the buy signal last weekend, annualizing at 78.7%.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 292.8% (annualized at 17.4%) since the Long-term Indicant signaled bull 873-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty. One non-contrarian red bull; Non-bullish.

Quick-term Yellow Bears/Threats: Twenty-four of thirty. Non-bearish support non-existent with majority yellow bears.

Quick-term Non-Bearishness: QTI differential is bearish 11.5%. Solid bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 8.6%; solid bearish support.

Force Vectors: A new bearish cycle is unfolding. Some are coupling above Vector Pressure, which could encourage the bull’s spurt potential, but certainly not sustainable at this time.

Vector Pressure: Three in bullish domains, offering little resistance to bearish aggression and no support for any sustainable bullish ambition.

STI Tangential Support: All major indices are without tangential protection. Bear can roam at free will.

Immediate Tactics: Some non-contrarian ETF’s justify buying due to non-participation in bearish cycle. So far, only one; ETF#10-IBB, which has a hold signal. Configurations are not consistent with ambitious gains, though, but it has been aggressively bullish the past five days.

Current Quick-term Bias: Bearish.

Overall Market Status: Solid bearish bias.

Profit Potential from Naked Options: Volatility is more common during bearish cycles, which is the current configuration.

Volume: Losing lethargy, which is inconsistent with seasonal behavior and thus even more bearish. The Indicant Volume Indicator cycle is robust and in solid support of bearish ambition.

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

The Short-term Indicant signaled bear on May 20, 2008 for the Dow Jones Industrial Average and on May 21, 2008, for the NASDAQ. The Dow is down 11.4% and the NASDAQ is down 5.6% since their respective bear signals. As stated the past several weeks, the bear has moved from having a tactical advantage to a position of dominance. Any bullish expressions should be viewed as contrarian spurt behavior in the face of underlying bearish trend and cycle.

Bias continues to favor the bear.

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

As stated daily since the June 25, 2008-Wednesday daily stock market report, both Indicant Volume Indicators remain configured with robustness and in support of bearish bias. There are no obviating attributes to suggest the bear is expiring, although some attributes favor an interest in a bullish spurt; no sustainability. On the contrary, volume has been aggressive, which does not correlate with seasonal factors, suggesting an enhanced bearish bias. Bullish expressions have been accompanied with less volume than recent bearish aggressions. The bias remains in favor of the bear.

Keep in mind stock price movement is influenced, in part, by the supply/demand ratio. Sometimes this is more influential than corporate or economic fundamentals. Do not be surprised at contrarian market behavior to uplifting commentary by pundits and politicians. The supply demand factor will be more influential on stock prices until well past improved fundamentals.

To view the STI-Tangential Protection for ten major indices, click here.

Configurations remain in support of the bear. As previously stated there is no tangential support. Most are yellow bears. There is no reference point to stop the bear’s aggression. The major indices should continue along a bearish cycle until such time the bear has left no survivors. You will notice, the bear finally unleashed its wrath against the Dow Utilities. This is positioning the market closer to a potential turnaround. The salient point is potential and none of the Quick-term or Short-term attributes are yet suggesting such configurations.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for six-ETF’s. They are up by an average of 33.9% (annualized at 13.6%) since their respective buy signals an average of 128.1-weeks ago. Although there were no sell signals, the SQI is avoiding 25-ETF’s at this time. They are down by an average of 8.3% since their sell signals an average of 9.0-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for six-ETF’s. They are up an average of 217.0% (annualized 87.2%) since the STI signaled, buy, an average of 127.9-weeks ago. Although there were no sell signals, there are 25-ETF’s with avoid signals. They are down by an average of 8.6% since their sell signals an average of 9.4-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for five-ETF’s. They are up by an average of 44.7% (annualized at 42.4%) since the QTI signaled buy an average of 54.1-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 26-ETF’s. They are down by an average of 8.2% since their sell signals an average of 7.6-weeks ago.

Current Strategy – As stated the past several weeks, all major indices do not have tangential support. Some are yellow bears, while bullish behavior has shifted some back above yellow. There is no consensus on directional intensity, which favors the bear. Any bullish expressions should be viewed as contrarian bullish spurts in the face of bearish trend and bearish cyclicality.

Configurations remain bearishly biased.

Conflicts Between the Short-term and Quick-term Indicants

A solid bearish bias originated on Thursday, June 12, 2008, with all major indices without tangential support. From all three Indicant models, there are a combined 14-hold signals and 76-avoid signals for ETF’s and thus with a significant bearish bias.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-four of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.3%. This is without non-bearish support and with bearish support. Bearish yellow has been acting as a ceiling to bullish ambition the past few days. That is bearish. Until that ceiling is cracked, do not expect significant and sustainable bullishness.

One of the ETF’s is above its bullish red curve. This attribute remains solidly non-bullish. All thirty ETF average positions are below bullish red by an average of 8.3%. which is non-bullish.

The lone red bull is ETF#10-IBB-Health. It is also non-contrarian. It has been immune to the bear attack. It has been bullish for seven consecutive days. It is up 6.8% since the Quick-term Indicant signaled buy on July 8, 2008.

The QTI differential is bearish by 11.5%. This is the thirty-second consecutive trading day of a bearish reading. It is a long way from a bullish reading.

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

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

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 18.9%. Double digit variances from breakout contact for 140-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. Contact in 15-of the last 25-trading days is bearish. Contact density has relaxed with zero breakdown contact the past seven trading days. Bearish density increased significantly last week, but quiet since then. This recent quietness is not yet relevant, but will keep track in the event it does.

The average distance between the price and breakdown is 10.3%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 13 of the last 21-trading days. Double digits provide non-bearish relief. However, as we have seen in the past, the bear has been angered by this such disruptions. As stated the past several days, configurations are forming similar to those in the early stages of the 2001-02 bear market.

The breakout/breakdown differential is bearish by 8.6%. This is solidly supporting bearish ambition.

ETF Force Vector Configurations

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

Twenty-one Force Vectors are in bullish domains. They equally are not supportive of bullish or bearish ambition. However, as stated last Thursday, they are inflecting. This suggests some bullish interest, but the bear remains strong enough to defeat such interest.

Force Vector cycle is again directionally bearish. Its recent bullish cycle was very robust and supportive of renewed bullish interest. However, Vector Pressure remains positioned in support of the bear.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were three put option buy signals after Friday’s close. That brings the total to five put option buy signals in the past two trading days. These are being generated by virtue of the newly forming bearish cycle by the Force Vector. Some are again approaching bearish domains. There is a 68% of bearish behavior two days after such domain crossings.

Three of the thirty ETF Vector Pressures are in bullish domains. This minority position is not supportive of any bullish inclination.

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

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

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008.

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

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled buy for QID on June 11, 2008. It is up by 7.9% since then, annualizing at 64.3%. Its southerly moving Force Vector is somewhat discerning, but its Vector Pressure remains well positioned inside bullish domains. Keep in mind QID’s behavior is inversely exponential to market behavior. It remains somewhat neutral but has some building propensity for bullish aggression.

A low end stop loss of $42.50 should protect it from wild fluttering. You should be able to elevate stop losses the next few days to ensure maximum profitability, provided Force Vectors do not misbehave. This fund has been dormant with respect to directional intensity for several days.

Other Contrarian Funds

ETF#03-Natural Resources - was up nearly 30.0% since the Quick-term Indicant signaled buy on Oct 25, 2006. The Quick-term Indicant signaled yesterday, Thursday, July 24, 2008. It is a yellow bear with negative Vector Pressure; something to not argue with. Fundamentally, this is most likely an aberration. As soon as the market determines the magnitude of recessionary threats, it should resume bullish direction. A $20-drop in oil prices to around $120 is a mere aberration. Also, the price of oil at $120 is still not cheap.

ETF#11-Gold and Precious Metals is up 110.6% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 36.6%. It has been bearish in four of the past seven days with mild bullishness the past two days. It lost Red Bull status last Tuesday, but nowhere near a sell signal. As stated last week, Vector Pressure is aggressively in bullish domains and remains in solid support of its bullish cycle and trend.

ETF#14-Long Government received a buy signal on July 15, 2008. It is down 3.0% since then. Its Force Vector is now moving north, favoring a mild bullish bias. It is configured to support increasing bullishness with a “flight to safety paradigm; at least in the early stages of additional stock market bearish aggression.”

This fund has some strategic risk. The dollar’s weakness and inflationary threats will eventually stimulate increased interest rates. With that, this fund, fundamentally, would endure bearish behavior. The contrarian movement to that fundamental prognosis would be high demand for safety purposes, depending on the nature of economic behavior. Do not be surprised at jawboning the dollar up, but the U.S. remains a net-importer and thus the continual downward pressure on the dollar, which fundamentally supports long-term upward pressure on interest rates.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

The market endured bearish divergence last week. It would have been bearish convergent if the S&P600, NASDAQ, and NASDAQ100 had been bearish. Energy and commodities were aggressively bearish, while general equities were also bearish with some mixed behavior. Some large cap stocks were bullish.

Indicant Conclusion

The bear has now completed its process of inflicting it influence on the pertinent sectors. Now, we are waiting for all major indices to find a final nesting place in their support of the bear. The bull cannot dominate until that happens.

Keep up with the daily stock market report as the Quick-term attributes can shift quickly. As stated the past few weeks, they continue favoring the bear.

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

07/27/08

July 20, 2008 Indicant Weekly Stock Market Report

Volume 07, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Overusing “Bottom”

This week, we read quite a bit; something we do not often do. For every word of “substance” one reads, one has to grapple through a million other “hype” words. If the Indicant garnished a nickel for every time "bottom" was mentioned since last February, we would have to find another planet to store them all.

No one knows when or where the bottom will be achieved. If they do, they are not going to tell us. They will, quietly and privately, make a lot of money.

Most pundits entertain, as opposed to “informing.” That is because most people like being entertained, as opposed to being informed. That is why 20% of the world’s population owns 80% of the wealth. The 20% rich work at getting substantive information, while the other 80% poorer souls seek entertainment. There is no solution to that problem, if indeed it is a problem.

Over the past few months, on hundreds of occasions with spotty undisciplined happenstance encounters with the general media from television to radio, ETF#05-XLF-Financial bottomed in February, March, April, May, June, and now July. That “entertainment” made those 80% poor souls poorer, if they executed the advice of the pundits.

