Jul 25, 2010 Indicant Weekly Stock Market Report

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

Bullish Spurt

Last weeks’ news was favorable to the bull. Corporate earnings, for the most part, beat expectations. Some were indeed impressive. The news out of Europe is increasingly favorable to the bull. The European crisis appears to be subsiding. Some of that is “official verbosity.” The stock market will eventually need the proof before offering long lasting bullish support.

Congress only has two more weeks of applying more potential damage to the economy. The summer recess starts on August 9 and will last through September 14. That offers bullish potential. Of course, the congressional effect is stratified over a long period with significant encounters to variance from time to time. The bear can unleash torment even during their absence.

Technically and disappointing to those desiring bearish behavior was Force Vectors northerly bounce off of Vector Pressure last Thursday. Rather than falling into bearish domains, Force Vectors moved back into bullish domains. That does not imply a long bullishly moving cycle, but it is discerning and threatening to the bearish theme now underway. The key is Vector Pressure. It is not to be argued with.

Vector Pressure remains in bearish domains, which is a bearish attribute. Click this sentence to view the S&P500 to illustrate this point. As you can see, its Force Vector decline last week was not accompanied with decreasing stock prices. That is typically non-bearish, although not necessarily bullish. Furthermore, you should notice the small movement of Force to the north. It bounced off Pressure and did not find comfort succumbing to gravitational forces invoked by the bear. This threatens the Short-term Bear signal. If Pressure moves into bullish domains, the Short-term Indicant will be forced to signal bull. It is very near doing so. One should never argue with bullish pressure in spite of one’s periodic desires to do so.

The VIX’s NTI Bullish Blue Curve collapsed last Thursday. Since the VIX is generally contrarian, that would offer arguments favoring the bull. Click this sentence to view its chart. Here is the tricky part. The VIX generally vacillates between the Quick-term Indicant’s Bullish Red Curve and its Bearish Yellow Curve. In other words, the VIX will bounce north from values equal to yellow or below it. The VIX never falls deeply below yellow, but it can linger just below yellow for very long periods. You saw that during most of 2009 while the bull demonstrated its glory.

As you can see, the VIX is very close to yellow. Recent behavior suggests it is heading for yellow, which should be bullish for the stock market (S&P500). The trickiness is that it is very close to yellow, which suggest such bullishness could only last for a few more days. The question is, should you be bothered by an S&P500 bull signal, knowing the bear’s loud growl is nearing. You will notice the answer to that question next week, as the Short-term Indicant never argues with Vector Pressure. If the S&P500 Index Vector Pressure becomes positive and the VIX becomes negative, rest assured the Short-term Indicant will signal bull for the S&P500 Index and others with similar configurations, even if within a mere bullish spurt cycle.

ETF#10-IBB is a subsector of the healthcare sector. Click this sentence to view its chart. As you can see, it did not participate in last week’s bullish behavior. ETF#06-Japan is also inflicted with the same configuration. Click this sentence to view its chart. Sustainable Short-term bullish cycles do not discriminate against any sector in the early days of bullish formation. Sustainable short-term bull cycles invite all to participate. Discrimination occurs months and years later near the peak of such cycles. As you can see, significant discriminatory behavior is being inflicted on these two ETF’s and a few others that are not sector related. That omission in bullish synergy is a common attribute to bullish spurts.

Both of those ETF’s participated in the birth of March 2009’s sustainable short-term bull cycle. You should also notice they have not yet been extended an invitation to participate, suggesting last week’s bullish behavior is a mere spurt. However, invitations for participation may be forthcoming. Once the discrimination subsides, one can conclude that the bullish spurt is again evolving into a longer lasting bullish cycle.

If those invitations are granted and those two ETF’s, in addition to others, accept those invitations, the short-term theme will convert from bullish spurt to sustainable bull.

The Indicant does not officially forecast. It prognosticates from time to time in anticipation of certain major events. Some of you may recall it projected a bullish spurt in early July. The Short-term Indicant was forced to signal sell and bear even though it knew a bullish spurt was in the offing.

Some spurts last only a day or two, while most last for about 8 to 14-weeks. During those longer spurts, the market vacillates without much direction, but they all enjoy a mild bullish bias. They tend to bounce above and below the Near-term Indicant’s Bullish Blue Curve without contacting the NTI Green Curve. Then all of a sudden, prices interact with NTI Green and the market can fall by double-digit amounts in only a few days. Bears occur quickly and much more dynamically than bulls. They seldom last as long as bulls. That risk induces the Short-term Indicant to signal sell even though bullish spurt probabilities are relative high.

As you can see, by clicking this sentence, the S&P500 has enjoyed a nice long-term bullish trend since 1950. Statistics support that argument. Statistics also support the S&P500 falling over 50% before 2012. You will notice the sinusoidal projections off the Mid-term Indicant’s bearish yellow and bullish red curves significantly favor the bear. However, the linear trend remains in support of the bull. That is one reason why the Indicant is event-based and does not forecast. Forecast, by nature, invites error.

Applying Al Gore sort of logic, we can produce a forecast that is diabolically opposed to the 1950’s originating forecast for the S&P500. The trend so far this century for the S&P500 is bearish. As you can see, by clicking this sentence, the linear trend originating in 2000, is bearish. On the other hand, sinusoidal waves of the MTI Bullish Red and Bearish Yellow curves portend a glorious future for the bull. It all depends on where the origination point is derived when using time as the independent variable. This, of course, has about as much merit as global warming enthusiasts.

Finally, the ETF and ETN that short the stock market, and tracked by the daily stock market report, both retain positive pressure. Their Force Vectors are not friendly to their current hold signals, but Vector Pressure is not to be argued and it remains positive (bullish). The stock market is enduring a bit of an inflection point whereby the struggle for directional intensity is strongly pursued by both bull and bear. The news last week favored the bull, but mainly irrelevant on most short-term cycles. The stock market will not reward corporate profits from simple workforce reductions for long periods. That is a predominant component to the favorable earnings report. Revenue growth will again become important once the euphoria subsides from the low level, low talent profit gains generated by corporate workforce reductions. Anyone can cut corporate headcount. Only a few know how to generate increasing revenues and profit growth rates greater than revenue growth rates. Of course, a robust economy makes that easy enough for even the dilettantes. Therein lies the problem, in addition to an ever-increasing number of bank failures.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 136 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 50.0%. That annualizes to 41.6%. The Mid-term Indicant has been signaling hold for these 136-stocks and funds for an average of 62.4-weeks.

The Mid-term Indicant is avoiding 178-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 18.9% since the Mid-term Indicant signaled sell an average of 55.8-weeks ago.

One year ago, on Jul 24, 2009, the Mid-term Indicant was holding only 26-stocks and funds out of 332 tracked for an average of 99.3-weeks. They were up by an average of 120.0% (annualized at 62.8%). There were 275-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 22.3% since their respective sell signals an average of 56.8-weeks earlier one year ago.

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

There were 307-stocks and funds with hold signals on Jul 20, 2007 since their buy signals an average of 113.1-weeks earlier. They were up by an average of 144.8% (annualized at 66.6%). There were 36-avoided stocks and funds at that time. They were down by an average of 6.3% from their respective sell signals an average of 29.3-weeks earlier.

On Jul 21, 2006, the Mid-term Indicant was signaling hold for 168-stocks and funds out of 345-tracked. They were up by an average of 159.3% (annualized at 66.4%) since their 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 by an average of 7.4% since their sell signals an average of 15.1-weeks earlier.

Five years ago, on Jul 22, 2005, there were 222-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 103.6% (annualized at 60.7%) since their respective buy signals an average of 88.7-weeks earlier. There were 95-avoided stocks and funds then. They were down an average of 6.0% since their respective sell signals an average of 17.3-weeks earlier.

On Jul 23, 2004, there were 166-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 67.5%, annualizing at 80.7%, since their respective buy signals an average of 62.2-weeks earlier. There were 83-avoided stocks and funds then. They were down by an average of 26.3% since their sell signals an average of 41.8-weeks earlier.

There were 265-stocks and funds with hold signals on Jul 25, 2003. They were up by an average of 46.2%, annualizing at 92.9%, since their buy signals 25.9-weeks earlier. The 16-avoided stocks and funds were down an average of 29.1% since their respective sell signals an average of 30.2-weeks earlier.

On Jul 26, 2002, there were 24-stocks and funds with a hold signal, enjoying a 54.0% gain since their respective buy signals an average of 49.0-weeks earlier. That annualized at 54.0%. There were 255-avoided stocks at that time. They were down 29.0% since their 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.

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

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

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

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 last week, the Long-term and Mid-term attributes have partially succumbed to the stock market bear’s ambition. There are elements of resistance; especially in the mid-caps and small caps. They are usually the last to succumb. So far, they continue resisting the bear on a mid-term basis.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. The S&P500 and the DJIA also shifted to bearish bias on a mid-term basis on Jul 2, 2010. Several stocks and funds also succumbed on Jul 2, 2010. Many of them reversing “reluctant buy signals” earlier this year and last year, as the 2009 bull market was configured as a “sucker rally.”

Most Mid-term stocks, funds, and indices remain above their bearish yellow curves and thus offering significant resistance values against a bearish onslaught. It is not uncommon for such resistance following strong bullish behavior, such as that during most of 2009 and early 2010.

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 5% for holds with less than a 20%-unrealized gain. 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.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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. If the green curve is rising, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you may want to set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will be presented.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 43.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 103.7% and the S&P500 is up 42.0% since then. The small cap index, S&P600, is up 104.5% 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. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 55.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 27.8% since its similar secular peak on March 23, 2000. The Dow is down by 11.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments.

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

The NASDAQ year-to-date performance was bearish by 19.5% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 37.0% 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 stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 28.7%. 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 0.2% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 8.4% 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 11.4% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 12.3% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 25.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 3.3% on this weekend last year, finishing 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 26.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 20.6% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 21.6% 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.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The current Near-term Bear cycle, originating during the weeks of May 9 and May 16, 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 59.2% since March 9, 2009. The NASDAQ is up 78.9% and the S&P500 is up 63.0% since then. The S&P600, Small Cap Index, is up 92.1% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is now suggesting impending bearishness, while the Short-term Indicant remains solidly bearish.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Great Britain and Germany are reportedly displaying spending constraints. If that proves to be real and sustainable, then the above paragraph may be viewed at some future point as too strongly worded. The key here is objective economic evidence, as opposed to political verbosity. It is hoped that their success is ultimately proven to be real. That would suggest a continuation of bullish sustainability. Remember, the stock markets require proof in the end.

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.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one.

