Jul 2009 Indicant Weekly Stock Market Report

Jul 26, 2009 Indicant Weekly Stock Market Report

Volume 7, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Will There be a Blue Dog Bull

Although considerable economic damage has been applied by politicians, evidence of Thomas Jefferson’s designed intention may be underway. For the past year or so, the Indicant has been bearish, based on broad fundamentals. The primary driver of that view has been government’s damaging influence to the economy.

The right to fail is directly and inversely proportionate to right to succeed. If failure is mitigated, there is a corresponding relationship to mitigating success. Government has protected many recent failures. That protection will lead to fewer successes. That is bearish for not only the stock market, but the quality of life as well.

The socialistic movement by the Federal Government may be slowing. The Blue Dog Democrats are challenging socialistic causes. The great bull markets of the 1980’s and 1900’s correlate well with different political parties in the executive and legislative branches of government. The Blue Dog’s recent resistance to governmental meddling may set the tone for even more bullish behavior than noted last week.

There are very few good things government can do with respect to health and wealth. Most of what government does is counter-productive to those two causes. The capital markets know this. The major indices were solidly configured for bearish behavior two weeks ago. Rather than following through with bearish expressions, the indices bounced off the Near-term Indicant’s green curve. They did that with Force Vectors in bearish domains. Although not solidly bullish, that excursion from bearish expressions defied very high probabilities.

The Congressional Effect Fund offers an amazing statistic. The S&P500 has risen 16.5% annually when congress is out of session and less than 1% when in session since 1965. If the Cap and Trade and Healthcare Reform bills were to pass, the “in session” performance would drop precipitously. Unfortunately, the “out of session” would also drop if the S&P500 content was U.S. intensive. If S&P500 content gravitates to freer societies, it would then move higher. The problem is most of the world is not freer than U.S. Some are leaning that way, while the U.S. is leaning the wrong way.

The Blue Dog Democrats are producing a phenomenon similar to the bullish phenomenon when the executive and legislative branches of government are from different parties. Although there was some fundamental support for last week’s bullishness, there was also fundamental support for stock market bearishness. A flat market or mild bullishness would have been consistent with economic data releases and reported corporate earnings. However, the market expressed profound bullish behavior that correlated with the newly evolving Blue Dog Democrats in Congress.

With that, the Indicant may back off on its extremely bearish projections for the stock market. That is not saying the market will not be bearish. Prior political economic damage from over-regulation and helping slobs buy houses will still impose future bearish influences on the stock market. However, the Blue Dog Democrats aroused the bull last week with some gusto. This may facilitate a continuation of the Near-term and Quick-term Bull.

The Cap and Trade bill and Healthcare Reform will add to prior economic damage. The only good thing politicians can do is undo prior damage. That is not happening, but the prevention of profound damage is certainly arousing the bull in spite of a continuing flow of economic uncertainty. The reverse tangential bearish detection projections of stock market bearishness are 100% certain, but they can occur long after significant bullish rallies. In other words, the Blue Dog phenomenon underway is not ever lasting. It is simply offering the potential of a higher bottom in the future.

The government and politicians are incapable of identifying the causes of accelerating healthcare costs. Healthcare costs started increasing disproportionately to the rest of the economy with Medicare. That “governmental” intrusion provided an accelerating demand against a finite supply of medical services. The laws of supply and demand prevailed and with that rising costs.

Healthcare costs and related problems originated with the creation of the FDA. That organization consists of the lower end of chemists and pharmaceutical technicians. The higher quality folks get much higher paying jobs from the few large pharmaceutical companies. The handful of large lethargic pharmaceutical companies will generally be victorious in any clashes with the FDA. Corruption between those two groups is not absent. Those large pharmaceutical companies are major contributors to politicians and their campaigns. Rest assured free market forces are not in play in that industry. More governmental meddling will only invite higher costs and inefficiencies.

Although air conditioning is a nice invention by capitalist, it has contributed to significant health problems. Perspiration is not what it once was. It is a natural biological excretion of harmful toxins and the most efficient method of accomplishing this task. People do not perspire as much as they once did and therefore endure more health problems. It was not available to many just fifty years ago. Humans are enduring profound differences in their environment.

The average worker use to burn over 10,000-calories a day. Technology has lightened that requirement and now people burn significantly less. That could contribute to an increase in health problems.

People live longer. Biological systems depreciate over time, which is a phenomenon common to any physical object. The adds stress to the health industry and with that, rising costs.

As you can see, technology, political campaign corruption, and governmental interventions are contributory to rising healthcare costs. In essence, modern society is increasingly a bunch of sissies and an increasing number of them subscribe to governmental solutions. Adding more demand through an inefficient facilitator (the government) will result is either even more acceleration in costs and/or a reduction in the quality of health services.

The Japanese developed an interesting method of preventing defects in production processing after World War II. They actually acted on it, while GM, Ford, and Chrysler did not. It is commonly referred to the Five Whys. Here is a breakdown.

Why #1 – Why are healthcare costs rising disproportionately to other costs?

Answer – An increasing number of people are unhealthier against a finite supply of healthcare resources. Supply and demand always prevail.

Why #2 – Why are healthcare resources not keeping up with demand?

Answer – The FDA and large pharmaceutical companies have contrived to minimize entrance of new competitors. Answer 2: The number of human beings smart enough and with the inclination to become medical experts is shrinking relative to an increasing number of stupid and lazy people.

Why #3 – Why are people unhealthier?

Answer – Success breeds apathy. Technology has transformed a living environment that does not challenge the human body. With that, the body becomes unhealthy, as the departure from thousands of years of environmental influences on humans has contributed to a disproportionate number of unhealthy people relative to the population.

Why #4 – Why does the FDA exists?