Here is one thing everyone should know about the media. Most have BA degrees in journalism. That means they can only report information in artsy form; that is, incomplete. They also have been trained to make headlines catchy. That increases sells, which is the primary purpose of any media, including yours truly. The problem is how one spends time; 80% on hype and 20% on substance will not be informative, but it will certainly garnish more readers and thus more revenue. Job done! The Indicant does not advertise on its website. This, by default, keeps us from attracting more advertisers (with hype) and makes us work on “informing” members.

Last week’s report stated, “until, the Dow Utilities joins the bear’s party, the bear will only become more tenacious. It will delight when there are no survivors in terms of major indices. Only then, the bear may become complacent.”

Some of you recall how the Dow Utilities had been expressing obstinate contrarian behavior to the bear’s ambition. Well, it finally succumbed last week. It was down, while most of the other indices enjoyed some bullish behavior. That mild bullish behavior induced heightened pundit chatter, regarding “the bottom.”

The Dow Utilities, along with a few other major indices, needs to be at a cyclical minimum value before the bear expires. The bear will be victorious once all of the bull’s soldiers are pushed to a cyclical minimum.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJtu.htm

Clicking the above link will show you the Dow Transports bullish behavior last week. Scrolling down will reveal the Dow Utilities bearish behavior. The Dow Transports was aggressively bullish last week, as well as some of the other indices.

Declining oil prices influenced the rise in Transports in addition to the overall market. Although encouraging from an economic viewpoint, the price of oil remains very high. Fundamentally, nothing significant has changed the long-term trend in oil prices.

The PPI is increasing at an alarming rate. The CPI was unfavorable to desired bullish behavior last month. Fundamentally, the stock market will not become dynamically bullish with inflationary pressures at recent levels, if left unchecked.

The Fed will be somewhat passive on attacking inflation ahead of the general election in the U.S. You will notice significant Fed aggression after the election. That will dampen economic growth and corresponding corporate profitability. Although this impending Fed action will strengthen the dollar next year along with economic slowness, it will have little impact on other countries. It is possible for their economies grow while the U.S. is in recession. Although a U.S. recession dampens worldwide economic growth, the U.S. is not the only economy. The U.S. is a nation that produces less and consumes more. At some point the consumption will be brought back into parity with production. If the production continues to shrivel, the quality of life will accompany it. Societies, who can manufacture, extract, and grow crop, has always ruled and enjoyed economic robustness.

If you hear someone saying, “the market has bottomed” in the next few weeks and months, you will be better off by switching to King of the Hill or an old episode of I Love Lucy. They are more entertaining.

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

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

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

The Mid-term Indicant generated three buy signals and no sell signals. There have been 95-buy signals since February 1, 2008. There have been 335-sell signals since October 26, 2007.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 79 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 255.1%. That annualizes to 70.6%. The Mid-term Indicant has been signaling hold for these 79-stocks and funds for an average of 187.9-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 263-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 13.1% since the Mid-term Indicant signaled sell an average of 20.6-weeks ago.

One year ago, on July 20, 2007, the Mid-term Indicant was holding 307-stocks and funds out of the 345 tracked for an average of 113.1-weeks. They were up by an average of 144.8% (annualized at 66.6%). There were 36-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 6.3% since their respective sell signals an average of 29.3-weeks earlier.

The Mid-term Indicant was signaling hold for 168-stocks and funds of the 345-tracked two years ago on July 21, 2006. They were up by an average of 159.3% (annualized at 66.4%) since their respective buy signals an average of 124.7-weeks earlier. The Mid-term Indicant was avoiding 164-stocks and funds at that time. They were down an average of 7.4% since their respective sell signals an average of 15.1-weeks earlier.

There were 222-stocks and funds with hold signals on July 22, 2005 since their buy signals an average of 88.7-weeks earlier. They were up by an average of 103.6% (annualized at 60.7%). There were 95-avoided stocks and funds at that time. They were down by an average of 6.0% from their respective sell signals an average of 16.5-weeks earlier.

On July 16, 2004, the Mid-term Indicant was signaling hold for 212-stocks and funds out of 296-tracked. They were up by an average of 69.0% (annualized at 79.1%) since their buy signals an average of 59.6-weeks earlier. The Mid-term Indicant was avoiding 50-stocks and funds at that time. They were down by an average of 20.2% since their sell signals an average of 45.0-weeks earlier.

Five years ago, on July 19, 2003, there were 277-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 44.4% (annualized at 93.2%) since their respective buy signals an average of 29.6-weeks earlier. There were only 13-avoided stocks and funds then. They were down an average of 28.1% since their respective sell signals an average of 29.6-weeks earlier.

On July 19, 2002, there were only 39-stocks and funds with hold signals from the listing of 294-tracked by the Mid-term Indicant at that time. They were up 38.4%, annualizing at 45.0%. There were 241-avoided stocks and funds then. They were down by an average of 27.7%.

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

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

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

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

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

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

As stated the past few weeks, all major indices are without tangential protection. As stated last week, “the Dow Utilities is the only remaining index successfully resisting bearish ambition. Although it has been a mild meandering bear the past several weeks, its obstinacy is incongruent with the other major market indices. The bear will not complete its mission until this index falls. The protection of dividends should not be justification for its resistance. However, most of its constituents continue with hold signals until such time this index succumbs.”

The Dow Utilities fell significantly last week. The trip south is not over. The other indices were somewhat bullish, but do not fight the trend.

Some stocks with avoid signals rebounded last week with double-digit gains. Most of them continued to receive “avoid” signals, as there is a high probability their bullish behavior is an aberration.

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 57.8% since its secular low on October 9, 2002. The NASDAQ is up 104.9% and the S&P500 is up 62.3% since then. The small cap index, S&P600, is up 112.9%. All major indices are configured with bearish bias.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 18.8% since its last closing peak on Oct 9, 2007. The NASDAQ is down 20.2% since its last peak on Oct 31, 2007. The S&P600 is down 18.4% since its last closing peak value on Jul 19, 2007. The Dow Transports was the most bullish last week with a 4.8%-gain. Do not be surprised if that gain is wiped out in the next few weeks. The Dow Utilities was the only bearish major index with a 4.7%-loss.

The NASDAQ is down 54.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.5% since its similar secular peak on March 23, 2000. The Dow is down by 1.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. The Dow had been expressing no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to non-bullish influences and recently to bearish influences. The NASDAQ needs to climb 121.2% to achieve a new record high. As stated the past several years in this report, do not be surprised if this occurs after the year, 2025.

The Dow is down 13.3% so far this year. The NASDAQ is down 13.9% this year. These conditions are incongruent with historical standards. This year should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle, ending six weeks ago, had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. Recent bearishness is a testament to that. Summer is now here and with full bearish support. Some unbelievable economic fundamentals are also wreaking havoc in addition to this seasonal behavior.

The NASDAQ year-to-date performance was bearish by 18.4% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 23.3%. This year is again configuring with 2001 similarity.

The NASDAQ was down by 30.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 27.9%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 6.0% in 2004. It was down by 1.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was down by 7.3% and up by 11.8% at this time last year.

As previously stated, so far this year, the DOW30 is down 13.3% and the NASDAQ down 13.9%.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers, who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. However, rising commodity prices could dampen that potential bullish effect.

As you can see, most of those gains from August 2006 have been wiped-out by the newly evolving bearish trend, originating in October 2007 and confirmed on January 4, 2008.

The Quick-term Indicant signaled sell for ETF’s that correlate with blue chips and large caps several weeks ago in anticipation of increasing bearish bias. It signaled sell for all non-contrarian ETF’s to major market indices in anticipation of increased bearishness five weeks ago. This could be reversed, quickly, depending on OPEC actions on the immediate horizon. The daily stock market report will keep you informed. Recent commentary from OPEC suggests no production increases.

Keep your eye on the daily stock market report.

Stop Loss Management

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue configuring a reversal. The Fed will attempt to bias economic support until the election. After the election, the bias should shift drastically to fending off inflation.

As stated the past two weeks, the U.S. Dollar continues with stabilization configurations. The underlying theme is the necessity to strengthen it to help soften the inflationary threat from its weakness. There is what appears to be a cyclical shift underway. Unfortunately, from an inflationary perspective, the weakening trend remains solidly in place.

Commodities were bearish last week. Oil prices fell sharply, bringing other commodities with it. This is encouraging from an inflationary viewpoint but equally discerning from an economic view. Demand projections obviously are less than supply capacity, which suggests sour economic conditions.

As stated the past two weeks, the stock market will eventually respond bullishly to the idea the increasing number of capitalists in spite of the immediate inflationary threats imposed by the short-term inequality between supply and demand. Capitalist delivered all meaningful solutions to real problems since the beginning of commerce. No politician, dictator, or bureaucrat of any type has ever provided any solution to any economic problem. They have created many.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 342.3% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 46.5%. It moved to the north in 57 of the past 97-weeks – a little over one-half the time. It has been bullish in 28 of the last 48-weeks. This fund has been bullish in 13 of the last 23-weeks. It was aggressively bearish last week.

Fidelity Gold, Fund #28, is up 14.9% since its buy signal on September 7, 2007. It is annualized at 17.0% since that buy signal. This fund was solidly bullish in 12 of the past 23-weeks. It was solidly bearish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 394.7% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 65.7%. This fund has been bullish in 10 of the last 21-weeks. It has been bearish the past three weeks, following five consecutive weeks of solid bullish behavior.

Vanguard Energy #18, VGENX, is up 240.3% (annualized at 44.8%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 244.4% (annualized at 52.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 193.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.7%.

Energy related funds were bearish the past three weeks, which conflicts with current fundamental requirements of bullishness. Profit taking is the likely culprit, but extreme economic weakness could be a burgeoning rationalization. Also, threats by the Fed to raise interest rates and the corresponding strengthening of the U.S. dollar could dampen views regarding the petroleum industry. Another wild card would be a sudden increase in OPEC production.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 116.3% since then. It is annualized at 38.8%. This fund has been bullish in 33 of the past 47-weeks. It has been bullish in 14 of the last 22-weeks. It was bearish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 257.7% (annualized at 47.8%). This fund has been bearish in 17 of the past 26-weeks and in five of the past six weeks.