Last week Mr. Bernanke stated they are holding at these low rates indefinitely into the future. He is stating the interest rates’ sinusoidal waves should not start rising on the immediate horizon, contrary to recent commentary stated herein. However, they are doing so in China. You should notice a subtle incline on CD rates. However, they dropped significantly two weeks ago. It will not be a smooth ride, as the Fed will endure conflicting policies between deflation and inflation in the coming months/years.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The CPI is down 0.1% last month, adding some credibility to that claim. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance will induce a significant and multi-year stock market bear. Current levels of those tolerances remain safe in U.S. terms. Becoming trickier are the international parameters.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Europe. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse. That is usually bearish, depending on location and severity. You have recently witnessed civil discourse in Greece. The question is, how much will this spread? Also, what new political mumbo-jumbo leaders will evolve from such crises? Such crises typically propel militant sort of folks to the top of the political heap. This typically leads to war, which is ultimately bullish, albeit painful, and depending on the winning side.

Some short-term rates, which had been nudging north the past few weeks, paused the past two weeks. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

This paragraph remains as a serious threat. The “political design” to prevent massive economic chaos remains ineffective. In spite of Bernanke’s recent comments, the Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid most of its cards on the table and economic opponents have not yet folded. Rest assured the Fed would take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real and sustainable.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for over a year, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective, as long as China, India, and other countries bias toward capitalistic behavior.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. However, they have been weakening the past few weeks, suggesting potential for a new bearish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices were rising, but that is against the trend for the time being. They have been taking it on the chin by the commodity bear the past few weeks. Increasing commodity prices will pressure rates more to the north. That will be non-bullish. Commodity prices appear to be stabilizing a bit, but gold is now under somewhat of a short-term threat, favoring bearish excursions.

Gold is obviously anticipating significant inflationary behavior with paper currencies and or economic chaos. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc. The Gold Bull was attacked by the Gold Bear the past few weeks due to, in part, to currency exchange rates and their recent volatility. Gold is encountering some near-term duress, while its long-term projections remain bullish.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. That suggests deflation will be first, but logic supports the opposite argument. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat and their corrupt partners.

Gold was solidly bearish the past few weeks. Its Force Vector is depressed, suggesting potential for non-bearishness to bullishness for the next few days. The optimistic 2012 forecasted price of gold is holding at $1600 in spite of bearishness the past few weeks. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value. However, its short-term attributes are under some duress at this time.

As stated 95-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake. The current one remains as a fake as well.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

As stated the past 47-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current mid-term bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

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 up 8.9% since the recent sell signal on Jul 2, 2010.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 8.3% since then, annualizing at 9.3%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but flat until the sell signal on Jul 2, 2010. It is up 9.1% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is up 3.9% since the May 21 sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 8.8% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

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 disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 4.8% since the Jun 4, 2010 sell signal.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 3.6% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is down 1.8% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 43.9% since that buy signal, annualizing at 26.9%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 4.6% since that buy signal, annualizing at 11.5%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 6.1% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 3.4% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals on Jul 2, 2010. They are up 7.8% and 7.6%, respectively, since that bear signal.

The six remaining major indices retaining bull signals are up by an average of 17.9% since there respective bull signals an average of 51.0-weeks ago. That annualizes at 18.3%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,585,976 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $108,009 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $206,814. That beats buy and hold’s $78,692 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1654.2%, 23.2%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA and S&P500. However, the Mid-term Indicant has not yet signaled bear for the NASDAQ and thus holding the same performance ratio of 162.8%, while the DJIA and S&P500 performance worsened on last week’s bullish spurt.

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.

Click here for the Mid-term Table of Mutual Funds.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 60.2% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred earlier this past week. The Mid-term Indicant could not justify a buy signal this weekend due to the bullish spurt behavior by the stock market last week and three weeks ago. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is getting close, though.

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 260.1% (annualized at 13.8%) since the Long-term Indicant signaled bull 977-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

In spite of bullishness this week, short-term attributes continue favoring the bear. Pressure is offering some resistance to declining Force. If Pressure elevates into bullish domains, bearish aggression will be deferred. VIX is configured for a bit more bearishness, which is contrary to overall stock market bearish expectations.

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

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

The VIX is the lone NTI bull. It is up 2.9% since the bull signal 12.4-weeks ago. That annualizes at 12.1%. It would not be surprising for the VIX to interact with QTI Yellow. Once there, it should pause and then skyrocket. That could take about six more weeks, though.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are down by an average of 0.7% since their bear signals an average of 11.0-weeks ago.

The Quick-term Indicant is signaling bull only for the VIX. It is up by 2.9%, annualizing at 12.1%, since the bull signal 12.4-weeks ago.

The Quick-term Indicant is signaling bear for eleven indices. They are up by an average of 6.5% since their bear signals an average of 7.1-weeks ago. Their recent bullishness remains configured as a bullish spurt and unsustainable.

Short-term Market Summary

Short-term attributes continue supporting the bear in spite of bullishness this week. Vector Pressure remains in bearish domains with the exception of the Dow Utilities. Force Vectors are now interacting with Pressure. Pressure is offering resistance to bearish ambition. However, the bear remains favored in this battle for dominance as long as Pressure remains in bearish domains.

It is discerning that Force is bouncing north off Pressure. That suggest delays to bearish dominance, while configurations remain in support of such dominance before the heart and soul of bullish seasonality later this year.

-Tangential Protection – None!

-Political Climate – Economic culprits, U.S. Congress, remains at work, threatening any positive economic activity. However, extending the Bush tax cuts is gaining momentum. Fundamentally, that could inspire the bull.

-Reverse Tangential Bearish Detection – This phenomenon is worthy of closely monitoring, as we are now enduring a significant Near-term bearish cycle. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The Quick-term bearish yellow curve is no longer offering a point of resistance to bearish ambition even though the major indices are bouncing around it.

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

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

Indicant Volume Indicators  

Volume indicators remain lethargic. Some of this lethargy is traced to seasonal behavior. The expiring robustness configured during solid bearish expressions during May and  June. Therefore, volume relationships remain biased in favor of the bear. (Recent chronological observations are expressed below in reverse order).

Jul 23, 2010-Fri-Relatively low volume continues shoving the bullish spurt. Bearish bias remains.

Jul 22, 2010-Thu-Mild volume on bullish aggression does not support a shift from bearish bias. Current earnings are favorable, which triggered emotional substantiation today. The stock market will resume its longer term view in a few days. Revenues need to increase. That remains questionable.

Jul 21, 2010-Wed-Late day volume aggression should invigorate the bear over the next few days. Volume bias remains in support of the bear.

Jul 20, 2010-Tue-Mild volume on bullish behavior does not suggest a return to bullish dominance. Bearish bias prevails.

Jul 19, 2010-Mon-Light volume on mild bullishness retains bearish bias.

Jul 16, 2010-Fri-Unseasonably aggressive volume on bearish aggression adds to bearish bias.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for four ETF’s. They are up by an average of 2.0%, annualizing at 9.8%, since their buy signals an average of 10.8-weeks ago.

The NTI is avoiding 28-ETF’s. They are up an average of 0.6% since their sell signals an average of 9.1-weeks ago.

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

The Quick-term Indicant is signaling hold for four ETF’s. They are up an average of 21.0% since their buy signals an average of 37.5-weeks ago. Those with hold signals are annualizing at an average rate of 29.0%.

The Quick-term Indicant is avoiding 28-ETF’s. They are up by an average of 3.4% since their sell signals an average of 5.6-weeks ago.

Short-term Summary: As stated the past several days, the bear is too strong to delay sell signals in spite of the recent bullish spurts. The avoid signals from those sell signals may appear to some as a mistake, but current configurations continue suggesting there is no mistake. If Vector Pressure elevates into bullish domains, the buy signals will triggered. Also, Congress is going on vacation in a few days, which could provide the bull some encouragement to move higher on a short-term basis.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on May 7, 2010. It is down 1.8% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is up 3.6% since the QTI sell signal. Vector Pressure remains in bearish domains, obviating bearish bias. Its Force Vector reversed back to the north today. That hurt put options. If Vector Pressure elevates into bullish domains, buy signals will be triggered. A short-term forecast of the NTI Green curve is at $49.06 on August 13, 2010. If Pressure fails climbing into bearish domains, this fund should fall to Green.

ETF#11-Gold and Precious Metals  is up 43.6% since the QTI signaled buy on December 11, 2008. Annualized growth is at 26.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $107.95 and still rising. Although Gold has been under dollar pressure, the QTI buy signal was at $80.65. So, that stop loss will generate over 20%-gain.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 4.6% since that buy signal, annualizing at 11.5%. It is under near-term cyclical pressure but as long as pressure is positive, the NTI will not signal sell. Pressure is moving south, but still in bullish domains. Force is moving to the south, but not yet solidly configured. This combination remains threatening to the near-term hold cycle.

Click this sentence for additional charting and current forecasting of the actual price of gold.

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

ETF#14-TLT-Long Government  received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 9.4% since those buy signals, annualizing at 38.9%.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 2.9% since then, annualizing at 14.7%.  Short-term attributes are favoring this hold and similar ETF’s that short the market. As stated the past several days, the bullish spurt will hurt it a bit, but continue holding.

The Quick-term Indicant signaled buy on July 6, 2010 for QID after avoiding it since March 26, 2009. It was down over 51.2% from the March 29, 2009 sell signal until the July 6, 2010 buy signal. Force Vector continues moving to the north, supporting non-bearishness with this fund. It is down 15.3% since the Jul 6, 2010 Quick-term buy signal.

Pressure remains in bullish domains. The NTI bullish blue curve collapsed. This is a bit discerning. If Pressure falls into bearish domains, a sell signal will be released.

The Near-term Indicant signaled buy for ETF#32-VXX on Jul 14, 2010. It is down 8.8% since that buy signal. It’s Force Vector matched a prior minimum on Jul 14, 2010 and was rising with positive (bullish) Pressure. That was bullish. Force shifted back to the south the past three days, suggesting S&P500 bearish weakness. Its blue curve collapsed yesterday. It fell below the green curve on Friday. All of that is threatening. If pressure succumbs to bearish domains, it will receive a Near-term sell signal.

The right hand chart suggests cyclical minimums are at or very near bottom. This ETN should perform bullishly on stock market bearishness. It monitors short-term VIX futures. The VIX is generally contrarian on short cycles, while its longer term trends can march to its own drum beat, depending on call/put ratios.

Major ETF Events

Jul 23, 2010-Fri-Force Vectors moved bullishly, bouncing north off the border between bullish and bearish domains. This could influence Pressure to elevate into bullish domains. If that occurs next week, this bullish spurt could last a few more weeks.

Jul 22, 2010-Thu-Strong corporate earnings propelled bullish behavior. Configurations suggest this is an emotional response by the bulls. The bear still lurks.

Jul 21, 2010-Wed-Bernanke provided a bearish economic briefing today. The bear was inspired late in the day and should continue to do so on the immediate horizon.