Answer – Unscrupulous snake oil sales people, combined with idiotic consumers, led to an altruistic movement whereby the government created an institution to protect consumers. In essence, there is a general belief among humans that one group of people (the government) claims another group of people (snake oil sales people) can take advantage of another group of people (consumers). The problem with this mode of thinking is that all three groups are made up of people and each group has the normal distribution of the good, bad, and ugly. In essence, nothing is being solved.

Why #5 – If it is true that all three groups (government, snake oil promoters, and consumers) contain an even distribution of the three types of people (good, bad, ugly), then how is it that government thinks it can solve the problem of rising healthcare costs?

Answer – Power over the masses.

An uncertain number of people simply desire power. Some do it honestly (E.g., Henry Ford, Thomas Edison, Bill Gates, Michael Dell). Others are simple control freaks and want to rule without having to perform honest hard work, such as Joseph Stalin, Adolph Hitler, and most politicians.

Those who rise to the top of any political structure only want power. Their egos are different from most. They are what they are; control freaks. With each passing law, politicians gain more power. Sometimes the majority of people want to follow a leader, regardless of good or evil. That eventually leads to bondage and only then the people recognize their stupidity. Most do not possess the anticipatory skills to prevent bondage before it happens. The capital markets, however, do recognize this. As long as that threat exists, the market’s trend is bearish. However, the Blue Dogs may fend off the immediate threat.

The Mid-term Indicant generated a few buy signals for the first time in several months this weekend for stocks and funds. Last week’s bullish stock market defied significant bearish probabilities. If the market is strongly bullish next week, then do not be surprised with buy and bull signals by the Near-term and Quick-term Indicant. There is already near-term technical merit for this, but Congressional action is being influential at this time. If the politicians pass more laws supporting vast governmental meddling, the long-term bearish trend now underway will continue.

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 15-buy signals and no sell signals.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 26 of the 332-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 120.0%. That annualizes to 62.8%. The Mid-term Indicant has been signaling hold for these 26-stocks and funds for an average of 99.3-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 275-stocks and funds of 332- tracked by the Indicant. The avoided stocks and funds are down an average of 22.3% since the Mid-term Indicant signaled sell an average of 56.8-weeks ago.

Stocks and funds no longer traded are identified with the letters NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

Dilettante run companies, such as GM, Eastman, and others will continue to be tracked as long as they are traded. We will move them from their former classifications, such as the Dow30, NAS100, etc., to the Indicant Select Stocks category. In a few instances, where there is little hope for a company to rebound, we will simply remove them from our tracking. This is difficult to do, as companies nearing the end from time to time are fortunate enough to hire a talented manager. Although rare, it does happen, and when it does, you would want to know about it.

One year ago, on Jul 25, 2008, the Mid-term Indicant was holding 82-stocks and funds out of the 345 tracked for an average of 185.3-weeks. They were up by an average of 241.3% (annualized at 67.7%). There were 254-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 13.0% since their respective sell signals an average of 22.3-weeks earlier.

The Mid-term Indicant was signaling hold for 283-stocks and funds of the 345-tracked two years ago on Jul 27, 2007. They were up by an average of 140.1% (annualized at 62.2%) since their respective buy signals an average of 117.0-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down an average of 18.9% since their respective sell signals an average of 31.7-weeks earlier. There were 26-sell signals two years ago. This turned out to be the beginning of a long period of selling without cyclical reversals.

There were 171-stocks and funds with hold signals on Jul 28, 2006 since their buy signals an average of 119.0-weeks earlier. They were up by an average of 151.8% (annualized at 66.3%). There were 168-avoided stocks and funds at that time. They were down by an average of 4.2% from their respective sell signals an average of 15.0-weeks earlier.

On Jul 22, 2005, the Mid-term Indicant was signaling hold for 222-stocks and funds out of 320-tracked. They were up by an average of 103.6% (annualized at 60.7%) since their buy signals an average of 88.7-weeks earlier. The Mid-term Indicant was avoiding 222-stocks and funds at that time. They were down by an average of 6.0% since their sell signals an average of 17.3-weeks earlier.

Five years ago, on Jul 23, 2004, there were 166-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 80.7% (annualized at 67.5%) since their respective buy signals an average of 62.2-weeks earlier. There were 83-avoided stocks and funds then. They were down an average of 26.3% since their respective sell signals an average of 41.8-weeks earlier.

On Jul 26, 2003, there were 277-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 46.2%, annualizing at 92.9%, since the buy signals an average of 25.9-weeks earlier. There were 16-avoided stocks and funds then. They were down by an average of 29.1% since their sell signals an average of 25.9-weeks earlier.

On Jul 26, 2002, there were 49-stocks and funds with hold signals. They were up 54.0%, annualizing at 57.3%. The 255-avoided stocks and funds were down an average of 29.0% since sell signals an average of 10.9-weeks earlier.

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

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

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity.

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

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

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

The stock market was bullish last week, defying very high probabilities of bearishness. Economic data and corporate earnings were mixed and not justification of the magnitude of bullishness. The political system is more influential at this time. The Blue Dog democrats may provide a political forum that is friendly to the bull.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, and Short-term Indicant models potential shift to bullish bias next week.

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

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

The Mid-term Indicant for major indices is no longer supporting with a bull signal. The Mid-term model is much more conservative in signaling buy for funds and stocks and thus the reason for continued avoidance for most of the stocks and funds.

Most of the longer-term holdings of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, even for the likes of Apple, remains relaxed.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 24.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 76.5% and the S&P500 is up 26.1% since then. The small cap index, S&P600, is up 70.4% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming.

The Dow is down 35.8% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 31.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 34.7% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant. However, if inflation manifests, triple digit gains over a twenty-year period will not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction.