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 March 20, 2008 for all ten major indices. However, since then all major indices are now Mid-term Indicant bears.

The ten indices are down by an average of 3.4% since the Mid-term Indicant signaled bear an average of 4.1-weeks ago.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,661,279

That beats buy and hold performance of $1,749,060 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,217. That beats buy and hold’s $123,487 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $227,792. That beats buy and hold’s $79,153 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,996.1%, 45.9%, and 187.8%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

Uncharacteristically, the Mid-term Indicant again signaled buy for this fund four weeks ago. The Mid-term Indicant is influenced, in part, by seasonal and historical influences. This year should be bullish, based on historical standards, which would be bearish for this fund. However, the Tangential model is gaining influence and thus the reason for the buy signal. The Tangential model is bearishly biased now and will be more tolerate of fluttering behavior than the buy and sell signals earlier this year.

This fund is up 10.5% since the buy signal last weekend, annualizing at 135.5%.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 297.2% (annualized at 17.7%) since the Long-term Indicant signaled bull 872-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty. One non-contrarian red bull; Non-bullish.

Quick-term Yellow Bears/Threats: Twenty-five of thirty. Non-bearish support non-existent with majority yellow bears.

Quick-term Non-Bearishness: QTI differential is bearish 12.6%. Solid bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 8.9%; solid bearish support.

Force Vectors: The newly formed bearish cycle was disrupted today. Although discernable on the charts, they are maturing into a robust cycle supporting the some bullishness, but only to be followed with additional dynamic bearish behavior. Do not be surprised at bearish behavior on the near-term horizon.

Vector Pressure: Four in bullish domains, offering little resistance to bearish aggression and no support for any sustainable bullish ambition.

STI Tangential Support: All major indices are without tangential protection. Bear can roam at free will.

Immediate Tactics: Some non-contrarian ETF’s justify buying due to non-participation in bearish cycle. So far, only one; ETF#10-IBB. Configurations are not consistent with ambitious gains, though.

Current Quick-term Bias: Bearish.

Overall Market Status: Solid bearish bias.

Profit Potential from Naked Options: Volatility is more common during bearish cycles, which is the current configuration.

Volume: Losing lethargy, which is inconsistent with seasonal behavior and thus even more bearish. The Indicant Volume Indicator cycle is robust and in solid support of bearish ambitions.

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

The Short-term Indicant signaled bear on May 20, 2008 for the Dow Jones Industrial Average and on May 21, 2008, for the NASDAQ. The Dow is down 10.4% and the NASDAQ is down 6.8% since their respective bear signals. As stated the past several weeks, the bear has moved from having a tactical advantage to a position of dominance. Recent bullishness should be viewed as contrarian spurts.

Bias continues to favor the bear.

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

As stated daily since the June 25, 2008-Wednesday daily stock market report, both Indicant Volume Indicators are remain configured with robustness and in support of bearish bias. There are no obviating attributes to suggest the bear is expiring. On the contrary, volume has been aggressive, which does not correlate with seasonal factors, suggesting an enhanced bearish bias. Bullish expressions have been accompanied with less volume than recent bearish aggressions. The bias remains in favor of the bear.

To view the STI-Tangential Protection for ten major indices, click here.

As stated the past several weeks, all major indices continue with bearish configurations. Bearish yellow is cycling south. Vector Pressure is in bearish domains. None have tangential protection against bearish ambition. Although Force Vectors have elevated into bullish domains, their cycle is mature. That suggests more bearishness on a near-term basis.

The STI-Tangential model will not signal bull until Force Vectors are higher than X and the index is higher than Red. This feature reduces fluttering. Some are threatening with a bull signal.

Consider any bullish expressions as contrarian spurts to the underlying bearish trend and cycle.

Bullish behavior the past few days has the potential to elevate major indices up to their respective bearish yellow curves. This is a common configuration in bear markets. Once they get there, which should take a few days, bearish expressions should resume dominance. Do not be surprised at bearish aggression in the next few days, as several indices have indeed crossed above bearish yellow. This should not manifest to a bullish spurt like the most recent one in March, April, and May.

You should also notice the Dow Utilities moved south the past few days, as predicted in last week’s weekly report. Solid bull markets do not discriminate against sectors. If this were a real bull being born, Utilities would not be bearish.

All the major indices need to consolidate at a minimum cycle point before a new bull can be born. That consolidation has not yet occurred.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for six-ETF’s. They are up by an average of 35.7% (annualized at 14.4%) since their respective buy signals an average of 127.1-weeks ago. Although there were no sell signals, the SQI is avoiding 25-ETF’s at this time. They are down by an average of 8.6% since their sell signals an average of 8.0-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for six-ETF’s. They are up an average of 227.7% (annualized 92.3%) since the STI signaled, buy, an average of 126.9-weeks ago. Although there were no sell signals, there are 25-ETF’s with avoid signals. They are down by an average of 8.9% since their sell signals an average of 8.4-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for six-ETF’s. They are up by an average of 45.2% (annualized at 39.2%) since the QTI signaled buy an average of 59.3-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 25-ETF’s. They are down by an average of 8.8% since their sell signals an average of 6.9-weeks ago.

Current Strategy – As stated the past several weeks, all major indices do not have tangential support. Most are yellow bears. Several are repeatedly contacting their breakdown lines. Any bullish expressions should be viewed as contrarian bullish spurts in the face of bearish trend and bearish cyclicality.

Configurations remain bearishly biased.

Conflicts Between the Short-term and Quick-term Indicants

A solid bearish bias originated on Thursday, June 12, 2008, with all major indices without tangential support. From all three Indicant models, there are a combined 15-hold signals and 75-avoid signals for ETF’s and thus with a significant bearish bias.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-five of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.7%. This is without non-bearish support and with bearish support.

Two of the ETF’s are above their bullish red curves. This attribute remains solidly non-bullish. All thirty ETF average positions are below bullish red by an average of 8.9%. which is non-bullish.

One of the two red bulls are contrarian – ETF#11-GLD-Gold. The lone non-contrarian remains ETF#10-IBB-Health, which has been immune to the bear attack. It has been bullish for three consecutive days and is a red bull.

The QTI differential is bearish by 12.6%. This is the twenty-seventh consecutive trading day of a bearish reading. It is a long way from a bullish reading.

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

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 19.3%. Double digit variances from breakout contact for 135-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. Contact in 15-of the last 20-trading days is bearish. The density of contact continues to increase, adding to bearish bias. Bearish density increased significantly last Tuesday, but quiet last Wed-Fri. This recent quietness for a few days means nothing.

The average distance between the price and breakdown is 10.4%. After providing non-bearish support since March 2003 with double digit readings, this had been a single digit expression (bearish) in 13 of the last 16-trading days. Double digits provide non-bearish relief. However, as we have seen in the past, the bear has been angered by this such disruptions. As stated the past several days, configurations are forming similar to those in the early stages of the 2001-02 bear market.

The breakout/breakdown differential is bearish by 8.9%. This is solidly supporting bearish ambition.

ETF Force Vector Configurations

Fourteen Force Vectors are in bullish domains, which is non-bullish. They have not configured with a strong propensity for support of bearish ambition. They equally are not supportive of bullish ambition. However, as stated yesterday, they are inflecting. This suggests some bullish interest, but the bear remains strong enough to defeat such interest.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close.

Mixed market behavior was not friendly for last Tuesday’s put option comments even though the NASDAQ related securities were under the bear attack on Friday.

Four of the thirty ETF Vector Pressures are in bullish domains. This minority position is not supportive of any bullish inclination. It is configured with solid bearish support.

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

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008.

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

The Indicant signaled buy for QID on June 11, 2008. It is up by 9.3% since then, annualizing at 90.8%. Last week’s Force Vector cycle ended, supporting increased bearish bias if it configures with normalcy in the next day or two. Keep in mind QID’s behavior is inversely exponential to market behavior. The configuration shifted the past two days in a configuration that is unfriendly to the bear’s ambition, but not yet configured with bullish support.

Other Contrarian Funds

ETF#03-Natural Resources - is up 35.5% (annualized at 20.2%) since the Quick-term Indicant signaled buy on Oct 25, 2006. It has been bearish in 10 of the last 12-trading days. It was bullish today, following some recent bearish aggression. It had been remaining in an “okay” holding pattern for those of you who bought on the last buy signal in late 2006. It is not a Red Bull and the threat of continued bearish expressions is real. The Quick-term Indicant will not signal sell until it is below bearish yellow. It is getting close, but bearish yellow has been a bounce point in the recent past. (Prior daily reports erroneously stated it could be above bearish yellow. It must be below bearish yellow before receiving a sell signal).

ETF#11-Gold and Precious Metals is up 116.3% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 38.8%. It was mildly bearish the past two days. It remains a Red Bull and thus the major attribute continues to support a hold position. As stated earlier last week, Vector Pressure is aggressively in bullish domains and remains in solid support of its bullish cycle and appears primed for bullish aggression. The Force Vector configuration is solidly bullish.

ETF#14-Long Government received a buy signal three days ago from the Quick-term Indicant. It is down 2.9% since then. Its Force Vector shifted deeply to the south, contrary to expectations. The cycle is mature. It is configured to support increasing bullishness with a “flight to safety paradigm; at least in the early stages of additional bearish aggression.”

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

The market enjoyed bullish divergence last week. Energy was down, while general equities were up. The bullish divergence is weak. That is because of the Utilities were bearish last week, which suggests the bearish trend is nowhere nearing expiration.

Indicant Conclusion

The Dow Utilities finally capitulated to bearish ambition. Now, we are waiting for all major indices to find a final nesting place in their support of the bear. The bull cannot dominate until that happens.

Keep up with the daily stock market report as the Quick-term attributes can shift quickly. As stated the past few weeks, they are increasingly favoring the bear.

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

07/20/08

July 13, 2008 Indicant Weekly Stock Market Report

Volume 07, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

A Bear Market Attribute

Most bear markets conclude when the major indices simultaneously are resting on cyclical bottoms. They typically do this on the exact same day and nearly every time in the same week. Their bear cycle start dates do not occur simultaneously; their conclusion does.

The Dow Utilities suggests this bear has a way to go before concluding its nasty cycle. Historical standards suggest this will occur in October 2010 or about 15-months from now. Of course, historical standards are not 100% reliable. After all, historical standards suggest 2008 should be a bull market. The election year is the second most bullish on record. Unless there is an immediate and dramatic reversal in the market’s direction, this election year will be bearish.