Jul 20, 2010-Tue-Bullish behavior in the face of declining Force Vectors for two consecutive days challenges the power of Force. The variance amounts will be offset on a single trading day if Force (bearish) is accurate and today’s bullishness was phony. That should occur in this cycle, which only has a few days remaining. In other words dynamic bearishness is expected if Force continues moving to the south.

Jul 19, 2010-Mon-None

Jul 16, 2010-Fri-Unseasonably high volume, coupled with bearish aggression, supports an eventual manifestation of dynamic bearishness.

Current Strategy-Short-term Indicant- Jul 23, 2010-Fri-Same as last Monday. Vector Pressure is the one of the few remaining attributes suggesting recent bullish is a spurt. This threat should be clarified next week. Jul 22, 2010-Thu-Same as last Monday. Jul 21, 2010-Wed-Same Jul 20, 2010-Tue-Short-term attributes remain favoring the bear. Jul 19, 2010-Mon-Any bullish behavior should be viewed as a spurt and unsustainable. Jul 16, 2010-Fri-The bear finally growled and there is very little to suggest it will stop on the short-term horizon!

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

The stock market enjoyed bullish convergence last week, following bearish convergence last two weeks and in three of the last five weeks.  Bullish convergence occurred in five of the past eight weeks. However, a combined bearish convergence/divergence in six of the past 13-weeks remains as a dominant theme. Periodic bullish spurts dampened bearish enthusiasm, but bearish bias remains.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks. However, there are a few adjustments.

As stated the past 41-weeks, low interest rates impose narrowed alternative investment opportunities. The expiration of the Near-term Bull, Quick-term Bull, and parts of the Mid-term Bull continue suggesting this is an increasingly irrelevant observation, relative to more worldly dynamics.

The capital markets crushed the early February threat by the stock market bear with a strong bullish spurt in March and April. Unfortunately, bearish behavior in seven of the last 12-weeks offset the March-April bullish surge. That suggests the early February bearish threat had more merit than the Mar-Apr bullish spurt. Although the Mar-Apr bullish spurt provided a new market high in cycle originating in March 2009, all of the major indices are lower than they were just after President Obama’s state of the union address last February.

That cycle repeated with a solid bullish spurt during half of this past June. It only lasted about two weeks. It highlighted the definition of a bullish spurt, while the March-April bullish cycle was more worthy of participation since it lasted about eight weeks.

Fundamental economic data had been improving, but the ineffective stimulus package is now running out of steam. Keep in mind, the 2009 stimulus package was about as ineffective as they come. That, coupled with declining economic outlooks, adds to the bear’s stimulation by more broad economic fundamentals. The bear’s delight is sourced primarily from Europe and now expanding to the U.S. There were some mild indications of improvements in Europe last week, but more proof must be delivered.

Politicians continue adding bearish punch. Cap and trade legislation, based on mystical global warming, and the oil slick in the Gulf of Mexico, is bearish as it sucks money from capitalists and places it in the hands of politicians and government bureaucrats, inviting greater inefficiencies in its use. A recent resurrection of drilling moratoriums should inspire the bear for yet more drama. Much of this favors inflation, but the jury is still out on that.

Financial reform, as recently passed by Congress, does not address the root cause of the problem. The capital markets are sensing elements of its content, adding to bearish delight.

Short-term attributes remain a concern. As stated the past 10-weeks, the problem of Vector Pressure remaining in a near-converging pattern for several weeks offered a technical avenue for the bear’s encouragement. Collapsing NTI Blue Curves and declining Vector Pressure are adding to the stock market bear’s arousal.

Short-term pressure remains in bearish domains. As it approached the demarcation to bullish domains, the bear unleashed its torment last Friday. That provides bearish confidence on a short-term basis. As you saw last Friday, the bullish spurt in early July was thoroughly attacked by the bear and it is not over. More attacks are on the way.

It would not be surprising, however, for the bull to resume once the outcome of the mid-term elections are smelled by the stock market. A huge number of losing incumbents should offer bullish inspiration. The stock market typically smells this around October-November, which coincides with the heart and soul of bullish seasonality. Between now and then, choppy stock market behavior should be viewed as the least-worst case.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

07/25/2010

Jul 18, 2010 Indicant Weekly Stock Market Report

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

Drones, Paupers, Naysayers, and Congress

There was a time, when so-called responsible television media applied candid camera concepts to members of Congress. The television producers of shows, such as Sixty-Minutes, Dateline, and 20-20, would sneak around Fortune 500 seminars and workshops with congressional representatives in attendance.

The cameras revealed the congressional representatives would attend the workshop sessions from about 9:00 AM until 9:30 AM. After that, they spent the rest of the day on the golf course or chumming around town and living a tension-free lifestyle.

These television shows were gleeful at their “catching them in the act” productions. They took it a step further. The script of the last segment of these shows would question the congressional representatives’ whereabouts during their attendance at seminars and workshops. After listening to the congressional representatives lie for a few moments, the television hosts would then show them the film footage of their gallivanting around on the golf course or chasing women at the local pubs and whatnot.

It was always enjoyable watching congressional representatives stammer and stutter when confronted with facts that denied their lies. That is always indeed a very pleasurable event to observe. Some of you can spot it all time, even today, without candid camera trickiness. Unfortunately, most among the contemporary mass of voters cannot detect the lies of politicians.

Since this sort of television exposure, of which most occurred during the 1990’s, Congress has tightened up the rules. They are no longer allowed to gallivant around on the taxpayer’s dime; at least not in the U.S.A., (They now charter planes to get out of the U.S.A. for such shenanigans). They indeed enjoy the good live, while their constituent paupers continue voting for them. Rest assured their paupers are going to get poorer over time for doing so, but a pauper is a pauper and for good reason. They are generally stupid, which is prerequisite for being a pauper.

Paupers and drones are going to continue voting for bad people. Drones are those who have developed an intellectual linkage to verbiage. In other words, they tend to believe in the spoken word by someone who they perceive as powerful; especially, if it has no real meaning, such as “the only thing we have to fear is fear itself.” This allows the drone to apply a personal spin on it, offering a “feel good” moment at their perceived intellectual expansion that offsets their negativity that is associated with their lack of being productive. They tend to gravitate toward so-called intellectual expression, as opposed to productive output. Some of you have seen and heard them. Listening to them is a very difficult thing to do. You can almost see the air in their brains. It does not take much imagination to do so.

Paupers have their hand out. Their congressional representatives line their pocketbooks with just enough to keep the pauper living in the comforts expected by the pauper. Doing this requires “political” taking from the productive so they can “buy the votes of the non-productive.” The sham seems to working just fine in contemporary societies around the world.

Politicians have little to offer to the productive. There is an inherent conflict. Even the contemporary politician express difficulty finding a way to appeal to the ones he is planning to rob. So, they continue bantering around the idea of “giving” where that word has profound appeal to an ever increasing number of people. That generally reassures their reelection.

In the last two major elections in the U.S., 2006 and 2008, drones and paupers were the majority. As long as they are allowed to vote, the population of drones and paupers will continue to increase. Their excessive idle time lends itself to more breeding. As their numbers increase, the democracy and republic of the United States will continue to erode in terms of the quality of life. That is bearish. This is one reason why the S&P500 is down so far this century. All the major indices are down so far this century. The major indices are reflecting the quality of life. It has started a long and steady decline, right along with the stock market.

Now back to the Congressional shenanigans. The stock market was bullish when congressional representatives were fooling around in the 1990’s. Those television shows, albeit very entertaining and enjoyable, did all of us a disservice in the 1990’s. That resulted in more hard work for Congress. The harder they work the less likely a sustainable stock market bull will manifest. Everything Congress accomplishes has significant nay-saying elements. That is bearish. It always has been and always will be.

Naysayers are increasing in numbers. Those pitiful souls do nothing constructive. All they do is view something that is and then denounce it. Union members are a subset of all three classes; paupers, drones, and naysayers. Unionism is making a comeback, funded by the United States government (your taxes). That is bearish.

Paupers, naysayers, and drones are increasing in voting numbers. They are the ones your elected representatives represent. That is bearish. If you are productive, then you are not being represented. Being productive means you provide a service or product of appeal in a competitive market place. If you are not doing that, then you are not productive. If more than 50% of the voting population is not productive, then do not expect a sustainable stock market bull.

If status quo prevails in the upcoming November elections, the normally bullish post election year of 2011 will most likely be non-conforming to historical standards.

Congress passed financial reform late last week. Here they go again. Most of you noticed solid bearish expressions shortly followed. Cap and trade is up next. That will also be bearish, if passed. It will be interesting to see, what they will come up with next. Rest assured it will be bearish.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 138 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 44.5%. That annualizes to 37.7%. The Mid-term Indicant has been signaling hold for these 138-stocks and funds for an average of 61.2-weeks.

The Mid-term Indicant is avoiding 178-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 22.0% since the Mid-term Indicant signaled sell an average of 54.8-weeks ago.

One year ago, on Jul 17, 2009, the Mid-term Indicant was holding only 26-stocks and funds out of 332 tracked for an average of 98.7-weeks. They were up by an average of 119.0% (annualized at 62.7%). There were 290-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 25.2% since their respective sell signals an average of 54.7-weeks earlier one year ago. Several stocks were identified as NLT, no longer traded, at this time one year ago. They will be replaced with new securities before the end of this year.

The Mid-term Indicant was signaling hold for 79-stocks and funds of the 345-tracked two years ago on Jul 18, 2008. They were up by an average of 255.1% (annualized at 70.6%) since their respective buy signals an average of 187.9-weeks earlier. The Mid-term Indicant was avoiding 263-stocks and funds at that time. They were down an average of 13.1% since their respective sell signals an average of 20.6-weeks earlier. There were 79-sell signals on this weekend and the two prior weekends in 2008.

There were 307-stocks and funds with hold signals on Jul 13, 2007 since their buy signals an average of 112.1-weeks earlier. They were up by an average of 145.0% (annualized at 67.3%). There were 37-avoided stocks and funds at that time. They were down by an average of 8.3% from their respective sell signals an average of 28.1-weeks earlier.

On Jul 14, 2006, the Mid-term Indicant was signaling hold for 177-stocks and funds out of 345-tracked. They were up by an average of 156.0% (annualized at 67.2%) since their 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 by an average of 8.2% since their sell signals an average of 16.8-weeks earlier.

Five years ago, on Jul 15, 2005, there were 203-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 107.9% (annualized at 59.8%) since their respective buy signals an average of 93.8-weeks earlier. There were 97-avoided stocks and funds then. They were down an average of 6.2% since their respective sell signals an average of 16.5-weeks earlier.

On Jul 16, 2004, there were 212-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 79.1%, annualizing at 69.0%, since their respective buy signals an average of 45.0-weeks earlier. There were 50-avoided stocks and funds then. They were down by an average of 29.2% since their sell signals an average of 45.0-weeks earlier.