The NASDAQ is down 61.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 35.9% since its similar secular peak on March 23, 2000. The Dow is down by 22.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now imposing more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will continue reducing their power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 3.6% so far this year. The NASDAQ is up 24.7% so far this year. Keep in mind the post election year is the most bearish and has lost money since 1832. So far, the stock market is conforming to this historical standard, but the NASDAQ is currently arguing with that standard and somewhat loudly.

The NASDAQ year-to-date performance was bearish by 20.7% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 33.8% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 27.4%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 7.7% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. It was up by 0.2% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness. In 2006, it was down 6.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 9.3% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 14.0% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing consistently with historical standards. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish. Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at what appears to be a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market for the time being.

As stated four weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. Such a movement is asynchronous to underlying market forces. Last week included mixed behavior between Freddie Mac and Fannie Mae. Regardless of bureaucratic and political interventions, the laws of supply and demand will prevail. Politicians delay impacts from time to time, but the markets will “catch-up” to the natural requirements.

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projections of declining demand. Although oil prices have been “softening” the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating members in the OPEC organization. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations.

A few weeks ago, commodities elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Commodity prices have been moving south the past several days. A low growth China and a flat West should invite a renewed bearish cycle to commodities. If you own related ETF’s make certain your stop losses are set.

Gold is an exception, although the Near-term Indicant is observing some concerns regarding gold. It remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. That would signal expectations in deflation and related economic decline. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 43-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions.

As stated 38-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is now over one-half complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. You are witnessing the early stages of this at this time.

On a positive note, it appears enough of the populace are influencing their political representatives to put an end to the stupidity. If this happens, then bearish expectations of great magnitude will be muted.

As stated 35-weeks ago, this bear has teeth, is hungry, and is nowhere near expiration. Cyclical spurts of a bullish configuration will occur from time to time, but the trend should remain bearish throughout this year and into 2010. As we learned from the November 28, 2008 – January 21, 2009 bullish spurt, profit potential from them is limited and in some cases disappoint rather rapidly. The attempted spurt on Feb 6, 2009 faded quickly and expired on Feb 19, 2009. The short-term trader will trade on those spurts, which is occurring now, while mid-to-long-term investor should remain on the sidelines. Finally, the current spurt underway has potential for sustainability through April and as you saw, it did that. It performed well through May, but fatigued in June. It is now in the process of expiring, while lingering is possible for a few more weeks.

The Near-term Indicant remains the primary focal point. The NTI’s blue curves are collapsing for the major indices. There have been several NTI bear signals and sell signals for the ETF’s tracked daily. Many of you have locked in your profits for this bullish spurt in the face of a major secular bear market. Although the market was bullish this past week, it is near or past the peak of this cycle.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 14.5% since that sell signal. It has been bearish in 15-of the last 29-weeks. It has been bullish in nine of the last 15-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Fidelity Gold, Fund #28 received a sell signal on July 10, 2009 after disappointing from the previous buy signal in May 2009. Although gold prices should continue to increase, risks of continued holding of this fund are currently too great. Fidelity Gold has been inconsistent for several years now.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 4.7% since that sell signal. It has been bullish in 13-of the last 19-weeks, but solidly bearish in four of the last six weeks. It was solidly bullish last week.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 19.4% since that sell signal. It has been bullish in 15-of the last 20-weeks, but also solidly bearish in four weeks of the last six weeks. It was solidly bullish last week.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 35.6% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 4.6% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#03 – Energy and Natural Resources on June 24, 2009. It is up 8.4% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 15.8% since that buy signal, annualizing at 25.3%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. The Near-term Indicant signaled buy on April 24, 2009. It is up 4.1% since the Near-term buy signal.

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

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

The ten major indices are up by an average of 7.4% since the Mid-term Indicant signaled bear 3.0 weeks ago. If the Blue Dog influence persists, the Mid-term Indicant may signal bull in a week or two.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $26,351,784. That beats buy and hold performance of $1,383,423 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $128,457. That beats buy and hold’s $95,929 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $180,298. That beats buy and hold’s $68,168 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1804.1%, 33.9%, and 164.5%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 36.3% since then. It remains too risky to buy since the Near-term Indicant continues resisting bearish assaults, even though weakly. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires, which it is on the verge of doing. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 214.1% (annualized at 12.0%) since the Long-term Indicant signaled bull 925-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

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

The Quick/Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

As stated the past several days major attributes are not strongly bullish. More are becoming increasingly bearish, even though strong bullish behavior last week, last Monday, and Thursday attempted to reverse bearish attributes. If Force Vectors decline over the next two to six days without bearish corresponding behavior, this Near-term Bull will persist for several more weeks.

This Near-term Bull has turned out to be a thoroughbred. Its expiration will not be easy, sharp, or quick. It is near its peak, but it can linger for several more weeks and even continue with meandering bullish behavior.

A deep bear cycle is not around the corner. It is possible for a new bull cycle to be contiguous to the expiring old bull. However, the probability of that remains low. The probability of a new Near-term Bear remains higher in spite of recent bullish behavior.

There is an increasing probability that the next bearish cycle will be mild, as opposed to being deep. It may not start until mid-August.

Force Vectors are bullishly mature. That should incite the bear to respond on the immediate horizon. If the bear does not display its ambition during the impending bearish Force Vector cycle, the current Near-term bull will persist.

The Near-term Bull is 20-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The bull is demonstrating dynamic responses to the bear’s influence. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. Bullishness this past week appears to be emotionally-based as the so-called improving fundamentals are not justification for the magnitude of the bull’s wrath. However, as usual, the market can move with sustainability against reasoned fundamentals. The Near-term Indicant may be signaling buy for the avoided funds if the market does not move in synch with Force Vectors over the next two to six days.

