March Indicant Weekly Stock Market Reports

March 31, 2002 Indicant.Net Weekly Update

Volume 3, Issue 6 ISSN 1526 6516 © The Indicant Stock Market Report

From Convergence to Divergence

Nearly everything is up right now. And it does not make sense. Shortly after September 11, the Mid-term and Quick-term Indicant signaled bull. The Dow is up 17.6% since September 21. Does that make sense? The Dow Transports are up a whopping 32.1% just after the tools of their trade are used by terrorists. Does that make sense? The Argentine market was heading south last December until they announced defaults on loans and political upheaval. The Argentine market is up 71% since then. Does that make sense? Gold is holding above the inflationary red curve at over $300 per ounce. Oil prices have slipped back above $25 per barrel and you are detecting that at the gas pump. The gas pump exchange drains billions from other potential consumer purchases. Commodity prices are rising, but remain in neutral to slightly inflationary territory. Although interest rates remain depressed state, they are moving to the north. The Freddie Mac and Fannie Mae are in neutral territory. With the exception of the NASDAQ and large caps, nearly all forms of investments are up. And does all that make sense?

Convergent forces never make sense and such a phenomenon is temporary. So, what is going to happen? The answer is in divergence. As stated several times in the past, oil and general stock prices will not parallel each other in the same direction. Over the long run, one will go up and the other will go down. In the early 1980's oil pinnacled around $38 barrel. The upward moving oil prices left the stock market flat during the 1970's. Before the end of the 1980's oil prices plummeted to a low of $9. During that secular decline in oil prices, the stock market shot up by triple digit amounts. During that "divergence" cycle, the energy sector stocks plummeted. Halliburton peaked at around $80 per share in 1980, which by designed coincidence is when oil prices peaked. By 1984 Halliburton was down to less than $20 per share, which by design was where oil prices had already plummeted to around $15. So when energy related investments go down, the stock market goes up and vice versus. That is typical of a secular divergence. Periods of convergence are always cyclical but never secular. As oil prices sky rocketed in early 2000, the NASDAQ plummeted by over 50%. Case close.

The conflict between the Israelis and the Palestinians could possibly accelerate the impending divergence cycle. If OPEC converts their synergies to support for the Palestinians, expect continued increases in oil prices. Or worse, if that conflict escalates into a Middle Eastern War, oil prices will continue to elevate. Although the larger exporter, Russia, will bad-mouth such a conflict, they will laugh all the way to the bank.

Regardless of what ignites such a scenario, an open invitation to the inflation spiral has been extended. That will stimulate the Federal Reserve Board to raise interest rates. So, the current slant on the divergence cycle favors energy related stocks. And if those stocks continue moving to the north, as they have been for the past few months, expect the rest of the stock market to head south. It is absolutely, unequivocally impossible for energy stocks and the general stock market to head north at the same time over the long run. There is only so much money consumers can spend. And if energy costs are high, then everyone else suffers.

Of course, peace could happen soon, productivity could continue moving to the north, and corresponding corporate earnings to follow suit. If that scenario, coupled with decreasing oil prices, were to happen, you could look forward to an explosively bullish stock market.

But as always, the criminal political minds of the world are always trying to impose their will on the rest of us. That drains consciousness from what is really important: free commerce and free and happy people. And that drained consciousness acts as a lid on the stock market. Until the criminally sick minds of political leadership throughout the world are reduced to ridiculous by the rest of us, stock prices will remain more flat to down than up. These "politically minded" folks and religious fanatics think they are important and they do not want to compete within the hard-working requirements of capitalism. They would rather try to control the rest of us; much like a parent does to a three-year-old. Someday, those folk's influence will evaporate from this planet, but for the time being, they just want to tell everyone else how to behave. And unfortunately, several small-minded folks from the world populace believe they are important folks and actually listen to them. Let's all get a bumper sticker that says, "politicians and religious fanatics, get out of the way of the bull market the rest of us want."

When will divergence occur and which one is going to win? We're not sure, as to the "when." But we are sure there will be divergence. That is one reason why the Indicant was developed. It is to find those inflection points where short cycles are differentiated from secular long running trends. There is nothing worse than holding an investment and then waiting for twenty years to get back to break even. If you are under 30 years of age, it may be okay, provided management stupidity does not kill your investment.

High flying Metro Media (Indicant Selected Stocks-MFNX-#13) is an example of where holding a stock will never make it back. It is now at 7 cents. It reportedly has assets around $7 billion, but you never know how much value management puts on a waste paper basket. Enron is another example. Buying for the long haul is good, as long as the quality is there. But unless you are the personnel director, you just never know when "management stupidity" is introduced into your investment.

We're not sure who is guilty of management stupidity at Hewlett Packard, but it is ever so present there. The dissident director or the CEO is practicing management stupidity. We're not sure which one is, but one of them is guilty. That stock's price is on the yellow curve. It is the only Dow 30 stock being avoided. So, we just watch the stock price. If it falls to yellow, the Indicant will signal sell.

This is our best guess at divergence. The end of April at the earliest and the end of May at the latest is our current guess at the beginning of the divergence cycle. Yes, it is a "guess." But the Indicant models will spot it when it occurs. We will know more next week and each week after that. The cycle or secular movement will begin within the next 60 calendar days. The origin of divergence is always conceived in a very subtle way. After a few weeks, the spread between the "haves" and the "have-nots" widens ever so slightly. And two years later, the gap is very wide and that is when you hear the "have-nots" saying "should of - would of - could of."

So right now there are three different groups of bullish investors. They are the "fear group", the "energy group" and the "generic group." The fear group is driving gold and related securities to the north. The energy group, who typically follows oil prices, is driving energy-related stocks to the north. And the generic group who is dutifully pushing the stock market higher. The latter group seems to be more focussed on the blue chips as opposed to the NASDAQ.

There was $500 billion setting on the sidelines prior to bull surge in the late 1990's. When that money funneled into the market, the strongest bull leg of all times materialized. Now there is two trillion setting on the sidelines. A lot of experts believe that will propel the markets to new heights. But the market has a way of doing what it wants to do and not what the experts say it will do. Never try to outguess the market. It is in charge of itself. What we do is go with the flow. If it is moving up, we're in. If it moves down, we're out. Except for those counter cyclical and counter secular sectors. There is always a way to make money in the stock market.