There were 277-stocks and funds with hold signals on Jul 18, 2003. They were up by an average of 44.4%, annualizing at 93.2%, since their buy signals 24.8-weeks earlier. The 13-avoided stocks and funds were down an average of 28.1% since their respective sell signals an average of 29.6-weeks earlier.

On Jul 19, 2002, there were 39-stocks and funds with a hold signal, enjoying a 38.4% gain since their respective buy signals an average of 44.4-weeks earlier. That annualized at 45.0%. There were 241-avoided stocks at that time. They were down 27.7% since their 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.

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

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

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

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 last week, the Long-term and Mid-term attributes have partially succumbed to the stock market bear’s ambition. There are elements of resistance; especially in the mid-caps and small caps. They are usually the last to succumb. So far, they continue resisting the bear on a mid-term basis.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. The S&P500 and the DJIA also shifted to bearish bias on a mid-term basis on Jul 2, 2010. Several stocks and funds also succumbed on Jul 2, 2010. Many of them reversing “reluctant buy signals” earlier this year and last year, as the 2009 bull market was configured as a “sucker rally.”

Although the market was aggressively bearish this past Friday, bullish behavior earlier last week resulted in a mildly bearish week. This overall result did not trigger sell signals, even though the Short-term Indicant is solidly favoring strong bearish bias. The Mid-term Indicant does not react to Short-term conditions. Most Mid-term stocks, funds, and indices remain above their bearish yellow curves and thus offering significant resistance values against a bearish onslaught.

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 5% for holds with less than a 20%-unrealized gain. 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.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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. If the green curve is rising, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you may want to set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will be presented.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 38.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 95.6% and the S&P500 is up 37.1% since then. The small cap index, S&P600, is up 92.7% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 56.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 30.3% since its similar secular peak on March 23, 2000. The Dow is down by 13.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments.

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

The NASDAQ year-to-date performance was bearish by 17.9% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 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 stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 30.9%. 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 0.9% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was 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 11.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 13.9% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 19.5% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 0.7% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 28.7% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 23.8% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 26.1% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The current Near-term Bear cycle, originating during the weeks of May 9 and May 16, 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 54.2% since March 9, 2009. The NASDAQ is up 71.8% and the S&P500 is up 57.4% since then. The S&P600, Small Cap Index, is up 81.0% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is now suggesting impending bearishness, while the Short-term Indicant remains solidly bearish.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

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.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one. The sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. You should notice a subtle incline on CD rates. However, they dropped significantly last week. It will not be a smooth ride, as the Fed will endure conflicting policies between deflation and inflation in the coming months/years.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance will induce a stock market bear. Current levels of those tolerances remain safe in U.S. terms. Becoming trickier are the international parameters.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Europe. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse. That is usually bearish, depending on location and severity. You have recently witnessed civil discourse in Greece. The question is, how much will this spread? Also, what new political mumbo-jumbo leaders will evolve from such crises? Such crises typically propel militant sort of folks to the top of the political heap. This typically leads to war, which is ultimately bullish, albeit painful, and depending on the winning side.

Some short-term rates, which had been nudging north the past few weeks, paused last week. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

This paragraph remains as a serious threat. The “political design” to prevent massive economic chaos remains ineffective. The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed would take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real and sustainable. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate several weeks ago, but has since taken a “easing” position. Another reason for the dollar’s strengthening is the weakening of foreign currencies. It is not based on the dollar’s merit, but based on European incompetence, laziness, stupidity, and a continuation on stringent controls in the class system. The parasitical elite will maintain their status, regardless of consequence. Eventually, that consequence does not bode well for them and their offspring.

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

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. However, they have been weakening the past few weeks, suggesting potential for a new bearish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices were rising, but that is against the trend for the time being. They have been taking it on the chin by the commodity bear the past few weeks. Increasing commodity prices will pressure rates more to the north. That will be non-bullish. Commodity prices appear to be stabilizing a bit, but gold is now under somewhat of a short-term threat for bearish excursions.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc. The Gold Bull was attacked by the Gold Bear the past few weeks due to, in part, to currency exchange rates and their recent volatility. Gold is encountering some near-term duress, while its long-term projections remain bullish.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat and their corrupt partners.

Gold was solidly bearish the past few weeks. Its Force Vector is depressed, suggesting potential for non-bearishness to bullishness for the next few days. The optimistic 2012 forecasted price of gold is holding at $1600 in spite of bearishness the past few days. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value. However, its short-term attributes are under some duress at this time.

As stated 94-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

As stated the past 46-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

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 up 4.5% since the recent sell signal on Jul 2, 2010.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 6.6% since then, annualizing at 7.5%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but flat until the sell signal on Jul 2, 2010. It is up 5.1% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is down 1.8% since the May 21 sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 14.1% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

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 disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 0.1% since the Jun 4, 2010 sell signal.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 0.1% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is down 5.5% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 44.7% since that buy signal, annualizing at 27.6%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 5.1% since that buy signal, annualizing at 13.5%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 3.6% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 0.2% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals on Jul 2, 2010. They are up 4.2% and 4.1%, respectively, since that bear signal.

The six remaining major indices retaining bull signals are up by an average of 12.4% since there respective bull signals an average of 50.0-weeks ago. That annualizes at 12.9%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,536,270 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $104,308 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $198,574. That beats buy and hold’s $75,557 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1710.9%, 27.5%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA and S&P500. However, the Mid-term Indicant has not yet signaled bear for the NASDAQ and thus holding the same performance ratio of 162.8%, while the DJIA and S&P500 performance worsened on last week’s bullish spurt.

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.

Click here for the Mid-term Table of Mutual Funds.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 56.8% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred earlier this past week. The Mid-term Indicant could not justify a buy signal this weekend due to the bullish spurt behavior by the stock market two weeks ago. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is getting close, though.

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 248.8% (annualized at 13.3%) since the Long-term Indicant signaled bull 976-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Configurations are indicating expiration of bullish spurt support. Most short-term attributes remain in support of the bear. Force is nearing maximum values. If they retreat, the bear should resume dominance. If not, the short-term bearish theme will become obsolete. As you can see, the stock market bull is valiantly resisting the bear, but consuming significant energy. Configurations suggest little hope for the bull to overcome the bear. Today’s bearish aggression will be more inspirational to the bear, than invigorating the bull. Do not be surprised at continuing bearishness until prices interact with Green and/or Force Vector interaction with Pressure.

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

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

The VIX is the lone NTI bull. It is up 15.1% since the bull signal 11.4-weeks ago. That annualizes at 68.6%.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are down by an average of 4.6% since their bear signals an average of 10.0-weeks ago.

The Quick-term Indicant is signaling bull only for the VIX. It is up by 15.1%, annualizing at 68.6%, since the bull signal 11.4-weeks ago.

The Quick-term Indicant is signaling bear for eleven indices. They are up by an average of 2.3% since their bear signals an average of 6.1-weeks ago. Their recent bullishness remains configured as a bullish spurt and unsustainable.

Short-term Market Summary

Short-term attributes continue supporting the bear. The expected bullish bounce occurred two weeks ago and early this past week. As you saw with Friday’s bearish aggression, bullish spurt energy waned, as expected. 

-Tangential Protection – None!

-Political Climate – Economic culprits, U.S. Congress, were hard at work this week. Their efforts delighted the bear, as they passed financial reform and continue barking irrational rhetoric.

-Reverse Tangential Bearish Detection – This phenomenon is worthy of closely monitoring, as we are now enduring a significant Near-term bearish cycle. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The Quick-term bearish yellow curve is no longer offering a point of resistance to bearish ambition even though the major indices are bouncing around it.

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

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

Indicant Volume Indicators  

Volume indicators remain lethargic. Some of this lethargy is traced to seasonal behavior. The expiring robustness configured during solid bearish expressions during May and  June. Therefore, volume relationships remain biased in favor of the bear. (Recent chronological observations are expressed below in reverse order).

Jul 16, 2010-Fri-Unseasonably aggressive volume on bearish aggression adds to bearish bias.

Jul 15, 2010-Thu-Same as yesterday.

Jul 14, 2010-Wed-Mild volume on flat behavior, although seasonal, suggests little interest in dynamic market behavior in either direction. However, bearish bias prevails.

Jul 13, 2010-Tue-Volume was up a bit on today’s bullish aggression, but not enough to suggest a bias shift.

Jul 12, 2010-Mon-Light volume continues. Bearish bias remains.

Jul 9, 2010-Fri-Light summertime volume on mild bullishness does very little to inspire a sustainable bullish cycle.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for four ETF’s. They are up by an average of 8.1%, annualizing at 42.4%, since their buy signals an average of 10.0-weeks ago.

The NTI is avoiding 28-ETF’s. They are down an average of 3.8% since their sell signals an average of 8.1-weeks ago.

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

The Quick-term Indicant is signaling hold for four ETF’s. They are up an average of 21.2% since their buy signals an average of 36.5-weeks ago. Those with hold signals are annualizing at an average rate of 30.1%.

The Quick-term Indicant is avoiding 28-ETF’s. They are down by an average of 1.0% since their sell signals an average of 4.6-weeks ago.

Short-term Summary: As stated the past few days, the bear is too strong to delay sell signals in spite of the recent bullish spurt. As stated the past few days, the avoid signals from those sell signals may appear to some as a mistake, but current configurations continue suggesting there is no mistake.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on May 7, 2010. It is down 5.5% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is down 0.4% since the QTI sell signal. Vector Pressure remains in bearish domains, obviating solid bearishness. Its Force Vector is bullishly mature, suggesting non-bullishness on the immediate horizon. As stated last Thursday, Pressure and Force favor put options. It was down considerably on Friday. It is currently behaving as a non-contrarian, but historically it is contrarian.

ETF#11-Gold and Precious Metals  is up 44.7% since the QTI signaled buy on December 11, 2008. Annualized growth is at 27.6%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $107.55 and still rising. Although Gold has been under dollar pressure, the QTI buy signal was at $80.65. So, that stop loss will generate over 20%-gain.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 5.1% since that buy signal, annualizing at 13.5%. It is under near-term cyclical pressure but as long as pressure is positive, the NTI will not signal sell. Force is moving mildly north in bearish domains and Pressure is moving south, but still in bullish domains. This combination is a bit threatening to the near-term hold cycle.

Click this sentence for additional charting and current forecasting of the actual price of gold.

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

ETF#14-TLT-Long Government  received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 10.5% since those buy signals, annualizing at 47.4%. This ETF is increasing its bullish attributes. It is usually contrarian to the overall stock market. As stated last Tuesday, call options are attractive for this fund. It is up by nearly $2.50 since then and has been profitable. It is below blue, but Pressure remains in bullish domains with rising Force. There is more upside potential.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 11.4% since then, annualizing at 64.2%.  Short-term attributes are solidly favoring this hold and similar ETF’s that short the market. As stated last week, the bullish spurt will hurt it a bit, but continue holding.

