Jun 26, 2011 Indicant Weekly Stock Market Report

Volume 06, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

The Weakest Index

Of the ten major indices tracked by the Mid-term Indicant, the S&P100 is the weakest. The Mid-term Indicant signaled bear for it this weekend. It is the only one, among the major indices, weak enough to be identified as a bear at this time. Therefore, the stock market is not necessarily bearish along the Mid-term Indicant cycle with this bear signal. The S&P100 is usually the first to getting a bear signal when a bearish stock market unfolds.

The component companies of the S&P100 index attract the less ambitious among us. Of course, that is not factual for everyone who works within the S&P100 companies. However, most of the management teams in those largest of the large caps are dilettantes. Many of them are political experts, fooling directors and/or hanging out with directors. Their habitual lackluster earnings dampen enthusiasm for such stocks and this could be contributing to excessive bearish behavior within the S&P100 family.

The S&P100 Index is down 22.8% since its Oct 9, 2007 peak price. Of the ten major indices tracked by the Mid-term Indicant, the S&P100 is down the most since the stock market cyclical peak in 2007. The only major index tracked by the Mid-term Indicant that is higher than its 2007 peak is the S&P400-Midcaps. It and the S&P600-Small Caps are much more volatile along a long cycle than the S&P100. Several of the major indices topped their 2007 highs a few weeks ago, but quickly fell back below those prior cyclical peaks. Technically, that is very challenging to the stock market bull.

Keep in mind, all the major indices along the near-term cycle, within the Short-term Indicant model, are bears at this time, while the Quick-term Indicant continues with bull signals. Next week should be interesting. Volume remains depressed, some of which is seasonal. That usually invites volatility. Several ETF’s Force Vectors bounced above and below Vector Pressure last week, signaling significant stock market indecisiveness with respect to any directional intensity.

The S&P100 companies continue to be enamored with academic pedigree, sound presentational skills, and overall polish. Management effectiveness is of minor consequence. At one time, Eastman Kodak was a member of the S&P100 Index. As you can see, its 12-year trend is south and during recent stock market bullish behavior, all it could do was be flat. That is a dilettante infested company. Most of the companies within the S&P100-Large Cap Index will eventually follow along the same path as Eastman. Many know this and thus another reason for avoiding S&P100 sort of companies.

At any rate, the S&P100-Large Cap Index is bearish at this time along the Mid-term Indicant cycle. It is unusual for the Mid-term Indicant to signal bear in a pre-election year for any of the major indices. Keep in mind, the presidential pre-election year is the most bullish in the four-year cycle. A $10,000-investment since 1832 only during presidential pre-election years grew to $302,066 by the last presidential pre-election year of 2006. The Dow was up 16.3% in 2006, adding value to that phenomenon.

The powerful bullish expressions during presidential pre-election years contrasts significantly with post election years, where $10,000 invested only in presidential post election years since 1832 grew to only $10,343 as of the last one in 2009. That’s right; only $343 was gained if investing in the stock market only during presidential post election years since 1832. Prior to 2009’s remarkable bullish stock market, the balance was only $8,758 in 2005. That’s right. Investing only in presidential-post -election -years since 1832 lost money until 2009. When considering inflation, the presidential post election year is a horrendous stock market loser.

The reason the presidential pre-election years are the most bullish is because incumbent presidents shift policies favorable to economic activity ahead of the election year. That contrasts with the post election year, where incumbents do not care about economic activity. After all, they just got elected, have a job, and are enjoying too good of a life. Unfortunately, that is also when most incumbents invoke policies favorable to social causes at the expense of the economy. The stock market reflects that by generally being bearish in presidential post election years.

All incumbents know that high unemployment will prevent their reelection and/or their party losing dominance. Consequently, during the mid-term election year, politicians shift their focus to nudge the economy upward to help ensure their reelection. Of course, that does not always work out for them, as they are incapable of positively impacting the economy. They can only undo their prior damage and sometimes that is not enough.

Keep in mind, politicians are concerned with their own well-being ahead of yours. They are just people too, who, for the most part, should be ignored, scorned, and/or laughed at. They add no economic value. On the contrary, they subtract from it. The historical record is inarguable.

In spite of the presidential pre-election year’s profound profit accumulations since 1832, not all of those years are bullish. In 1839, the stock market was down 12.3%. The biggest loser occurred in 1931’s presidential pre-election year with the Dow falling 52.7%. Since then, all presidential pre-election years have been bullish. That contrasts with ten bearish presidential post election years since 1931.

One could argue the odds favor a bearish stock market in this presidential pre-election year since there has not been one since 1931. Fundamentals certainly support it, but political gridlock in Washington D.C. can override those fundamentals. The only time the stock market bull is delighted with the absence of political gridlock is when politicians engage in undoing their prior damage.

Although the Mid-term Indicant includes probabilistic modeling, it does not include odds favoring the first bearish presidential election year since 1931. The only problem on the Mid-term cycle is that the S&P100 is so weak that it garnished a bear signal this weekend.

A bullish bounce next week would dampen any concerns with this bear signal. Some vigilance regarding the overall stock market is appropriate at this time. There were eight sell signals this weekend for stocks and funds. That is a rather small number and certainly not indicative of a major stock market collapse. However, keep in mind, the S&P100 is typically the first to get a bear signal ahead of major collapses. Hopefully, it will receive a bull signal in a few weeks. Also, note that summertime behavior is more bearish than bullish.

Whipsawed – Review of Wild Swings Last Week

In spite of volatile stock market behavior, none of the NAS100 stocks changed by double digits last week.

The largest ISTK gainer was ISTK#78-RFMD. It was up 13.7% last week. It is up 45.2% since the MTI signaled buy on Oct 23, 2009. It continues losing bullish Pressure, which is a mild threat to its hold position.  Keep in mind, this stock is down 93.2% from its all time high. There were no major ISTK losers last week.

The Dow30, Dow Utilities, and Mutual Funds all traded in a tight range last week. There were no double digits swings.

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 eight sell signals.  

The Mid-term Indicant is signaling hold for 276 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.5%. That annualizes to 38.1%. The Mid-term Indicant has been signaling hold for these 276-stocks and funds for an average of 71.6-weeks.

The Mid-term Indicant is avoiding 51-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 30.1% since the Mid-term Indicant signaled sell an average of 76.4-weeks ago.

One year ago, on Jun 25, 2010, the Mid-term Indicant was holding 189-stocks and funds out of 333 tracked for an average of 53.0-weeks. They were up by an average of 33.6% (annualized at 32.9%). There were 125-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 31.7% since their respective sell signals an average of 74.3-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Jun 26, 2009. They were up by an average of 124.2% (annualized at 63.0%) since their respective buy signals an average of 102.4-weeks earlier. The Mid-term Indicant was avoiding 310-stocks and funds at that time. They were down an average of 26.7% since their respective sell signals an average of 53.2-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009, as buy signals were nearing.

There were 159-stocks and funds with hold signals on Jun 20, 2008 since their buy signals an average of 157.4-weeks earlier. They were up by an average of 192.7% (annualized at 63.6%). There were 163-avoided stocks and funds at that time. They were down by an average of 17.8% from their respective sell signals an average of 27.9-weeks earlier. There was one buy signal on this weekend in 2008. There were 22-sell signals on this weekend in 2008 in addition to the 284-sell signals in the prior 32-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.”

On Jun 22, 2007, the Mid-term Indicant was signaling hold for 313-stocks and funds out of 345-tracked. They were up by an average of 127.9% (annualized at 62.5%) since their buy signals an average of 106.4-weeks earlier. The Mid-term Indicant was avoiding 31-stocks and funds at that time. They were down by an average of 14.7% since their sell signals an average of 28.8-weeks earlier. There were no buy signals and one sell signal on this weekend in 2007.

Five years ago, on Jun 23, 2006, there were 207-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 143.6% (annualized at 66.5%) since their respective buy signals an average of 112.4-weeks earlier. There were 132-avoided stocks and funds then. They were down an average of 6.4% since their respective sell signals an average of 14.4-weeks earlier. There was one buy signal and five sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Jun 24, 2005, there were 196-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 106.1%, annualizing at 57.9%, since their respective buy signals an average of 95.3-weeks earlier. There were 110-avoided stocks and funds then. They were down by an average of 26.6% since their sell signals an average of 61.0-weeks earlier. There were two buy signals and 12-sell signals on this weekend in 2005.

There were 249-stocks and funds with hold signals on Jun 25, 2004. They were up by an average of 73.9%, annualizing at 72.5%, since their buy signals 53.0-weeks earlier. The 35-avoided stocks and funds were down an average of 30.4% since their respective sell signals an average of 44.9-weeks earlier. There were ten buy signal and three-sell signals on this weekend in 2004 in addition to 61-sell signals in the prior nine weeks. The meandering bear market was well underway at this time of year in 2004.

On Jun 27, 2003, there were 277-stocks and funds with a hold signal, enjoying a 42.6% gain since their respective buy signals an average of 22.2-weeks earlier. That annualized at 99.7%. There were only three avoided stocks at that time. They were down by an average of 26.9% since their sell signals an average of 22.2-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There was one buy signal in addition to 209-buy signals in the prior 14-weeks. There were no sell signals on this weekend in 2003. The 2003 bull market was eighteen weeks old on this weekend in 2003.

On Jun 28, 2002, there were 71-stocks and funds with hold signals. They were up 39.9% since their buy signals an average of 40.4-weeks earlier. 213-stocks and funds were being avoiding since the Mid-term Indicant signaled sell an average of 10.0-weeks earlier. There were no buy signals and 10-sell signals on this weekend in 2002 in addition to the 78-sell signals in the prior two weeks. The 2000-2002 stock market bear remained in full force at this time in 2002.

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 here. It is in the member’s only section.

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 and the related quality of life for the productive and honest.

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

Most short-term attributes are now supporting the stock market bear along the near-term cycle. The Quick-term cycle remains in tact, but nearing confrontations by the stock market bear. Consequently, the Short-term Indicant is offering mixed signals at this time.  Several stocks remain overheated and thus a pullback would be natural. Bearish Force Vector cycles are maturing. Expected, but unimpressive, bullish resistance to recent bearishness occurred this past week.

In spite of short-term concerns, the Mid-term Indicant attributes supporting the stock market bull remain, albeit weakening. So far, most of the pullback is with attributes consistent with summertime doldrums.

The mid-term election year of 2010 behaved classically pivoting in support of the normally bullish pre-election year (2011). This behavior correlated well with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011 in spite of recent bad economic news and bearish behavior.

The current stock market bull originated in anticipation of political stalemating. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish. Political hate mongering is favorable to the stock market bull and that is mounting as we approach the election year in 2012. That suggests the stock market bull will carry forward through 2012, which is consistent with historical norms.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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 and above your buy price, 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 should 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 in related sectors, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will emerge.

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 63.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 138.1% and the S&P500 is up 63.3% since then. The small cap index, S&P600, is up 150.4% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts. Such bearishness is unlikely based on current Mid-term Indicant configurations. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. However, that can change, as Washington DC stupidity is far more reaching than historical standards suggest.

The NASDAQ is down 48.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 16.8% since its similar secular peak on March 23, 2000. The Dow is up by 2.4% 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. One should note that buy and hold so far this century is a loser as the stock market has been flat to bearish for the last eleven years.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. Look at the resumes of intellectual elites who argue against these points. You will detect they are pure economic leeches arguing on behalf of such regulations, which is a source of their livelihoods. None has ever produced anything of value.

The NASDAQ year-to-date performance was bearish by 17.6% through this week in 2001. The NASDAQ finished 2001 down by 19.9%, which was congruent with standards of post-election-year-bearishness. Interestingly, the NASDAQ was explosively bullish on this week in 2001 in addition to the prior week.

The NASDAQ was down by 25.1% 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 during mid-term election years.

The NASDAQ YTD 2003 performance was up 20.2%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 0.6% and finishing up for that year by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 5.6% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 3.8% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 7.2% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 10.7% on this weekend in 2008. It finished 2008 down by 40.5%. 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.

It was up 13.7% on this weekend in 2009. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. 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 NASDAQ was down 2.3% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 15.7% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 7.2% since its last peak on Oct 31, 2007. The S&P500 is down 19.0% since its Oct 9, 2007 peak. The S&P600-small cap index is down by 4.0% 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. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago.  It was above those levels until three weeks ago. It is now down by 1.0% since its Oct 31, 2007 peak. The S&P400-MidCaps is the other major index tracked by the Indicant that remains above its pre-2008-crash levels. It is up by 2.1% since its prior peak on Jul 13, 2007. The S&P600 joined ranks of this sort of bullish behavior in late March, but did not find comfort in topping its 2007 peak. It is down 4.0% from its Jul 2007 high. The NASDAQ jumped above its Oct 31, 2007 peak on Apr 29, 2011, but expressed discomfort in doing so and is down 7.2% since that peak.

The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 22.8% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow30 and Dow Composite remain joined with the weak S&P100 Index. Those dilettante infested companies may participate more strongly with the stock market bull in spite of that infestation. Until the Dow crosses above its pre-crash peak, the Dow Theory Forecast remains bearish.

Most major last cyclical bottoms 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 last weekly cyclical bottom on November 20, 2008.

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 a 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 82.3% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 109.1% and the S&P500 is up 87.5% since then. The S&P600, Small Cap Index, is up 135.2% since March 9, 2009. That March 2009-current 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. Of course, such bearishness will eventually occur, but the Mid-term Indicant finds limited evidence of that on the immediate horizon.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes awhile for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the near-term cycle is not as supportive of the bull at this time. A potential of defaults by Greece and others, promoting and catering to laziness, add to threats to the stock market bull.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. The three month yield zero as of the morning of Jun 24, 2011. CD’s remain a joke. Who would buy them?