Why is there convergence during these troubled times? Since 1950 the Dow gained 9235.81 points from November 1 through April 30. The Dow gained only 1299.03 points from May through October. So November through April out performs May through October by over seven to one. So, as you can see the general markets dutifully conformed to historical standards and rose during the past six months. That sounds mystical, but the numbers are nonetheless facts. Oil is rising because OPEC had its way in curtailing production. And terrorism has invited fear investing. Market seasonality, OPEC's influence, and terrorism threats are the three reasons for the current convergence cycle.

Although the markets do not like to make sense from day to day, logic in the long run always prevails. Reality has a way of exerting itself. And the reality of investing is that not every one can make money. There has to be losers for they're to be winners. The current convergence cycle is nearing its end. Divergence cycles are around the corner. As previously stated divergence is expected sometimes in the next four to eight weeks. The various Indicant models will spot the one or two groups that will maintain bullish stamina.

Market Themes

We will continue to omit the bearish market themes as long as we are into the various bull markets. So, until the Indicant models say otherwise, let us continue to enjoy the bull, although many of the indexes are lazy yellow ones. A bull is a bull and we cannot control its magnitude.

Mid-term Indicant Stock and Mutual Fund Trade Signals

There were no buy or sell signals in mutual funds this past week. That continues to signal there is no divergence in process right now. That is very strong non-bearish behavior. Fund managers tend to stay in the stronger companies and those stocks did not fall very much the past three weeks, when the markets waffled. Even the Rydex NAS100 (RYOCX) fund did not receive a sell signal last week. That fund indexes the NASDAQ100 stocks, the weakest performer the past three weeks.

There were a few sell signals for stocks. You received an email earlier this weekend about these buy/sell signals. Additional comments about that are below.

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

As always, remember to never have more than 10% of your investment resources into a single stock. And try your best to never have more than 20% of your investment resources in a single mutual fund.

Economic Outlook

Economic data suggests continuing bullish outlooks. Fear oriented investments, such as gold, continued a two-week surge now.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Four week's ago it was up by 20.1%. Three weeks ago it was up 19.4%. Two weeks ago, it was up 28.4%. Last week, it is up by an unbelievable 37.7% since the "buy" signal. Vanguard Gold and Precious Metals (VGPMX) - #19 was up 36.0% four weeks ago since the Indicant signaled "buy" on April 13, 2001. It is now up a whopping 46.4%. The softening we saw in these fear related investments the past few weeks has been replaced by solid fear behavior. Let's continue to watch these as they alone can signal fear/greed relationships. If oil prices and inflation win the battle of divergence, expect these funds to continue their northward ascent.

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

Quick-term Indicant - Markets

There is not much different from last week's comments. The Quick-term Indicant is suggesting the formation of a mini-inflection point. Watch your email, as we will keep you abreast of the ever-changing configurations in the stock market. Now four out of five-QT variables remain bullish. The volatility index is the only culprit by expressing potential bearish behavior. Volume continues to signal non-bearish behavior. The force vectors turned to the north late last week and vector pressure remains in bullish territory. The configuration of the current Quick-term Bull favors bullish posturing.

For the past two weeks, the S&P400 and S&P600 are the only two major indexes in red bull mode by 1.1% and 1.7%, respectively. They are the strongest Quick-term Bulls. They are up 2.3% and 3.8% since the QT Bull Signal. The S&P500, S&P100, DJIA, and DJC are all now green bulls. The NASDAQ and NASDAQ100 are yellow bulls and need the most zest. We'll keep you posted every day next week.

Short Term Indicant Positions - Markets

The Short-term Indicant signaled "bear" for the Dow Jones Industrial Average on March 20. The Dow has continued to move in a slight downward direction and is down 1.7% since the ST Indicant signaled "bear." The NASDAQ is down 56.3% since the Short-term Indicant signaled "bear" on March 31, 2000 at 4223.68. Today is the two-year anniversary of the Short-term Bull Signal.

Mid-term Indicant Positions - Major U.S. Markets

The Dow Jones Transports is the only red bull. The NASDAQ and NASDAQ100 are the only two yellow bulls. They are down 4.4% and 6.6% since the Mid-term Indicant signaled bull. But they remain ever so slightly above the bearish yellow curve. The Dow Jones Transports are up 32.1% since the Mid-term Indicant signaled bull on October 5, 2001. The most positive for current investing opportunities is the Dow Jones Utilities. It is up only 2.3% since the Mid-term Indicant signaled bull on March 8. That particular index and its components can express bullish behavior during market down cycles. As stated in this report in the past, you can lock into some pretty good dividends. The utilities have been the strongest index the past two weeks.

All eight markets are up a combined 6.9%, which is the same as last week. But the annualized movement is down 27.4% from last week's 29.5% since the markets remained relatively flat for the week. Three weeks ago they were up an annualized amount of 48.2%. As stated last week, the sideways to bearish behavior since March 8 is consistent with monthly patterns with the weakest market performance between the tenth and twenty-fifth day of the month. If historical patterns continue, then we should expect some solid bullish behavior over the next three weeks.

But the Dow Jones Industrial Average has remained below the bullish red curve for two weeks in a row. Since late 1998, that index has leveled or moved slightly downward every time it dips below the bullish red curve.

To view these charts, please click here.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

The Russian stock market continues to soar. It is now up 178.3% since the Mid-term Indicant signaled bull on December 29, 2000. Over the next few months, the Indicant will be researching investing opportunities for the flat tax country.

The rest of the world took a breather last week, but they remain safely in bullish territory. It is encouraging to see the Japanese Nikei 225 participate with some Mid-term bullish behavior. It is up 9.7% since the Feb 15, 2002 bull signal. The Slovakia market took a significant breather last week, but it is still up 34.7% since the Mid-term Indicant signaled bull last week.

All 22 of the foreign markets the Indicant tracks are Mid-term Bulls. Seven of them are red bulls, as was the case last week.

There are now twenty-two bull markets out of the twenty-two international markets the Indicant tracks. They are up 30.5% since the Mid-term Indicant signaled bull an average of 22.7 weeks ago. That is an annualized gain of 69.9%. Three weeks ago, the annualized gain was 32.7%. The biggest contributor to this gain is the Russian and Argentine markets. As you can see, the International arena continues to move ahead of the U.S. with much more bullish optimism. Flat taxers have a good chance of dominating the capitalistic arena.

Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were no buy or sell signals last week. The Indicant continues holding 74 out of the 76 mutual funds it tracks. There will be some sell signals within the next eight to ten weeks as the divergent cycle begins.

The 74 funds with hold signals are up an average of 6.5%. Last week they were up 6.7%. Four weeks ago they were up 10.4%. The funds slipped a little last week, but the next two weeks should be bullish. The average period of time with Indicant "hold" signals is 8.4 weeks, which is down from the 15.6 weeks reported three weeks ago due to several funds being held for only four weeks. The 6.5% average gain annualizes to 40.5%, which is up from 31.1% eleven weeks ago, but down from 46.9% last week. The two funds the Indicant recommends avoiding are up 2.3% since the Indicant "sell" signals. The Indicant has been avoiding these two bearish funds for an average of 10.0 weeks.

One of the funds, the Indicant is avoiding is The Profunds Ultra short (USPIX) -#22 is up 5.9%. It runs counter to the market. Since the markets were down last week, it was up. If oil prices and inflation win the divergence battle for the second half of this year, this will be an excellent fund to buy and hold. But let's finish the month of April first, as it is historically a bullish month.

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

Always remember to never 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.

Mid-term Indicant Positions - Indicant Selected Stocks

There were no "buy" signals, but there were six "sell" signals. You received an email earlier this weekend about that. Also, the status for each of the stocks can be found on the web site. A direct link is provided later in this report.

The Mid-term Indicant now recommends holding 58 of the 74 stocks it tracks. Keep in mind this listing of stocks contains several companies that were removed from the NASDAQ100 listing late last year. They were booted off that listing last December and as promised we will track them for at least one year from the time they were booted. A few of them are no longer traded and we continue searching for good replacements.

Over the next few weeks, there will be more sell signals. In weak bull markets selectivity is the key. Those stocks made a bullish move in the first part of March, but could not hold their position. They fell back to their respective yellow curves. The sell signal for I2 Technologies was especially disappointing. That company provides tremendous "value add" to corporations with profound productivity potential for I2 clients. But Corporate America is not spending right now on such investments. I2 is a much more specialized company than Oracle, who also bearish on its outlook. Oracle will not deliver as much productivity punch as I2 Technologies, but Oracle's target market is much more diversified. I2 will suffer a worse fate in the short run than the likes of Oracle. If you bought it with a long-term view the stock should do just fine as long as the founder remains CEO.

The 58 stocks with "hold" recommendations are up an average of 20.5% since the Mid-term Indicant signaled "buy." That is down from 29.5% four weeks ago. Much of this decrease is due to the inclusion of several new stocks in the "hold" position and market bearish behavior the past three weeks. The average period of time the Indicant has signaled "hold" for these stocks is 8.1 weeks, which is down from 11.9 weeks four weeks ago. The 20.5% gain since the Mid-term buy signals is an average annual gain of 131.6% which is down from 154.7% two weeks ago. Even with the recent bearish (or should we say, non-bullish behavior) it is still up from the 117.6% annualized gain reported twelve weeks ago. The remaining stocks the Indicant recommends avoiding are down an average of 56.2%. The Indicant has avoided these stocks for an average of 38.4 weeks.

It can be frustrating buying stocks near market bottoms. Many of the stocks are just above the bearish yellow curve and the slightest retreat can signal sell. But the key is to diversify. If you maintain about ten stocks in your stock portfolio, one of them will move up to the triple digit level of performance.

http://www.indicant.net/Members/Updates/MT-Stocks/S03.htm##13

Always remember to never keep more than 10% of your investment resources into any single stock. You never know when management stupidity will ruin it. The threat is ever present. Remember Metro Media, Tyco, and Enron.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

There were no "buy" or "sell" signals. The Indicant is signaling "hold" for 29 of the 30 Dow stocks. HP did not rebound from last week's sell signal. It dropped another 0.2% last week. It will be interesting to see how the company performs with angry directors, lawsuits, and a CEO from Lucent Technologies. The reason we mention Lucent Technologies is to raise a question. What did HP's current CEO learn while she was an employee of Lucent Technologies. How many successful mergers did Lucent Technology pull off? And Lucent Technologies is not what you would conclude as a world class organization. So, does Walter Hewlett, the dissident director, know what he is doing with lawsuits and his current attitude? Time will tell. At any rate, HP is on the yellow curve, so let's continue to avoid it until such time it lifts above it.

The 29 Dow stocks with a hold signal are up an average of 8.2% since the Mid-term Indicant individual buy signals. That is down from 21.0% four weeks ago due to recent buy signals and recent bearish market behavior. The current hold positions are annualizing at a 38.0% growth rate. That is down from the 56.6% growth rate reported two weeks ago. The Indicant has been holding these stocks an average of 11.2 weeks, which is down from 15.0 weeks four weeks ago.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

There were no buy signals and no sell signals. You received a report earlier this weekend about the Indicant signals. The Dow Utilities Index is the most embryonic of all the Mid-term bulls. These stocks held up well during the last three week's general market bearish behavior. As stated the past several weeks, there are good dividend opportunities in this group of stocks.

The Indicant recommends holding fourteen of the fifteen utility stocks. These 14 stocks are up 28.4% since their respective MTI buy signals. Two weeks ago they were up22.9%. The buy signals were generated an average of 29.3 weeks ago. The 28.4% gain annualizes to a 50.3% gain. Two weeks ago that figure was 43.3%. The Indicant has signaled "avoid" for the remaining stock (Enron) for an average of 57.0 weeks. This stock is down 99.9% since the sell signal at $70.47 on February 23, 2001. Enron is no longer listed in the Dow Utilities.

Click the following hyperlink to view the entire group of these stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - NASDAQ100 Stocks

There were no "buy" signals and six sell signals. You were advised of the specific "buy" and "sell" signals in an earlier email this weekend. Like the Indicant Selected Stocks, selectivity in investing is the key to success. Nearly all of the avoided stocks in February got a buy signal in early March. March, historically roars like a lion in the first part of the month and wines like a lamb at the conclusion of the month. History repeated itself that past March. But when the Mid-term Indicant signaled "buy" it does not mean all stocks will go up like they did in the 1990's. The markets are a lot more harsh than then. When the stocks fall to the yellow curve, the Indicant will signal sell. Market cycles are going to be shallower than what we experienced in the 1990's. That means a stock in a depressed state can remain that way for quite some time. There are always other investment opportunities available and there is no need to hold a loser. What you want is to catch a blue line bull. And the charts will help you detect that. A blue line bull can garnish you triple digit gains even in flat markets.