The Quick-term Indicant signaled buy on July 6, 2010 for QID after avoiding it since March 26, 2009. It was down over 55.0% from the March 29, 2009 sell signal until the July 6, 2010 buy signal. Force Vector continues shifting to the south. It penetrated bearish domains a few days ago, but its cycle is mature and primed for recoil. There is room for a bit more bearishness, but not too much.

The Near-term Indicant signaled buy for ETF#32-VXX on Jul 14, 2010. It is up 5.6% since that buy signal, annualizing at 999.6%. It’s Force Vector matched a prior minimum on Jul 14, 2010 and now rising with positive (bullish) Pressure. That is bullish. The right hand chart suggests cyclical minimums are at or very near bottom. This ETN should perform bullishly on stock market bearishness. It monitors short-term VIX futures. The VIX is generally contrarian on short cycles, while its longer term trends can march to its own drum beat, depending on call/put ratios.

Major ETF Events

Jul 16, 2010-Fri-Unseasonably high volume, coupled with bearish aggression, supports an eventual manifestation of dynamic bearishness.

Jul 15, 2010-Thu-The stock market was mainly bearish most of the day, but finished in bullish mode. That does not suggest a return of bullish dominance.

Jul 14, 2010-Wed-Today’s flat stock market behavior is supported by extreme attribute positions, where meandering or cyclical redirection quite often unfolds.

Jul 13, 2010-Tue-Most Force Vectors are at a max, which is the opposite of their minimums that led to the recent bullish spurt. If they do not retreat, the bearish theme contained herein will become obsolete.

Jul 12, 2010-Mon-Most Force Vectors are mature. Contrarians are in bearish domains and non-contrarians in bullish domains. This is minor convergence with Vector Pressure continue in favoring the bear.

Jul 9, 2010-Fri-Several Force Vectors crossed into bullish domains. There are a few more remaining before obviations of directional intensity manifest.

Current Strategy-Short-term Indicant- Jul 16, 2010-Fri-The bear finally growled and there is very little to suggest it will stop on the short-term horizon! Jul 15, 2010-Thu-Same! Jul 14, 2010-Wed-Same! Jul13, 2010-Tue-Same as yesterday. Jul 12, 2010-Mon-Configurations supporting the bullish spurt are configuring for expiration.

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

The stock market endured bearish convergence last week and in three of the last four weeks.  Bullish convergence occurred in four of the past seven weeks. However, a combined bearish convergence/divergence in six of the past twelve weeks remains as a dominant theme. Periodic bullish spurts dampened bearish enthusiasm, but bearish bias is increasing dominance.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks. However, there are a few adjustments.

As stated the past forty weeks, low interest rates are imposing narrowed alternative investment opportunities. The expiration of the Near-term Bull, Quick-term Bull, and parts of the Mid-term Bull continue suggesting this is an increasingly irrelevant observation, relative to more worldly dynamics.

The capital markets crushed the early February threat by the stock market bear with a strong bullish spurt in March and April. Unfortunately, bearish behavior in seven of the last eleven weeks offset the March-April bullish surge. That suggests the early February bearish threat had more merit than the Mar-Apr bullish spurt. Although the Mar-Apr bullish spurt provided a new market high in cycle originating in March 2009, all of the major indices are lower than they were just after President Obama’s state of the union address last February.

That cycle repeated with a solid bullish spurt during half of this past June. It only lasted about two weeks. It highlighted the definition of a bullish spurt, while the March-April bullish cycle was more worthy of participation since it lasted about eight weeks.

Fundamental economic data had been improving, but the ineffective stimulus package is now running out of steam. Keep in mind, the 2009 stimulus package was about as ineffective as they come. That, coupled with declining economic outlooks, adds to the bear’s stimulation by more broad economic fundamentals. The bear’s delight is sourced primarily from Europe and now expanding to the U.S.

Politicians continue adding bearish punch. Cap and trade legislation, based on mystical global warming, and the oil slick in the Gulf of Mexico, is bearish as it sucks money from capitalists and places it in the hands of politicians and government bureaucrats, inviting greater inefficiencies in its use. A recent resurrection of drilling moratoriums should inspire the bear for yet more drama. Much of this favors inflation, but the jury is still out on that.

Financial reform, as recently passed by Congress, does not address the root cause of the problem. The capital markets are sensing elements of its content, adding to bearish delight.

Short-term attributes remain a concern. As stated the past nine weeks, the problem of Vector Pressure remaining in a near-converging pattern for several weeks offered a technical avenue for the bear’s encouragement. Collapsing NTI Blue Curves and declining Vector Pressure are adding to the stock market bear’s arousal.

Short-term pressure remains in bearish domains. As it approached the demarcation to bullish domains, the bear unleashed its torment last Friday. That provides bearish confidence on a short-term basis. As you saw last Friday, the bullish spurt in early July was thoroughly attacked by the bear and it is not over. More attacks are on the way.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

07/18/2010

Jul 11, 2010 Indicant Weekly Stock Market Report

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

1937-39 and 2008-2010 Stock Market Congruencies

The bear market of 1937 through early 1938 is of particular interest. That is because of similarities in the political climate between then and now. FDR was promoting unionism in an attempt to garnish a large block of votes. Barack Obama is doing same and even directly feeding money to the unions. Incumbent politicians in 1937 were bantering around minimum wage laws in spite of their personal inability to be an effective employer. Their egotistical mania drives solutions to problems through coercion.

During the 1930’s, politicians represented unions, as opposed to the “people.” Contemporary politicians are promoting much more damage than the minimum wage laws in 1937/8, such as cap and trade, social medicine, and union expansionism. All will lead to declining productivity and with that declining quality of life and, of course, perpetuating a stock market bear.

Look at the bear market of 1937/8 by clicking this sentence.

Now do the same for the more recent bear in 2008, by clicking this sentence.

Both bears had teeth; big teeth. The 1937 bear was nastier than 2008’s. The 1937/38 bear bruised FDR’s ego. It was obviating his failing social policies. His only way to save face was war and he did indeed get it. It was good for FDR, but bad for millions of dead folks. But, egotistical mania is never concerned about the well-being of others. It is always about “me!”

Congress will be returning to work in a few days. They will resume legislating financial reform. Rest assured they are not doing anything that will upset the flow of funds into their campaign coffers or separate themselves from huge cash flow operations. In essence, they continue tinkering with money laundering ideas to go along with their Ponzi schema. Success in their endeavors will perpetuate the bear stock market that originated in 2000.

Although financial reform laws have not yet passed, current assessments suggest an absence of measures that would prevent future financial crisis. In essence, these elected maniacs are legislating their capacity to bailout or not at their whim. That will certainly expand corruption in the halls of Congress. This problem is inherent in human nature. Politicians enjoy having influence and control over money operations. Rest assured that is bearish. Congressional behavior originated the financial collapse in 2008 when they invented the idea that “everyone” should live in a house. Of course, that was fostered for “vote getting” purposes. You are witnessing why all democracies eventually fail.

The 1937 bear was followed by a bull cycle in 1938/39; a very impressive one, indeed. The 2008 bear was followed by an almost equally impressive bull in 2009 and early 2010. The 1938 bull cycle was a bit more impressive than the 2009/10 bull cycle in terms of %-age gain. The 1938/39 bull cycle was followed by a very steep but quick bear cycle in 1939. It occurred very quickly and only lasted a few months with most of the decline in the pre-election year of 1939. There were two such bear cycles with another one just ahead of World War II. It is on the same chart, which highlights FDR’s embarrassment at being wrong for so long.

Corporate profits will be reported this coming week. Some will disappoint, while others will be exhilarating. The stock market will react to both classes and all in between. The stock market will then adjust to what it sees in terms of corporate profits in the next few weeks and apply to 2011-expectations. The slightest disappointment in corporate earnings, coupled with congressional legislation, may be extrapolated and projected as a bearish earnings outlook for 2011. The stock market will react, right now (in the next few weeks) to the early 2011 outlook.

Historical standards would be supportive of a bearish cycle in the next few months. The stock market typically shifts into a bullish cycle in the autumn of mid-term election years, following a bearish cycle in the summer months to early autumn. This is ahead of the normally bullish pre-election year. Congress is typically more militant about having their way when they suspect their days are numbered, during mid-term election years. That is why bearishness correlates during such periods.

During the normally bullish pre-election year, politicians are typically weakening each other’s power. That is always bullish. The pre-election year typically has an incumbent president, who for the most part, is viewed, as a lame duck, regardless of the term. That lame duck view, coupled to a demonstrative congress, who is typically stepping on the toes of the so-called lame buck stifles legislation. That is typically bullish and one reason why the pre-election year is very bullish. That was not the case in 1939 because FDR was seldom viewed as a lame duck, as the populace only heard him on the radio without Rush Limbaugh-like counterpoints. So, they all voted for him to their demise. FDR had a lock on re-election due to his union expansion practices for a large block of votes for him and a monopoly on the radio. That was inarguably bearish.

If historical standards manifest this year, bearish behavior leading into this October should not be surprising. A solid bullish response should occur at that time if the polls are strongly suggesting the legislative and executive branches of government will be from different parties, but more importantly, expressing different philosophies and policies. That would have a stalemating effect on government and politicians, which is always bullish.

Although that did not happen in 1938, the mid-term election year phenomenon of finding a bottom and bouncing bullishly to support the normally bullish pre-election year occurred with near absolute perfection in terms of expected configurations.

There are significant similarities, suggesting 2010 will be somewhat congruent to those of 1938. The only potential variance to that would be a few rising new entrepreneurs of the likes of Steven Jobs with a great product or service. Such a variant is the spirit of all bulls. Politicians are the antithesis to that.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 138 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 46.1%. That annualizes to 39.8%. The Mid-term Indicant has been signaling hold for these 138-stocks and funds for an average of 60.2-weeks.

The Mid-term Indicant is avoiding 178-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 21.5% since the Mid-term Indicant signaled sell an average of 53.8-weeks ago.

One year ago, on Jul 10, 2009, the Mid-term Indicant was holding only 23-stocks and funds out of 332 tracked for an average of 98.1-weeks. They were up by an average of 121.4% (annualized at 54.6%). There were 288-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 32.0% since their respective sell signals an average of 54.6-weeks earlier one year ago. Several stocks were identified as NLT, no longer traded, at this time one year ago. They will be replaced with new securities before the end of this year.

The Mid-term Indicant was signaling hold for 79-stocks and funds of the 345-tracked two years ago on Jul 11, 2008. They were up by an average of 262.9% (annualized at 73.1%) since their respective buy signals an average of 186.9-weeks earlier. The Mid-term Indicant was avoiding 261-stocks and funds at that time. They were down an average of 13.5% since their respective sell signals an average of 19.8-weeks earlier. There were 81-sell signals on this weekend and the two prior weekends in 2008.