Woodrow Wilson’s 1920 is the most bearish on record. The Dow was down 32.9% in that particular election year. Hubert Hoover’s 1932 was the second worse with a 23.1% drop. FDR’s 1940 comes in third with a 12.7% bear. Since 1950, the worse bear was Bill Clinton’s 6.2% Dow decline in 2000. The Dow is down 16.3% so far this year, which is on course for setting a new election year bearish record since 1950. This bear could set a new record since the Dow was developed for tracking stock market performance. It is halfway to Wilson’s 1920 bear.

Those bear markets with the exception of FDR and arguably, Wilson’s, were not the fault of the president. They simply emulated normal economic cycles. Economic booms invite more capital investment. Eventually capacity exceeds the requirements of it and the economy cools. That is natural since most capitalists are short sighted. Do not take that wrong. They are the better group when compared to soft-handed, slow thinking socialists. And that short-sightedness could be construed as an advantage because they move quickly in either direction; up or down.

As you can see, the Dow Utilities has yet to be participative with bearish ambition. Click the following link to view the Mid-term Indicant’s perspective of the Dow Utilities.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-07-DJU-Curr.htm

It obstinacy to bearish dominance should be mentioned in the context that it should endure a bear cycle before the conclusion of the bear market. In other words, this could be an indicator of the excessive dialog regarding this bear’s bottom.

Click the following link to view the Short-term Indicant’s perspective of the Dow Utilities.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJtu.htm

Scroll down a bit, as the above link has the Dow Transports on top. As you can see, the Dow Transports was significantly bullish during the March-June rally. You can also see it finally succumbed to bearish influence a days ago. However, the Utilities continue hold with its obstinacy.

The related ETF is XLU. Click the below link to see the Quick-term Indicant’s perspective. As

http://www.indicant.net/Members/Updates/QTI-ETF-Charts/QTI-ETF2-Charts.htm#12

As you can see, the Quick-term Indicant signaled bear a few days ago when it lost its Red Bull status. Its Vector Pressure is negative (bearish) and its Force Vector is declining below the Vector Pressure. Both attributes are bearish for that particular ETF.

Last week was bearish. However, utilities were not bearish. The Dow Utilities were up 0.5%. The Transports enjoyed a bullish spurt and was up 2.1%.

Economic fundamentals are dynamic. If it is true that foreclosures are on the rise, utility companies will lose revenue. The folks losing their homes are going to move from say, 5,000 square feet to say 1500 or so. That should lead to reduced revenue to utilities. Since they are basically fixed cost operations, the profit impact will be non-lineal. Profit margins will endure a faster and more dynamic squeeze.

With that simple analysis, there is a technical reason for Utilities capitulating to bearish ambition. This sector has not been immune in recent bear markets. Click the following link to observe the Dow Utilities behavior from 2000-2004.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-07-DJU-2000-2004.htm

As you can see, it endured a deep bearish cycle of over 50% from peak to trough from early 2001 through late 2002. A fundamental argument against bearish protection is the late 2002 buyers locked into some nice dividends. Only when perceptions (real or emotional) that these sizeable dividend earnings are threatened, will sellers exceed buyers. That is when bearish obstinacy expires. When that happens, utilities should join the foray of bearish expressions.

Fundamentals constantly shift. Each unfavorable shift invokes more socialism, as the tyranny by the majority in democracies unfolds. For example, the Senate voted to protect homeowners who were victims to the sub-primed lending crisis. That vote is wrong and contains particles of communism. Senators behave in a way to get votes and nothing else. The long-term trend for the quality of life will decrease when a societies removes risk.

Thomas Jefferson and his pals were pretty sharp. They understood the pitfalls of democracy. That is why they designed a republic, where the majority does not rule. Popularity or lack thereof does not dictate policy. Would you want someone who signed a variable mortgage note to have an influence on international policy? We would be conquered in minutes.

So, do not be surprised when you see the Republic work as designed. That is, President Bush will veto that bill if it passes the House. The Senators who voted for the measure will be able to point out to their constituents, “I tried to help, but the president decided to not go along.” The Senators do not care about their constituents. They only care about the votes and the wealth and fame it brings them and nothing else. There is nothing wrong with that since that is what they do for a living. Unfortunately, their behavior sometimes is hurtful to the economy.

The government created Fannie Mae and Freddie Mac to ensure liquidity in the mortgage industry. Since the government created it to ensure a steady stream of mortgage money, it is an unnatural element in a capitalistic society. It did not evolve, as it should. Regardless of one’s religious beliefs, there is a universal law that continues to persist. That is, any interruptions to Darwin’s Law of the Survival of the Fittest, leads to an accumulation of massive unfitness for all.

Fannie Mae and Freddie Mac created “excess capacity.” When capacity exceeded the capacity requirements of it, the law of supply and demand prevailed, like it does anywhere else. Chaos follows and the only solution is time. Shareholders who invested in that unnatural capacity enhancement are paying the price. They are not fit. Their investment should not survive. The creation of Fannie Mae and Freddie Mac violated universal law, which is unforgiving and has no respect for minimal effort and the nastiness that follows.

Down the food chain, the mortgagees who fell prey to the short-term greed of the mortgagors are also not fit. They should not survive their mistake. Governmental interference with universal law will lead to a weakening of the whole. Therein lays one element to the bear market. Just as the FDR policies of the 1930’s led to that “weakening” of all, the Senate is trying the same approach. Universal law has no respect for that sort of behavior.

At some point, an asteroid will be directed toward earth. The solutions to that problem will be borne through science and the hard working effort that encompasses it. The Senate could vote to disallow the asteroid from contacting earth. That would have absolutely no influence on the asteroid. Unless a methodical scientific approach with cold hard facts are deployed, the asteroid is going to hit the earth and that will be it. The soft-hands of the paper world are irrelevant. The analogy can be expanded to their attempt to rationalize stupidity. That is another universal law; stupidity is unforgiveable. Most issues are wrong or right. Those who meander in the middle area between right and wrong are confused and that is a form of stupidity.

EFT#14-TLT-Long Government Bonds behaved mysteriously last Friday. It paralleled bear market behavior. It has been contrarian for over two years. Last Friday’s bearish behavior did not invoke the normal flight to safety, which is one reason this ETF has been contrarian. It is somewhat arousing to those desiring bearish behavior for government instruments viewed as being unsafe.

The money printing presses are running. Productivity measures, which are the sole source for increasing quality of life, cannot keep up with that crazy machine. Former buyers of U.S. government bonds may be no longer considering them as safe. When the paper money is not backed by real economic wealth, which is constituted in only three areas; extraction, manufacturing, and agriculture, U.S. government bonds are losing perceptions of reliability. Who wants monopoly play money in their bank vault.

Government could lower the price of gasoline with the stroke of a pin, but they have not done this. In fact, government stands in the way of extraction and one of the reasons for the gap between supply and demand for fossil fuels. Government created “fake” institutions and is now bailing them out and attempting to bail out the victims they created. As long as the constituents of a society look to government for long-term economic solutions, rest assured that society is in trouble. The N.A. automobile industry is a classic case of that. They are near extinction. The government saved Chrysler in late 1970’s and prolonged the problem of massive incompetence. The exact same models of incompetence are recurring now. Violating universal law is not without paying the price. The industry would be much healthier today without that interference. Along the way, the bonds may become worthless, as they increasingly unrelated to real economic wealth.

So, until the Dow Utilities joins the bear’s party, the bear will only become more tenacious. It will delight when there are no survivors in terms of major indices. Only then, the bear may become complacent.

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

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

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

The Mid-term Indicant generated no buy signals and five sell signals. There have been 92-buy signals since February 1, 2008. There have been 335-sell signals since October 26, 2007.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 79 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 262.9%. That annualizes to 73.1%. The Mid-term Indicant has been signaling hold for these 79-stocks and funds for an average of 186.9-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 261-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 13.5% since the Mid-term Indicant signaled sell an average of 19.8-weeks ago.

One year ago, on July 13, 2007, the Mid-term Indicant was holding 307-stocks and funds out of the 345 tracked for an average of 112.1-weeks. They were up by an average of 145.0% (annualized at 67.3%). There were 37-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 8.3% since their respective sell signals an average of 28.1-weeks earlier.

The Mid-term Indicant was signaling hold for 177-stocks and funds of the 345-tracked two years ago on July 14, 2006. They were up by an average of 156.0% (annualized at 69.2%) since their respective buy signals an average of 120.7-weeks earlier. The Mid-term Indicant was avoiding 143-stocks and funds at that time. They were down an average of 8.2% since their respective sell signals an average of 16.8-weeks earlier.

There were 195-stocks and funds with hold signals on July 15, 2005 since their buy signals an average of 93.8-weeks earlier. They were up by an average of 107.9% (annualized at 59.8%). There were 97-avoided stocks and funds at that time. They were down by an average of 6.2% from their respective sell signals an average of 16.5-weeks earlier. The reason there is a significant difference from last week’s numbers is the Red Bull Signal for Enron. It was sold in early 2002 at around $70. It eventually fell to pennies and thus its statistic was influential on the overall statistics. At this time in 2005 its avoidance was discontinued with a buy signal and statistical normalcy continued thereafter.

On July 9, 2004, the Mid-term Indicant was signaling hold for 246-stocks and funds out of 296-tracked. They were up by an average of 67.8% (annualized at 65.6%) since their buy signals an average of 53.7-weeks earlier. The Mid-term Indicant was avoiding 45.9-stocks and funds at that time. They were down by an average of 31.2% since their sell signals an average of 45.9-weeks earlier.

Five years ago, on July 12, 2003, there were 278-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 47.5% (annualized at 103.2%) since their respective buy signals an average of 23.9-weeks earlier. There were only 10-avoided stocks and funds then. They were down an average of 29.0% since their respective sell signals an average of 29.1-weeks earlier.

On July 12, 2002, there were only 50-stocks and funds with hold signals from the listing of 294-tracked by the Mid-term Indicant at that time. They were up 40.3%, annualizing at 46.6%. There were 220-avoided stocks and funds then. They were down by an average of 26.6%.