The Mid-term Indicant now recommends "holding" 83 of the NASDAQ100 stocks. These stocks are up an average of 12.3% with an average "holding" period of 8.8 weeks. That is down from 13.5 weeks four weeks ago. The annualized gain of the stocks being held is 72.5%, which is down significantly from 145.2% four weeks ago. This deterioration is due to lazy yellow bear of the NAS100 Index. In addition to the six "sell" signals, the 11 stocks being avoided are down 18.0% since the Indicant signaled "sell" an average of 13.5 weeks ago.

Remember to never hold more than 10% of your investment resources into a single stock. You never know when "stupid management" will kick in. As you can tell stocks outperform mutual funds in bull movements, but with greater risks. They decline in price more than good mutual funds during bear markets.

Click the following link to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Index Options

The Indicant generated no new "bull" and new "bears" signals. After a three weeks of lateral to mildly bearish behavior it was surprising there were no bear signals. Some indexes are just barely off receiving a bear signal. The Index data is taken from Thursday's close.

Of the thirty-nine index options the Indicant tracks, 38 have been "bulls" for the past 18.4 weeks (average). They are up an average of 20.3% since the Mid-term Indicant signaled bull. This is an annualized gain of 57.6%, which is down from 62.7% two weeks ago. The only bear market at this time is the volatility index, which is counter-cyclical to the markets. So, when it is bearish, the market is bullish.

To view the status and charts of these markets, please click the following:

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

Long Term Indicant Positions - Dow Jones Industrial Average

The Long-term Indicant has had you in blue chips since December 1991. The blue-chip long-term "buy" was at 2895 for the DJIA. There is no long-term sell signal anywhere on the horizon. Since the Long-term Indicant's buy signal in December 1991, the Dow is up 259.4% (annualized at 25.0%).

Indicant Conclusion

The length of this convergence cycle has been surprising. So surprising that it was hard to not notice it. Each week, we expected softening in fear, energy, or the general markets. And each week we are surprised by the strength in each of those groups. It is our belief that all three cannot continue to parallel a northward direction. One or two will win over the other (s) creating a cycle of divergence. But April is historically bullish. The Quick-term Indicant is leaning in favor of bullishness. And the days between the twenty-sixth and through the tenth are historically more bullish than the eleventh through the twenty-fifth days. So, let's do not worry about divergence at this time. It is our job to prevent you from being surprised by the market and thus the reason for the commentary.

Hyperlinks

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

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

Also, once you are inside www.indicant.net, 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

03-31-02

March 24, 2002 Indicant.Net Weekly Update

Volume 3, Issue 5 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Mid-term Bull Market Has at Least Five More Weeks of Life

Each of the three major markets were down in the month of January. Since 1950 we have had 36 January's when the Dow finished up for the month and 16 when it finished down. That ratio of 36/16 = 2.25:1 is the highest of the remaining eleven months. And the old saying goes "as January goes the rest of the year goes." The Dow rebounded slightly in February, while the S&P500 and NASDAQ continued downward. The NASDAQ lost 203 points in February or just over 10%. So far in March the Dow is up a little over 300 points (3.2%) and the NASDAQ is up 120 points (6.9%).

The current Quick-term Bull Market began on March 4, 2002 when all eight of the markets moved above the bearish yellow curve. If you look at the perspectives charts (the link is provided in your daily updates), you can see last two quick-term bulls are shaping a mid-term concave configuration. This is forming the bottom of the market. For those of you who are reading this experienced the NASDAQ bubble burst and now you are seeing the formation of a bottom from the phenomenon. You are the first generation to do so since those who saw the Dow bubble burst in 1929 through 1933.

But this bubble popped from the top of a mountain, whereas the Dow bubble burst in 1929-1933 popped from a foothill. The NASDAQ closed at 373.84 in 1990. It closed at 4069.31 in 1999. That was a nice 988.5% gain during the decade of the 1990's. That is unprecedented and will not happen again in your lifetime, except maybe in Russia. But let's not get into that right now. There will be more about Russia in coming weeks.

The NASDAQ closed last Friday at 1851.39. So, since 1990, the NASDAQ is still up 395.2%. In historical terms, that is a very good move. If you bought in 1990 and are still holding, you should be doing just fine, unless you bought Global Crossing or Metro Fiber. Global Cross is dead and Metro Fiber is near death. But if you bought several of the NASDAQ stocks or related funds you should be up 395.2% since 1990. The majority of the investors who got into the NASDAQ in the late 1990's at 3800 are the same ones who got out at 2400. In other words many investors lost about 25%.

The issue here is that "crowd" is always going to be wrong. And that is who owns the two trillion dollars setting on the sidelines. In the late 1990's there was 500 billion dollars that entered the market and that demand propelled stock prices to record levels. Many experts are projecting that the 2 trillion dollars setting on the sidelines will have the same effect on the market. We monitor that every day through the Indicant Volume Indicator and you will know before most if and when the two trillion enters the market.

Here is the current thinking. April is also a historically good month. When the market is bullish April is the most bullish month. Its "up/down" ratio is 33/19 or 1.7:1. Various Indicant data is signaling a continuation of this bull market and it should last at least until the last week of April.

During last two week's drop in the markets, the Indicant Volume Indicator continued to profess non-bearish attributes. The recent softening of the markets continue to reveal non-bearish support with other "quick-term" data. In other words the bears are not coming out of hibernation.

The force vectors in the markets have matured and are trying to bottom out. This should lead to some additional bullish behavior over the next few days. We will continue to monitor that on a daily basis.

The S&P600 and S&P400 continue to not weaken on the down days. Either this will continue to act as a depressant on the other markets, especially the NASDAQ, or the S&P400 and S&P600 are preparing to move on to all time highs. In a few weeks we will know.

If the two trillion continues to set on the sidelines and volume remains passive for both markets in April, the Mid-term Bulls, as well as the Quick-term Bull market may be nearing an end. Historically, the strongest bullish behavior occurs from November through April and the least amount of money made in the stock market occurs from May through October. Of course, there are variations to historical patterns and we will be watching.