The Euro jumped to Red Bull status 23-weeks ago. In spite of its bearishness in five of the last eight weeks, it remains a Red Bull.

The Canadian dollar and the Japanese Yen remain strong.

Overall, the US dollar trend of weakening continues. Recent strengthening will most likely not challenge the longer-term trend of its demise. Inflationary pressures will eventually confront the market in spite of recent commodity weakening.

Eventually, the U.S. will be faced with either higher interest rates or $1,000 oil. Universal law will impose one or the other with varying orders of magnitude. With a maximum inflationary bias, gold would be priced above $10,000/oz. The release of strategic petroleum reserves for political purposes may trick the masses, but not those “in the know.” That is one reason why the masses are getting poorer and those “in the know” are not.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. The $2,000/oz-forecast by 2014 continues to be challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. However, statistical bullishness for gold remains in tact. At the same webpage, you will notice oil is less stable with a mild bearish bias. It became a yellow bear this week, based on political manipulations.

As stated by the Indicant for several months, oil is priced where the Kingdom finds comfort at around $80/bbl, albeit departing on the high end of his desired tolerance levels the past several months due, mainly, to instability in the Middle East. Its recent bearishness the past few weeks can be attributable to souring economic projections. It achieved Red Bull status several weeks ago for the first time since 2007. It has since lost that Red Bull position due to recent bearishness. The high-end forecast lowered from $120/bbl to $118 by 2012.

Commodity prices continue with dynamic bullish aggression. Most have fallen of their recent record highs due to souring economic forecast. Some are no longer Red Bulls, but that is temporary. Their potential contribution to inflationary pressures remains absent. The Dow Jones AIG Commodity Index and Spot Prices are no longer Red Bulls.  

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues its shift from waffling to significant and dynamic bullish aggression in spite of recent bearishness from a strengthening U.S. dollar. It remains a solid Red Bull and economically bullish albeit with long-term inflationary threats. After nearly a century, Reuters UK commodity tracking is not readily available. We will continue to searching a reliable source for that information. It is proving difficult and we may have to abandon tracking it.

Commodity prices, overall, were bearish in seven of the last eight weeks. Do not be surprised at a bullish surge when they interact with the bullish Red Curve. Some have already done that, but all of them will have to do that before exciting the commodities bull. That will also require the U.S. dollar’s resumption of its bearish slide.

Mortgage rates are moving bearishly.   They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011 and retreated back down to economic neutrality. Freddie Macs are now Yellow Bears. They appear to have acquiesced to bearish direction, falling and staying below the declining bullish Red Curve.  Therefore, the underlying mid-term bearish cycle remains unthreatened. They have been bearish the past few weeks offering home buyers better opportunities.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months. The CPI announcement on Friday, May 13, 2011 generated a bearish effect on the stock market. Since then rising unemployment and souring corporate earnings are arousing the stock market bear’s ambition.

Overall, hard economic data continues with stability, although cyclically increasing with recent profit-taking bearishness and some souring fundamentals, such as corporate earnings. That is challenging the former theme of being economically non-bearish. This also adds to the double-edged sword of inflationary concerns. Rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. Contrarian behavior, though, will indeed inspire the stock market bear ahead of depressing economic conditions.

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 again signaled buy on Sep 17, 2010. It is up 5.7%, annualizing at 7.4% since then. As stated nine weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. Unfortunately, this gold fund is bordering on unacceptable performance levels.

Fidelity Gold, Fund #28 received a sell signal this weekend after generating less than 5% returns after over two years of holding. It fell below the short-term green curve and Force is vacillating in bearish domains. There is no point in holding this poorly performing fund.

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. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 21.0%, annualized at 27.1% since the more recent buy 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 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 36.0%, annualized at 46.3%, since its Sep 17, 2010 buy 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 buy on Oct 8, 2010. It is up 17.3% since then, annualizing at 24.1%.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 32.6% since that buy signal, annualizing at 41.9%.

The Quick-term signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 31.9% since then, annualizing at 40.7%. The Near-term Indicant signaled sell on Jun 6, 2011. It is down 3.2% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 81.4% since that buy signal, annualizing at 31.7%. 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 sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It is up 8.0%, annualizing at 22.9%, since its most recent Near-term Indicant buy signal on Feb 18, 2011.

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

There were no new bull signals and one new bear signal. The bear signal was for the S&P100 Index.

The remains nine major indices are up by an average of 26.4% since their bull signals an average of 66.2-weeks ago. That annualizes at 20.7%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,300,073. That beats buy and hold performance of $1,815,698 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $149,906. That beats buy and hold’s $124,248 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226,916. That beats buy and hold’s $91,896 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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 MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 74.1% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. 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, which approximates the normal time to buy this fund. Although QID is now with a hold signal, this fund may not receive a buy signal until 2013, which is the next post election year. The near-term stock market bearish attributes alone are not justification for buying this fund at this time.

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 312.3% (annualized at 15.8%) since the Long-term Indicant signaled bull 1,025-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 or Saturday afternoon.

Short-term Indicant Stock Market Report - Summary

The near-term cycle remains bearish, but being challenged by the near-term bull cycle in spite of Friday’s aggressive stock market bearish behavior. The next buy/bull signals will not occur until crossing above NTI blue and Force crosses above Pressure. Volume remains low, which should encourage some additional volatility.

None of the non-contrarian ETF’s are NTI Blue bulls. Several Force Vectors shifted back to the south today, but 21-remain in bullish domains and thus one element of the bullish threat against the dominating near-term bear cycle.

All Near-term attributes are, cyclically, trending south for the non-contrarian ETF’s. All contrarians are cyclically moving north. An inflection point is attempting to form along the near-term cycle where the Near-term bear retains its edge.

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

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 2.2% since those bear signals an average of 3.7-weeks ago. Contrarian VIX has a bull signal. It is up 17.8% since its Near-term bull signal 3.0-weeks ago, annualizing at 309.0%.

The Quick-term Indicant has been signaling bull for all major indices for an average of 34.9-weeks. They are up by an average of 14.4% since their bull signals, annualizing at 21.5%. Contrarian VIX is up 17.8% since its bull signal 3.0-weeks ago.

Short-term Market Summary

A Near-term Indicant bull signal will manifest when prices are above NTI blue curve and Force is greater than Vector Pressure. That occurred last Tuesday, Jun 21, for several indices, but not enough to trigger bull signals. A bit more bullish unanimity is required for a near-term bull signal. Much of last Tuesday’s threat to the bear has evaporated.

Indicant Volume Indicators  

The NASDAQ IVI crossed into high activity domains on Mar 21, 2011. It fell back into low activity a few weeks later. Lethargy is accelerating, which is a common summertime attribute. The NYSE Indicant Volume Indicator remains in low interest domains. It appears to be peaking ahead of normally lethargic summertime volume. As stated the past several weeks, unless these configurations shift back to robustness, do not be surprised at overall stock market lethargy.

Jun 24-Fri-Although volume is not screaming, it has been increasing on days with bearish behavior. That supports the bear along the near-term bear cycle.

Jun 23-Thu-Volume was up on today’s mixed stock market behavior. Much of that was attributable to bearish aggression in the morning hours. The stock market recovered before the close with mixed results.

Jun 22-Wed-Yesterday’s volume on bullish aggression was a bit higher than today’s volume on bearish behavior. That bodes well for underlying stock market bearish spurt behavior, as opposed to a massive bear. However, the near-term bear cycle remains in tact.

Jun 20-Mon-Light volume on mild bullish behavior is not inspirational to the bull. So far, configurations suggest any bullish rally is a mere spurt in the face of a short-term bear 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 6.4% since their buy signals an average of 7.7-weeks ago. This annualizes at 43.3%.

The NTI is avoiding 28-ETF’s. They are down by an average of 2.3% since their sell signals an average of 3.2-weeks ago.

The avoided ETF’s will not receive buy signals until Force crosses above Pressure and prices climb above NTI blue curve. Some have accomplished those two feats the past few days, but not enough of the non-contrarians have answered the call of the Near-term Bull cycle. Also, none of the contrarian ETF’s have fallen below NTI Green, adding a depressing affect to bullish desires.

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

The Quick-term Indicant is signaling hold for 27-ETF’s. They are up by an average of 20.7% since their buy signals an average of 45.5-weeks ago. This annualizes at 23.6%.

The Quick-term Indicant is avoiding four ETF’s. They are down by an average of 3.8% since the QTI sell signals 4.3-weeks ago.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on Jun 6, 2011. It is down 3.2% since that sell signal. Price fell below NTI Blue and Force continues meandering in bearish domains. The next near-term buy signal will not occur until Price is above Blue and Force is higher than Pressure. Politicians released strategic petroleum reserves for their political gain and at the sacrifice of the purpose of “strategic reserves.”

The Quick-term Indicant signaled buy on Sep 15, 2010. It is up 31.9%, annualizing at 40.7% since then. The Quick-term Indicant will not signal sell until interacting with QTI Yellow.

ETF#11-Gold and Precious Metals  is up 81.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 31.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $133.76 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $146.26.

The Near-term Indicant signaled buy on Feb 18, 2011. It is up 8.0% since then, annualizing at 22.9%. The Near-term Indicant may signal sell next Monday if it again endures bearish expression.

Near-term attributes for the next sell signal will be price below NTI Green with Force below Pressure. Force fell below Pressure and its price is below NTI Green by six pennies. Technically, it is now qualified for a sell signal.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on May 17, 2011 from the Near-term Indicant and the Quick-term Indicant. It is pretty hot, but the next sell signal will not occur until price falls below NTI Green. It is up 0.4% since the buy signals, annualizing at 3.8%.

The Near-term Indicant and Quick-term Indicant signaled buy on May 25, 2011 for ETF#31-QID. It is up 7.5% since then, annualizing at 90.3%. Force remains in bullish domains, supporting bullish bias, although declining a bit. The next near-term sell signal will not occur until price falls below NTI Green and Force less than Pressure.

The Quick-term signaled sell on Apr 1, 2011 for ETF#32-VXX. This ETN does not track well with VIX. It is down 15.7% since that sell signal. The Near-term Indicant signaled buy on Jun 3, 2011 and it is up 9.7% since then, annualizing at 165.6%.

Major ETF Events

Jun 24-Fri-Gold fell below NTI green, qualifying for a sell signal next Monday.

Jun 23-Wed-Three more non-contrarian Force Vectors climbed into bullish domains. Nearly all are in bullish domains on a mature bullish Force cycle.

Jun 22-Tue-ETF#13-EWH-Hong Kong fell below QTI Yellow. Consequently, a sell signal was triggered even though Force is bearishly mature.

Jun 20-Mon-None

Current Strategy-Short-term Indicant- Jun 24, 2011. The stock market bear continues along the near-term cycle.  The Quick-term Indicant bull/holds remain in tact since prices remain above the QTI bearish yellow curve, but notice that a few are interacting with bearish yellow.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. 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. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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.

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 was mixed last week, following five consecutive weeks of combined bearish convergence and divergence. Only two of those five weeks endured the dreaded bearish convergence. Therefore, this attribute is not suggesting a heightened probability of bearish behavior. However, this offers no evidence for the bull to find sustainable excitement.  

Indicant Conclusion

The presidential pre-election year stock market bull endured a rough spot this past week with the bear signal for the S&P100. This is challenging prior comments regarding the bull’s full conformance to historical standards in pre-election years.

Technical support for stock market bearish behavior along the short-term cycle continues pestering. The Near-term cycle continues favoring the stock market bear. Several bear/sell signals were generated three weeks ago by the Near-term Indicant model. Although the Quick-term cycle was solid, a few ETF’s fell below bearish yellow last week and endured sell signals; the first since last summer. Force Vectors have struggled climbing into bullish domains the past six weeks, which is a bit disappointing for those desiring a stock market bull.

The Indicant Volume Indicator remains depressed, as post holiday sessions never produced significant increases in volume. Summertime volume will influence continuing lethargic volume behavior. That can incite additional volatility.

As stated the past 90-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle other than short-term attributes and this week’s Mid-term Indicant bear signal for the S&P100, which is now supporting bearish behavior.

Keep in mind, the dilettante infest S&P100 companies is the weakness index and should be considered as a mild threat to the Mid-term stock market bull cycle.

Inflationary threats continue. Stagflation remains as an accurate descriptor of the current economy even though economic data continues offering evidence of souring activity.

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

06/26/2011

Jun 19, 2011 Indicant Weekly Stock Market Report

Volume 06, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

Hackers and Wealth Redistribution

Rory Mcllroy has an 8-stroke lead at the conclusion of the third round of this year’s U.S. Open. In essence, he has committed eight fewer errors than his nearest competitor has. If he hangs on in tomorrow’s final round, he will win in excess of $1,000,000. The golfer finishing second will win around $800,000. The last place finisher will win around $20,000 or so. The last place golfers will earn about $5,000 per day, minus expenses, which are significant.

Ben Hogan once said, “golf is 99% mental.” So far, this week, the young 22-year old from Northern Ireland has a superior functioning brain. Some of the competitors hit the bars in the evenings and enjoy the nightlife. That, of course, is additive to brain dysfunction, which more often than not leads to poor performance.

Joseph Biden, John Boehner, and Barrack Obama have golf handicaps of 6.3, 7.9, and 17, respectively according to several news sources. Rory Mcllroy, as well as most PGA tour professionals have handicaps less than zero. If Hogan’s statement is true, then why does the populace elect less brainy people to run their country? Maybe one should be disallowed from running for public office if they are not a scratch golfer or better.

Golf, unlike the abstract world of politics, very accurately defines superiority and inferiority that is immune to any argument. It is simple. The one who makes the fewest mistakes on the golf course wins. The abstract world of politics offers arguments that the most efficient and more talented should pay more taxes than the rest of us.