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

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

The five existing bulls are up 26.8%, annualizing at 84.8%, since the NTI signaled bull 16.4-weeks ago.

The NTI is signaling bear for six major indices. They are up by an average of 8.7% since the bear signals an average of 2.3-weeks ago.

The Quick-term Indicant did not generate any new bull or bear signals today.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for six major indices. They are up 12.0%, annualizing at 51.0%, since their bull signals an average of 12.2-weeks ago.

The six bears are up 3.4% since their respective bear signals an average of 4.4-weeks ago.

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day.

-Near-term Directional Intensity Unanimity-No longer exists. The NTI is signaling bear and bull for major indices. Although there is no bullish unanimity, there is also an absence of bearish unanimity, suggesting limited obviations of directional intensity.

QTI Red Bull Status-Jul 22, 2009-Mixed bias. Eleven red bulls continue to discourage bear. Although configurations are not supportive of dynamic bullish behavior, they are equally preventing dynamic bearish behavior.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. Eleven of eleven non-contrarian indices are above bearish yellow. This should anger the bear, but so far, the bear appears content on being subdued.

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven moving north; up from nine 20-days ago.

-NTI Green Bear Direction – Jul 14, 2009-Mild bearish bias. Two moving north; down from eleven 20-days ago.

-STI Force Vector Position- Jul 9, 2009-Bearish bias. Eleven in bullish domains; One in bearish domain. (Force Vectors are bullishly mature and inviting the bear to respond. July 22, 2009-Bear’s response too puny to stimulate much aggression right now, but bearish bias retained due to maturity of cycle). July 24, 2009-Force Vectors remain in bullish domains, minimizing bearish threats.

-STI Force Vector Direction – Jul 22, 2009-Mild bearish bias; Nine continuing south. If Force Vectors decline without corresponding market bearishness, this Near-term Bull could linger for several more weeks. July 23, 2009-If Force Vectors start moving laterally or even passively to the south, the conclusion of this Near-term Bull is nowhere in sight.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Nine in bullish domains; down from eleven 20-days ago. A non-responsive bear is discerning with respect to bearish expectations. Although the major indices are at or near cyclical peaks, this bull is now being supported by Vector Pressure.

-Vector Pressure Direction- Jul 9, 2009-Bearish bias. Two moving north; nine moving south. Much of the theme of bearish expectations rests with this lone attribute as it does not change direction too often. It remains supportive of bearish aspirations in spite of recent bullish behavior.

-Tangential Protection - None of the 11-major indices possess this attribute.

-Reverse Tangential Bearish Detection - Although the current Near-term Bull has not yet expired, as the bull/bear battle is waged for dominance. See the below list for major indices, where reverse tangential detects future valuations of indices will be lower than current.

Major Indices

>DJIA will be at or below 7976 at some future point.

>DJ Composites will be at or below 2630 at some future point.

>DJ Transports will be at or below 2830 at some future point.

>S&P500 will be at or below 835 at some future point.

>S&P100 will be at or below 394 at some future point.

>S&P400 will be at or below 500 at some future point.

>S&P600 will be at or below 250 at some future point.

>NYSE will be at or below 5429 at some future point.

ETF’s

>ETF#02-SPY will be at or below $82.35 at some future point.

>ETF#05-XLF will be at or below $9.50 at some future point.

>ETF#06-EWJ will be at or below $8.50 at some future point.

>ETF#07-DIA will be at or below $77.50 at some future point.

>ETF#08-EFA will be at or below $39.35 at some future point.

>ETF#09-XLK will be at or below $15.35 at some future point.

>ETF#15-IVV will be at or below $81.50 at some future point.

>ETF#16-IWO will be at or below $46.75 at some future point.

>ETF#18-MDY will be at or below $90.60 at some future point.

>ETF#19-XLB will be at or below $22.40 at some future point.

>ETF#22-IWF will be at or below $35.80 at some future point.

>ETF#23-IWD will be at or below $41.80 at some future point.

>ETF#24-IWN will be at or below $42.30 at some future point.

>ETF#25-DVY will be at or below $33.50 at some future point.

>ETF#26-IJR will be at or below $37.30 at some future point.

>ETF#29-XLY will be at or below $19.80 at some future point.

>ETF#30-XLI will be at or below $19.70 at some future point.

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

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

The NYSE and NASDAQ Indicant Volume Indicators are again moving north. Although embryonic and most likely a reflection of late market participants (the group that loses), one cannot argue with the implications. The configuration is supportive of the bull, but should be short-lived.

Current Strategy-Short-term Indicant- Jul 24, 2009-Fri-Same as yesterday. Jul 23, 2009-Thu-Bullishly mature Force Vectors are the only attribute preventing unanimous bull signals for the major indices. They have started to shift south. If the market does not parallel southerly moving Force Vectors, this Near-term Bull will linger for several more days/weeks. Today’s bullish behavior, coupled with mildly southerly moving Force Vectors does not bode well for bearish ambition. Jul 22, 2009-Wed-Although the bounce off of green a few weeks ago is typical, the bear’s delayed influence is discerning for those desiring bearish behavior. Force Vectors finally shifted south. This should provide the bear some encouragement and it will be interesting to see how the bear reacts. If the reaction is passive, this Near-term Bull may not expire for several more weeks. New bull/buy signals may be triggered due to increasing minimal risks of doing so. This should be more telling in the next five to seven days. Do not be surprised at lingering, lateral movement for several more weeks. Jul 21, 2009-Tue-Although there is little likelihood of dynamic bullish expressions in the next two to three days, the bear is not expressing any interest in subjecting its ambition into the major indices. If prices do not show some bearish influences in the next day or two, the Near-term Indicant may have to signal bull for those indices with a current bear signal. This inflection period, so far, has not offered much bearish support. Jul 20, 2009-Mon-Mature Force Vectors should reverse. If that reversal coincides with bullish market behavior, the current Near-term Bull will delay its expiration for several more days. Vector is starting to shift back to the north. If that is not arrested by the bear, expectations of bearish behavior will be delayed by several more days. As stated, though last week, do not be surprised at non-bullish behavior for this week. Bearish behavior is difficult to achieve with increasing Vector Pressure and a rising blue curve. Jul 17, 2009-Fri-Do not be surprised at non-bullish to bearish behavior next week.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 12-ETF’s. They are up by an average of 21.5%, annualizing at 79.1% since their buy signals an average of 14.1-weeks ago. Although there were no sell signals, the NTI is avoiding 19-ETF’s. They are up by an average of 11.9% since their sell signals an average of 2.9-weeks ago with most of those gains since in eight of the last ten-trading days. Force Vectors are at a maximum. If prices do not fall with the impending Force Vector decline, the Near-term Bull may persist for several more weeks.