If you are looking for triple digit gains in a whole bunch of stocks like you saw in the 1990's quit looking. That is not going to happen. It will for a select few stocks and maybe a fund or two, but the bull/bear cycles for the next two to three years are definitely going to be more crisp and shallow than what most of you are use to seeing. Investment money will be made, but not in the same way as in the last decade.

Market Themes

We will continue to omit the bearish market themes as long as we are into the various bull markets.

Mid-term Indicant Stock and Mutual Fund Trade Signals

There were no buy or sell signals in mutual funds this past week. That is very strong non-bearish behavior. Fund managers tend to stay in the stronger companies and those stocks did not fall very much the past two weeks. Actually, the funds tracked by the Indicant all went up last week. Even the Rydex NAS100 (RYOCX) fund did not receive a sell signal last week. That fund indexes the NASDAQ100 stocks.

There were a few sell signals for stocks. You received an email earlier this weekend about these buy/sell signals. Additional comments about that are below.

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

As always, remember to never have more than 10% of your investment resources into a single stock. And try your best to never have more than 20% of your investment resources in a single mutual fund.

Economic Outlook

Economic data suggests continuing bullish outlooks. Fear oriented investments regained some lost steam from last week.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Three week's ago it was up by 20.1%. Two weeks ago it was up 19.4%. Now it is up 28.4%. Vanguard Gold and Precious Metals (VGPMX) - #19 was up 36.0% three weeks ago since the Indicant signaled "buy" on April 13, 2001. It is now up 39.6%. Last week we saw some softening in these "fear" related investments, but now they are stronger. Let's continue to watch these as they alone can signal fear/greed relationships.

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

Quick-term Indicant - Markets

There is not much different from last week's comments. The Quick-term Indicant is suggesting the formation of a mini-inflection point. Watch your email, as we will keep you abreast of the ever-changing configurations in the stock market. Three out of five-QT variables remain bullish. The volatility index and the force vectors are the two bearish variables. But volume, vector pressure, and the configuration of the current Quick-term Bull favors bullish posturing.

The Indicant Volume Indicator continues to signal non-bearish market behavior. The NASDAQ is down 1.4% in the past five days with volume down 2.5% during the same time period. Similarly, the NYSE is down 1.2% with volume declining by 3.7%. Applying the law of supply and demand reveals there are fewer investors willing to sell on weakness.

The force vectors turned bullish last Thursday for some of the indexes. But on Friday they all turned bearish again. The bearish direction is very mature and discontinuation of that behavior is expected real soon.

As of last Friday all but two markets were below the bullish red curve. The S&P400 and S&P600 are in red bull mode by 0.8% and 1.5%, respectively. The S&P500, S&P100, DJIA, and DJC are all now green bulls. The NASDAQ and NASDAQ100 are yellow bulls. Let's watch the market's behavior next week as this is the first time in quite a few weeks we have a minority of red bulls.

Short Term Indicant Positions - Markets

The Short-term Indicant signaled "bear" for the Dow Jones Industrial Average on last week on March 20. The Dow has continued to weaken since then and is down 1.5% since the ST Indicant signaled "bear." The NASDAQ has yet to receive a "bull" signal. The NASDAQ was maintaining a few bullish points during the past two weeks, but lost all of them toward the end of last week. The NASDAQ is down 56.2% since the Short-term Indicant signaled "bear" on March 31, 2000 at 4223.68. Watch your daily reports for continued progress on this.

Mid-term Indicant Positions - Major U.S. Markets

There are no longer any red bulls. The Dow Jones Industrial Average and the Dow Jones Transports lost red bull status this past week. They are now green bears, along with S&P500, S&P100, Dow Jones Transports, and Dow Jones Utilities. The NASDAQ and NASDAQ100 are yellow bulls, which are the weakest.

Of the eight major indexes the Mid-term Indicant tracks, the Dow Jones Utilities was the only one that increased last week. And it was a relatively healthy increase of 3.0%. All the other markets were down. But none of the markets touched the bearish yellow curve and thus we still have eight bull markets, although weak ones.

All eight markets are up a combined 6.9% (annualized at 29.5%) since their respective bull signals. Two weeks ago they were up an annualized amount of 48.2%. Some of these bull markets are relatively new with a combined average age of 12.1 weeks. The Dow Jones Transports continues to be the strongest bull market. It is up 30.2% since the Mid-term Bull signal on October 5, 2001. The Dow Jones Industrial Average, the oldest bull, is the second strongest and is up 17.9% since the MTI signaled bull on September 21, 2001. The NASDAQ, NASDAQ100, and S&P100 are down 4.1%, 5.5%, and 1.7% since their respective bull signals on March 8. The sideways to bearish behavior since March 8 is consistent with monthly patterns with the weakest market performance between the tenth and twenty-fifth day of the month. If historical patterns continue, then we should expect some solid bullish behavior over the next three weeks.

To view these charts, please click here.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

As stated every week, the Russian and Slovakian stock markets continue to soar. Although they paused somewhat last week, they are still up 172.1% and 39.0% since their respective bull signals on December 29, 2000 and April 6, 2001.

The rest of the world is soundly bullish. There markets are zooming higher. Even the Argentina market continues its soaring mode since it nearly defaulted on its debt. Amazingly, that market is up 69.9% since the MTI signaled bull on December 7, 2001. It is absolutely amazing how markets turn bullish in catastrophic environments.

Of the 22 foreign markets the Indicant tracks, seven of them are red bulls.

There are now twenty-two bull markets out of the twenty-two international markets the Indicant tracks. They are up 30.8% since the Mid-term Indicant signaled bull an average of 21.9 weeks ago. That is an annualized gain of 73.3%. Two weeks ago, the annualized gain was 32.7%. As you can see, the International arena is moving ahead of the U.S. with much more bullish optimism. One has to wonder how much the flat tax in Russia relates to that. One has to wonder how the rest of the world may be viewing the U.S. industry base is weakening with protectionist policies. Because the U.S. has been great in the past offers no guarantees of its greatness in the future. Protectionist policies erode our leadership.

It is encouraging to see the Japanese market (N225) continue to improve. It is up 12.9% since the MTI bull signal on February 15, 2002.

Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were no buy or sell signals last week. The Indicant is now holding 74 out of the 76 mutual funds it tracks.

The 74 funds with hold signals are up an average of 6.7%. Last week they were up 6.6%. Three weeks ago they were up 10.4%. It is interesting the funds gained 0.1% last week when the markets were down about 1.0%. When the funds go up while the markets are going down means your mutual fund managers are doing a fantastic job. The average period of time with Indicant "hold" signals is 7.4 weeks, which is down from the 15.6 weeks reported two weeks ago due to several funds being held for only three weeks. The 6.7% average gain annualizes to 46.9%, which is up from 31.1% eleven weeks ago. The two funds the Indicant recommends avoiding are down 0.1% since the Indicant "sell" signals. The Indicant has been avoiding these bearish funds for an average of 9.0 weeks.

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

Always remember to never 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.

Mid-term Indicant Positions - Indicant Selected Stocks

There were no "buy" signals, but there was one "sell" signal. You received an email earlier this weekend about that. Also, the status for each of the stocks can be found on the web site. A direct link is provided later in this report.

The Mid-term Indicant now recommends holding 64 of the 74 stocks it tracks. Keep in mind this listing of stocks contains several companies that were removed from the NASDAQ100 listing late last year. They were booted off that listing last December and as promised we will track them for at least one year from the time they were booted. A few of them are no longer traded and we continue searching for good replacements.

The 64 stocks with "hold" recommendations are up an average of 17.5% since the Mid-term Indicant signaled "buy." That is down from 29.5% three weeks ago. Much of this decrease is due to the inclusion of several new stocks in the "hold" position and market bearish behavior the past two weeks. The average period of time the Indicant has signaled "hold" for these stocks is 6.7 weeks, which is down from 11.9 weeks three weeks ago. This is an average annual gain of 136.1% which is down from last weeks 154.7%. Even with the recent bearish (or should we say, non-bullish behavior) it is still up from the 117.6% annualized gain reported eleven weeks ago. The remaining stocks the Indicant recommends avoiding are down an average of 62.0%. The Indicant has avoided these stocks for an average of 41.6 weeks.

The Mid-term Indicant does not hesitate signaling "bear" when a stock is depressed and hits it yellow curve. Yesterday, the preliminary report advised you of a nightmarish situation with Metromedia Fiber (MFNX - #13). In case you missed that, it is repeated here. It was a former darling of a stock and the stock price collapsed to 7 cents last week. It closed at $49.03 on March 24, 2000. And almost exactly to the day, two years later it closed down 99.9%. Apparently the company has fallen into the graces of "management stupidity." They will blame it on the recession, but a company with assets exceeding $7-billion and increasing sells should not have cash shortage problems unless those increasing sell are to non-paying customers. Stories are abounding that bankruptcy is around the corner. If you look at the chart, you will see why there is no hesitation in selling on yellow. A direct link to that chart is below:

http://www.indicant.net/Members/Updates/MT-Stocks/S03.htm##13

Trading commissions are getting less expensive. And it is better to sell on yellow and buy if it moves above yellow. Even a company such as HP may not recover. Odds are that it will. After all, it is a Dow 30 stock and the bluest of the blue chips. But keep in mind that Enron was a Dow 15 Utility and was the bluest of that blue chip group. Here is an interesting fact. There are only 74 companies remaining of the S&P500 in 1957. And only 12 of them outperformed the S&P500 since then. So when a stock is depressed and is on the yellow, why take the chance. Brokerage commissions or not, management stupidity is always lurking.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

There were no "buy" signals and one "sell" signal. We are now holding 29 of the 30 Dow stocks. You received an email earlier this weekend advising of the stock being sold. It is on the yellow curve in a depressed state. If the stock being sold rebounds next week, the Mid-term Indicant will reissue a "buy" signal.

These 29 stocks are up an average of 8.2% since the Mid-term Indicant individual buy signals. That is down from 21.0% three weeks ago due to recent buy signals and recent bearish market behavior. The current hold positions are annualizing at a 42.0% growth rate. That is down from the 56.6% growth rate reported last week. The Indicant has been holding these stocks an average of 10.2 weeks, which is down from 15.0 weeks three weeks ago.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

There were no buy signals and no sell signals. You received a report earlier this weekend about the Indicant signals. The Dow Utilities Index was the only up market last week with a rise of 3.0%. As stated the past several weeks, there are good dividend opportunities in this group of stocks.

The Indicant recommends holding fourteen of the fifteen utility stocks. These 14 stocks are up 27.7% since their respective MTI buy signals. Last week they were up22.9%. The buy signals were generated an average of 28.5 weeks ago. This annualizes to a 50.6% gain. Last week that figure was 43.3%. The Indicant has signaled "avoid" for the remaining stock (Enron) for an average of 56.0 weeks. This stock is down 99.9% since the sell signal 56.0 weeks ago at $70.47 on February 23, 2001. Enron is no longer listed in the Dow Utilities. We will track its replacement as soon as it is available.

Click the following hyperlink to view the entire group of these stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - NASDAQ100 Stocks

There were no "buy" signals and four sell signals. You were advised of the specific "buy" and "sell" signals in an earlier email this weekend.

The Mid-term Indicant now recommends "holding" 89 of the NASDAQ100 stocks. These stocks are up an average of 11.7% with an average "holding" period of 7.5 weeks. That is down from 13.5 weeks three weeks ago. The annualized gain of the stocks being held is 74.8%, which is down significantly from 145.2% three weeks ago. This deterioration is due to the recent inclusion of several "buy" signals the past four weeks and the markets recent bearish behavior. In addition to the four "sell" signals, the 7 stocks being avoided are down 25.4% since the Indicant signaled "sell" an average of 19.6 weeks ago.

Click the following link to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Index Options

The Indicant generated no new "bull" and new "bears" signals. After a couple of weeks of mildly bearish behavior it was surprising there were no bear signals. Some are close to receiving a bear signal, so far, all bulls remain bulls. The Index data is taken from Thursday's close.

Of the thirty-nine index options the Indicant tracks, 38 have been "bulls" for the past 17.2 weeks (average). They are up an average of 19.6% since the bull signals. This is an annualized gain of 59.3%, which is down from last week's 62.7%. The indexes were up 19.6% also last week, but remained unchanged this from the prior week. That is the reason for the drop in annualized performance. The only bear market at this time is the volatility index, which is counter-cyclical to the markets. So, when it is bearish, the market is bullish.