Some political leaders are advocating, “the rich should pay more taxes.” Some of the socialist rich agree they could pay more taxes without any added problems. Pure logic holds that those rich folks could simply write a bigger check to the IRS and pay more taxes. It is legal to overpay taxes.

If Biden, Boehner, and Obama were playing in this week’s U.S. Open, which is open to any and all golfers around the world, they would not have made the cut. That means they would not have made one penny from their efforts. According to Hogan, their brains are not as functional as a professional tour golfer.

The lowest score not making the cut in this week’s U.S. Open was Chad Campbell’s 76 and 71 for a total of 147, which was 5-over par. That suggests a handicap over those two rounds of about 2.5 without applying some of the sophisticated math in handicap calculations. Mr. Campbell did not make one penny. Neither did the other eighty or so players who also did not make the cut. The cut line is generally tied to one-half of the golfers who qualified to play in the U.S. Open. The bottom half are disallowed to play additional rounds, while the top half are allowed to continue competing for the $1,000,000+ prize money.

Biden, Boehner, and Obama would have been in the bottom half if they had participated. Overall participation started several months ago with thousands of participants around the world with qualifying rounds. Very few of them made it to the tournament this past week. They also received no remuneration for their efforts.

The socialists minded person would argue, “that is not fair.” They would claim that all who participated in the qualifying rounds, those missing the cut, and those who finish second or worse tomorrow should receive the same prize money as the winner. It does not matter that the winner hit balls late into the evening, while several of the losers drank wine, sang songs, and danced the night away.

Such a system of fairness would eventually cave in. No one would watch it on television if five handicappers and higher were playing. There is nothing special about watching a golfer hack his or her way around the golf course. That is more the rule than the exception by the millions of people that play the game. There are only about 150-golfers of the millions who play that are good enough to make a decent living playing the game.

The reason people watch golf is a direct appreciation for the talents seen that is derived from a profound work ethic and the human spirit to perfect. Those you see on television are extraordinary athletes with tremendous mental toughness. However, if the socialists had their way, such superior skills would never manifest in human beings. Since all would get the same check, all would devolve to the level of the worse performer. No one would watch. With that, sponsor money would dry up. Finally, there would be no system. All those that enjoy playing the game of golf would be hackers. That is what socialism produces; all hackers with equally low effort and talent. One could suppose that would be fair albeit very boring with the absence of the human spirit to perfect.

Just as all wheat farmers in the former Soviet Union devolved to the level of the lowest performer, which led to long lines to buy bread, the system caved in. Lethargy, low effort, laziness, etc. is the culmination of devolving human spirit. All of that always manifests in the name of fairness.

As Joe Biden once said, when promoting tax increases on the wealthy and giving it to the poor, “this is only being fair.” It is amazing what can swirl around in a three-pound brain that makes around 7-mistakes in a round of golf.

Whipsawed – Review of Wild Swings Last Week

The largest NASDAQ100 loser was NAS#55-RIMM. It was down 24.1% this past week. Fundamentally, the stock is weakening. The company is being blasted by their competition. It is down 39.7% since the MTI signaled sell on May 6, 2011. It is down 80.8% since its all time high weekly closing price of $144.56.

The largest NASDAQ100 gainer was NAS100#83-SHLD. It was up 8.3% in last week’s mildly bearish stock market. It is up 8.3% since the MTI signaled sell on Jun 10, 2011.

The largest gainer among the Indicant Select Stocks was ISTK#32-HYGS. It was up 23.0% in last week’s mildly bearish stock market, including the energy sector. It is down 92.1% since the Mid-term Indicant signaled sell on May 19, 2006. As you can see from the chart it continues enduring negative trends.

The biggest loser in last week’s Indicant Select group was ISTK#96-CIEN. It was down 12.1% this past week. It is down 21.9% since the MTI signaled buy on Dec 17, 2010. This stock is also enduring a negative trend, but it is nestled just above MTI yellow. It also enjoys positive Vector Pressure. If you stopped out, you may want to consider buying more. If you do, though, set a pretty tight stop loss, say 5%.

The Dow30, Utilities, and mutual funds traded in relatively tight ranges.

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 one sell signal.  

The Mid-term Indicant is signaling hold for 284 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 49.8%. That annualizes to 30.4%. The Mid-term Indicant has been signaling hold for these 284-stocks and funds for an average of 70.5-weeks.

The Mid-term Indicant is avoiding 50-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 30.4% since the Mid-term Indicant signaled sell an average of 74.4-weeks ago.

One year ago, on Jun 18, 2010, the Mid-term Indicant was holding 191-stocks and funds out of 333 tracked for an average of 52.0-weeks. They were up by an average of 36.7% (annualized at 36.6%). There were 124-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 28.9% since their respective sell signals an average of 73.3-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Jun 19, 2009. They were up by an average of 124.1% (annualized at 63.9%) since their respective buy signals an average of 101.0-weeks earlier. The Mid-term Indicant was avoiding 322-stocks and funds at that time. They were down an average of 27.2% since their respective sell signals an average of 54.0-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009, as buy signals were nearing.

There were 181-stocks and funds with hold signals on Jun 13, 2008 since their buy signals an average of 136.3-weeks earlier. They were up by an average of 161.3% (annualized at 61.5%). There were 141-avoided stocks and funds at that time. They were down by an average of 18.4% from their respective sell signals an average of 32.2-weeks earlier. There were no buy signals on this weekend in 2008. There were 23-sell signals on this weekend in 2008 in addition to the 261-sell signals in the prior 31-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.”

On Jun 15, 2007, the Mid-term Indicant was signaling hold for 314-stocks and funds out of 345-tracked. They were up by an average of 131.5% (annualized at 64.9%) since their buy signals an average of 105.3-weeks earlier. The Mid-term Indicant was avoiding 31-stocks and funds at that time. They were down by an average of 14.2% since their sell signals an average of 27.8-weeks earlier. There were no buy signals and no sell signals on this weekend in 2007.

Five years ago, on Jun 16, 2006, there were 212-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 142.1% (annualized at 67.0%) since their respective buy signals an average of 110.3-weeks earlier. There were 124-avoided stocks and funds then. They were down an average of 6.0% since their respective sell signals an average of 14.0-weeks earlier. There were no buy signals and no sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Jun 17, 2005, there were 208-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 103.4%, annualizing at 59.0%, since their respective buy signals an average of 91.1-weeks earlier. There were 112-avoided stocks and funds then. They were down by an average of 24.7% since their sell signals an average of 59.7-weeks earlier. There were no buy signals and no sell signals on this weekend in 2005.

There were 249-stocks and funds with hold signals on Jun 18, 2004. They were up by an average of 72.0%, annualizing at 70.8%, since their buy signals 52.8-weeks earlier. The 42-avoided stocks and funds were down an average of 18.2% since their respective sell signals an average of 26.3-weeks earlier. There were two-buy signal and three-sell signals on this weekend in 2004 in addition to 58-sell signals in the prior eight weeks. The meandering bear market was well underway at this time of year in 2004.

On Jun 20, 2003, there were 289-stocks and funds with a hold signal, enjoying a 44.5% gain since their respective buy signals an average of 21.0-weeks earlier. That annualized at 110.4%. There were only three avoided stocks at that time. They were down by an average of 27.5% since their sell signals an average of 26.2-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were three-buy signals in addition to 206-buy signals in the prior 13-weeks. There were no sell signals on this weekend in 2003. The 2003 bull market was seventeen weeks old on this weekend in 2003.

On Jun 21, 2002, there were 81-stocks and funds with hold signals. They were up 37.2% since their buy signals an average of 37.6-weeks earlier. 201-stocks and funds were being avoiding since the Mid-term Indicant signaled sell an average of 9.5-weeks earlier. There were no buy signals and 12-sell signals on this weekend in 2002 in addition to the 66-sell signals a week earlier. The 2000-2002 stock market bear remained in full force at this time in 2002.

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 here. It is in the member’s only section.

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 and the related quality of life for the productive and honest.

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

Most short-term attributes are now supporting the stock market bear along the near-term cycle. The Quick-term cycle remains in tact, but nearing confrontations by the stock market bear. Consequently, the Short-term Indicant is offering mixed signals at this time.  Several stocks remain overheated and thus a pullback would be natural. Bearish Force Vector cycles are maturing. Expected, but unimpressive, bullish resistance to recent bearishness occurred this past week.

In spite of short-term concerns, the Mid-term Indicant attributes supporting the stock market bull remain, albeit weakening. So far, most of the pullback is with attributes consistent with summertime doldrums.

The mid-term election year of 2010 behaved classically pivoting in support of the normally bullish pre-election year (2011). This behavior correlated well with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011 in spite of recent bad economic news and bearish behavior.

The current stock market bull originated in anticipation of political stalemating. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish. Political hate mongering is favorable to the stock market bull and that is mounting as we approach the election year in 2012. That suggests the stock market bull will carry forward through 2012, which is consistent with historical norms.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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 and above your buy price, 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 should 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 in related sectors, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will emerge.

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 64.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 134.8% and the S&P500 is up 63.7% since then. The small cap index, S&P600, is up 146.8% 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. Such bearishness is unlikely based on current Mid-term Indicant configurations. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. However, that can change, as Washington DC stupidity is far more reaching than historical standards suggest.

The NASDAQ is down 48.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 16.8% since its similar secular peak on March 23, 2000. The Dow is up by 2.4% 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. One should note that buy and hold so far this century is a loser as the stock market has been flat to bearish for the last eleven years.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. Look at the resumes of intellectual elites who argue against these points. You will detect they are pure economic leeches arguing on behalf of such regulations, which is a source of their livelihoods. None has ever produced anything of value.

The NASDAQ year-to-date performance was bearish by 17.9% through this week in 2001. The NASDAQ finished 2001 down by 19.9%, which was congruent with standards of post-election-year-bearishness. Interestingly, the NASDAQ was explosively bullish on this week in 2001 in addition to the prior week.

The NASDAQ was down by 20.4% 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 during mid-term election years.

The NASDAQ YTD 2003 performance was up 24.9%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 1.0% and finishing up for that year by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 3.9% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was down by 3.4% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 8.8% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 7.3% on this weekend in 2008. It finished 2008 down by 40.5%. 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.

It was up 14.6% on this weekend in 2009. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. 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 NASDAQ was up 1.7% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 15.3% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 8.5% since its last peak on Oct 31, 2007. The S&P500 is down 18.8% since its Oct 9, 2007 peak. The S&P600-small cap index is down by 5.4% 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. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago.  It was above those levels until two weeks ago. It is now down by 2.1% since its Oct 31, 2007 peak. The S&P400-MidCaps is the other major index tracked by the Indicant that remains above its pre-2008-crash levels. It is up by 0.7% since its prior peak on Jul 13, 2007. The S&P600 joined ranks of this sort of bullish behavior in late March, but has succumbed to bearish ambition. It is down 5.4% from its Jul 2007 high. The NASDAQ jumped above its Oct 31, 2007 peak on Apr 29, 2011, but expressed discomfort in doing so and is down 8.5% since that peak.

The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 22.3% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow30 and Dow Composite remain joined with the weak S&P100 Index. Those dilettante infested companies may participate more strongly with the stock market bull in spite of that infestation. Until the Dow crosses above its pre-crash peak, the Dow Theory Forecast remains bearish.

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 last weekly cyclical bottom on November 20, 2008.

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 a 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 83.4% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 106.2% and the S&P500 is up 87.9% since then. The S&P600, Small Cap Index, is up 131.7% since March 9, 2009. That March 2009-current 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. Of course, such bearishness will eventually occur, but the Mid-term Indicant finds limited evidence of that on the immediate horizon.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the near-term cycle is not as supportive of the bull at this time. A potential of defaults by Greece add to threats to the stock market bull.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness 16-weeks ago and holding there after a bit of mild volatility. Bernanke, apparently, remains concerned with the economic outlook but carelessly ignoring inflationary pressures in the U.S. That carelessness will eventually shift to cognizance and with that, the great bear market will resume. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time.

The 6-month CD yield increased significantly 29-weeks ago, suggesting desired longer-term upward pressures by the banks. It remains depressed and has been flat to even more bearish since then. It fell 10-basis-points 17-weeks ago, another five points 12-weeks ago, and another five basis points seven weeks ago. It fell six basis points this past week.

The Euro jumped to Red Bull status 22-weeks ago. In spite of its bearishness in four of the last seven weeks, it remains a Red Bull. It was bullish the past three weeks, relative to the U.S. dollar. The Euro’s bullish Red Curve continues rising, joining the Bearish Yellow Curve’s rise. The European rate hike ten weeks ago contributed to Euro strengthening, but enduring weakness the past few weeks due to U.S. dollar strengthening.

The Canadian dollar has recently weakened while the Japanese Yen has expressed significant strength and stability. The Japanese resiliency to their recent catastrophic events will impress. Canadians will continue to enjoy their exports of commodities and raw materials.

Overall, the US dollar trend of weakening continues. Recent strengthening will most likely not challenge the longer-term trend of its demise. Inflationary pressures will eventually confront the market.

Eventually, the U.S. will be faced with either higher interest rates or $1,000 oil. Universal law will impose one or the other with varying orders of magnitude. With a maximum inflationary bias, gold would be priced above $10,000/oz.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. The $2,000/oz-forecast by 2014 continues to be challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. However, statistical bullishness for gold remains in tact. At the same webpage, you will notice oil is less stable with a mild bearish bias.

As stated by the Indicant for several months, oil is priced where the Kingdom finds comfort at around $80/bbl, albeit departing on the high end of his desired tolerance levels the past several months due, mainly, to instability in the Middle East. Its recent bearishness the past few weeks can be attributable to souring economic projections. It achieved Red Bull status several weeks ago for the first time since 2007. It has since lost that Red Bull position due to recent bearishness. The high-end forecast lowered from $120/bbl to $118 by 2012.