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

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

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

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

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

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

As stated the past few weeks, all major indices are without tangential protection. The Dow Utilities is the only remaining index successfully resisting bearish ambition. Although it has been a mild meandering bear the past several weeks, its obstinacy is incongruent with the other major market indices. The bear will not complete its mission until this index falls. The protection of dividends should not be justification for its resistance. However, most of its constituents continue with hold signals until such time this index succumbs.

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 52.3% since its secular low on October 9, 2002. The NASDAQ is up 101.0% and the S&P500 is up 59.6% since then. The small cap index, S&P600, is up 107.4%. All major indices are configured with bearish bias.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 21.6% since its last closing peak on Oct 9, 2007. The NASDAQ is down 21.7% since its last peak on Oct 31, 2007. The S&P600 is down 20.5% since its last closing peak value on Jul 19, 2007. The S&P100 was the most bearish last week with a 2.0%-loss, while the Dow Jones Transports was bullish by 2.1%. The Dow Utilities, S&P400, and S&P600 enjoyed small gains during last weeks overall mild bearishness.

The NASDAQ is down 55.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 18.9% since its similar secular peak on March 23, 2000. The Dow is down by 5.3% since January 13, 2000 when it peaked from the 1990’s roaring bull. The Dow had been expressing no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to non-bullish influences and recently to bearish influences. The NASDAQ needs to climb 125.5% to achieve a new record high. As stated the past several years in this report, do not be surprised if this occurs after the year, 2025.

The major indices are now “official” bear markets. It is not over, either.

The Dow is down 16.3% so far this year. The NASDAQ is down 15.6% this year. These conditions are incongruent with historical standards. This year should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle that ended five weeks ago had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. Recent bearishness is a testament to that. Summer is now here and with full bearish support. Some unbelievable economic fundamentals are also wreaking havoc in addition to this seasonal behavior.

The NASDAQ year-to-date performance was bearish by 20.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 23.3%. This year is again configuring with 2001 similarity.

The NASDAQ was down by 29.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 29.8%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 2.8% in 2004. It was down by 1.8% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was down by 3.5% and up by 9.8% at this time last year.

As previously stated, so far this year, the DOW30 is down 16.3% and the NASDAQ down 15.6%.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers, who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. However, rising commodity prices could dampen that potential bullish effect.

As you can see, most of those gains from August 2006 have been wiped-out by the newly evolving bearish trend, originating in October 2007 and confirmed on January 4, 2008.

The Quick-term Indicant signaled sell for ETF’s that correlate with blue chips and large caps a few weeks ago in anticipation of increasing bearish bias. It signaled sell for all non-contrarian ETF’s to major market indices in anticipation of increased bearishness four weeks ago. This could be reversed, quickly, depending on OPEC actions on the immediate horizon. The daily stock market report will keep you informed.

A key element to monitor is the Dow Utilities from a major index perspective. All major indices should succumb to bearish influences before the bear concludes its damage. The PPI and CPI are scheduled to be released this coming week. If they disappoint, do not be surprised at continued bearish behavior.

Keep your eye on the daily stock market report.

Stop Loss Management

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue configuring a reversal. The Fed will attempt to bias economic support until the election. After the election, the bias should shift drastically to fending off inflation.

As stated last week, the U.S. Dollar continues with stabilization configurations. The underlying theme is the necessity to strengthen it to help soften the inflationary threat from its weakness. There is what appears to be a cyclical shift underway. Unfortunately, from an inflationary perspective, the weakening trend remains solidly in place.

As stated the past two weeks, other “real” commodities continue setting new record highs or hovering near those records, as the additional two to three-billion capitalist desire them. That is positive; not negative. Extraction and conversion to saleable product adds economic wealth. Good old fashion demand/supply laws continue to unfold. Any political interference with those “natural” laws will worsen the problems.

As stated last week, the stock market will eventually respond bullishly to the idea the increasing number of capitalists in spite of the immediate inflationary threats being imposed by the short-term inequality between supply and demand. Capitalist delivered all meaningful solutions to real problems since the beginning of commerce. No politician, dictator, or bureaucrat of any type has ever provided any solution to any economic problem. They have created many.

Here is the problem. As short-term conditions worsen, the FDR type of interference issues will become more pronounced by political mumbo-jumbo. Some will worm their way into the economic process. That always delays solutions in substance. So, between now and then do not be surprised at an 8,000 or less Dow.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 378.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 51.5%. It moved to the north in 57 of the past 96-weeks – a little over one-half the time. It has been bullish in 28 of the last 47-weeks. This fund has been bullish in 13 of the last 22-weeks. It was mildly bullish last week, but ever so mildly.

Fidelity Gold, Fund #28, is up 19.5% since its buy signal on September 7, 2007. It is annualized at 22.8% since that buy signal. This fund was solidly bullish in 12 of the past 22-weeks. It was solidly bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 453.6% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 75.7%. This fund has been bullish in 10 of the last 20-weeks. It has been bearish the past two weeks, following five consecutive weeks of solid bullish behavior.

Vanguard Energy #18, VGENX, is up 260.4% (annualized at 48.7%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 255.9% (annualized at 54.9%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 215.7% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 44.4%.

Energy related funds were bearish the past two weeks, which conflicts with current fundamental requirements of bullishness. Profit taking is the likely culprit, but extreme economic weakness could be a burgeoning rationalization. Also, threats by the Fed to raise interest rates and the corresponding strengthening of the U.S. dollar could dampen views regarding the petroleum industry. Another wild card would be a sudden increase in OPEC production.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 118.6% since then. It is annualized at 39.8%. This fund has been bullish in 33 of the past 46-weeks. It has been bullish in 14 of the last 21-weeks. It was mildly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 280.4% (annualized at 52.2%). This fund has been bearish in 16 of the past 26-weeks and in four of the past five weeks.

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 March 20, 2008 for all ten major indices. However, since then all major indices are now Mid-term Indicant bears.

The ten indices are down by an average of 5.0% since the Mid-term Indicant signaled bear an average of 3.1-weeks ago.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,661,279

That beats buy and hold performance of $1,688,809 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,217. That beats buy and hold’s $121,411 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $227,792. That beats buy and hold’s $77,638 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,070.8%, 48.4%, and 193.4%, respectively, for these indices as of this past week.

You will notice the percentages changed from last week since the buy and hold values worsened while the Indicant maintained its values. The reason the Mid-term Indicant gained a competitive advantage over buy and hold is due to the market’s bearish behavior since signaling bear.

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.

Uncharacteristically, the Mid-term Indicant again signaled buy for this fund three weeks ago. The Mid-term Indicant is influenced, in part, by seasonal and historical influences. This year should be bullish, based on historical standards, which would be bearish for this fund. However, the Tangential model is gaining influence and thus the reason for the buy signal. The Tangential model is bearishly biased now and will be more tolerate of fluttering behavior than the buy and sell signals earlier this year.

This fund is up 12.2% since the buy signal last weekend, annualizing at 209.6%.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 283.5% (annualized at 16.9%) since the Long-term Indicant signaled bull 871-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Two of thirty. One non-contrarian red bull; Non-bullish.

Quick-term Yellow Bears/Threats: Twenty-four of thirty. Non-bearish support non-existent with majority yellow bears.

Quick-term Non-Bearishness: QTI differential is bearish 15.9%. Solid bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 12.5%; solid bearish support.

Force Vectors: Bullish cycle mature, but from deep inside bearish domains. If they move aggressively to the south next week, configurations will be similar to April 2002 that preceded additional bearish legs with significant depth and breadth.

Vector Pressure: Four in bullish domains, offering little resistance to bearish aggression and no support for any sustainable bullish ambition.

STI Tangential Support: All major indices are without tangential protection. Bear can roam at free will.

Current Quick-term Bias: Bearish with an increasing probability of bullish argument to bearish ambition, but non-threatening to bearish dominance.

Overall Market Status: Solid bearish bias.

Profit Potential from Naked Options: Volatility is more common during bearish cycles, which is the current configuration.

Volume: Losing lethargy, which is inconsistent with seasonal behavior and thus even more bearish. Cycle is robust and in solid support of bearish ambitions.

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

The Short-term Indicant signaled bear on May 20, 2008 for the Dow Jones Industrial Average and on May 21, 2008, for the NASDAQ. The Dow is down 13.5% and the NASDAQ is down 8.5% since their respective bear signals. As stated the past several weeks, the bear has moved from having a tactical advantage to a position of dominance.

As stated last Monday, “do not be surprised at the market’s settling the next few days/weeks.” Two of the last four days experienced “settling.” Sandwiched, as in five-decked club sandwich, in between those two settling days was an aggressive bear. Bias remains in favor of the bear.

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

As stated in the June 25, 2008-Wednesday daily stock market report, both Indicant Volume Indicators are configuring robustly and in support of bearish bias. There are no obviating attributes to suggest the bear is retiring. On the contrary, volume has been aggressive, which does not correlate with seasonal factors, suggesting enhancing bearish bias.

To view the STI-Tangential Protection for ten major indices, click here.

As stated the past several days/weeks, all major indices continue with bearish configurations. Bearish yellow is cycling south. Force Vectors are in bearish domains. Vector Pressure is in bearish domains. None have tangential protection against bearish ambition.

As stated the past few days, the STI-Tangential model will not signal bull until Force Vectors are higher than X and the index is higher than Red. This feature reduces fluttering. Configurations are nowhere near signaling bull.

Consider any bullish expressions as contrarian spurts to the underlying bearish trend and cycle.

Tuesday’s and Thursday’s bullish expressions, albeit mild ones, were consistent with expectations of the market finding a settling point. Wednesday’s and Friday’s counter-punch suggests the bear is not ready to allow the bull to find a resting place. However, as stated a few days ago, bullish behavior supports the idea that suggests the bull is maneuvering for additional skirmishes against a bearish force with significant more energy. However, current configurations suggests the bear will win major battles.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for six-ETF’s. They are up by an average of 35.4% (annualized at 14.4%) since their respective buy signals an average of 126.1-weeks ago. Although there were no sell signals, the SQI is avoiding 25-ETF’s at this time. They are down by an average of 10.3% since their sell signals an average of 7.0-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for six-ETF’s. They are up an average of 233.7% (annualized 95.5%) since the STI signaled, buy, an average of 125.9-weeks ago. Although there were no sell signals, there are 25-ETF’s with avoid signals. They are down by an average of 10.6% since their sell signals an average of 7.4-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for five-ETF’s. They are up by an average of 57.2% (annualized at 42.0%) since the QTI signaled buy an average of 70.1-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 26-ETF’s. They are down by an average of 10.1% since their sell signals an average of 6.0-weeks ago.