To view the status and charts of these markets, please click the following:

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

Long Term Indicant Positions - Dow Jones Industrial Average

Indicant Conclusion

The Quick-term Bull, Mid-term Bull, and Long-term Bull all support a continuation of generally bullish behavior. The Short-term Indicant has the Dow and the NASDAQ in bearish positions. There are no international bear markets. There are no index option bear markets. We are holding 29 of the 30 Dow Stocks and buying or holding 89 of the NASDAQ100 stocks. We are only avoiding two mutual funds out of the 74 funds we track and one of those moves inversely with the market. The NASDAQ100 stocks are the weakest group with pronounced hesitancy of moving to the north with the other stocks we track.

The bearish variables are the omission of a bull signal from the Short-term Indicant for the NASDAQ composites, the force vectors, and the volatility index. All else is bullish. We need all variables to be moving simultaneously in the same direction for a robust bull market.

April has been historically the best month for bullish market behavior. Although, we are not big believers in that sort of stuff, that observation at the very least is supported by Indicant data for April 2002 to express bullish market behavior.

These bull markets are for the most part yellow bulls and baby bulls. As you know not all baby bulls grow up. Some are taken to market before puberty. Conditions can change. That is why we developed a Quick-term Indicant and its corresponding support variables. We will advise you the minute the attributes change to bear status.

Hyperlinks

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

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

Also, once you are inside www.indicant.net, 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

03-24-02

March 17, 2002 Indicant.Net Weekly Update

Volume 3, Issue 4 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

The Crystal Clear Bull Market Remains in Full View

Last week we said do not be concerned about market drops and to use those drops for additional buying opportunities. The markets did indeed drop last week. But there were no bull/bear signal changes. The Quick-term Indicant continues to signal bull. The Mid-term Indicant maintained bull status for all the markets. There was not one sell signal for mutual funds. There were very few sell signals for stocks. All of the blue chip stocks maintained their hold status.

During last week's drop, the Indicant Volume Indicator continued to profess non-bearish attributes. The NYSE Index and Volume were up 0.5% and 1.0% on a rolling five day average. Although not robust, the preferred synergistic direction of both is in place. The NASDAQ was down 3.2% last week, but more importantly, the volume was down 4.1%. Again, the same direction is good, although most of us would prefer a slant to the north. There is no major bearish sell-off when volume direction parallels the down days. The big board is slightly bullish and the NASDAQ is non-bearish.

Also, the big burst of volume that gave birth to the Oct. 3, 2001 Quick-term Bull market was refreshing for those of you who prefer bullish behavior. That configuration along with the apparent forming of a mid-term concave bottom suggests the markets are near absolute bottoms. Historically, volatility is more pronounced near market bottoms, as the bears are not yet ready to hibernate and the bulls want to snort and charge. So, there is always a scuffle during the shift in bear/bull power, just as is the case at market tops where volatility is even more pronounced.

Unfortunately, not all attributes are moving in a synchronized direction. The force vectors are still pointing to the south. But they have bullish pressure points. The force vectors turned south early last week. We are still trying to simplify these force vectors from an 8-dimensional algorithm to 2 dimensions so we can produce charts for our members. This data is especially beneficial for extreme short-term market prognosis on a two to three day planning horizon. Most of you do not care about that, but when the market moves in a certain direction, it is good to understand the nature of that movement and whether or not that direction is sustainable.

Also, the Volatility Index does not look friendly to supporting quick-term to mid-term bullish behavior. But this variable is a minor weight. It can languish for quite some time before committing strongly to an unfavorable direction. Last week, it moved up on a quick-term basis but still languishes on a mid-term basis.

The current "Quick-term Bull" is going through a mini-inflection point. It began just as soon as the NASDAQ and NASDAQ100 touched the bullish red curve. Those two markets apparently felt uncomfortable as they gained that level of altitude on the charts. They gasped for air and rather than uplifting, they fell back into the neutral territory between the bullish red curve and the bearish yellow curve. Interestingly, the NASDAQ100 and the S&P600 are the strongest markets with their relative position to the bearish yellow curve. They are both above that curve by 9.2%. The weakest is the S&P100 at 7.4% above the bearish yellow curve. But last week's bearish behavior left two markets below their bullish red curves: NASDAQ and NASDAQ100.

The biggest problem confronting the current Quick-term Bull is the S&P400 and S&P600 relative position to the bullish red curve. Those two markets are above the bullish red curve by 2.4% and 2.2% respectively. They need to continue moving to the south, which is expected. Once they return to the bullish red curve, there is a greater chance the markets will rekindle robust bullish energies. It will be interesting to see how those markets will behave when they begin to interact with the bullish red curve. It is also important to keep your eye on the Indicant Volume Indicator. You receive email reports about that nearly every day.

The trick is for those stronger markets to continue to retreat without bringing the weaker markets down with them (NASDAQ and NASDAQ100). That did occur in the last Quick-term Bull. But we all know the market seldom displays such behavioral patterns on a consistent basis.

Market Themes

Economic fundamentals are overriding the bearish themes, except for last week's earnings disappointments by Oracle and other technology firms. As soon as the current Quick-term Bull market begins to fade we will start to analyze the bearish themes again. But until then, let's be positive about the bull market that is currently underway.

Mid-term Indicant Stock and Mutual Fund Trade Signals

There were no buy or sell signals in mutual funds this past week. That is non-bearish behavior. Fund managers tend to stay in the stronger companies and those stocks did not fall last week. Even the Rydex NAS100 (RYOCX) fund did not receive a sell signal last week. That fund indexes the NASDAQ100 stocks.

There were some buy and sell signals for stocks. You received an email earlier this weekend about these buy/sell signals.

Last week we bragged about double-digit gains made from prior weeks buy signals. But, as expected there was some profit taking. What we need to guard against is that it was just profit taking and not the resurgence of a general bear market.

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

As always, remember to never have more than 10% of your investment resources into a single stock. And try your best to never have more than 20% of your investment resources in a single mutual fund.