Commodity prices continue with dynamic bullish aggression. Most have fallen of their recent record highs due to souring economic forecast. However, most remain as Red Bulls as this recent bearishness is simply market nervousness, heightened recently with Greece’s potential defaults. Their potential contribution to inflationary pressures remains absent. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues its shift from waffling to significant and dynamic bullish aggression in spite of recent bearishness from a strengthening U.S. dollar. It is also a solid Red Bull and economically bullish albeit with long-term inflationary threats. After nearly a century, Reuters UK commodity tracking is not readily available. We will continue to searching a reliable source for that information. It is proving difficult and we may have to abandon tracking it.

Commodity prices, overall, were bearish in six of the last seven weeks. Do not be surprised at a bullish surge when they interact with the bullish Red Curve. Some have already done that, but all of them will have to do that before exciting the commodities bull. That will also require the U.S. dollar’s resumption of its bearish slide.

Mortgage rates remain configured with countering the prevailing bearish trend. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011 and retreated back down to economic neutrality. They appear to have acquiesced to bearish direction, falling and staying below the declining bullish Red Curve.  Therefore, the underlying mid-term bearish cycle remains unthreatened. They have been bearish the past few weeks offering home buyers better opportunities.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months. The CPI announcement on Friday, May 13, 2011 generated a bearish effect on the stock market. Since then rising unemployment and souring corporate earnings are arousing the stock market bear’s ambition.

Overall, hard economic data continues with stability, although cyclically increasing with recent profit-taking bearishness and some souring fundamentals, such as corporate earnings. That is challenging the former theme of being economically non-bearish. This also adds to the double-edged sword of inflationary concerns. Rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. Contrarian behavior, though, will indeed inspire the stock market bear ahead of depressing economic conditions.

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 again signaled buy on Sep 17, 2010. It is up 7.3%, annualizing at 9.6% since then. As stated eight weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. That holds true in spite of bearish behavior in four of the last seven weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 6.9% since then, annualizing at 3.8%.

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. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 22.4%, annualized at 29.5% since the more recent buy 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 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 36.5%, annualized at 48.1%, since its Sep 17, 2010 buy 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 buy on Oct 8, 2010. It is up 16.8% since then, annualizing at 23.9%.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 34.0% since that buy signal, annualizing at 44.9%.

The Quick-term signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 32.8% since then, annualizing at 42.9%. The Near-term Indicant signaled buy on May 31, 2011. It is down 2.5% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 85.9% since that buy signal, annualizing at 33.7%. 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 sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It is up 10.7%, annualizing at 32.5%, since its most recent Near-term Indicant buy signal on Feb 18, 2011.

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

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

All the major indices are up by an average of 24.2% since their bull signals an average of 62.6-weeks ago. That annualizes at 20.1%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,483,081. That beats buy and hold performance of $1,826,314 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $150,266. That beats buy and hold’s $124,547 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $223,801. That beats buy and hold’s $90,724 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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 MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 73.4% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. 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. Although QID is now with a hold signal, this fund may not receive a buy signal until 2013, which is the next post election year. The near-term stock market bearish attributes alone are not justification for buying this fund at this time.

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 314.7% (annualized at 16.0%) since the Long-term Indicant signaled bull 1,024-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 or Saturday afternoon.

Short-term Indicant Stock Market Report - Summary

The near-term cycle remains solidly bearish. The next buy/bull signals will not occur until crossing above NTI blue and Force crosses above Pressure. Volume remains low, which should encourage some additional volatility.

Several Force Vectors are climbing north from bearish domains. Their interaction with Pressure and/or bullish domains will be interesting. If they quickly retreat back to the south with solid bearish expressions, the near-term bear will find additional vigor. If they climb into bullish domains with solid bullish behavior, the bull will find inspiration.

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

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The stock market continues with bearish unanimity along the near-term cycle with all major non-contrarian indices enduring a Near-term Indicant Bear signal. Bearish unanimity suggests the bull is too anemic for argument.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 2.6% since those bear signals an average of 2.7-weeks ago. Contrarian VIX has a bull signal. It is up 21.8% since its Near-term bull signal 2.0-weeks ago, annualizing at 567.8%. Of course that annualized amount will not manifest. The math is what it is.

The Quick-term Indicant has been signaling bull for all major indices for an average of 33.9-weeks. They are up by an average of 14.4% since their bull signals, annualizing at 22.1%. Contrarian VIX is up 21.8% since its bull signal 2.0-weeks ago. Its expected rise will deflate performance here since the non-contrarian indices remain with bull signals. They will not qualify for bear signals until they interact with bearish yellow with the possible exception of the Dow Utilities. Interestingly, for the first time since September 2010, many indices are nearing their QTI bearish yellow curve. QTI yellow was also contacted in July 2009. Both of these interactions, however, triggered powerful bullish responses. It will be interesting if same occurs this time. (Note: Yesterday’s report stated these interactions triggered powerful bearish responses. That was wrong. Bullish responses were triggered. The website was corrected).

Short-term Market Summary

A Near-term Indicant bull signal will manifest only when prices are above NTI blue curve and Force is greater than Vector Pressure. The bear continues minimizing that potential, but a few indices are threatening with some bullish inspiration.

Indicant Volume Indicators  

The NASDAQ IVI crossed into high activity domains on Mar 21, 2011. It fell back into low activity a few weeks later. Lethargy is accelerating, which is a common summertime attribute. The NYSE Indicant Volume Indicator remains in low interest domains. It appears to be peaking ahead of normally lethargic summertime volume. As stated the past several weeks, unless these configurations shift back to robustness, do not be surprised at overall stock market lethargy.

Jun 17-Fri-Higher volume, but within norms, on flat behavior does nothing to motivate the near-term bull to exert influence.

Jun 16-Thu-Although volume was up on mixed behavior, the NYSE and NASDAQ were mildly bearish. That did nothing to discourage the bear from continuing its shenanigans.

Jun 15-Wed-Volume was higher on bearish aggression than yesterday’s bullish aggression. The bear finds a bit more inspiration to claw even more deeply.

Jun 14-Tue-Lighter volume on bullish aggression than recent higher volume on bearish aggression offers no sustainable support for the stock market bull.

Jun 13-Mon-Low volume on flat stock market behavior does not support bias shift 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 four ETF’s. They are up by an average of 8.5% since their buy signals an average of 6.7-weeks ago. This annualizes at 66.3%.

The NTI is avoiding 28-ETF’s. They are down by an average of 2.5% since their sell signals an average of 2.2-weeks ago.

The avoided ETF’s will not receive buy signals until Force crosses above Pressure and prices climb above NTI blue curve.

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

The Quick-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 20.1% since their buy signals an average of 44.5-weeks ago. This annualizes at 23.5%.

The Quick-term Indicant is avoiding four ETF’s. They are down by an average of 3.9% since the QTI sell signals 4.4-weeks ago.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on Jun 6, 2011. It is down 2.5% since that sell signal. Price remains below NTI Blue and Force continues meandering in bearish domains.

The Quick-term Indicant signaled buy on Sep 15, 2010. It is up 32.8%, annualizing at 42.9% since then. The Quick-term Indicant will not signal sell until interacting with QTI Yellow.

ETF#11-Gold and Precious Metals  is up 85.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $133.06 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $149.94.

The Near-term Indicant signaled buy on Feb 18, 2011. It is up 10.7% since then, annualizing at 32.5%.

Near-term attributes for the next sell signal will be price below NTI green with Force below Pressure. Force remains below Pressure, but price remains above NTI green. 

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on May 17, 2011 from the Near-term Indicant and the Quick-term Indicant. It is pretty hot, but the next sell signal will not occur until price falls below NTI Green. It is up 0.3% since the buy signals, annualizing at 3.7%.

The Near-term Indicant and Quick-term Indicant signaled buy on May 25, 2011 for ETF#31-QID. It is up 10.2% since then, annualizing at 159.2%. Force is aggressive in bullish domains, supporting bullish bias.

The Quick-term signaled sell on Apr 1, 2011 for ETF#32-VXX. This ETN does not track well with VIX. It is down 13.2% since that sell signal. The Near-term Indicant signaled buy on Jun 3, 2011 and it is up 12.8% since then, annualizing at 329.9%.

Major ETF Events

Jun 17-Fri-None
Jun 16-Thu-One more Quick-term sell signal. Prices are starting to interact with QTI Yellow.

Jun 15-Wed-Strong bearish aggression demonstrated yesterday’s comment.

Jun 14-Tue-Bullish aggression has no support for sustainability until prices climb above NTI Blue and Force mounts Pressure.

Jun 13-Mon-None.

Current Strategy-Short-term Indicant- Jun 17, 2011. The stock market bear is gaining strength on the near-term cycle.  The Quick-term Indicant bull/holds remain in tact since prices remain above the QTI bearish yellow curve, but notice that a few are interacting with bearish yellow. The bull should find some inspiration, as these interactions are slowing bearish aggression.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. 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. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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.

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 divergence last week. That follows two weeks of bearish divergence and two weeks of bearish convergence. That is five consecutive weeks of bearish convergence or divergence. That is bearish, but not as bearish as it would be with four consecutive weeks of bearish convergence.

Indicant Conclusion

The presidential pre-election year stock market bull remains in tact and in full conformance to historical standards. There is minimal technical support for stock market bearish behavior along the short-term cycle. However, the Near-term cycle continues favoring the stock market bear. Several bear/sell signals were generated two weeks ago by the Near-term Indicant model, while the Quick-term model remains with bull/hold signals. However, the Quick-term bullish cycle is nearing a challenging position by the stock market bear. Force Vectors did not continue aggressively to the north the past five weeks, which is a bit disappointing for those desiring a stock market bull.

The Indicant Volume Indicator remains depressed, as post holiday sessions never produced significant increases in volume. Summertime volume will influence continuing lethargic volume behavior. That can incite additional volatility.

As stated the past 89-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle other than short-term attributes, which is now supporting bearish behavior.

Inflationary threats continue. Stagflation remains as an accurate descriptor of the current economy even though economic data continues offering evidence of souring activity.

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

06/19/2011

Jun 12, 2011 Indicant Weekly Stock Market Report

Volume 06, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

Chinese Prostitutes, Intellectual Elites, and Blackberries

According to www.dirtyspendingsecrets.com your elected congressional representatives approved spending $2.6-million to train Chinese prostitutes to drink more responsibly on the job. Dr. Wayne Xiamong Li is the researcher conducting the program at Wayne State University in Detroit, Michigan. This research will occur in China. This has been confirmed as accurate from many other sources.

Why are intellectual elites what they are? These people set around and think. That takes very little effort. They believe their thinking is of high value. Their three-pound brains can pound out extreme thoughts on a variety of subjects. The economy can absorb a maximum number of these types of people. No one knows that number. Once achieved, however, everyone would know with the collapsing economy. Even then, the headcount of intellectual elites would remain a mystery because they are not yet being counted in the census.

Intellectual elites have a lot of time on their hands. They always have their hands out, as thinking and only thinking does not provide them with basic needs. They are, in effect, sophisticated beggars. The only difference between them and the street beggar is costume and hygiene.

Intellectual elites are unwilling or incapable of being capitalist. Rather than expending biological energy to produce and sell their services or products, they connive to obtain objects and wealth without offering any economic value. They are 100% economic leeches. They live off the rest of us.

Dr. Li’s resume is unknown. However, the three-pound brain figured out a way to garnish $2.6-million from U.S. taxpayers to study Chinese prostitutes not in the United States, but in China. Wayne State University, like most others, claims some sort of special greatness in whatever. In this case, they claim to be a great research institution for health related functions. You can make the same claim if you want. No one really cares about self-proclamations.

Dr. Li will get his (or her) $2.6-million and proceed to do whatever. There will certainly be no economic benefit to the United States, who is paying for this.

One has to wonder how much grant money can be accumulated to study OPM disease. OPM disease permeates the halls of Congress, most Fortune 500 companies, state and local governments, and most colleges and universities. Those institutions produce no physical objects and thus contribute nothing to the economy. College professors in the sciences, though, indirectly contribute greatly to the economy. The arts, however, is pure economic leeching. OPM means other people’s money.

The problem with Dr. Li’s vocation is not being able to prove his (or her) worthiness or value to society. No one is displacing his object of physical production with that of a competitor.  Dr. Li may or may not do good work. Regardless though, there will be no objective evidence of the value returned from the effort. That is the nature of being an intellectual elite; living a good life without substantive justification to do so. Analogizing, “you go kill reindeer and I will eat it.” Of course, several thousand years ago, the hunter aimed his bow and arrow at the “intellectual elite” as opposed to the reindeer. These days, congress stands in the way of that.

Research-in-Motion, RIMM-NAS#55, is down over 70% from its 2008 peak price. There is objective evidence its management is more dilettante infested than Apple. Apple is up over 4400% since the Mid-term Indicant signaled buy on May 9, 2003. Dr. Li will never be able to show any “objective” evidence. Dr. Li may show some data with significant bias, but certainly not objective. There are very few things more objective than a stock price. Wayne State University’s claim in some form of greatness is not objective and thus their claim is pure mysticism.

RIMM enjoyed significant success in the last decade. As their success grew, more people joined the company. Many of them had OPM disease. In other words, they were looking for other people’s money to maintain a lifestyle. They sucked the former greatness from RIMM, albeit with that greatness being a bit suspicious. RIMM was accused of stealing technology from another company that led to their product development. RIMM more or less agreed to it with varying details of admitting guilt. In spite of that, though, they created wealth for many by producing and marketing a great product, called the Blackberry.