There were 308-stocks and funds with hold signals on Jul 6, 2007 since their buy signals an average of 110.9-weeks earlier. They were up by an average of 140.6% (annualized at 65.9%). There were 36-avoided stocks and funds at that time. They were down by an average of 12.7% from their respective sell signals an average of 27.8-weeks earlier.

On Jul 7, 2006, the Mid-term Indicant was signaling hold for 202-stocks and funds out of 345-tracked. They were up by an average of 154.2% (annualized at 69.7%) since their 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 by an average of 5.9% since their sell signals an average of 16.2-weeks earlier.

Five years ago, on Jul 8, 2005, there were 195-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 110.7% (annualized at 59.2%) since their respective buy signals an average of 97.3-weeks earlier. There were 116-avoided stocks and funds then. They were down an average of 25.4% since their respective sell signals an average of 61.3-weeks earlier.

On Jul 9, 2004, there were 246-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 67.8%, annualizing at 65.6%, since their respective buy signals an average of 53.7-weeks earlier. There were 36-avoided stocks and funds then. They were down by an average of 31.2% since their sell signals an average of 45.9-weeks earlier.

There were 277-stocks and funds with hold signals on Jul 11, 2003. They were up by an average of 47.5%, annualizing at 103.2%, since their buy signals 23.9-weeks earlier. The 10-avoided stocks and funds were down an average of 29.0% since their respective sell signals an average of 29.1-weeks earlier.

On Jul 12, 2002, there were 50-stocks and funds with a hold signal, enjoying a 40.3% gain since their respective buy signals an average of 45.0-weeks earlier. That annualized at 46.6%. There were 220-avoided stocks at that time. They were down 26.6% since their sell signals an average of 10.7-weeks earlier.

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

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

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

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

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

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

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

The Long-term and Mid-term attributes have partially succumbed to the stock market bear’s ambition. There are elements of resistance; especially in the mid-caps and small caps. They are usually the last to succumb. So far, they continue resisting the bear.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. The S&P500 and the DJIA also shifted to bearish bias on a mid-term basis on Jul 2, 2010. Several stocks and funds also succumbed on Jul 2, 2010. Many of them reversing “reluctant buy signals” earlier this year and last year, as the 2009 bull market was configured as a “sucker rally.”

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 5% for holds with less than a 20%-unrealized gain. 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.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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. If the green curve is rising, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you may want to set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will be presented.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 40.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 97.1% and the S&P500 is up 38.8% since then. The small cap index, S&P600, is up 98.3% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 56.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 29.4% since its similar secular peak on March 23, 2000. The Dow is down by 13.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments.

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

The NASDAQ year-to-date performance was bearish by 18.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 29.1% 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 stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 30.8%. 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 2.8% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 2.9% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 3.4% 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 10.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 15.7% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 11.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 6.8% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 28.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 23.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 33.0% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The current Near-term Bear cycle, originating during the weeks of May 9 and May 16, 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 55.8% since March 9, 2009. The NASDAQ is up 73.1% and the S&P500 is up 59.3% since then. The S&P600, Small Cap Index, is up 86.2% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is now suggesting impending bearishness, while the Short-term Indicant remains bearish in spite of last week’s bullish behavior. It was expected and it is configured as a mere spurt.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

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.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one. The sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. You should notice a subtle incline on CD rates.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance will induce a stock market bear. Current levels of those tolerances remain safe.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Europe. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse. That is usually bearish, depending on location and severity. You have recently witnessed civil discourse in Greece. The question is, how much will this spread? Also, what new political mumbo-jumbo leaders will evolve from such crises? Such crises typically propel militant sort of folks to the top of the political heap. This typically leads to war, which is ultimately bullish, albeit painful, and depending on the winning side.

Some short-term rates continue nudging north the past few weeks. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

This paragraph remains as a serious threat. The “political design” to prevent massive economic chaos remains ineffective. The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed would take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real and sustainable. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate several weeks ago. Another reason for the dollar’s strengthening is the weakening of foreign currencies. It is not based on the dollar’s merit, but based on European incompetence, laziness, stupidity, and a continuation on stringent controls in the class system. The parasitical elite will maintain their status, regardless of consequence. Eventually, that consequence does not bode well for them and their offspring.

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

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. However, they have been weakening the past few weeks, suggesting potential for a new bearish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices were rising, but that is against the trend for the time being. They have been taking it on the chin by the commodity bear the past few weeks. Increasing commodity prices will pressure rates more to the north. That will be non-bullish.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc. The Gold Bull was attacked by the Gold Bear the past few weeks due to, in part, to currency exchange rates and their recent volatility. Gold is encountering some near-term duress, while its long-term projections remain bullish.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat and their corrupt partners.

Gold was solidly bearish the past few weeks. Its Force Vector is depressed, suggesting potential for non-bearishness to bullishness for the next few days. The optimistic 2012 forecasted price of gold is holding at $1600 in spite of bearishness the past few days. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 93-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

As stated the past 45-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 6.1% since the recent sell signal on Jul 2, 2010.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 10.4% since then, annualizing at 10.4%. It is on the verge of receiving a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but flat since then and endured a sell signal on Jul 2, 2010. It is up 6.8% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is up 0.7% since the May 21 sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 10.6% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

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 disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 2.7% since the Jun 4, 2010 sell signal.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 0.8% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is down 4.4% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 45.3% since that buy signal, annualizing at 28.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 5.6% since that buy signal, annualizing at 15.7%.

Most commodities were bullish last week. The energy services sector was solidly bullish last week, following three weeks of solid bearish behavior. As stated the past few weeks, it will be interesting to see how the moratorium on drilling in the U.S. will play out. Fundamentally, it should be bearish for the energy services sector, while the oil companies should do well since oil prices should move to the north. They will enjoy more profits with less expense. They will drill around the world and most likely depart from U.S. political threats.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 3.7% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 1.1% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals on Jul 2, 2010. They are both up on last week’s bullish spurt behavior.

The six remaining major indices retaining bull signals are up by an average of 13.9% since there respective bull signals an average of 49.0-weeks ago. That annualizes at 14.8%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,551,503 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $105,589 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $200,160. That beats buy and hold’s $76,160 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1693.1%, 26.0%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA and S&P500. However, the Mid-term Indicant has not yet signaled bear for the NASDAQ and thus holding the same performance ratio of 162.8%, while the DJIA and S&P500 performance worsened on last week’s bullish spurt.

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.

Click here for the Mid-term Table of Mutual Funds.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 57.1% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred earlier this past week. The Mid-term Indicant could not justify a buy signal this weekend due to the bullish spurt behavior by the stock market. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 252.3% (annualized at 13.5%) since the Long-term Indicant signaled bull 975-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

The bullish spurt continues due, in part, to Congressional holidays. The spurt was expected. Causations were primarily technical, while the Congressional Effect was interestingly correlated. Those causative technical indicators have consumed significant energy.

Force Vectors are rapidly maturing. Yesterday’s report stated they were declining. It should have said they were rising. Their incline is past average half-life.

Vector Pressure remains solidly in bearish domains. As long as that attribute persists, bearish bias prevails.

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

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

The VIX is the lone NTI bull. It is up 9.5% since the bull signal 10.4-weeks ago. That annualizes at 47.4%. It appears to be heading between Green ($24) and Yellow ($22). Once there, the stock market should turn bearish and the VIX should move bullishly. There was no bear signal for the VIX this week.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are down by an average of 3.5% since their bear signals an average of 9.0-weeks ago.

The Quick-term Indicant is signaling bull only for the VIX. It is up by 9.5%, annualizing at 47.4%, since the bull signal 10.4-weeks ago.

The Quick-term Indicant is signaling bear for eleven indices. They are up by an average of 3.5% since their bear signals an average of 5.1-weeks ago. Their recent bullishness remains configured as a bullish spurt and unsustainable.

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

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

      QTI-Red Bull Count; No non-contrarians; no bullish support.

      QTI-Bullish Red Curve Trend; None of the non-contrarians are moving bullishly; no bullish support.

      QTI-Yellow Bear Count; Several leaped above yellow on bullish spurt behavior the past few days.

      QTI-Bearish Yellow Curve Trend; None of 11-non-contrarian indices are in non-bearish trend, supporting bearish bias along this slower cycle.

The Quick-term Indicant is now supportive of the QTI Bear. All non-contrarians are yellow bears, offering no floor to falling stock prices on this slower cycle. However, prices recently eclipsed bearish yellow, offering another opportunity for resistance. That is not expected on the next cycle of bearish aggression.

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

      NTI-Blue Bull Count; two non-contrarians; limited near-term bullish support.

      NTI-Bullish Blue Curve Trend; All non-contrarians sloping negatively; no bullish support.

      NTI-Bearish Green Curve Trend; All non-contrarians sloping negatively; no non-bearish support.

All Near-term attributes are favoring the near-term bear.

      Short-term Force Vectors and Pressure Attributes

      STI-Force Vector Domain Position; Six moved into bullish domains, paralleling spurt behavior.

      STI-Force Vector Direction; All of the non-contrarians shifted north last Wednesday. They are now approaching maturity, which suggest a turnaround to the south in a matter of days.

      STI-Vector Pressure Trend; None of the non-contrarian indices are moving bullishly; no bullish support in terms of sustainability.

      STI-Vector Pressure Position; Zero non-contrarians are in bullish domains; no sustainable bullish support.

      Short-term Market Summary

      Short-term attributes are supporting the bear. The expected bullish bounce is now occurring, but currently configured as a bullish spurt.

-Tangential Protection – None!

-Political Climate – Congress was on vacation this past week, which is generally bullish. The stock market was indeed bullish last week. The economic culprits will be back at work next week. That is generally non-bullish.

-Reverse Tangential Bearish Detection – We can now monitor this phenomenon, as we are now enduring a significant Near-term bearish cycle. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The Quick-term bearish yellow curve is no longer offering a point of resistance to bearish ambition even though the major indices are bouncing around it.

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

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

Indicant Volume Indicators  

Volume indicators remain lethargic. Some of this lethargy is traced to seasonal behavior. The expiring robustness configured during solid bearish expressions during May and  June. Therefore, volume relationships remain biased in favor of the bear. (Recent chronological observations are expressed below in reverse order).

Jul 9, 2010-Fri-Light summertime volume on mild bullishness does very little to inspire a sustainable bullish cycle.

Jul 8, 2010-Thu-Same as yesterday.

Jul 7, 2010-Wed-Although volume was seasonally high, it was not aggressive enough to discontinue bearish bias.

Jul 6, 2010-Tue-Again light volume and thus bearish bias remains.

Jul 2, 2010-Fri-Light holiday volume on continued bearishness does nothing to shift bias from bearish.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for five ETF’s. They are up by an average of 5.9%, annualizing at 38.5%, since their buy signals an average of 8.0-weeks ago.