Current Strategy – As stated the past several days, all major indices do not have tangential support. Most are yellow bears. Several are repeatedly contacting their breakdown lines. Any bullish expressions should be viewed as contrarian bullish spurts in the face of bearish trend and bearish cyclicality.

As stated yesterday, there are no strong obviations of directional intensity at this time. The perceived settling should not be construed as a bottom. The market is asking, “where do we go from here?” Once it answers its questions, configurations will form and advise of directional intensity. However, the current configurations are bearishly biased.

Conflicts Between the Short-term and Quick-term Indicants

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-four of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 5.2%. This is without non-bearish support and with bearish support.

Two of the ETF’s are above their bullish red curves. This attribute remains solidly non-bullish. All thirty ETF average positions are below bullish red by an average of 10.7%. which is non-bullish.

One of the two red bulls are contrarian – ETF#11-GLD-Gold. The lone non-contrarian remains ETF#10-IBB-Health, which has been immune to the bear attack.

The QTI differential is bearish by 15.9%. This is the twenty-third consecutive trading day of a bearish reading.

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

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 20.3%. Double digit variances from breakout contact for 130-consecutive trading-days has been non-bullish.

Seven of the thirty ETF’s are contacting their breakdown lines. Contact in 14-of the last 15-trading days is bearish. The density of contact is increasing adding to bearish bias.

The average distance between the price and breakdown is 7.8%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression in ten of the last 11-trading days. As stated the past several days, configurations are forming similar to those in the early stages of the 2001-02 bear market.

The breakout/breakdown differential is bearish by 12.5%. This is solidly supporting bearish ambition.

ETF Force Vector Configurations

Four Force Vectors are in bullish domains, which is non-bullish. As stated the past few days, their configurations support bearish bias. Although Force Vectors are rising, they are from deep inside bearish domains. A new aggressive bearish cycle should commence once the Force Vectors cross above Vector Pressure. Many are in near proximity of doing that.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close.

Four of the thirty ETF Vector Pressures are in bullish domains. This minority position is not supportive of any bullish inclination. It is configured with solid bearish support.

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

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008.

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

The Indicant signaled buy for QID on June 11, 2008. It is up by 10.8% since then, annualizing at 129.4%. The Force Vector is now nestled just below Vector Pressure. If did not bounce north off of it yesterday. Falling below is not necessarily a concern, but if it keeps moving south, then the cycle could collapse. Keep in mind its behavior is inversely exponential to market behavior.

The assigned QID stop loss of $44.75 was triggered on Monday, July 7. The Quick-term Indicant did not signal sell in spite of the triggered stop loss. Spurts cannot be avoided, but the stop loss locked a nice profit. Wild spurt behavior will facilitate additional profits as the bear continues to dominate.

So, as stated early last week, the current strategy for QID is to wait a couple of days, as QQQQ’s Force Vector is rebounding and QID’s is relaxing. Although the Quick-term Indicant remains bullish on QID, Force Vector behavior suggests risk/reward is favorable to those who did not set a stop loss, while those who sold on Monday’s stop-loss should hold off on buying for a day or two.

As suggested last Thursday evening after the close, buy more QID and set the stop loss about 2.5 points below your bought amount.

Other Contrarian Funds

ETF#03-Natural Resources - is up 44.1% (annualized at 25.4%) since the Quick-term Indicant signaled buy on Oct 25, 2006. It has been bearish in six of the last seven trading days. Its Force Vector cycle is mature, suggesting bearish pressure should be subsiding. It remains in an “okay” holding pattern for those of you who bought in late 2006. It is no longer a Red Bull and the threat of continued bearish expressions is real. The Quick-term Indicant will not signal sell until it is above bearish yellow.

ETF#11-Gold and Precious Metals is up 118.6% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 39.8%. Following three bearish days, it has been bullish the past three days. It is again a Red Bull. As stated earlier this week, Vector Pressure is aggressively in bullish domains and remains in solid support of the bull and appears primed for some bullish aggression. The Force Vector configuration is solidly bullish.

ETF#14-Long Government is up 0.5% the May 5, 2008 sell signal. Friday was the first day this ETF did not move contrarian to the market; it was bearish along with a bearish stock market. That does not bode well for credit crisis concerns. It also suggests some insiders are already aware of the CPI and PPI numbers, which are to be announced next week. We would want to ask someone with power, position, and integrity to investigate why this ETF suddenly quit moving contrarian the market. Oh well, never mind. The Quick-term Indicant continues to signal avoid, while the Short-term Indicant is holding. They will be synchronized next week on the CPI and PPI reports.

Its Vector Pressure remains inside bullish domains. It’s Force Vector is deep inside bullish domains, but tiring. The Quick-term Indicant will hold off on signaling buy until this cycle finds bottom. Even then, there is some concern that rising interest rates will confront its bullish potential.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Combined bullish convergence and divergence in ten of a recent thirteen-week period was powerfully bullish. This bullish convergence with some bullish divergence configurations during that bull cycle suggests 2008 still had a significant chance to finish the year on a bullish note.

However, the stock market endured bearish convergence the past two weeks, following bearish divergence in the previous two weeks. This combination is increasingly bearish.

As stated the past four weeks, the Quick-term Indicant and Short-term Indicant suggest some potential bearishness on the near-term horizon. As you have witnessed, there is little doubt the bear is in charge of the stock market right now.

Nothing has changed; expect more bearishness. Keep in mind, OPEC continues to be a wild card regardless of perceptions of their struggle to increase production.

Indicant Conclusion

Commentary here has been bearish the past several weeks. However, OPEC can influence a reversal to bullish bias very quickly and dynamically.

The Dow Utilities is now required to capitulate to bearish ambition before any substantial new bull leg can unfold.

Keep up with the daily stock market report as the Quick-term attributes can shift quickly. As stated the past few weeks, they are increasingly favoring the bear.

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

07/13/08

July 6, 2008 Indicant Weekly Stock Market Report

This Week’s Report

A Quick-tour of Dynamic Bearishness

The blue chips endured extreme bearishness first. The other indices followed. That foretells significant economic uncertainty. The Dow30 contacted its breakdown line a few weeks ago. Click the following link to observe its apparent comfort zone at bearish extremes.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJ.htm

Scrolling down on the above link, you will notice the Dow Composites barely hovering above its breakdown line. Some of you may have to peer at the chart a few moments to see it.

The Dow Composites constitute the Dow30, Dow-Transports, and Dow Utilities. The Transports and Utilities received new bear signals this weekend from the Mid-term Indicant.

Click the following link to view the Transports Mid-term Indicant chart.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-06-DJT-Curr.htm

As you can see, the Transport Index was solidly bearish last week falling below both Red and Trip Line.

Click the following link to view the Utilities

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-07-DJU-Curr.htm

As you can see, it has expressed some obstinate behavior to the bear’s ambition.

Clicking the below link will show you a Short-term Indicant perspective on both the Dow Transports and Dow Utilities.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJtu.htm

As you can see, the Transports succumbed to bearish ambition shortly after losing tangential protection (falling below the approximate 33-degree blue line). It rebounded with an admired bullish attempt to thwart the bear’s overtures. It was eventually was over-powered by the bear and simply acquiesced to the realization that $150-oil is probably underestimated.

However, scrolling down, you will notice Utilities have also lost tangential protection, but expressing obstinate behavior to bearish ambition. There is a simple reason for this. In late 2002, Utility Stocks were depressed along with the general stock market. Buyers at that time locked into some nice dividends. As long as the general population of people continues to increase, the utility companies provide much of the baseline to Maslow’s Hierarchy of Human needs; warmth. Those dividends will continue to be paid, as Utilities have little risk of bad debt. If one does not pay, they simply flip a switch to “off.” So, personal budgets will pay the utility companies, even if they have to take the bus to work, as opposed to their Corvettes.

The relative Utility demand/supply ratio of common stocks is in equilibrium. That is the reason for its flatness. Many 2002 buyers are not anxious to abandon their dividend positions. That depresses the supply of those stocks for sell; thus the flatness of the index’s value.

There are two thoughts at this time. Fear-based emotionalism can accelerate the supply of Utility Stocks to sell, relative to the demand to buy. If this fear occurs, the index can fall in value.

ETF#11-UTY is the related ETF. As you can see, it recently received a sell signal from the Quick-term Indicant. This was induced, in part, by the Dow Utilities losing tangential protection. However, it continues to be obstinate against bearish ambition. It is unlikely this ETF will increase with current economic conditions. The risk of extreme bearishness is too high to continue to hold even in the face of obstinate behavior.

The second reason for Utility price declines may occur, once other safe alternative to dividends or interest income exceeds the value of the current dividend yields from the 2002 or earlier investment dates. Currently, interest rates remain too low to threaten Utilities dividend earnings potential. Therefore, a solid fundamental reason for continued holding is without solid argument.

However, that fear element is present. If a critical mass of mid to long-term investors at any moment in time perceives of economic downturn much greater than a mild recession, they would follow that with the idea the dividends are now threatened. If the utilities flip the switch to the “off position” too many times, rest assured the decline in revenue threatens the size of the dividend. That will quickly add to the supply of Utilities to the trading floor with sell orders. UTY and the Dow Utilities will tumble like all the other indices have been or doing now.

Let’s continue this mini-tour.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08b-NS.htm

As you can see by clicking the above link, the NASDAQ and NASDAQ100 have yet to contact their breakdown lines. Although the Indicant does not forecast, odds are 1.55 to 1 in favor contact with breakdown, as of last Thursday.

Many of you have noticed the Daily Stock Market report’s increased interest in ETF#31-QID. Rather than signaling buy or sell on a Quick-term daily basis, recommended stop losses are recommended, daily. The market can bounce dramatically from one day to the next without fundamental reason. So, the stop loss recommendation is to protect the profit in the event of an irrational, but real, bounce to the north. The QID reacts more violently in magnitude to such a bounce. The idea is to allow the stop loss to garnish a profit, albeit small at this time (about six to nine percent). If the stop-loss triggers a sell because of a bullish bounce, the Quick-term will signal sell and revaluate. If the attributes continue to suggest the NASDAQ100 is traveling to its breakdown, the Quick-term Indicant will signal buy again at the appropriate time and then resume recommendation of stop losses. Right now, QID is in the mid-40’s but should hit 55 to 60 if the NAS100 drops to breakdown, which is the current expectation.