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

The Quick-term Indicant is signaling hold for 19-ETF’s. They are up an average of 16.1% since their buy signals an average of 13.5-weeks ago. Those with hold signals are annualizing at 62.0%. Twelve ETF’s are up by an average of 6.6% since their sell signals an average of 4.4-weeks ago.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only two red bulls 10-days ago to 29-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon. However, declining Force Vectors should facilitate non-bullish to bearish behavior next week.

Vector Pressure in bullish domains is also a bear depressant. There are now nineteen ETF’s with this bullish and non-bearish configuration. The bearish threat is diminishing. That is up from eighteen 20-days ago. Bullish behavior in seven of the last ten trading days has reversed the bearish threat with 29 moving north. That is up from only three 5-days ago. This should be temporary, as the insult to the bear should be enough to incite a response. So far, the bear has been timid. The next two to five days of Force Vector behavior will be more telling.

Force Vectors are bullishly mature. Although the probability of non-bullish to bearish behavior remains high on the immediate horizon, any bearish incursion should be shy of recent bullishness in magnitude.

The Mid-term Indicant is avoiding all 100-Mutual Funds. Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on Jul 23, 2009. The primary reason for the sell signal is to clearly identify the next buy signal, which will coincide with the next QQQQ sell signal. Keep in mind, though, QID is configured for a robust bullish cycle.

The Quick-term Indicant signaled sell on March 26, 2009. It is down 40.5% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $39.68 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled sell on June 24, 2009. This ETF has too many bearish attributes to continue holding. It is up 8.4% since both sell signals. It is configured to move south and not be contrarian.

ETF#11-Gold and Precious Metals is up 15.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 25.3%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $85.27 and rising. Although under Near-term duress, this ETF remains solidly bullish from a long-term perspective.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 4.1% since then, annualizing at 16.3%. Fundamentally, it is one of the few ETF’s that could continue to increase in price in the face of an overall bearish stock market. Declining Vector Pressure is discerning, though. It is enjoying tangential protection and thus one reason for no sell signal.

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

This fund crossed above QTI-Yellow on July 8, 2009 and thus received a Quick-term buy signal. It is down 5.2% since then.

Jul 17, 2009-Fri-TLT has enough options volume for trading. Aug or Sep 90 to 100 calls look good. If this ETF opens down on Monday morning, you should consider buying.

As of Jul 20, 2009-Mon-This ETF appears to be “explosively” bullish.

Jul 21, 2009-Tue-This was the most bullish of the ETF’s tracked by the Daily Indicant Stock Market Report. It was up a solid 2.0%. The mentioned call options were up over 30% with one trading at one point at +50% on the day.

Jul 22, 2009-Wed-TLT pulled back today. If Force Vector shifts south, do not be holding these options.

Jul 23, 2009-Thu-TLT is being threatened by the money bear. It is equally positioned for a bounce north, but not as obviating as last Monday’s configuration. A spread options play for 10% beyond strike price is a good tactic for those with time and money. It should be dynamic in price movement one way or the other with a mild bias favoring it moving north.

Jul 24, 2009-Fri-TLT Force Vector continues moving north. Obviations of bullish directional intensity that occurred last Mon are not quite a strong now. Force Vector’s interaction with Vector Pressure in a day or two should configure again with enhanced obviations of directional intensity.

Major ETF Events

Jul 24, 2009-Fri-Significant intraday bearishness, coupled with bullishly mature Force Vectors suggests non-bullishness to bearish behavior on the immediate horizon.

Jul 23, 2009-Thu-Force Vectors moved mildly south today with dynamic bullish behavior. Although that does not support the bear, configurations continue suggesting non-bullish behavior; mostly due to maximum Force Vectors and tiring Vector Pressure.

Jul 22, 2009-Wed-Force Vectors are at a peak. If the bear does not respond, this Near-term Bull will persist for several more days and possibly weeks.

Jul 21, 2009-Tue-ETF#14 exploded north today. It was somewhat contrarian as its bullish behavior was four times greater than the major indices. This bullishness by TLT should last for at least three more days, but be cautious that this bullishness is against the trend. (Red and Yellow are drifting south. If this bullish behavior continues and remains a contrarian indicator, the market should be non-bullish to bearish. Keep in mind, though, too many attributes are not supportive of dynamic bearish behavior. Patience is the key at this point, if one is desiring bearishness.

Jul 20, 2009-Mon-ETF#14-TLT is configured with an explosively bullish configuration. This fund is contrarian to market 70% of the time. It has fallen to a rising NTI-green curve with rising Vector Pressure and bearishly mature Force Vectors. If this fund continues falling it will be defying at 97.4% probability of significant bullish behavior over the next five days.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bullish convergence occurred the past two weeks, countering the prior two weeks of bearish convergence. Fifteen of the past nineteen weeks enjoyed combined bullish convergence/divergence. This suggests this Near-term Bull will not expire with the efficiency desired by the bear.