Apple rehired Steve Jobs several years ago. Prior to that, Steve Jobs was fired by a group of dilettante managers who accumulated into Apple during their success in the 1980’s and early 1990’s. After those dilettantes fired Steve Jobs, Apple’s stock price plummeted and neared bankruptcy during the 1990’s. The dilettantes and their lazy ways nearly sucked the company dry. Interestingly, Microsoft’s Bill Gates provided cash infusions to keep his competitor alive in the mid-1990’s. Apple was Gate’s research source. He worked long hard hours copying Apple’s software creativity for his development of Microsoft Windows. Keep in mind this is not a point of criticism. Copying is not that easy, although not as difficult as starting with a blank sheet of paper or blank computer screen. Marketing a copied product is very difficult. Gates was very successful here and his success resulted in massive productivity gains. He was rewarded handsomely from it by the capital markets as opposed to the U.S. Congress.

Steven Jobs is no dilettante. RIMM has many dilettantes. There is no intellectual argument as to what is better, Apple or RIMM.  Click this sentence for objective proof of which is best; Apple or RIMM. The evidence is "objective." Intellectual elites tend to avoid objectivity, favoring instead, whatever is swirling around in their little 3-pound brains. They have disgust for those who can objectively point to their achievements. Intellectuals tend to pontificate their greatness with minimal caloric spend.

Keep in mind that Steven Jobs and the other non-dilettantes are biological mortals. Some day they will be gone. Who is replacing them? Always keep in mind that the un-ambitious tend to gravitate toward existing money flow. The largest cash flow occurs in Washington D.C. where the least ambitious among us accumulate. They are not only lacking ambition, they tend to possess either a conscious or an unconscious belief they are royalty. Fortune 100 is the next easiest target to get close to massive cash flows. The dilettante accumulations there accelerate the demise of those companies. Intellectual elites tend to penetrate the halls of both groups; Washington D.C. and S&P100 companies. Some leech at colleges and universities. Some with political shrewdness, such as Dr. Li, can extract monies from all three groups.

Rest assured dilettantes are accumulating at Apple, just as they always have at other large successful companies. The most competent is typically not heard in such organizations. The intellectual elites tend to sound better to the non-knowing and generally gain influence. The loudest and/or the one with the most political skills promulgate their strategies and tactics throughout the organization. It is difficult to be politically skilled and substantively skilled, simultaneously. That is why the weakest stock price performers are the large caps. That is why all federal governments around the world run huge deficits. Low productivity and OPM disease are the culprits. The solution may be an eventual return to the days, where one has to kill their own reindeer to eat.

Dr. Li definitely enjoys political skills. Unfortunately, he cannot prove he has substantive skills. Fifty years from now, no one will know that the $2.6-million spent on Chinese prostitutes helped anyone. Steven Jobs has plenty of proof of his substantive skills. RIMM also has evidence of substantive skills, but dilettante intrusions have overwhelmed RIMM for the time being. The NASDAQ100 is littered with plenty of stocks that once traded near four digits to the left of the decimal that now trade at only one digit to the left of the decimal. Some former NAS100 stocks trade at values only to the right of the decimal place, much like General Motors did prior to its 2009 bankruptcy and where GM is again heading.

Whipsawed – Review of Wild Swings Last Week

The largest NASDAQ100 loser was NAS#77-VRTX. It was down 12.0% last week. It, however, is up 36.5% since the Mid-term Indicant signaled buy on Oct 8, 2010. It remains technically strong, but one has to worry about what dilettantes won political battles last week.

The largest NASDAQ100 gainer was NAS100#53-BBBY. It was up a paltry 2.5% in last week’s bearishly behaving stock market. It is up 28.7% since the MTI buy signal on Sep 17, 2010.

The largest loser among the Indicant Select Stocks, which for the most part, are former NAS100 stocks was ISTK#96-CIEN. It was down 23.3% in last week’s bearish stock market. It is down 11.1% since the MTI signaled buy on Dec 10, 2010. It did not receive a sell signal this weekend because its positive Vector Pressure and remaining above the MTI bearish yellow curve. Do not buy until such time the Short-term Indicant detects bullish stock market bias. The largest gainer was ISTK#39-ELN. It was up 7.0% last week. It is down 15.2% since the MTI signaled sell two and a half years ago on Sep 12, 2008. The reason there is no buy signal is overall stock market bearishness detected by the Short-term Indicant and that stock’s longer-term negative trend lines.

The Dow30 did not have any bullish stocks last week. The biggest loser was DOW#12-CSCO. It was down 5.6% last week. It is down 19.1% since the MTI sell signal on Feb 11, 2011. There is no resistance point to bearish inclinations at this time. All attributes are bearish.

Utilities traded in a tight range last week.

The mutual funds tracked by the Mid-term Indicant were fairly volatile in last week’s bearish stock market. The biggest gainer was contrarian MF#22-USPIX. It was up over 6.0% last week. It is down 74.0% since the MTI sell signal over two years ago on Apr 3, 2009. It is not qualifying for a buy signal since it is heavily weighted along the election year cycle. It is typically bullish during presidential post election years. However, if the Short-term Indicant continues signaling hold for QID, then it may indeed get a buy signal. QID is up 7.5% since the Near-term and Quick-term Indicant signaled buy on May 25, 2011.

The largest loser among mutual funds was MF#37-FSDCX, Fidelity’s Communications. It was down 6.2% in last week’s bearish stock market. It is up 43.4% since the MTI signaled buy nearly two years ago on Jul 31, 2009.

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 eight sell signals.  

The Mid-term Indicant is signaling hold for 285 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 50.6%. That annualizes to 38.2%. The Mid-term Indicant has been signaling hold for these 285-stocks and funds for an average of 68.9-weeks.

The Mid-term Indicant is avoiding 42-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 35.1% since the Mid-term Indicant signaled sell an average of 89.9-weeks ago.

One year ago, on Jun 11, 2010, the Mid-term Indicant was holding 192-stocks and funds out of 333 tracked for an average of 51.0-weeks. They were up by an average of 30.8% (annualized at 31.4%). There were 124-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 31.1% since their respective sell signals an average of 72.3-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Jun 12, 2009. They were up by an average of 122.9% (annualized at 63.8%) since their respective buy signals an average of 100.2-weeks earlier. The Mid-term Indicant was avoiding 322-stocks and funds at that time. They were down an average of 24.7% since their respective sell signals an average of 53.0-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009, as buy signals were nearing.

There were 204-stocks and funds with hold signals on Jun 6, 2008 since their buy signals an average of 126.6-weeks earlier. They were up by an average of 144.2% (annualized at 59.2%). There were 131-avoided stocks and funds at that time. They were down by an average of 18.9% from their respective sell signals an average of 33.2-weeks earlier. There was one buy signal on this weekend in 2008. There were 10-sell signals on this weekend in 2008 in addition to the 251-sell signals in the prior 30-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008 and through the summer months. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.”

On Jun 8, 2007, the Mid-term Indicant was signaling hold for 312-stocks and funds out of 345-tracked. They were up by an average of 127.1% (annualized at 63.2%) since their buy signals an average of 104.6-weeks earlier. The Mid-term Indicant was avoiding 27-stocks and funds at that time. They were down by an average of 14.8% since their sell signals an average of 28.3-weeks earlier. There were two buy signals and four sell signals on this weekend in 2007.

Five years ago, on Jun 9, 2006, there were 221-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 141.9% (annualized at 67.8%) since their respective buy signals an average of 108.9-weeks earlier. There were 112-avoided stocks and funds then. They were down an average of 6.6% since their respective sell signals an average of 14.8-weeks earlier. There were no buy signals and 12-sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Jun 10, 2005, there were 207-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 90.5%, annualizing at 57.5%, since their respective buy signals an average of 90.5-weeks earlier. There were 112-avoided stocks and funds then. They were down by an average of 26.4% since their sell signals an average of 58.7-weeks earlier. There was one buy signal and no sell signals on this weekend in 2005.

There were 245-stocks and funds with hold signals on Jun 11, 2004. They were up by an average of 72.0%, annualizing at 70.6%, since their buy signals 53.0-weeks earlier. The 40-avoided stocks and funds were down an average of 14.6% since their respective sell signals an average of 20.2-weeks earlier. There were 10-buy signal and four sell signals on this weekend in 2004 in addition to 54-sell signals in the prior seven weeks. The meandering bear market was well underway at this time of year in 2004.

On Jun 13, 2003, there were 289-stocks and funds with a hold signal, enjoying a 44.6% gain since their respective buy signals an average of 20.0-weeks earlier. That annualized at 116.3%. There were only three avoided stocks at that time. They were down by an average of 26.1% since their sell signals an average of 26.6-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There was one buy signal in addition to 203-buy signals in the prior 12-weeks. There were no sell signals on this weekend in 2003. The 2003 bull market was sixteen weeks old on this weekend in 2003.

On Jun 14, 2002, there were 93-stocks and funds with hold signals. They were up 34.7% since their buy signals an average of 36.4-weeks earlier. 188-stocks and funds were being avoiding since the Mid-term Indicant signaled sell 9.2-weeks earlier. There were no buy signals and 13-sell signals on this weekend in 2002 in addition to the 53-sell signals a week earlier. The 2000-2002 stock market bear remained in full force at this time in 2002.

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 here. It is in the member’s only section.

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 and the related quality of life for the productive and honest.

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

Most short-term attributes are now supporting the stock market bear along the near-term cycle. The Quick-term cycle remains in tact. Consequently, the Short-term Indicant is offering mixed signals at this time.  Several stocks remain overheated and thus a pullback would be natural. Bearish Force Vector cycles are maturing. Do not be surprised at bullish resistance to recent bearishness.

In spite of short-term concerns, the Mid-term Indicant attributes supporting the stock market bull remain, albeit weakening. So far, most of the pullback is with attributes consistent with summertime doldrums.

The mid-term election year of 2010 behaved classically pivoting in support of the normally bullish pre-election year (2011). This behavior correlated well with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011 in spite of recent bad economic news and bearish behavior.

The current stock market bull originated in anticipation of political stalemating. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish. Political hate mongering is favorable to the stock market bull and that is mounting as we approach the election year in 2012. That suggests the stock market bull will carry forward through 2012, which is consistent with historical norms.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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 and above your buy price, 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 should 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 in related sectors, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will emerge.

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 64.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 137.3% and the S&P500 is up 63.6% since then. The small cap index, S&P600, is up 144.9% 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. Such bearishness is unlikely based on current Mid-term Indicant configurations. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. However, that can change, as Washington DC stupidity is far more reaching than historical standards suggest.

The NASDAQ is down 47.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 16.8% since its similar secular peak on March 23, 2000. The Dow is up by 2.0% 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. One should note that buy and hold so far this century is a loser as the stock market has been flat to bearish for the last eleven years.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. Look at the resumes of intellectual elites who argue against these points. You will detect they are pure economic leeches arguing on behalf of such regulations, which is a source of their livelihoods. None has ever produced anything of value.

The NASDAQ year-to-date performance was bearish by 10.3% through this week in 2001. The NASDAQ finished 2001 down by 19.9%, which was congruent with standards of post-election-year-bearishness. Interestingly, the NASDAQ was explosively bullish on this week in 2001 in addition to the prior week.

The NASDAQ was down by 21.5% 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 during mid-term election years.

The NASDAQ YTD 2003 performance was up 21.9%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 0.2% and finishing up for that year by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 5.2% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 3.2% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.6% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 7.7% on this weekend in 2008. It finished 2008 down by 40.5%. 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.

It was up 17.5% on this weekend in 2009. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. 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 NASDAQ was down 2.2% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 15.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 7.5% since its last peak on Oct 31, 2007. The S&P500 is down 18.8% since its Oct 9, 2007 peak. The S&P600-small cap index is down by 6.1% 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. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago.  It was above those levels until this past week. It is now down by 0.8% since its Oct 31, 2007 peak. The S&P400-MidCaps is the other major index tracked by the Indicant that remains above its pre-2008-crash levels. It is up by 0.6% since its prior peak on Jul 13, 2007. The S&P600 joined ranks of this sort of bullish behavior in late March, but has succumbed to bearish ambition. The NASDAQ jumped above its Oct 31, 2007 peak on Apr 29, 2011, but expressed discomfort in doing so and is down 7.5% since that peak.

The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 22.4% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow30 and Dow Composite remain joined with the weak S&P100 Index. Those dilettante infested companies may participate more strongly with the stock market bull in spite of that infestation. Until the Dow crosses above its pre-crash peak, the Dow Theory Forecast remains bearish.

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 last weekly cyclical bottom on November 20, 2008.

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 a 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 82.6% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 108.4% and the S&P500 is up 87.9% since then. The S&P600, Small Cap Index, is up 130.0% since March 9, 2009. That March 2009-current 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. Of course, such bearishness will eventually occur, but the Mid-term Indicant finds limited evidence of that on the immediate horizon.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the near-term cycle is not as supportive of the bull at this time. Middle Eastern unrest remains threatening to the stock market bull, depending though on the nature of that unrest. If oil prices skyrocket, the bear will be delighted. If democracy expands in that region, the bull will be delighted. Current parameters suggest stock market bearishness in the event of maximal threats to the Saudi Kingdom, which is a stabilizing force in that region.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness 15-weeks ago and holding there after a bit of mild volatility. Bernanke, apparently, remains concerned with the economic outlook but carelessly ignoring inflationary pressures in the U.S. That carelessness will eventually shift to cognizance and with that, the great bear market will resume. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time.

The 6-month CD yield increased significantly 28-weeks ago, suggesting desired longer-term upward pressures by the banks. It remains depressed and has been flat to even more bearish since then. It fell 10-basis-points 16-weeks ago, another five points eleven weeks ago, and another five basis points six weeks ago. In essence, a level of stability has been found with mild yield bearishness after wild variations in such a minor investment vehicle.

The Euro jumped to Red Bull status 21-weeks ago. In spite of its bearishness in three of the last five weeks, it remains a Red Bull. It was bullish the past two weeks, relative to the U.S. dollar. The Euro’s bullish Red Curve continues rising, joining the Bearish Yellow Curve’s rise. The European rate hike nine weeks ago contributed to Euro strengthening.