There is not much to say about the S&P100 and S&P500. That is where the dilettante management teams collect. Click the following link to see there pitiful condition.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08c-SPL.htm

Those “behind the curve” management teams at the larger caps will exert the same amount of effort tomorrow than they expended yesterday; very little. With their size and the power vested upon them by their predecessor entrepreneurial leaders, rest assured weak economic conditions would only accelerate their demise. They need raw business volume to make a buck. Without increasing revenue volume, they do not know how to make money for the most part.

Many of you recall how the S&P400 and S&P600 expressed profound obstinate behavior in the face of blue chip bearish behavior a few weeks ago. Click the following link to see how those two indices finally acquiesced to the bear’s directional intention.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08d-SPS.htm

You will notice they expressed similar configurations to that of the Transports after losing tangential protection.

You should also notice their acquiescence to the bear’s onslaught was dynamic and without mercy. Unfortunately, that sell-off was mostly emotionally based. This is where the better management teams work. They are risk takers and some of them are the future members of those companies of the S&P500 and S&P100 indices, where they will prosper. That is, until the dilettantes gravitate into their organizations. Resume writer’s seeking security gravitate to the bigger companies. So, keep your eye on that. Bill Gates left Microsoft in pretty good hands. So, it should continue to perform well, even though down a bit right now. Michael Dell was requested to return to his once great company and set the ship in the right direction. Unfortunately for him, the lack of economic robustness is going to make the job a little harder for him, but he is the right person for the job.

The general rule of thumb is a blue chip bear leading the other broader indices to the south is a strong advocate for weak economic conditions. The Fed is going to have to start raising rates. They may start these rate hikes this year, but political pressure to do so will be at a minimum next year, where you should expect unbelievable aggression against inflation or high rates of inflation. Neither will result in a significant bullish stock market. Historical standards and current prognosis suggests next year will be the “real bear market.”

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

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

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

The Mid-term Indicant generated no buy signals and 20-sell signals. There have been 92-buy signals since February 1, 2008. There have been 330-sell signals since October 26, 2007.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 84 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 262.6%. That annualizes to 74.0%. The Mid-term Indicant has been signaling hold for these 84-stocks and funds for an average of 184.5-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 241-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 15.2% since the Mid-term Indicant signaled sell an average of 20.0-weeks ago.

One year ago, on July 6, 2007, the Mid-term Indicant was holding 308-stocks and funds out of the 345 tracked for an average of 110.9-weeks. They were up by an average of 140.6% (annualized at 65.9%). There were 36-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 12.7% since their respective sell signals an average of 27.8-weeks earlier.

The Mid-term Indicant was signaling hold for 202-stocks and funds of the 345-tracked two years ago on July 7, 2006. They were up by an average of 152.4% (annualized at 69.7%) since their respective buy signals an average of 113.8-weeks earlier. The Mid-term Indicant was avoiding 136-stocks and funds at that time. They were down an average of 5.9% since their respective sell signals an average of 16.2-weeks earlier.

There were 195-stocks and funds with hold signals on July 8, 2005 since their buy signals an average of 97.3-weeks earlier. They were up by an average of 110.7% (annualized at 59.2%). There were 116-avoided stocks and funds at that time. They were down by an average of 25.4% from their respective sell signals an average of 61.3-weeks earlier.

On July 2, 2004, the Mid-term Indicant was signaling hold for 257-stocks and funds out of 296-tracked. They were up by an average of 68.9% (annualized at 69.3%) since their buy signals an average of 51.7-weeks earlier. The Mid-term Indicant was avoiding 45.1-stocks and funds at that time. They were down by an average of 30.3% since their sell signals an average of 45.1-weeks earlier.

Five years ago, on July 5, 2003, there were 277-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 44.7% (annualized at 100.2%) since their respective buy signals an average of 23.2-weeks earlier. There were only 14-avoided stocks and funds then. They were down an average of 27.4% since their respective sell signals an average of 28.3-weeks earlier.

On July 5, 2002, there were only 66-stocks and funds with hold signals from the listing of 294-tracked by the Mid-term Indicant at that time. They were up 41.0%, annualizing at 47.8%. There were 217-avoided stocks and funds then. They were down by an average of 22.3%.

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

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

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

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

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

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

All of the major indices are now without tangential protection against the bear. Last week’s aggressive bearish behavior was consistent with expectations within the tangential model. Most of the weaker securities had already received sell signals and last week solid companies, such as Caterpillar received sell signals this weekend. Their technical configurations are not that weak, but the overall market’s condition of outright bearishness was too influential on borderline configurations. The number of held stocks and funds, as a percentage of the total tracked by The Indicant, is about the same as in late 2001 and early 2002. The bear is completely dominant for the time being. As previously stated, keep your eye on the daily stock market report.

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 54.9% since its secular low on October 9, 2002. The NASDAQ is up 101.5% and the S&P500 is up 62.6% since then. The small cap index, S&P600, is up 106.1%. All major indices are configured with bearish bias.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 20.3% since its last closing peak on Oct 9, 2007. The NASDAQ is down 21.5% since its last peak on Oct 31, 2007. The S&P600 is down 20.9% since its last closing peak value on Jul 19, 2007. The Small Caps Index was the most bearish last week with a 5.0%-loss, while the blue chips were less bearish with a 1.4%-loss. The NASDAQ was also bearish with a 3.3%-loss.

The NASDAQ is down 55.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.3% since its similar secular peak on March 23, 2000. The Dow is down by 3.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. The Dow had been expressing no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to non-bullish influences. Since October 2007, it succumbed to bearish influences. The NASDAQ needs to climb 124.8% to achieve a new record high. As stated the past several years in this report, do not be surprised if this occurs after the year, 2025.

The major indices are now “official” bear markets. It is not over, either.

The Dow is down 14.9% so far this year. The NASDAQ is down 15.3% this year. These conditions are incongruent with historical standards. This year should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle ending four weeks ago had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. Recent bearishness is a testament to that. Summer is now here and with full bearish support.

The NASDAQ year-to-date performance was bearish by 13.1% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 23.3%. This year is again configuring with 2001 similarity. As previously stated, there will be additional bearish cycles in 2008. As stated the past several weeks, do not be surprised at increased bearishness in the next few weeks, but with significant volatility. You have been witnessing that the past few weeks and especially the past two weeks.

The NASDAQ was down by 29.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 24.6%. It finished up in that solidly bullish year by 50.0%. It was up on this weekend by a paltry 0.2% in 2004. It was down by 5.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was down by 0.7% and up by 9.5% at this time last year.

As previously stated, so far this year, the DOW30 is down 14.9% and the NASDAQ down 15.3%.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers, who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. However, rising commodity prices could dampen that potential bullish effect.

As you can see, most of those gains from August 2006 have been wiped-out by the newly evolving bearish trend, originating in October 2007 and confirmed on January 4, 2008.

The Quick-term Indicant signaled sell for ETF’s that correlate with blue chips and large caps a few weeks ago in anticipation of increasing bearish bias. It signaled sell for all non-contrarian ETF’s to major market indices in anticipation of increased bearishness three weeks ago. This could be reversed, quickly, depending on OPEC actions on the immediate horizon. The daily stock market report will keep you informed.

The remainder of this section has not changed the past few weeks. Although boring to repeat it each week, the idea of hype vs. boredom is an irrelevant contrast when seeking what is “real.”

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The problem confronting this scenario is two fold; economic conditions and inflation.

Depending on bearish magnitude and breadth, a violation to historical standards could be underway. Also, CNBC and other similar publications to the masses continue to destroy the integrity of old methods that once worked well. That is why we are shifting our models to extreme esotericism.

The fundamental requirements are limited inflation and economic stabilization. Fundamental influences will always be the primary force of directional stock market intensity. Three of the big four are okay for the time being; inflationary threats have cooled but again threatening with a significant increase in the CPI, as oil continues setting new highs, but the Saudi influence could help this. Interest rates remain low, which is bullishly favorable. Deflation is not threatening. In addition to a resurging CPI, another unfavorable condition for stock market bullishness is the weak economy. The unknown is voodoo bookkeeping. The market reacts to corporate earnings. If those earnings are perceived as fiction, the market will move bearishly. Fictional financial representations will enhance stock market bearishness. The capital market system requires absolute honesty from the bookkeepers.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to increasing bearish influences.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The interest rate cycle and trend is south. However, they are configuring for a reversal. When that reversal occurs, the key element to monitor will be the CPI and oil prices. Increasing rates should strengthen the dollar. That should at the very least yield a disinflationary result. That could bode well for those desiring bullish behavior.

As stated last week, the U.S. Dollar has stabilized the past few weeks. The underlying theme is the necessity to strengthen it to help soften the inflationary threat from its weakness. There is what appears to be a cyclical shift underway. Unfortunately, from an inflationary perspective, the weakening trend remains solidly in place.

Gold prices continue softening. As stated last week, other “real” commodities continue setting new record highs as the additional two to three-billion capitalists desire them. That is positive; not negative. Extraction and conversion to saleable product adds economic wealth. Good old fashion demand/supply laws continue to unfold. Any political interference with those “natural” laws will worsen the problems.

The stock market will eventually respond bullishly to the idea the increasing number of capitalists in spite of the immediate inflationary threats being imposed by the short-term inequality between supply and demand. Capitalist delivered all meaningful solutions to real problems since the beginning of commerce. No politician, dictator, or bureaucrat of any type has ever provided any solution to any problem. They have created many.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 378.1% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 51.6%. It moved to the north in 56 of the past 95-weeks – a little over one-half the time. It has been bullish in 27 of the last 46-weeks. This fund has been bullish in 12 of the last 21-weeks. It was solidly bearish last week, following solid bullishness in the previous two weeks. It has been solidly bearish in three of the last five weeks.

Fidelity Gold, Fund #28, is up 15.5% since its buy signal on September 7, 2007. It is annualized at 18.5% since that buy signal. This fund was solidly bullish in 11 of the past 21-weeks. It was solidly bearish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 451.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 75.6%. This fund has been bullish in 10 of the last 19-weeks. It was solidly bearish last week, following five consecutive weeks of solid bullish behavior.