The NTI is avoiding 27-ETF’s. They are down an average of 2.2% since their sell signals an average of 7.4-weeks ago.

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

The Quick-term Indicant is signaling hold for six ETF’s. They are up an average of 15.0% since their buy signals an average of 24.2-weeks ago. Those with hold signals are annualizing at an average rate of 32.2%. (Note: The annualized performance is a bit skewed since the recent buy signal was for contrarian QID, which shortened the hold span inflating the annualized number just a bit).

The Quick-term Indicant is avoiding 26-ETF’s. They are up by an average of 0.7% since their sell signals an average of 4.0-weeks ago. VXX is on the verge of receiving a Quick-term Indicant buy signal. The Indicant is waiting for the Force Vector cycle to play out. It should be over within a week; possibly two.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; 22-non-contrarians; bullish spurt support; zero sustainable bullish support.

NTI Blue Curve Trend: all non-contrarians are moving north, offering bullish spurt support.

NTI Green Curve Trend; three non-contrarians are sloping north, but this is a minority and thus remains in support of the bear.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; no non-contrarians; no bullish support.

QTI Bullish Red Curve Trend; One of the non-contrarians is sloping north and offering minimal protection against the bear.

QTI Bearish Yellow Curve Trend;  One of the non-contrarians is sloping north and no longer supporting non-bearishness along this slower moving plane.

The Short-term Indicant ETF Key Attributes:

>STI Force Vectors Trend; all sloping north, as anticipated. They continue offering bullish spurt potential, but more sell signals were triggered this past week in spite of that prognosis.

>STI Force Vector Position; 15-non-contrarians are populating bullish domains, reflecting bullish spurt support. Their behavior at Vector Pressure interaction and the border between bullish and bearish domains will obviate directional intensity. It is getting close since there are only a few remaining to cross into bullish domains.

>Vector Pressure Position; None of the non-contrarians are in bullish domains. That is bearish.

>Vector Pressure Trend; none of the non-contrarians are moving north. Continuation of this bearish slope will encourage the bear to unleash yet more torment to those desiring bullish behavior.

Short-term Summary: As stated the past few days, the bear is too strong to delay sell signals in spite of this past week’s bullish spurt. Although the avoid signals from those sell signals appear to be a mistake, current configurations continue suggesting there is no mistake.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on May 7, 2010. It is down 3.9% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is up 1.3% since the QTI sell signal. Vector Pressure remains in bearish domains, obviating solid bearishness. It is currently behaving as a non-contrarian, but historically it is contrarian.

ETF#11-Gold and Precious Metals  is up 46.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.3%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $107.09 and still rising. Although Gold has been under dollar pressure, the QTI buy signal was at $80.65. So, that stop loss will generate over 20%-gain.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 6.6% since that buy signal, annualizing at 18.5%. It is under near-term cyclical pressure but as long as pressure is positive, the NTI will not signal sell. Force is moving laterally in bearish domains, which is a bit threatening to the near-term hold cycle.

Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last year-plus months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government  received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 8.8% since those buy signals, annualizing at 43.4%. This ETF is increasing its bullish attributes. It is usually contrarian to the overall stock market.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 10.4% since then, annualizing at 65.5%.  Short-term attributes are solidly favoring this and similar ETF’s that short the market. As stated earlier this past week, the bullish spurt will hurt it a bit, but continue holding.

The Quick-term Indicant signaled buy on July 6, 2010 for QID after avoiding it since March 26, 2009. It was down over 55.0% since the March 29, 2009 sell signal and the July 6, 2010 buy signal. Force Vector continue shifting to the south, but solidly in bullish domains. It may retreat all the way down to Vector Pressure, but from there it should be explosively bullish. If it does not, a sell signal will ensue for an approximate breakeven transaction between the two signals.

The Near-term Indicant is avoided ETF#32-VXX. Performance data will be updated at the first signal after its inclusion on Jun 29, 2010. It is also nearing a buy signal. VIX was down the past few days on overall market bearishness and bullishness. It is, however, contrarian and should be explosively bullish when the bear resumes dominance.

Major ETF Events

Jul 9, 2010-Fri-Several Force Vectors crossed into bullish domains. There are a few more remaining before obviations of directional intensity manifest.

Jul 8, 2010-Thu-Nothing unusual. The bear is merely resting ahead of its attack in a few days.

Jul 7, 2010-Wed-The anticipated bullish spurt is now underway. Goldman Sachs publicly announced they were advising their long-term holders to continue holding. Geese, do not fall for that trap. They are simply looking for buyers. Those big firms play the game in search of suckers. There are plenty of them. One should ask, why would a company, such as Goldman announce to the world what they are advising their clients. Rest assured, they are simply drumming up buyers for this bullish spurt to “protect their clients.”

Jul 6, 2010-Tue-The stock market opened with strong bullishness, but fizzled to a flat sort of day. The Quick-term Indicant signaled buy for ETF#31-QID-Short QQQQ. It was down over 50% since QTI sell signal over a year ago in March 2009. The Quick-term Indicant signaled sell for ETF#29-XLY-Consumer. It was up over 34% since the QTI signaled buy over a year ago on April 9, 2009.

Current Strategy-Short-term Indicant- Jul 9, 2010-Fri-Same. Jul 8, 2010-Thu-Same. Jul 7, 2010-Wed-Same. Jul 6, 2010-Tue-Do not be surprised at some bullishness this week, but consider it as a mere bullish spurt.

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

The stock market enjoyed bullish convergence last week, following bearish convergence in the prior two weeks. Bullish convergence has occurred in four of the of past six weeks. However, a combined bearish convergence/divergence in six of the past eleven weeks remains as a dominant theme. Periodic bullish spurts dampened bearish enthusiasm a few weeks ago and again last week.

Bearish convergence was endured for four consecutive weeks ending 22-weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. Although the bullish spurt last week is encouraging, these convergent behaviors continue in favor of the stock market bear.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks. However, there are a few adjustments.

As stated the past thirty-nine weeks, low interest rates are imposing narrowed alternative investment opportunities. The expiration of the Near-term Bull, Quick-term Bull, and parts of the Mid-term Bull continue suggesting this is an increasingly irrelevant observation, relative to more worldly dynamics.

The capital markets crushed the early February threat by the stock market bear with a strong bullish spurt in March and April. Unfortunately, bearish behavior in six of the last ten weeks offset the March-April bullish surge. That suggests the early February bearish threat had more merit than the Mar-Apr bullish spurt.

Fundamental economic data had been improving, but the wasteful stimulus package is now running out of steam. Keep in mind, the 2009 stimulus package was about as ineffective as they come. That, coupled with declining economic outlooks, adds to the bear’s stimulation by more broad economic fundamentals. The bear’s delight is sourced primarily from Europe and now expanding to the U.S.

Politicians continue adding bearish punch. Cap and trade legislation, based on mystical global warming, and the oil slick in the Gulf of Mexico, is bearish as it sucks money from capitalists and places it in the hands of politicians and government bureaucrats, inviting greater inefficiencies in its use. A recent resurrection of drilling moratoriums should inspire the bear for yet more drama. Much of this favors inflation, but the jury is still out on that.

Financial reform, as currently documented, does not address the root cause of the problem. The capital markets are sensing elements of its content, adding to bearish delight.

Short-term attributes remain a concern. As stated the past eight weeks, the problem of Vector Pressure remaining in a near-converging pattern for several weeks offered a technical avenue for the bear’s encouragement. Collapsing NTI Blue Curves and declining Vector Pressure are adding to the stock market bear’s arousal.

Short-term pressure is now residing in bearish domains. That provides bearish confidence on a short-term basis. Last week’s stock market bullish spurt used too much energy to sustain itself. The bear should resume dominance in a matter of days.

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

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

The daily updates are on the following link.

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

Hyperlinks

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07/11/2010

Jul 04, 2010 Indicant Weekly Stock Market Report

Volume 07, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

This Summer’s Stock Market

You undoubtedly noticed an unusually large number of sell signals this weekend. Even though Congress will be taking a holiday during the week of July 5, which is typically bullish, the continued holding of certain configurations are enduring excessive risks.

Although the probability of a bullish bounce next week is increasing, the risks of holding an increasing percentage of stocks and funds exceeds the benefits of potential gains from a bullish spurt. The bullish spurt is supported, in part, by the congressional effect.

There are technical justifications for expecting a bullish bounce next week; or at least non-bearishness. Most non-contrarian Force Vectors have reached a low point in their respective cycles. They need to move north. If they continue plummeting without some form of non-bearish disruption, the stock market could be perceived as sensing something sinister about the economy or political influence. In spite of this, though, non-bearishness at worse should be expected next week. This will, hopefully, occur early in the week, allowing the selling to occur at higher prices than Friday’s closing prices.

After next week’s holiday, Congress returns to work on July 12 for about four weeks. The agenda includes financial reform. It excludes the root causes of the 2008 financial collapse. There are two root causes; Freddie Mac and Fannie Mae. Of course, incumbent politicians are not going to cut off a nice source of campaign contributions and no telling what other corrupt revenue streams they derive from Freddie Mac and Fannie Mae.

The root cause of politicians not addressing the root cause of financial reform is because they (the politicians) are the root cause. They will not put themselves in jail for their misbehavior. This was graphically illustrated in the March 22, 2009 Weekly Report. Politicians will not shake themselves from their money sources, which is the primary purpose of Fannie Mae and Freddie Mac. The secondary purpose is vote getting from the low-end of society, but an increasing faction of American society.

Contemporary politicians are the founding fathers of the low-end of society. The more offspring they can create in that group, the more votes they can get. That is all they care about in spite of the fact that leeches always eventually kill their host. Leeches never look to the future. Their non-productive livelihoods are always focused on the “right now.”

Pundits are promoting fundamental support for bullish continuations based on corporate earnings. They are projected to increase 45% this year. That sounds bullish. Unfortunately, that is irrelevant to the stock market. It made its move late last year in anticipation of such glorious earnings this year. It is now focused on Quarter 1 and Quarter 2 of 2011. Political interference can disrupt current projections and by a lot. The stock market may be sensing this potential.

The stock market remains bearishly biased. The reasons for bias are generally unknown until after the detection of bias shifts. If the market indeed turns dynamically bearish this summer, one can understand more clearly “why” about six to nine months from now.

It is believed the current bearish bias is politically induced. Proposed financial regulations are not addressing the financial crisis of 2008. Furthermore, current proposals suggest bailouts will be more common in the future. In essence, politicians are granting themselves more power. That is always bearish. There is a reason the iron curtain fell. Here is the reason. Government run entities never produce competitiveness in any element of life and always depress the quality of life among their populace. That is bearish for U.S. based companies with a propensity to expose themselves to bailouts. They will perform poorly and with each bailout more so. There will be socioeconomic contamination from that process, which adds to bearishness.