The Canadian dollar continues to strengthen while the Japanese Yen continues to weaken, although a bit bullish the past few days against the U.S. dollar. Japan will require significant debt financing for rebuilding infrastructure. Canadians will continue to enjoy their exports of commodities and raw materials.

Overall, the US dollar is weakening, but again threatening to strengthen. Inflationary pressures will eventually confront the market.

Eventually, the U.S. will be faced with either higher interest rates or $1,000 oil. Universal law will impose one or the other with varying orders of magnitude. With a maximum inflationary bias, gold would be priced above $10,000/oz.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. The $2,000/oz-forecast by 2014 continues to be challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. However, statistical bullishness for gold remains in tact. At the same webpage, you will notice oil is less stable with a mild bearish bias.

As stated by the Indicant for several months, oil is priced where the Kingdom finds comfort at around $80/bbl, albeit departing on the high end of his desired tolerance levels the past several months due, mainly, to instability in the Middle East. It has been nudging a bit higher than that for the past several weeks, but bearish the past several days/weeks. It achieved Red Bull status several weeks ago for the first time since 2007. The high-end forecast continues to project $120/bbl by 2012. The Saudi Kingdom will have to approve that, though, unless they are rooted out of power. With that, no one knows, depending on the new ruling class. The Middle East tends to restrict their choices to 1) monarchies, 2) dictators, or 3) religious fanatics. With the exception of Saudi royalty, none would have a stabilizing effect on oil prices.

Commodity prices continue with dynamic bullish aggression. Most have fallen of their recent record highs, but again rising. Significant bullish behavior continues along the mid-term to long-term cycle. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues its shift from waffling to significant and dynamic bullish aggression. It is also a solid Red Bull and economically bullish albeit with long-term inflationary threats. After nearly a century, Reuters UK commodity tracking is not readily available. We will continue to searching a reliable source for that information. It is proving difficult and we may have to abandon tracking it.

Commodity prices, overall, were bearish in five of the last six weeks. It was solidly bullish last week. Do not be surprised at a bullish surge when they interact with the bullish Red Curve. Some have already done that, but all of them will have to do that before exciting the commodities bull. That will also require the U.S. dollar’s resumption of its bearish slide.

Mortgage rates remain configured with countering the prevailing bearish trend. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011 and retreated back down to economic neutrality. They appear to have acquiesced to bearish direction, falling and staying below the declining bullish Red Curve.  Therefore, the underlying mid-term bearish cycle remains unthreatened. They have been bearish the past few weeks offering home buyers better opportunities.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months. The CPI announcement on Friday, May 13, 2011 generated a bearish effect on the stock market. Since then rising unemployment and souring corporate earnings are arousing the stock market bear’s ambition.

Overall, hard economic data continues with stability, although cyclically increasing with recent profit-taking bearishness and some souring fundamentals, such as corporate earnings. That is challenging the former theme of being economically non-bearish. This also adds to the double-edged sword of inflationary concerns. Rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. Contrarian behavior, though, will indeed inspire the stock market bear ahead of depressing economic conditions.

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 again signaled buy on Sep 17, 2010. It is up 11.1%, annualizing at 15.0% since then. As stated seven weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. That holds true in spite of bearish behavior in three of the last six weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 9.7% since then, annualizing at 5.4%.

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. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 25.0%, annualized at 33.8% since the more recent buy 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 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 40.4%, annualized at 54.7%, since its Sep 17, 2010 buy 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 buy on Oct 8, 2010. It is up 22.1% since then, annualizing at 32.5%.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 37.0% since that buy signal, annualizing at 50.1%.

The Quick-term signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 35.8% since then, annualizing at 48.1%. The Near-term Indicant signaled buy on May 31, 2011. It is down 0.3% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 85.0% since that buy signal, annualizing at 33.6%. 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 sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It is up 10.2%, annualizing at 32.8%, since its most recent Near-term Indicant buy signal on Feb 18, 2011.

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

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

All the major indices are up by an average of 23.8% since their bull signals an average of 61.6-weeks ago. That annualizes at 20.1%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,345,524. That beats buy and hold performance of $1,818,334 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $150,205. That beats buy and hold’s $124,496 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226,132. That beats buy and hold’s $91,669 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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 MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 74.0% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. 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. Although QID is now with a hold signal, this fund may not receive a buy signal until 2013, which is the next post election year. The near-term bearish attributes alone are not justification for buying this fund at this time.

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 312.9% (annualized at 15.9%) since the Long-term Indicant signaled bull 1,023-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 or Saturday afternoon.

Short-term Indicant Stock Market Report - Summary

The near-term cycle continues enduring increasingly bearish attributes. Keep in mind, prices remain above the Quick-term bearish yellow curve, but some are no longer “well above” bearish yellow. However, even with that, configurations continue suggesting a bearish spurt is underway.

Non-contrarian Force Vectors shifted north last Thursday, invoking the expected bullish response. Configurations suggest more is to come. However, until Force crosses above Pressure and into bullish domains with Price above NTI Blue curve, the Near-term Indicant will continue to signal bear/avoid. In other words, bullish responses along the near-term cycle will be considered irrelevant until aforementioned attributes manifest.

International funds are no longer resisting bearish ambition. With that, the prognosis of a bearish spurt may be challenged depending on how the stock market behaves when it interacts with the QTI bearish yellow curve.

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

The Near-term Indicant signaled one new bull and no new bears. Click this sentence to see table leading to the charts.

The stock market is now expressing bearish unanimity along the near-term cycle with all major non-contrarian indices along the Near-term Indicant Bear signal.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 2.8% since those bear signals an average of 1.7-weeks ago. Contrarian VIX has a bull signal. It is up 5.1% since its Near-term bull signal 1.0-weeks ago, annualizing at 263.6%.

The Quick-term Indicant has been signaling bull for all major indices for an average of 32.9-weeks. They are up by an average of 12.7% since their bull signals, annualizing at 20.2%. Contrarian VIX is up 5.1% since its bull signal one week ago. Its expected rise will deflate performance here since the non-contrarian indices remain with bull signals. They will not qualify for bear signals until they interact with bearish yellow with the possible exception of the Dow Utilities. Interestingly, for the first time since 2009, many indices are nearing their QTI bearish yellow curve.

Short-term Market Summary

Bearishly mature Force Vectors shifted north, which should invoke non-bearish to bullish behavior. However, this pestering bear will only laugh at that along the near-term cycle. With the exception of the Dow Utilities all non-contrarian indices are enduring negative Vector Pressure. Both Near-term Indicant curves are cyclically south.

The VIX has not completed its bullish cycle, but it could endure some degrading performance over the next day or two.

Indicant Volume Indicators  

The NASDAQ IVI crossed into high activity domains on Mar 21, 2011. It fell back into low activity a few weeks later. Lethargy is accelerating, which is a common summertime attribute. The NYSE Indicant Volume Indicator remains in low interest domains, while mildly increasing there. It appears to be peaking ahead of normally lethargic summertime volume. As stated the past several weeks, unless these configurations shift back to robustness, do not be surprised at overall stock market lethargy.

Jun 10, 2011-Fri-Volume was not aggressive on bearish aggression. This bear is a bit sneaky, but a Near-term cycle bear nonetheless.

Jun 9, 2011-Thu-Reduced volume on mild bullishness does not upset prevailing near-term bearish bias.

Jun 8, 2011-Wed-Volume was up mildly on mild bearishness. Although normally insignificant, some mild concern is manifesting with volume support for continued bearishness.

Jun 7, 2011-Tue-Low volume on mild bearishness is certainly not adding to bearish energy, but a bear is a bear nonetheless.

Jun 6, 2011-Mon-Mediocre volume on mild bearishness offers little argument to the stock market bear along the short-term cycle.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for six-ETF’s. They are up by an average of 7.6% since their buy signals an average of 11.9-weeks ago. This annualizes at 33.3%.

The NTI is avoiding 23-ETF’s. They are down by an average of 2.7% since their sell signals an average of 1.5-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 19.5% since their buy signals an average of 42.1-weeks ago. This annualizes at 24.1%.

The Quick-term Indicant is avoiding three ETF’s. They are down by an average of 8.2% since the QTI sell signals 4.8-weeks ago.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled sell on Jun 6, 2011, as Force dipped below Pressure and into bearish domains.  It is down 0.3% since that sell signal. That coupled with price below NTI blue offered no alternative to the sell signal. Pressure fell into bearish domains this past Thursday, supporting the near-term avoid signal. Magnitude is always unknown, but risks are too high to continue to holding.

The near-term cycle is not behaving in a contrarian manner at this point. Keep in mind, though, this fund can be extremely contrarian to the stock market depending on the nature of the worldwide economy and not just that of the U.S. economy.

The Quick-term Indicant signaled buy on Sep 15, 2010. It is up 35.8%, annualizing at 48.1% since then. The Quick-term Indicant will not signal sell until interacting with QTI Yellow.

ETF#11-Gold and Precious Metals  is up 85.0% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.6%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $132.31 and still rising. Relaxation is in order since your buy price approximates $80.65 versus Friday’s closing price of $149.24. Force fell below Pressure this Friday and is a bit discerning.

The Near-term Indicant signaled buy on Feb 18, 2011. It is up 10.2% since then, annualizing at 32.8%.

Near-term attributes for the next sell signal will be price below NTI Blue with negative Vector Pressure. Price crossed below NTI Blue this Friday and thus renewing the bearish threat along the near-term cycle.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on May 17, 2011 from the Near-term Indicant and the Quick-term Indicant. Force started rising in bullish domains at that time, but weakened the past few days in bullish domains. It is pretty hot, but the next sell signal will not occur until price falls below NTI Blue, since the buy signal was tardy in doing so. It is up 0.6% since the buy signals, annualizing at 8.5%. Its magnitude approximates one-half of prior bullish cycle and at about same to the cycle before the last one.

The Near-term Indicant and Quick-term Indicant signaled buy on May 25, 2011 for ETF#31-QID. It is up 7.5% since then, annualizing at 169.7%. Force is aggressive in bullish domains, supporting bullish bias.

The Quick-term signaled sell on Apr 1, 2011 for ETF#32-VXX. This ETN does not track well with VIX. It is down 24.0% since that sell signal. The Near-term Indicant signaled buy on Jun 3, 2011 and it is up 2.2% since then, annualizing at 112.7%.

Major ETF Events

Jun 10, 2011-Fri-International funds reduced their resistance to bearish ambition. Therefore, a few more Near-term Indicant sell signals were triggered.

Jun 9, 2011-Thu-Today’s bullish bounce was expected, albeit with limited magnitude.

Jun 8, 2011-Wed-Volume was up a bit on mild, but consistent bearishness.

Jun 7, 2011-Tue-VIX was not contrarian. That means nothing to the stock market, but relevant to the VIX since its Force bullish cycle is mature.

Jun 6, 2011-Mon-More attributes shifted with increasing support for the stock market bear.

Current Strategy-Short-term Indicant- Jun 10, 2011. The stock market bear is gaining strength on the near-term cycle.  The Quick-term Indicant bull/holds remain in tact since prices remain above the QTI bearish yellow curve, but notice that a few are threatening to interact with bearish yellow.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. 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. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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.

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. That follows two weeks of bearish divergence and one week of bearish convergence. That is four consecutive weeks of bearish convergence or divergence. That is bearish, but not as bearish as it would be with four consecutive weeks of bearish convergence.

Prior bullish convergence is no longer relevant.

Indicant Conclusion

The presidential pre-election year stock market bull remains in tact and in full conformance to historical standards. There is minimal technical support for stock market bearish behavior along the short-term cycle. However, the Near-term cycle continues favoring the stock market bear. Several bear/sell signals were generated last week by the Near-term Indicant model, while the Quick-term model remains with bull/hold signals. Force Vectors did not continue aggressively to the north the past four weeks, which is a bit disappointing for those desiring a stock market bull.

The Indicant Volume Indicator remains depressed, as post holiday sessions never produced significant increases in volume. Summertime volume will influence continuing lethargic volume behavior. That can incite additional volatility.

As stated the past 88-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle other than short-term attributes, which is now supporting bearish behavior.

Inflationary threats continue. Stagflation remains as an accurate descriptor of the current economy even though economic data continues offering evidence of souring activity.

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

06/12/2011

Jun 5, 2011 Indicant Weekly Stock Market Report

Volume 06, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

The Great Depression of 2008-2018-Part II

Politicians continue claiming the great recession would have propelled the economy into another great depression without their grandiose schemes. Those same politicians said unemployment would not fall below 8% with their stimulus spending. Last week, the official unemployment was at 9.1%. It is actually much higher.

So, why do people applaud when politicians claim what would have been, when they have clearly demonstrated not knowing what is? Let us review it one more time. Here is the constant bantering comment from the president, tweeting Congressmen Weiner, and others. It goes like this; “if we had not released economic stimulus money, the economy would have fallen into another great depression.”

Tracking back to 2008, the president and his cronies stated, “Unemployment would not exceed 8% due to the economic stimulus.” It is now, officially, 9.1% two and a half years later. That is forecast error.

Why do people listen to politicians? The American Indian listened to chiefs, aimed their bows and arrows at the Gatling gun, and their entire culture was completely wiped out within about five generations. It does not take long to pay the price for wrong-headed thinking.

The reason the stock market was bearish the last three weeks and more specifically following unemployment news that past Friday was variance to expectation. The experts (economists) forecasted a larger reduction in unemployment. Even the experts were wrong. The stock market reacts to variance from expectation from experts. Those same experts did not forecast the great recession. The Indicant forecasts some economic data, but after 40-years of researching nearly every mathematical model, all have error and so much so, that the Indicant will not forecast the stock market. It does, however, attempt to recognize bull or bear.