Vanguard Energy #18, VGENX, is up 271.4% (annualized at 51.0%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 265.9% (annualized at 57.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 225.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 45.4%.

Energy related funds were solidly bearish last week, which conflicts with current fundamental requirements of bullishness. Profit taking is the likely culprit, but extreme economic weakness could be a burgeoning rationalization.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 111.5% since then. It is annualized at 37.7%. This fund has been bullish in 32 of the past 45-weeks more than half the time with bullish expressions. It has been bullish in 13 of the last 20-weeks. It was mildly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 294.9% (annualized at 55.1%). This fund has been bearish in 15 of the past 25-weeks and in three of the past four weeks.

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

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

The Mid-term Indicant signaled bull on March 20, 2008 for all ten major indices. However, since then there have been several bear signals. Three new bear signals were generated last weekend and two more this weekend.

In addition to the two new bear signals, eight indices are down by an average of 6.0% since the Mid-term Indicant signaled bear an average of 2.6-weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,661,279

That beats buy and hold performance of $1,717,411 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,217. That beats buy and hold’s $123,705 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $227,792. That beats buy and hold’s $77,856 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,034.7%, 45.7%, and 192.6%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

Uncharacteristically, the Mid-term Indicant again signaled buy for this fund two weeks ago. The Mid-term Indicant is influenced, in part, by seasonal and historical influences. This year should be bullish, based on historical standards, which would be bearish for this fund. However, the Tangential model is gaining influence and thus the reason for the buy signal. The Tangential model is bearishly biased now and will be more tolerate of fluttering behavior than the buy and sell signals earlier this year.

This fund is up 12.1% since the buy signal last weekend, annualizing at 311.8%.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 290.0% (annualized at 17.3%) since the Long-term Indicant signaled bull 870-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty. Zero non-contrarian red bulls; solidly non-bullish.

Quick-term Yellow Bears/Threats: Twenty-four of thirty. Non-bearish support non-existent with majority yellow bears.

Quick-term Non-Bearishness: QTI differential is bearish 15.2%. Solid bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 12.1%; solid bearish support.

Force Vectors: Favoring bearish behavior, although the cycle is mature. It is configuring to support bullish spurt expressions, but mere spurts nonetheless.

Vector Pressure: Four in bullish domains, offering no resistance to bearish aggression and no support for any bullish ambition.

STI Tangential Support: All major indices are without tangential protection. Bear can roam at free will.

Immediate Tactics: Avoid all non-contrarian ETF’s. Increase QID stop loss to $44.75.

Current Quick-term Bias: Bearish with an increasing probability of bullish argument to bearish ambition, but non-threatening to bearish dominance.

Overall Market Status: Solid bearish bias.

Profit Potential from Naked Options: Volatility is more common during bearish cycles, which is the current configuration.

Volume: Losing lethargy, which is inconsistent with seasonal behavior and thus even more bearish.

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

To view the STI-Tangential Protection for ten major indices, click here.

Consider any bullish expressions as contrarian spurts to the underlying bearish trend and cycle.

The “expected” bullish bounce occurred on Thursday, July 03, 2008 ahead of the holiday. It was meek. The bear cycle is not over. Ignore all commentary with the word, bottom, in it. It is not here, yet. We’ll let you know; very quietly, privately, and without any hype or commercial interruptions.

From May 4, 2008-Weekly Stock Market Report – At that time there was a 97% probability the major indices and most of the non-contrarian ETF’s would be below their early April values at some future point.

As of July 2, 2008, you will notice that all major indices are now below their early April values. Although the April-May bullish cycle turned out to be a spurt, it was indeed a healthy one. It started out with some fluttering behavior that cost us a few points. In the end we made a little and now enjoying healthy cash positions except for the added enjoyment from contrarian profits. Those contrarian funds, such as QID, allow for smiley faces even in deep bear markets.

The Short-term Indicant signaled bear on May 20, 2008 for the Dow Jones Industrial Average and on May 21, 2008, for the NASDAQ. The Short-term Indicant is influenced, in part, by historical seasonality, which has become too popular to be effective. It will eventually be replaced by the more esoteric tangential model. However, the tangential model was included in the Short-term Indicant bull/bear signal criteria a in late May. The Dow is down 12.0% and the NASDAQ is down 8.3% since their respective bear signals. As stated the past several weeks, the bear has moved from having a tactical advantage to a position of dominance.

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

As stated in the June 25, 2008-Wednesday daily stock market report, both Indicant Volume Indicators are configuring robustly and in support of bearish bias. Thursday’s meek bullish bounce was a mere spurt in the face of deep bear market behavior.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for five-ETF’s. They are up by an average of 37.0% (annualized at 12.7%) since their respective buy signals an average of 150.1-weeks ago. Although there were no sell signals, the SQI is avoiding 26-ETF’s at this time. They are down by an average of 9.0% since their sell signals an average of 5.8-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for five-ETF’s. They are up an average of 285.7% (annualized 98.1%) since the STI signaled, buy, an average of 149.9-weeks ago. Although there were no sell signals, there are 26-ETF’s with avoid signals. They are down by an average of 9.3% since their sell signals an average of 6.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for four-ETF’s. They are up by an average of 72.2% (annualized at 43.0%) since the QTI signaled buy an average of 86.4-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 27-ETF’s. They are down by an average of 8.9% since their sell signals an average of 4.8-weeks ago.

Current Strategy – No change. All major indices do not have tangential support. Most are yellow bears. Several are repeatedly contacting their breakdown lines. Any bullish expressions should be viewed as bullish spurts in the face of bearish trend and bearish cyclicality.

A few non-contrarian ETF’s are not possessing increasing bearish attributes. Some of them will not go down with a bear market. Once this bearish cycle bottoms, a few non-contrarian ETF’s will receive buy signals.

Conflicts Between the Short-term and Quick-term Indicants

A solid bearish bias originated on Thursday, June 12, 2008, with all major indices without tangential support. From all three Indicant models, there are a combined 11-hold signals and 79-avoid signals for ETF’s and thus with a significant bearish bias.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-four of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 4.8%. This is without non-bearish support and with bearish support.

Only one of the ETF’s is above its bullish red curve. This attribute remains solidly non-bullish. All thirty ETF average positions are below bullish red by an average of 10.4%. which is non-bullish.

The lone Red Bull is contrarian ETF#11-Gold and Precious Metals. ETF-#03-Energy lost its red bull status today.

The QTI differential is bearish by 15.2%. This is the eighteenth consecutive trading day of a bearish reading.

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

None of the thirty ETF’s are contacting their breakout lines, which is no longer providing bullish support.

The average distance from breakout contact is 19.8%. Double digit variances from breakout contact for 125-consecutive trading-days has been non-bullish.

Four of the thirty ETF’s are contacting their breakdown lines, which is bearish. This is the tenth consecutive day with breakdown contact, offering further support for an ambitious bear.

The average distance between the price and breakdown is 7.8%. After providing non-bearish support since March 2003, this is the sixth consecutive trading day of non-double digit reading, which is bearish. As stated the past few days, configurations are forming similar to those in the early stages of the 2001-02 bear market. As stated the past few days, emotional bearishness can become influential regardless of fundamental reason with a single digit reading. Unfortunately, fundamental factors are also supportive of the bear.

The breakout/breakdown differential is bearish by 12.1%. This is solidly supporting bearish ambition.

ETF Force Vector Configurations

Three Force Vectors are in bullish domains, which is non-bullish. As stated the past few days, their configurations support bearish bias. The bearish Force Vector cycle has matured and appears to have bottomed out. This increases probability of bullish spurt behavior on the immediate horizon. Keep in mind Force Vectors cycles are short, ranging from averaging four to six days. Also, keep in mind any bullish expressions would be mere spurts.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Thursday’s close.

Thursday’s pre-holiday session was too mild for deep discounted buy offers from being accepted.

Four of the thirty ETF Vector Pressures are in bullish domains. This minority position is not supportive of any bullish inclination. It is now configured with solid bearish support.

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

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born today, June 11, 2008.

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

The Indicant signaled buy for QID on June 11, 2008. It is up by 11.8% since then, annualizing at 192.3%. Its Force Vector is now expressing tenacity and helping to elevate Vector Pressure. A cyclical reversal is difficult with those values at such elevated positions. Configurations continue supporting bullish expectations for this ETF, but on the immediate horizon it may relax. The buy signal was premature, but committed. If the market shifts to bullish bias, this ETF will receive a quick sell signal. Keep in mind its behavior is exponential to market behavior.

Increase the QID stop loss to $44.75. Although the Quick-term Indicant may not signal sell with the threats of bullish spurts, this paragraph will continue to update you in the event the price falls below the stop loss. Spurts cannot be avoided, but the stop loss will lock the profits. Wild spurt behavior will facilitate additional profits as the bear continues to increase its dominance.

Other Contrarian Funds

ETF#03-Natural Resources - is up 49.6% (annualized at 28.9%) since the Quick-term Indicant signaled buy on Oct 25, 2006. It has been bearish the last two days. It remains in a perfect holding pattern for those of you who bought in late 2006. It is a Red Bull. Bearish expressions are mere spurts.

ETF#11-Gold and Precious Metals is up 111.5% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 37.7%. It was bearish today. It is Red Bull. Vector Pressure is aggressively in bullish domains.

ETF#14-Long Government is up 0.3% the May 5, 2008 sell signal. Its Vector Pressure is now inside bullish domains. It’s Force Vector is deep inside bullish domains, but tiring. The Quick-term Indicant will hold off on signaling buy until this cycle finds bottom. Even then, there is some concern that rising interest rates will confront its bullish potential.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Combined bullish convergence and divergence in ten of a recent thirteen week period was powerfully bullish. This bullish convergence with some bullish divergence configurations during that bull cycle suggests 2008 still had a significant chance to finish the year on a bullish note.

However, the stock market endured bearish convergence last week, following bearish divergence in the previous two weeks. This combination is increasingly bearish.

As stated the past three weeks, the Quick-term Indicant and Short-term Indicant suggest some potential bearishness on the near-term horizon. As you have witnessed, there is little doubt the bear is in charge of the stock market right now.