Indicant Conclusion

The bull continued goring the bear last week. This defied a very high probability of bearish expressions. The Near-term Bull continues to persist. If the bear remains quiet next week, this bull will continue. The Blue Dog phenomenon may contribute to bullish behavior for several more weeks.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

07/26/09

Jul 19, 2009 Indicant Weekly Stock Market Report

Volume 7, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Fundamental Timing of Political Influences

Before expressing what one may consider as an abstract opinion, it is always helpful to understand facts.

http://www.indicant.net/Non-Members/Back%20Issues/Supplements/Jul/2009-0719-Presidential%20Election%20Cycle.htm

Clicking the above link will illustrate how a $10,000 stock market investment in 1832 only in presidential post election years looses money? It is the only year, along the four-year presidential election cycle, that does this. Money has been made on the other three years with the most being made in the presidential pre-election year.

One has to ask, how can a $10,000 stock market investment only during presidential post election years lose money over a span of nearly 200-years? A simple savings account opened in 1832, earning 2% per year, for the last 180-years would be worth $353,208.

There are a few theories regarding the presidential post election year stock market bearishness. The new president dominates the news shortly after the election. This shoves other “more worthy” news to the back pages. This distracts investor interest in the stock market and dampens demand for stocks.

Politicians do not create wealth. Excessive news coverage and focus on members of the economic overhead group (politicians) does not generate too much interest in capital markets.

The current president speaks of saving jobs. This is likened to a purchasing manager proclaiming cost avoidance. Purchasing managers during the high inflation years in the 1970’s added this to their resumes and corporate agendas. All they would do is send out RFQ’s to inefficient suppliers and then report how they turned down doing business with them and thus the claims of cost avoidance. It took some time, but this was rejected on the basis of being a joke by competent organizations. Saving jobs? No politician can do this. All they can do is undo prior economic damage. Few do that since it is not self-serving.

Once elected, the president typically pushes new programs through. There are very few times new programs support economic wealth building. On the contrary, wealth destruction is more common than not.

The capital markets recognize the destructive elements of politicians. Once the new rules are in place, capitalists start figuring out workarounds, cheating methods, and other approaches to minimize the effects of wealth destruction. Many will relocate in the years to come if cap and trade is actually passed. It is amazing how political atheist point to an abstract view, such as global warming, and laugh at Christians, claiming similar abstractness. Hypocrisy in political circles is more common than not.

Where does one plot the first data point? Most never ask the question, “why is the first temperature for earth plotted on this graph paper in 1649?” The answer quite often is, “well this is the first time accurate records were kept.” Accuracy is elusive when people read an instrument and then jot down a number. There are too many therbligs used to claim accuracy. If the first data point was plotted 75-million years ago, the earth is cooling. The first data point and the last data point plotted influence the trend. Two-dimensional observations ensue and there is very little relevance to any subject confined to two-dimensional data arrays.

It takes about eighteen months for the process from new political programs, implemented by the newly elected, and ways to workaround by the capitalists. That is one reason why bear market bottoms typically occur in the mid-term election years. The next mid-term election year is 2010.

The United States is a Republic. That suggests the president can implement actions not approved by the majority. The founding fathers understood that sometimes the majority is wrong. When emotions are attached to opinion without support of underlying facts, the majorities’ views are, quite often, wrong.

You may have noticed the speed of new programs introduced by newly elected politicians. Cap & trade and healthcare are the immediate political focal points. Neither of these are economic stimulants. They add nothing to economic wealth creation.

The reason political leadership is in a big rush to get these programs implemented, is the threat of the upcoming mid-term elections in November 2010. This is a real threat to any incumbent president. If the other party assumes Congressional majority, the incumbent executive branch is considerably slowed.

This occurred in 1994 when Republicans took over Congress. The stock market reacted with a gleeful and unprecedented bull. Bill Clinton said after being embarrassed by losses of democratic seats, “the days of big government are over.” The stock market not only enjoyed the comment, it enjoyed the execution thereof.

Just ahead of the mid-term election year of 1998, Bill Clinton did what most presidents attempt to do during elections. He started a war. It was too small to help him get more democrats in Congress. The bull continued stamping and goring any bears’ desires as the legislative and executive branches of government did not get along.

In 2000 the executive and legislative branches of government were again from the same political party; republican. The bear market unfolded. A war was started in Iraq in 2003. Presidents know that war is friendly to their desires for political control. A solid war virtually ensures the reelection of any incumbent. Do not be surprised at escalating military conflicts in late 2010.

War is generally bullish for the stock market. Depending on the nature of the war, it does invoke an acceleration the three pillars of economic wealth building; manufacturing, agriculture, and extraction.

Cap and trade and healthcare reform do nothing toward economic wealth creation. The executive and legislative branches appear in agreement on these. That should be bearish.

In 2006, democrats resumed control of Congress. The executive branch reached across the aisle. The bear shortly followed. The bull does not like it when the executive branch and legislative branch get along, while the bear flourishes with that relationship.

Politicians are politicians. They are neither democrat or republican. They join a party with one singular thought. “Which party is best one for my being elected?” Watch the behavior. Regardless of party affiliation, watch how they vote or get along with those in the other party. Disagreements and a do-nothing government is bullish. Agreements and backslapping is bearish.

The wild card is the rest of the world. The U.S. influence on world economies could be diminishing. As business is worldlier, one has a solid argument for a bullish stock market in spite of declining U.S. influence. If the rest of the world minimizes social programs in favor of enhancing the three pillars of economic wealth, it would not be surprising to see the bull flourish. Multinational corporations are no longer limited to the large caps, where growth is slower. Some may choose to relocate a significant portion of their business out of the U.S. similar to Halliburton, which has a second headquarters in Dubai.