Why is unemployment persistently high? Washington D.C. politicians, where the air has an unpleasant stench to it, took a different tact this time. They wanted to control the economy, in spite of consistent historical illustrations that centralized bureaucratic controls do not work. That contrasts with Washington D.C.’s response to the 1981-1984-recession. That group somehow agreed to reduce taxes and allowed the populace to “handle the money.” After that, the economy spiraled to the north and through the 1990’s. The stock market propelled northward with historical bullishness.

Although contemporary political leadership desires to continue increasing headcount of Washington D.C. bureaucrats, they could never achieve populace majority. By doing so, hunger pains would lead to civil strife.

Here’s the problem. There are about 4.2 million federal bureaucrats. They make a living using other people’s money for all of their activities. None of their money is used. It is impossible to measure their effectiveness, efficiency, or productivity. All we know is that is low; very low!

The combined brain weight of those 4.2-million bureaucrats is 4.2-million x 3-pounds = 12.6-million pounds of brain mass. A federal bureaucrat is not an ambitious person. That lack of ambition should be viewed with suspicion. That suggests their significant ineffectiveness. Examples continue to highlight that ineffectiveness. They are the ones who sent economic 15,000 stimulus checks to the wrong bank accounts and counties that do not exist. Where is that money now? Since they are inflicted with OPM disease (other people’s money), who cares? And, curiously, many Americans appear willing to allow those same bureaucrats to handle their healthcare.

There are approximately 138,000,000 U.S. taxpayers. That means they have a brain mass of about 414,000,000-pounds (3 x 138,000,000). So, there is about 32-pounds of taxpayer brain mass for each pound in Washington D.C. Taxpayers use their own money and with that there is no OPM disease. Therefore, the economy has a 32-times-plus advantage with money in the hands of taxpayers than federal bureaucrats.

As earlier stated, federal bureaucrats cannot become the majority of people in spite of many contemporary politicians attempting to increase bureaucratic headcount. Increasing federal bureaucratic headcount will only worsen the economy and that is bearish.

The Near-term Indicant cycle is suggesting bearishness. However, political partisanship in Washington D.C. can counter current desires to expand federal bureaucracies. The only subject with desired partisanship is reducing federal spending and bureaucracies by massive and historical amounts. That would be bullish.

Whipsawed – Review of Wild Swings Last Week

NAS#55-RIMM was the largest NASDAQ100 loser this past week with a loss of 10.6%. It is down 15.2% since the Mid-term Indicant signaled sell on May 6, 2011. There is no resistance points, as it is below QTI Yellow, NTI Green, and with negative Vector Pressure. Its Force Vector is bearishly mature, offering some hope for a bullish bounce. This company’s profound success with its Blackberry Phone produce may be only in the past. This company was found guilty of copying technology. The copier is usually more successful than the creator. However, when being a copier, one must improve what was copied. It is believed this company missed that opportunity and is now on the “downslide.”

The largest NAS100 loser was NAS#94-APOL. It was up 14.5% last week, but down by 12.8% since the Mid-term Indicant signaled sell over a year ago on May 14, 2011. QTI Red and Yellow have been in bearish trend since early 2009. It was a not a participant in the bull market of 2009, as its bullish cycles were anemic.

ISTK#25-NOK was down 18.8% last week. It is down 73.5% since the Mid-term Indicant signaled sell on Aug 29, 2008. It is interesting that two phone-makers were biggest losers this past week. As you can see from the chart, NOK did not participate in the 2009 bull cycle as its price could not pinnacle the short-term blue curve. It has been in bearish trend since the 2008 sell signal.

The biggest ISTK gainer last week was ISTK#42-AFFX was up 21.0% last week. However, this stock is down 68.9% since the Mid-term Indicant signaled sell on Jan 4, 2008. Although this stock participated in the 2003-2005 bull cycle, it remains in bearish trend since 1999. It is difficult to refer to this stock as a dog, but there has been steady erosion in shareholder equity. This stock is down 95.5% since its all time peak price in early 2000.

The DJIA stocks ranged from its largest loser of -5.2% with its largest least loser at -0.4%. In other words all the Dow stocks were down last week, but none with double digit changes.

The Dow Utility stocks traded in a tighter range with its largest loser at -2.9% and biggest gainer of 0.1%.

Mutual Funds behaved normally with a tight range with its largest loser at -4.3% and the largest gainer up 3.5%.

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 three sell signals.  

The Mid-term Indicant is signaling hold for 293 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.3%. That annualizes to 40.9%. The Mid-term Indicant has been signaling hold for these 293-stocks and funds for an average of 66.5-weeks.

The Mid-term Indicant is avoiding 39-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 42.2% since the Mid-term Indicant signaled sell an average of 103.9-weeks ago.

One year ago, on Jun 4, 2010, the Mid-term Indicant was holding 192-stocks and funds out of 333 tracked for an average of 50.0-weeks. They were up by an average of 29.4% (annualized at 30.6%). There were 107-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 34.3% since their respective sell signals an average of 75.8-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 22-stocks and funds of the 344-tracked two years ago on Jun 5, 2009. They were up by an average of 128.4% (annualized at 67.2%) since their respective buy signals an average of 99.4-weeks earlier. The Mid-term Indicant was avoiding 322-stocks and funds at that time. They were down an average of 26.0% since their respective sell signals an average of 52.6-weeks earlier. There were no buy signals and no sell signals on this weekend in 2009. The stock market bear was beginning to lose its dominance on this weekend in 2009, while the Mid-term Indicant remained more conservative before signaling buy.

There were 213-stocks and funds with hold signals on May 30, 2008 since their buy signals an average of 126.7-weeks earlier. They were up by an average of 148.1% (annualized at 60.8%). There were 131-avoided stocks and funds at that time. They were down by an average of 16.5% from their respective sell signals an average of 32.2-weeks earlier. There was one buy signal on this weekend in 2008. There were no sell signals on this weekend in 2008 in addition to the 251-sell signals in the prior 29-weeks, as the bear market was already well underway at this point in 2008. Although performance levels remained excellent, many stocks and funds were displaying souring configurations in early 2008. There was a near-term bullish cycle in March/April 2008 that triggered a few buy signals, but most of the avoided stocks from late 2007 and early 2008 Mid-term Indicant sell signals remained with avoid signals during that “bullish spurt.”

On Jun 1, 2007, the Mid-term Indicant was signaling hold for 313-stocks and funds out of 345-tracked. They were up by an average of 126.4% (annualized at 64.8%) since their buy signals an average of 101.5-weeks earlier. The Mid-term Indicant was avoiding 29-stocks and funds at that time. They were down by an average of 13.2% since their sell signals an average of 26.7-weeks earlier. There were three buy signals and no sell signals on this weekend in 2007.

Five years ago, on Jun 2, 2006, there were 232-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 147.8% (annualized at 73.0%) since their respective buy signals an average of 105.3-weeks earlier. There were 109-avoided stocks and funds then. They were down an average of 4.3% since their respective sell signals an average of 14.1-weeks earlier. There was one buy signal and three-sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Jun 3, 2005, there were 207-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 98.8%, annualizing at 57.4%, since their respective buy signals an average of 89.5-weeks earlier. There were 112-avoided stocks and funds then. They were down by an average of 26.0% since their sell signals an average of 57.8-weeks earlier. There were no buy signals and no sell signals on this weekend in 2005.

There were 245-stocks and funds with hold signals on Jun 4, 2004. They were up by an average of 70.9%, annualizing at 70.8%, since their buy signals 52.1-weeks earlier. The 50-avoided stocks and funds were down an average of 12.9% since their respective sell signals an average of 18.9-weeks earlier. There was one buy signal and no sells signal on this weekend in 2004 in addition to 54-sell signals in the prior six weeks. The meandering bear market was well underway at this time of year in 2004.

On Jun 6, 2003, there were 289-stocks and funds with a hold signal, enjoying a 45.4% gain since their respective buy signals an average of 19.0-weeks earlier. That annualized at 124.1%. There were only three avoided stocks at that time. They were down by an average of 26.1% since their sell signals an average of 26.8-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were four buy signals in addition to 199-buy signals in the prior eleven weeks. There were no sell signals on this weekend in 2003. The 2003 bull market was fifteen weeks old on this weekend in 2003.

On Jun 7, 2002, there were 106-stocks and funds with hold signals. They were up 33.6% since their buy signals an average of 33.5-weeks earlier. 135-stocks and funds were being avoiding since the Mid-term Indicant signaled sell 11.1-weeks earlier. There were no buy signals and 53-sell signals on this weekend in 2002. The 2000-2002 stock market bear remained in full force since then.

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.

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 and the related quality of life for the productive and honest.

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

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

Most short-term attributes continue supporting the stock market bull. Several stocks remain overheated and thus a pullback would be natural. Regardless, though, Force Vectors continue favoring the stock market bull. If they shift back to the south, the stock market bear will be encouraged.

In spite of short-term concerns, the Mid-term Indicant attributes supporting the stock market bull remain, albeit weakening. So far, most of the pullback is with attributes consistent with summertime doldrums.

The mid-term election year of 2010 behaved classically pivoting in support of the normally bullish pre-election year (2011). This behavior correlated well with political dynamics and was consistent with historical standards. The stock market remains configured for classical stock market bullishness during pre-election years, which should be enjoyed in 2011 in spite of recent bad economic news and bearish behavior.

The current stock market bull originated in anticipation of political stalemating. That has been the historical standard and in this case, history repeats. Partisanship is expected to heighten and that remains in effect and therefore bullish.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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 and above your buy price, 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 should 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 in related sectors, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will emerge.

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 66.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 145.3% and the S&P500 is up 67.4% since then. The small cap index, S&P600, is up 153.1% 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. Such bearishness is unlikely based on current Mid-term Indicant configurations. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. However, that can change as Washington DC stupidity is far more reaching than historical standards suggest.

The NASDAQ is down 45.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 14.9% since its similar secular peak on March 23, 2000. The Dow is up by 3.7% 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. Also, one should note that buy and hold so far this century is a loser as the stock market has been flat to bearish for the last eleven years.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence.  If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bearish by 13.0% through this week in 2001. The NASDAQ finished 2001 down by 19.9%, which was congruent with standards of post-election-year-bearishness. Interestingly, the NASDAQ was explosively bullish on this week in 2001 in addition to the prior week.

The NASDAQ was down by 19.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 20.1%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 2.2% and finishing up for that year by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.8% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 0.6% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 8.2% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 6.5% on this weekend in 2008. It finished 2008 down by 40.5%. 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.

It was up 15.8% on this weekend in 2009. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. 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 NASDAQ was up 1.5% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 14.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 4.4% since its last peak on Oct 31, 2007. The S&P500 is down 16.9% since its Oct 9, 2007 peak. The S&P600-small cap index is down by 2.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that though, a few indices have eclipsed pre-crash highs.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago.  It is now up by 2.4% since its Oct 31, 2007 peak. The S&P400-MidCaps is the other major index tracked by the Indicant that is also above pre-2008-crash levels. It is up by 3.8% since its prior peak on Jul 13, 2007. The S&P600 joined ranks of this sort of bullish behavior in late March, but has succumbed to bearish ambition. The NASDAQ jumped above its Oct 31, 2007 peak on Apr 29, 2011, but expressed discomfort in doing so and is down 4.4% since that peak.

The remaining indices remain below their 2007 peaks. The weakest index, S&P100, continues lagging. It is down by 20.7% since its Oct 9, 2007 weekly closing peak. The current bull will remain suspicious, in character, until all these major indices cross above their prior peaks from 2007 and 2000. The Nov 14, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The Dow30 and Dow Composite remain joined with the weak S&P100 Index. Those dilettante infested companies may participate more strongly with the stock market bull in spite of that infestation.

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 last weekly cyclical bottom on November 20, 2008.

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 a 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 85.6% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 115.4% and the S&P500 is up 92.2% since then. The S&P600, Small Cap Index, is up 137.7% since March 9, 2009. That March 2009-current 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. Of course, such bearishness will eventually occur, but the Mid-term Indicant finds limited evidence of that on the immediate horizon.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the 4-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull continues expressing its delight in that, which is supported by historical standards.

Political behavior is favoring the stock market bull with pressure to reduce government waste. Anticipating that is bullish, even though the near-term cycle is not as supportive of the bull at this time. Middle Eastern unrest remains threatening to the stock market bull, depending though on the nature of that unrest. If oil prices skyrocket, the bear will be delighted. If democracy expands in that region, the bull will be delighted. Current parameters suggest stock market bearishness in the event of maximal threats to the Saudi Kingdom, which is a stabilizing force in that region.

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.

Although this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets, both free and controlled, are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As promised by Bernanke, the discount rate (and prime) rate continue holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. It endured significant bearishness 15-weeks ago and holding there after a bit of mild volatility. Bernanke, apparently, remains concerned with the economic outlook but carelessly ignoring inflationary pressures in the U.S. That carelessness will eventually shift to cognizance and with that, the great bear market will resume. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time.

The 6-month CD yield increased significantly 27-weeks ago, suggesting desired longer-term upward pressures by the banks. Since then it has settled back down, but was up 4-basis points this past week. In spite of that, it remains depressed and has been flat to even more bearish since then. It fell 10-basis-points 15-weeks ago, another five points ten weeks ago, and another five basis points five weeks ago. In essence, a level of stability has been found with mild yield bearishness after wild variations in such a minor investment vehicle.

The Euro jumped to Red Bull status 20-weeks ago. In spite of its bearishness in two of the last three weeks, it remains a Red Bull. It was a bit bullish this past week, relative to the U.S. dollar. The Euro’s bullish Red Curve continues rising, joining the Bearish Yellow Curve’s rise. The European rate hike eight weeks ago contributed to Euro strengthening.