Failure to pass financial reforms in its current language will be bullish. However, the stock market should remain bearish as long as politicians threaten to pass it.

The Reverse Tangential Projections suggest the stock market and other securities will fall below certain prices. Those prices are noted at the link in the prior sentence. Most of these projections were made in the summer of 2009. Those projects are with 100% confidence in their manifestations, while the timing is unknown. Political behavior, right now, suggests the timing is near perfect for another 30% or more drop in prevailing stock market prices. That would manifest the reverse tangential projections.

For example, EFT#26-IJR-Small Caps, is typically among the most bullish in bull markets. It fell below the Quick-term Indicant’s bearish yellow curve last week for the first time since Feb 2009. Click this sentence to review its chart. It is among the most bearish during bear markets. If the reverse tangential projections manifest, it will fall another 30% from its current price. It is already down 6.7% since the Near-term Indicant signaled sell on May 20, 2010.

Another example is ETF#06, EWJ-Japan, which is already down 8.1% since the Near-term Indicant signaled sell on May 5, 2010. It only has to fall another 8.3% to manifest the reverse tangential projection that was made over a year ago on May 28, 2009. Click this sentence to view its chart.

Although the Indicant tracks several Funds that short the stock market, only two are displayed in the daily stock market updates. ETF#31, QID, which moves inversely times two to QQQQ, is tracked daily. Click this sentence to view its chart. You will notice its Force Vector is the highest it has been since early 2009. Vector Pressure is rising and well inside bullish domains. That is bullish for QID and bearish for QQQQ and the NAS100. A 20% drop in the NASDAQ100 (and QQQQ) should catapult this ETF up another 40% by the end of summer. Of course, that is speculative. If it is wrong, the daily stock market report will advise. It is already up 22.3% since the Near-term Indicant signaled buy on May 13, 2010.

Last week, the Indicant added an ETN, VXX, to its tracking. Although there is no way to predict how high VXX will go, it will definitely move up if the stock market turns bearish. It parallels the VIX index, although not quite as volatile as the VIX. Its Force Vector, similar to QID’s, is hot; a little to hot to signal buy. However, it should receive a Near-term buy signal within a few days. To view its chart with some additional commentary, click this sentence.

If the stock market indeed turns bearish during the summer months, there are ways to profit from that. QID and VXX are two good ways.

The Speaker of the House of Representative, Nancy Pelosi, stated last week that unemployment benefits create jobs. The stock market does listen to the news. When a person with significant socioeconomic responsibilities becomes newsworthy by virtue of idiocy, the bear finds that arousing. Paying people not to work does increase demand for toilet paper, some canned goods, and maybe gasoline. Unfortunately, though, all this does is allow the factories to accelerate production for an hour or two for a few weeks to accommodate this additional demand. It will not create any significant jobs albeit it does add to corporate profits in a minor sort of way. This economic theory is derived from the same three-pound brain that did not know natural gas was a fossil fuel. It is unbelievable there is a pocket majority of people who voted for this lunatic. Oh well, such commentary from politicians is indeed bearish.

The stock market will keep an eye on the political polls. As we enter autumn just ahead of the mid-term elections, historical standards suggest a powerful bull leg will be born heading into the normally bullish presidential pre election year. This is especially true when the polls suggest the formation of a possible “do nothing” government. Since the incumbent president is a democrat, it would be bullish if the polls suggest a republican takeover of both the U.S. House of Representatives and the U.S. Senate. That would have a stalemating effect on politicians and that would be bullish and solidly so.

If the summer months indeed prove to be bearish, one would not be out of line by anticipating a bullish bounce later this year. Other attributes suggest the stock market will not fall to previous cyclical lows (Feb/Mar 2009). However, the Reverse Tangential Projections suggest they may fall close to those lows.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated no buy signal and 52-sell signals.

The Mid-term Indicant is signaling hold for 138 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 39.6%. That annualizes to 34.8%. The Mid-term Indicant has been signaling hold for these 138-stocks and funds for an average of 59.2-weeks.

The Mid-term Indicant is avoiding 126-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 35.0% since the Mid-term Indicant signaled sell an average of 75.3-weeks ago.

One year ago, on Jul 3, 2009, the Mid-term Indicant was holding only 19-stocks and funds out of 332 tracked for an average of 103.1-weeks. They were up by an average of 123.6% (annualized at 62.3%). There were 290-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 29.2% since their respective sell signals an average of 53.5-weeks earlier one year ago. Several stocks were identified as NLT, no longer traded, at this time one year ago. They will be replaced with new securities before the end of this year.

The Mid-term Indicant was signaling hold for 84-stocks and funds of the 345-tracked two years ago on Jul 4, 2008. They were up by an average of 262.6% (annualized at 74.0%) since their respective buy signals an average of 184.5-weeks earlier. The Mid-term Indicant was avoiding 241-stocks and funds at that time. They were down an average of 15.2% since their respective sell signals an average of 20.0-weeks earlier. There were 76-sell signals on this weekend and the prior weekend in 2008. That is the reason for the tremendous shift in performance on the hold signals.

There were 308-stocks and funds with hold signals on Jun 29, 2007 since their buy signals an average of 110.0-weeks earlier. They were up by an average of 135.2% (annualized at 63.9%). There were 31-avoided stocks and funds at that time. They were down by an average of 15.6% from their respective sell signals an average of 29.6-weeks earlier.

On Jun 30, 2006, the Mid-term Indicant was signaling hold for 208-stocks and funds out of 345-tracked. They were up by an average of 151.6% (annualized at 69.7%) since their buy signals an average of 113.0-weeks earlier. The Mid-term Indicant was avoiding 136-stocks and funds at that time. They were down by an average of 5.0% since their sell signals an average of 15.2-weeks earlier.

Five years ago, on Jul 1, 2005, there were 196-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 108.0% (annualized at 58.7%) since their respective buy signals an average of 95.7-weeks earlier. There were 122-avoided stocks and funds then. They were down an average of 26.4% since their respective sell signals an average of 60.3-weeks earlier.

On Jul 2, 2004, there were 257-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 68.9%, annualizing at 69.3%, since their respective buy signals an average of 51.7-weeks earlier. There were 35-avoided stocks and funds then. They were down by an average of 30.3% since their sell signals an average of 45.1-weeks earlier.

There were 277-stocks and funds with hold signals on Jul 4, 2003. They were up by an average of 44.7%, annualizing at 100.2%, since their buy signals 23.2-weeks earlier. The 14-avoided stocks and funds were down an average of 27.4% since their respective sell signals an average of 28.3-weeks earlier.

On Jul 5, 2002, there were 66-stocks and funds with a hold signal, enjoying a 41.0% gain since their respective buy signals an average of 44.6-weeks earlier. That annualized at 47.8%. There were 217-avoided stocks at that time. They were down 22.3% since their 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.

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

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

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

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

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

The Long-term and Mid-term attributes have not yet succumbed to the stock market bear’s ambition, but with an increasing probability to do so.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. The S&P500 and the DJIA also shifted to bearish bias on a mid-term basis this weekend. Several stocks and funds also did. Many of them reversing “reluctant buy signals” earlier this year and last year, as the 2009 bull market was configured as a “sucker rally.”

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 5% for holds with less than a 20%-unrealized gain. 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.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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. If the green curve is rising, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you may want to set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will be presented.

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 32.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 87.8% and the S&P500 is up 31.6% since then. The small cap index, S&P600, is up 89.1% 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. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 58.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 33.1% since its similar secular peak on March 23, 2000. The Dow is down by 17.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments.

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

The NASDAQ year-to-date performance was bearish by 13.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 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 stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 25.7%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 0.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards. 

It was down 5.4% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 1.5% 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 9.0% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 15.1% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 13.9% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007.  Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 5.6% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 31.7% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 26.8% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 27.5% 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.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The current Near-term Bear cycle, originating during the weeks of May 9 and May 16, 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 48.0% since March 9, 2009. The NASDAQ is up 64.9% and the S&P500 is up 51.2% since then. The S&P600, Small Cap Index, is up 77.6% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is now suggesting impending bearishness, while the Short-term Indicant remains bearish

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

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.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one. The sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. You should notice a subtle incline on CD rates.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Europe. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse. That is usually bearish, depending on location and severity. You have recently witnessed civil discourse in Greece. The question is, how much will this spread? Also, what new political mumbo-jumbo leaders will evolve from such crises? Such crises typically propel militant sort of folks to the top of the political heap. This typically leads to war, which is ultimately bullish, albeit painful.

Some short-term rates continue nudging north the past few weeks. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed would take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real and sustainable. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate several weeks ago. Another reason for the dollar’s strengthening is the weakening of foreign currencies. It is not based on the dollar’s merit, but based on European incompetence, laziness, stupidity, and a continuation on stringent controls in the class system. The parasitical elite will maintain their status, regardless of consequence. Eventually, that consequence does not bode well for them and their offspring.

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

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. However, they have been weakening the past few weeks, suggesting potential for a new bearish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices were rising, but that is against the trend for the time being. They have been taking it on the chin by the commodity bear the past few weeks. Increasing commodity prices will pressure rates more to the north. That will be non-bullish.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc. The Gold Bull was attacked by the Gold Bear last week due to the U.S. dollar weakening. Gold is encountering some near-term duress, while its long-term projections remain bullish.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat and their corrupt partners.

Gold was solidly bearish the past few days. Its upward price movement paralleled civil strife in Greece for a significant and noticeable period. The optimistic 2012 forecasted price of gold is holding at $1600 in spite of bearishness the past few days. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 92-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

As stated the past 44-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It was down slightly until this weekend’s sell signal.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 8.4% since then, annualizing at 10.1%. It is on the verge of receiving a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but basically flat since then and endured a sell signal this weekend.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is down 6.4% since the May 21 sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 16.7% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

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 disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is down 3.5% since the Jun 4, 2010 sell signal.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is down 4.9% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is down 9.8% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 46.9% since that buy signal, annualizing at 29.7%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 6.7% since that buy signal, annualizing at 19.9%.

Most commodities were bearish last week following two weeks of solid bullish behavior. The energy services sector has paralleled that behavior the last three weeks. It will be interesting to see how the moratorium on drilling in the U.S. will play out. Fundamentally, it should be bearish for the energy services sector, while the oil companies should do well since oil prices should move to the north. They will enjoy more profits with less expense. They will drill around the world and most likely depart from U.S. political threats.

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 July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is down 2.3% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is down 4.1% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals this weekend.

The six remaining major indices retaining bull signals are up by an average of 8.2% since there respective bull signals an average of 48.0-weeks ago. That annualizes at 8.9%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,473,677 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,021. That beats buy and hold’s $100,165 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $190,622. That beats buy and hold’s $72,531 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA and S&P500.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

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

Mid-term Indicant Positions - Indicant Selected Stocks  

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

Mid-term Indicant Positions - Mutual Funds

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