The rest of the world is hungry for economic wealth. The desire for that may override U.S. political bearishness. If the rest of the world follows the U.S. lead to increased socialism, rest assured the bear will be around for a long time.

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 no sell signals.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 26 of the 332-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 119.0%. That annualizes to 62.7%. The Mid-term Indicant has been signaling hold for these 26-stocks and funds for an average of 98.7-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 290-stocks and funds of 332- tracked by the Indicant. The avoided stocks and funds are down an average of 25.2% since the Mid-term Indicant signaled sell an average of 54.7-weeks ago.

One year ago, on Jul 18, 2008, the Mid-term Indicant was holding 79-stocks and funds out of the 345 tracked for an average of 184.5-weeks. They were up by an average of 255.1% (annualized at 70.6%). There were 263-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 13.1% since their respective sell signals an average of 20.6-weeks earlier.

The Mid-term Indicant was signaling hold for 307-stocks and funds of the 345-tracked two years ago on Jul 20, 2007. They were up by an average of 144.8% (annualized at 66.6%) since their respective buy signals an average of 113.1-weeks earlier. The Mid-term Indicant was avoiding 36-stocks and funds at that time. They were down an average of 6.3% since their respective sell signals an average of 29.3-weeks earlier.

There were 168-stocks and funds with hold signals on Jul 21, 2006 since their buy signals an average of 124.7-weeks earlier. They were up by an average of 159.3% (annualized at 66.4%). There were 164-avoided stocks and funds at that time. They were down by an average of 6.2% from their respective sell signals an average of 15.1-weeks earlier.

On Jul 15, 2005, the Mid-term Indicant was signaling hold for 203-stocks and funds out of 320-tracked. They were up by an average of 107.9% (annualized at 59.8%) since their buy signals an average of 93.8-weeks earlier. The Mid-term Indicant was avoiding 203-stocks and funds at that time. They were down by an average of 29.2% since their sell signals an average of 16.5-weeks earlier.

Five years ago, on Jul 16, 2004, there were 212-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 79.1% (annualized at 69.0%) since their respective buy signals an average of 59.6-weeks earlier. There were 50-avoided stocks and funds then. They were down an average of 29.2% since their respective sell signals an average of 45.0-weeks earlier.

On Jul 19, 2003, there were 277-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 44.4%, annualizing at 93.2%, since the buy signals an average of 24.8-weeks earlier. There were 13-avoided stocks and funds then. They were down by an average of 28.1% since their sell signals an average of 29.6-weeks earlier.

On Jul 19, 2002, there were 39-stocks and funds with hold signals. They were up 38.4%, annualizing at 45.0%. The 241-avoided stocks and funds were down an average of 27.7% since sell signals an average of 10.4-weeks earlier.

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

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

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Right now, the pendulum is swinging to the left. That is not good for stock equity related investing.

However, some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity.

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

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

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

The stock market is either about to shift to bearishness or move laterally. Some stocks move bullishly during bear or meandering markets. This is because profit making corporations become fewer and thus fewer viable companies to invest in. Such stocks skyrocket disproportionately to the norm of their profit potential due to the dynamics of supply and demand. In the early stages of such buying, some will falter. Therefore, do not be surprised at sell signals shortly following some of these buy signals.

Some organizations will perform to strategic expectations. Some will not. It is very difficult to keep up with management teams. All organizations have only a handful of good managers. Most of those “good” managers are too busy for the limelight. They are too busy improving organizational effectiveness. Therefore, when a stock technically configures for robustness bullish behavior, the Mid-term Indicant will signal buy.

Finally, the Indicant uses profit synonymously to cash flow. Some companies report excellent profits but weak cash flow. Those are dogs. You want to be vested into an organization that does both.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to the Near-term, Quick-term, and Short-term Indicant models increasingly non-bullish configurations.

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

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

Most of the longer-term holdings of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, even for the likes of Apple, remains relaxed.

If you feel you will need cash within the next two years, you should consider selling all stocks and funds. The Mid-term Indicant is not signaling hold for any mutual funds, including those that short the market at this time.

It is unlikely the market will not enjoy long-lasting bullish cycles for the next ten to fifteen years with the possible exception of Asian markets and stocks/funds that will benefit during the earlier phases of socialism and/or superior products/management.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 20.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 69.3% and the S&P500 is up 21.1% since then. The small cap index, S&P600, is up 62.1% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 38.3% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 34.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 37.8% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

At this point, do not be surprised at $500 oil by 2015. This is especially true if the Chinese accelerate capitalistic endeavors. The Cap and Trade Tax could accelerate this pricing of oil and commodities. This is shaping up similarly to the 1970’s and that was without China’s demand for oil.

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may in fact not return. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market are being confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction.

The NASDAQ is down 62.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 38.4% since its similar secular peak on March 23, 2000. The Dow is down by 25.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 0.4% so far this year. The NASDAQ is up 19.6% so far this year. Keep in mind the post election year is the most bearish and has lost money since 1832. So far, the stock market is conforming to this historical standard, but the NASDAQ is currently arguing with that standard and somewhat loudly.

The NASDAQ year-to-date performance was bearish by 16.3% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%., which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 28.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 27.1%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 6.0% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. It was down by 0.9% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness. In 2006, it was down 7.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 12.3% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 11.8% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated three weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. Such a movement is asynchronous to underlying market forces. As you noticed last week, they fell quite significantly. Regardless of bureaucratic and political interventions, the laws of supply and demand will prevail. Politicians delay impacts from time to time, but the markets will “catch-up” to the natural requirements.