The Canadian dollar continues to strengthen while the Japanese Yen continues to weaken. Japan will require significant debt financing for rebuilding infrastructure. The Canadians will continue to enjoy their exports of commodities and raw materials.

Overall, the US dollar is weakening, but again threatening to strengthen. Inflationary pressures will eventually confront the market.

Eventually, the U.S. will be faced with either higher interest rates or $1,000 oil. Universal law will impose one or the other in varying orders of magnitude. With a maximum inflationary bias, gold would be priced above $10,000/oz.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. The $2,000/oz-forecast by 2014 continues to be challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold should decrease. However, statistical bullishness for gold remains in tact. At the same webpage, you will notice oil is less stable with a mild bearish bias.

As stated by the Indicant for several months, oil is priced where the Kingdom finds comfort at around $80/bbl, albeit departing on the high end of his desired tolerance levels the past several months due, mainly, to instability in the Middle East. It has been nudging a bit higher than that for the past several weeks, but bearish the past several days/weeks. It achieved Red Bull status several weeks ago for the first time since 2007. The high-end forecast continues to project $120/bbl by 2012. The Saudi Kingdom will have to approve that, though, unless they are rooted out of power. With that, no one knows, depending on the new ruling class. The Middle East tends to restrict their choices to 1) monarchies, 2) dictators, or 3) religious fanatics. With the exception of Saudi royalty, none would have a stabilizing effect on oil prices.

Commodity prices continue with dynamic bullish aggression. Most have fallen of their recent record highs. That appears to be simple profit taking following sharp increases over several months. The tsunami effect on their bearishness a few weeks ago expired and replaced with normal greed-profit taking cycles. Significant bullish behavior continues along the mid-term to long-term cycle. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status.  This remains economically bullish.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures continues its shift from waffling to significant and dynamic bullish aggression in spite of recent bearish behavior. It is also a solid Red Bull and economically bullish albeit with long-term inflationary threats. After nearly a century, Reuters UK commodity tracking is not readily available. We will continue to searching a reliable source for that information. It is proving difficult and we may have to abandon tracking it.

Commodity prices, overall, were bearish the past five weeks; some of which appears to be mere profit taking and a strengthening U.S. dollar. Do not be surprised at a bullish surge when they interact with the bullish Red Curve. Some have already done that, but all of them will have to do that before exciting the commodities bull. That will also require the U.S. dollar’s resumption of its bearish slide.

Mortgage rates remain configured with countering the prevailing bearish trend. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011 and retreated back down to economic neutrality. They appear to have acquiesced to bearish direction, falling and staying below the declining bullish Red Curve.  Therefore, the underlying mid-term bearish cycle remains unthreatened. They have been bearish the past few weeks offering home buyers better opportunities.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months. The CPI announcement on Friday, May 13, 2011 generated a bearish effect on the stock market. Since then rising unemployment and souring corporate earnings are arousing the stock market bear’s ambition.

Overall, hard economic data continues with stability, although cyclically increasing with recent profit-taking bearishness and some souring fundamentals, such as corporate earnings. That is challenging the former theme of being economically non-bearish. This also adds to the double-edged sword of inflationary concerns. Rising productivity from increased interests in capitalism around the world could significantly dampen inflationary threats. That, coupled with U.S. political dynamics of potential massive sovereign debt reductions, suggests dynamic bullishness. Contrarian behavior, though, will indeed inspire the stock market bear ahead of depressing economic conditions.

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 again signaled buy on Sep 17, 2010. It is up 15.2%, annualizing at 21.1% since then. As stated six weeks ago, the Mid-term Indicant is no longer detecting a troubling future for gold. That holds true in spite of bearish behavior in three of the last five weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 15.2% since then, annualizing at 8.6%.

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. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 27.9%, annualized at 38.7% since the more recent buy 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 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 46.3%, annualized at 64.4%, since its Sep 17, 2010 buy 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 buy on Oct 8, 2010. It is up 27.4% since then, annualizing at 41.4%.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 41.6% since that buy signal, annualizing at 57.8%.

The Quick-term signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 39.4% since then, annualizing at 54.3%. The Near-term Indicant signaled buy on May 31, 2011. It is down 2.4% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 86.3% since that buy signal, annualizing at 34.4%. 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 sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It is up 10.9%, annualizing at 37.5%, since its most recent Near-term Indicant buy signal on Feb 18, 2011.

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

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

All the major indices are up by an average of 27.0% since their bull signals an average of 60.6-weeks ago. That annualizes at 23.2%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,868,346. That beats buy and hold performance of $1,848,663 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $153,653. That beats buy and hold’s $127,354 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $233,749. That beats buy and hold’s $94,757 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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 MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 75.6% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. 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. Although QID is now with a hold signal, this fund may not receive a buy signal until 2013, which is the next post election year.

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 319.8% (annualized at 16.3%) since the Long-term Indicant signaled bull 1,022-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 or Saturday afternoon.

Short-term Indicant Stock Market Report - Summary

Unfavorable, but not unsurprising, economic news triggered a bearish stock market. Although the magnitude of that bearishness was mediocre, most Force Vectors dipped back to the south in bearish domains. Consequently, there were several sell signals today by the Near-term Indicant model.

As stated the past few days, “bullish and bearish unanimity remains absent. That opens the possibility of stock market fluttering. Unanimity will occur when all non-contrarian signals are same; that is either hold/bull or avoid/bear. A mix between those two signals continues pestering a desired directional intensity in either direction.” Friday’s behavior suggests a mild edge favoring the stock market bear.

Here’s why bearish unanimity does not yet exist. ETF#10-IBB-Biotech remains strongly bullish, albeit being challenged with declining Vector Pressure and a price below NTI Blue. Its Force is falling, offering additional bearish support. Until its configuration is obviated with bearish attributes, bearish unanimity remains absent. There are a few other non-contrarian funds with this sort of configuration, but IBB is the more pronounced one. It is up 27.8% since the Quick-term and Near-term Indicant signaled buy on Sep 14, 2010.

The large number of bearish configurations on several other ETF’s obviates absence of bullish unanimity.

As long as bearish unanimity exists, the bear will be confronted with bullish responses from time to time. That enhances fluttering potential, which will minimize bearish magnitude. However, as you saw in 2008, once bearish unanimity occurs, the bear’s depth can be significant and it is usually quick.

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

The Near-term Indicant signaled one new bull and five new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for only one major non-contrarian index; the Dow Utilities. It is up 2.7% since the Near-term Indicant signaled bull 9.0-weeks ago. As long as the Dow Utilities remains with a bull signal, consider bearish behavior as a bearish spurt. Keep in mind the Dow Utilities was the last major index to succumb to the great bear market of 2008. Its resistance to a bear signal is not falling below the NTI Green curve.

The Near-term Indicant signaled bull today for the VIX index in spite of its bearishness on Friday. Its Force Vector crossed above Pressure and penetrated bullish domains. It did not cross above NTI Blue curve, though. However, Force Vector behavior trumps all with dismal economic data.

The Near-term Indicant is signaling bear for five major indices. They are down by an average of 0.9% since those bear signals an average of 1.6-weeks ago.

The Quick-term Indicant has been signaling bull for the eleven major indices for an average of 34.8-weeks. They are up by an average of 16.3% since their bull signals, annualizing at 24.4%. Contrarian VIX received a bull signal today even though it was uncharacteristically bearish this Friday on bearish stock market behavior.

Short-term Market Summary

VIX Force discontinued its struggle to penetrate bullish domains. Most of the major indices Force continues shifted south today. With that, the underlying raging bull/bear battle is now favoring the stock market bear.

Indicant Volume Indicators  

The NASDAQ IVI crossed into high activity domains on Mar 21, 2011. It fell back into low activity a few weeks later. Lethargy is accelerating. The NYSE Indicant Volume Indicator remains in low interest domains, while mildly increasing there. It appears to be peaking ahead of normally lethargic summertime volume. As stated the past several weeks, unless these configurations shift back to robustness, do not be surprised at overall stock market lethargy.

Jun 3, 2011-Fri-Summertime volume is now underway. Low volume on bearish behavior supports prevailing bias, which is increasingly bearish.

Jun 2, 2011-Thu-Light volume on mild bearishness does not support dynamic stock market behavior. Summertime lethargy is influencing.

Jun 1, 2011-Wed-Volume was about the same as yesterday on offsetting bearish aggression, suggesting a confused stock market. Current configurations remain in support of fluttering behavior with a mild bias favoring a short-term bear cycle.

May 31, 2011-Tue-Volume was healthy on today’s bullish aggression, threatening those indices with bear signals.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for eleven-ETF’s. They are up by an average of 3.3% since their buy signals an average of 6.9-weeks ago. This annualizes at 24.4%.

The NTI is avoiding nine-ETF’s. They are down by an average of 0.7% since their sell signals an average of 1.6-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 22.2% since their buy signals an average of 41.1-weeks ago. This annualizes at 28.2%.

The Quick-term Indicant is avoiding three ETF’s. They are down by an average of 7.7% since the QTI sell signals 3.8-weeks ago.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term Indicant signaled buy this past Tuesday, as Pressure crossed into bullish domains. It is down 2.4% since then. The next near-term sell signal will occur if price falls below NTI Blue and Force dips back into bearish domains. Unfortunately, price dipped below NTI Blue last Wednesday, but Force remains in bullish domains. Set a tight stop loss here, as Force continues bending south.

The Quick-term Indicant signaled buy on Sep 15, 2010. It is up 39.4%, annualizing at 54.3% since then. The Quick-term Indicant will not signal sell until interacting at QTI Yellow.

ETF#11-Gold and Precious Metals  is up 86.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $131.62 and still rising. Relaxation is in order since your buy price approximates $80.65 versus today’s closing price of $150.22. Force is vacillating in bullish domains and thus remains with short-term non-bearish support.

The Near-term Indicant signaled buy on Feb 18, 2011. It is up 10.9% since then, annualizing at 37.5%.

Near-term attributes for the next sell signal will be price below NTI Blue with negative Vector Pressure. Price crossed above NTI Blue this Friday, removing bearish threat. Pressure remains positive.

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

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a buy signal on May 17, 2011 from the Near-term Indicant and the Quick-term Indicant. Force started rising in bullish domains. It is pretty hot, but the next sell signal will not occur until price falls below NTI Blue since the buy signal was tardy in doing so. It is down 0.3% since the buy signals. Its magnitude approximates one-half of prior bullish cycle and at about same on the cycle before the last one. It was harshly bearish last Thursday and mildly bullish today.

The Near-term Indicant and Quick-term Indicant signaled buy on May 25, 2011 for ETF#31-QID. It is up 1.2% since then, annualizing at 47.2%. Force penetrated bullish domains this Friday. That coupled with lagging bearish pressure heightens the threat to the hold signal. It will receive a sell signal tomorrow if there is no bullish bounce to it.

The Quick-term signaled sell on Apr 1, 2011 for ETF#32-VXX. This ETN does not track well with VIX. It is down 23.1% since that sell signal. The Near-term Indicant signaled buy this Friday.

Major ETF Events

Jun 3, 2011-Fri-Unfavorable economic news triggered mediocre bearish behavior. However, several Force Vectors dipped into bearish domains, triggering many sell signals by the Near-term Indicant.

Jun 2, 2011-Thu-There were no major events.

Jun 1, 2011-Wed-ETF#05-XLF received a Quick-term sell signal today, as its price fell below the QTI bearish yellow curve. This is the second Quick-term sell signal since last August. It will be interesting if XLF responds bullishly to this attempt by the financial bear to dominate this fund.

May 31, 2011-Tue-Several Force Vectors penetrated bullish domains. That should encourage the bull, but some are bullishly mature. If Force continues to strengthen, the stress on the near-term bullish cycle will subside. If they reverse back to bearish domains, either stock market fluttering will manifest or a stock market bear will occur. Neither is good, while fluttering would be favored.

Current Strategy-Short-term Indicant- Jun 3, 2011. The stock market bull retains bullish support by the Short-term Indicant. The bull’s challenge to the bear along the near-term cycle along the near-term cycle appears to have fizzled out. The bear is gaining strength on the near-term cycle.  The Quick-term Indicant remains in tact since prices remain well above the QTI bearish yellow curve.

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. 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. The presidential pre-election year is the most bullish of the four years. This phenomenon reduces the risks of bearish aggression in 2011.

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. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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.

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. That follows two weeks of bearish divergence. Last week’s prognosis of meandering stock market behavior is being challenged. Keep in mind, this bearish tone is based solely on the near-term cycle.

Economic fundamentals are souring somewhat. International political conflicts continue pestering. The Japanese crisis remains discerning, but not completely configurable. U.S. political stalemating is always bullish. Hopefully, political discourse will accelerate. The only unfavorable discourse is not cutting federal spending by profound and historical amounts. That money laundering scheme needs to be shut down.

The overall stock market has enjoyed bullish convergence in eight of the past sixteen weeks. Bullish convergence is now no longer relevant and being replaced by the bearish convergent cycle.

Indicant Conclusion

The presidential pre-election year stock market bull remains in tact and in full conformance to historical standards. There is minimal technical support for stock market bearish behavior along the short-term cycle. Several bear/sell signals were generated last week by the Near-term Indicant model, while the Quick-term model remains with bull/hold signals. Force Vectors did not continue aggressively to the north the past three weeks, which is a bit disappointing for those desiring a stock market bull.

The Indicant Volume Indicator remains depressed, as post holiday sessions never produced significant increases in volume. Summertime volume will influence continuing lethargic volume behavior. That can incite additional volatility.

As stated the past 87-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle other than short-term attributes, which is now supporting bearish behavior.

Inflationary threats continue. Stagflation remains as an accurate descriptor of the current economy even though economic data offered evidence of souring activity.

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

06/05/2011

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