Gold is an exception, although the Near-term Indicant is observing some concerns regarding gold. It remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. Longer-term hold positions are okay. Its strength (non-bearishness) is a testament to the fear elements inherent in the economy. Economic conditions will be fostering the “hate element” of humanity. Keep your eye on the daily report as gold appears nearing a cyclical peak on a short-term basis, but fundamentally remains a solid hold. Keep in mind, the one who has engine lathes, turret lathes, and mills and knows how to operate them can take gold from those who only have gold.

As stated 42-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions.

As stated 37-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” This year is now over one-half complete. The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. You are witnessing the early stages of this at this time.

As stated 33-weeks ago, this bear has teeth, is hungry, and is nowhere near expiration. Cyclical spurts of a bullish configuration will occur from time to time, but the trend should remain bearish throughout this year and into 2010. Bullish spurts will occur from time to time. As we learned from the November 28, 2008 – January 21, 2009 bullish spurt, profit potential from them is limited and in some cases disappoint rather rapidly. The attempted spurt on Feb 6, 2009 faded quickly and expired on Feb 19, 2009. The short-term trader will trade on those spurts, which is occurring now, while mid-to-long-term investor should remain on the sidelines. Finally, the current spurt underway has potential for sustainability through April and as you saw, it did that. It performed well through May, but fatigued in June. It is now in the process of expiring, while lingering is possible for a few more weeks.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 20.5% since that sell signal. It has been bearish in 15-of the last 28-weeks. It has been bullish in eight of the last 14-weeks but has not yet qualified for a Mid-term Indicant buy signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 9.8% since that sell signal. It has been bullish in 12-of the last 18-weeks, but solidly bearish in four of the last five weeks.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 40.6% since that sell signal. It has been bullish in 14-of the last 19-weeks, but also solidly bearish in four weeks of the last five weeks.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 40.6% since that sell signal. It rebounded with last week’s bullishness but not enough to inspire the Mid-term Indicant to signal buy.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 10.9% since that sell signal.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#03 – Energy and Natural Resources on June 24, 2009. It is up 2.6% since then. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal, but on the last cycle it did not gain similar traction as that in 2003.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 14.0% since that buy signal, annualizing at 23.1%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. The Near-term Indicant signaled buy on April 24, 2009. It is up 2.5% since the Near-term buy signal.

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

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

The ten major indices are up by an average of 2.1% since the Mid-term Indicant signaled bear 2.0 weeks ago.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $26,351,784. That beats buy and hold performance of $1,330,281 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $128,457. That beats buy and hold’s $92,113 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $180,298. That beats buy and hold’s $65,416 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1880.2%, 39.5%, and 175.6%, 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.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 29.1% since then. It remains too risky to buy since the Near-term Indicant continues resisting bearish assaults, even though weakly. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires, which it is on the verge of doing. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 202.4% (annualized at 11.4%) since the Long-term Indicant signaled bull 924-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

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

The Quick/Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

As stated the past several days major attributes are not strongly bullish. More are becoming increasingly bearish, even though strong bullish behavior this week is attempting to reverse bearish attributes. Several indices and ETF’s received bear signals the past few weeks, while others continue with hold signals.

The current Near-term Bear is nearing expiration, but this particular breed of Near-term bulls is a near thoroughbred. If it does not expire within a couple of weeks, one could deem it a pure thoroughbred. It has tenacity and not quite ready to succumb to bearish desires. It can linger for several more days.

This does not mean a bear cycle is around the corner. It is possible for a new bull cycle to be contiguous to the expiring old bull. However, the probability of that is very low. The probability of a new Near-term Bear remains higher in spite of this week’s bullish behavior.

Force Vectors are bullishly mature. That should incite the bear to respond on the immediate horizon.

The Near-term Bull is 19-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The bull finally demonstrated dynamic responses to the bear’s influence. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration.

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

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

The five existing bulls are up 20.2%, annualizing at 68.1%, since the NTI signaled bull 15.4-weeks ago.

The NTI is signaling bear for six major indices. They are up by an average of 5.4% since the bear signals an average of 1.3-weeks ago.

The Quick-term Indicant did not generate any new bull or bear signals today.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for six major indices. They are up 6.4%, annualizing at 29.7%, since their bull signals an average of 11.2-weeks ago.

The six bears are up 0.1% since their respective bear signals an average of 3.4-weeks ago.

On-going attribute watch for major indices: Biases are dated at the time of bias observation. The next sentence advises of conditions and indicators each day.

QTI Red Bull Status-Jul 9, 2009-Non-bullish bias. There are ten red bull among the major indices, but this should anger the bear; non-bullish bias retained.

QTI Yellow Bear Status-Jul 13, 2009-Mild bearish bias. Eleven of eleven non-contrarian indices are above bearish yellow. This should also anger the bear; mild bearish bias retained.

-NTI Blue Bull Direction-Jul 13, 2009-Mild non-bullish bias. Ten moving north; down from twelve 20-days ago.

-NTI Green Bear Direction – Jul 14, 2009-Mild bearish bias. Two moving north; down from eleven 20-days ago and down by eight from last Monday.

-STI Force Vector Position- Jul 9, 2009-Bearish bias. Eleven in bullish domains; One in bearish domains. (Force Vectors are bullishly mature and inviting the bear to respond).

-STI Force Vector Direction – Jul 13, 2009-Bullish bias; Most moving north, which should last for one to three more days.

-Vector Pressure Position- Jul 10, 2009-Increasing non-bullish bias. One in bullish domains; down by six the past five days and down from eleven 20-days ago.

-Vector Pressure Direction- Jul 9, 2009-Bearish bias. Two moving north; nine moving south.