Political Influence

Electronic commerce from TV to the Internet continues to erode the influence of politicians, worldwide. Remember that this planet contains two primary groups of people: those that "produce" and those that "take." Those that take are fewer in numbers but still hold most of the power. From a secular perspective, that power continues to erode. The more the power of the "takers" erodes, the more bullish the markets will be. Just imagine a world whereby commerce could occur without the limitations imposed by political establishments. Everyone on the planet would live like a millionaire. In the 1970's business was a bad word. Social Credentialism was the order of the day. That nonsense is now dead. Business is what makes the world work.

http://www.indicant.net/Non-Members/Back%20Issues/Archives/March/Mar02-Day.htm

Economic Outlook

Economic data suggests continuing bullish outlooks. Greed elements continue to overcome the fear elements. Fear oriented investments continue to lose steam. But not enough to signal "sell."

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Three weeks ago it was up 25.0% since the "buy" signal. Two week's ago it was up by 20.1%. Last week it was up 19.4%. Vanguard Gold and Precious Metals (VGPMX) - #19 was up 37.1% three weeks ago since the Indicant signaled "buy" on April 13, 2001. Two weeks ago it was up 36.0%. It is now up 35.5%. These two funds are fairly stable, but you can see some softening in such fear related investments. As you can see, there is some money rotation out of fear and into good old fashion greed, which is what a bull market needs.

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

Quick-term Indicant - Markets

The Quick-term Indicant is suggesting the formation of a mini-inflection point. Watch your email, as we will keep you abreast of the ever-changing configurations in the stock market. Right now three out of five variables remain bullish. The volatility index and the force vectors are the two bearish variables. But volume, vector pressure, and the configuration of the current Quick-term Bull favors bullish posturing.

Short Term Indicant Positions - Markets

The Short-term Indicant signaled "bull" for the Dow Jones Industrial Average on Monday, March 6. Even with last week's bearish behavior, it maintained its bullish position. The NASDAQ has yet to receive a "bull" signal. The NASDAQ is maintaining its bullish points, although not enough for a clear bullish signal. The NASDAQ is down 55.8% since the Short-term Indicant signaled "bear" on March 31, 2000 at 4223.68. Watch your Quick-term daily reports for continued progress on this.

Mid-term Indicant Positions - Major U.S. Markets

The Dow Jones Industrial Average joined the Dow Jones Transports as the only two "red bull" markets. The DJIA gained 34.74 points last week (or 0.3%) and that meager amount was enough to propel it above the bullish red curve. The DJIA is now up 19.9% since the September 21, 2001 bull signal. The Dow Jones Transports is up 33.6% since the MTI signaled bull on October 5, 2001. Last week, the DJT was up 36.2%.

Last week the remaining six markets were green bulls. But last week's bearish behavior by the NASDAQ and NASDAQ100 positioned them to yellow bull status. And with that, they are closer to getting a bear signal. The NASDAQ and NASDAQ100 lost 61.37 and 59.7 points last week. That loss did not reduce those two markets to bear status, though. They are both hovering just above the bearish yellow curve.

All eight markets are up a combined 8.1% (annualized at 37.8%) since their respective bull signals. Last week they were up an annualized amount of 48.2%, but the inclusion of the new bulls last week and their corresponding newness has reduced the average growth rate. Last week's bearish behavior by the NASDAQ and NASDAQ100 also did not help the combined performance of the Mid-term Bull markets. There are no bear markets at this time.

To view these charts, please click here.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

As stated every week, the Russian and Slovakian stock markets continue to soar. They are up 172.8% and 39.8% since their respective bull signals on December 29, 2000 and April 6, 2001.

The flat tax is going to continue to generate unbelievable economic wealth and prosperity for the Russian people. By adding 200-300 hours of productive time to a society of 100,000,000 working Russians by the removal of same hours on tax preparation and wasted consciousness, you have just added two to three trillion productive hours to the economy. The Russian stock market will surpass the Dow in within three years based on recent growth rates. And with the two to three trillion productive hours added, it could be sooner.

There were no new bull or bear signals this week.

There are now twenty-two bull markets out of the twenty-two international markets the Indicant tracks. They are up 29.9% since the Mid-term Indicant signaled bull an average of 20.9 weeks ago. That is an annualized gain of 74.6%. Last week, the annualized gain was 32.7%. The international markets paused last week, just as the U.S. markets did. There are no international bear markets of the twenty-two markets the Indicant tracks.

Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were no buy or sell signals last week. The Indicant is now holding 74 out of the 76 mutual funds it tracks.

The 74 funds with hold signals are up an average of 6.6%. Last week it was 8.8% and is down from the 10.4% reported two weeks ago due to the several new funds that were bought in the past few weeks. The average period of time with Indicant "hold" signals is 6.4 weeks, which is down from the 15.6 weeks reported two weeks ago due to several funds being held for only two weeks. The 6.6% average gain annualizes to 53.6%, which is up from 31.1% ten weeks ago. The two funds the Indicant recommends avoiding are up 1.2% since the Indicant "sell" signals. The Indicant has been avoiding these bearish funds for 8.0 weeks.

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

Always remember to never 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.

Mid-term Indicant Positions - Indicant Selected Stocks

There were no "buy" signals and 2 "sell" signals. You received an email earlier this weekend about that. Also, the status for each of the stocks can be found on the web site.

The Mid-term Indicant now recommends holding 65 of the 74 stocks it tracks. Keep in mind this listing of stocks contains several companies that were removed from the NASDAQ100 listing late last year. They were booted off that listing last December and as promised we will track them for at least one year from the time they were booted. A few of them are no longer traded and we continue searching for good replacements.

The 65 stocks with "hold" recommendations are up an average of 16.7% since the Mid-term Indicant signaled "buy." That is down from last week's 20.6% and 29.5% two weeks ago. Again, this decrease is due to the inclusion of several new stocks in the "hold" position and last week's market bearish behavior. The average period of time the Indicant has signaled "hold" for these stocks is 5.6 weeks, which is down from 11.9 weeks two weeks ago. This is an average annual gain of 154.7%, which is up from 128.9% two weeks ago and 117.6% ten weeks ago. The remaining stocks the Indicant recommends avoiding are down an average of 75.5%. The Indicant has avoided these stocks for an average of 52.1 weeks.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

There were no "buy" signals and no "sell" signals. We are now holding all 30 of the Dow stocks.

These 30 stocks are up an average of 10.1% since the Mid-term Indicant individual buy signals. That is down from 21.0% two weeks ago due to recent buy signals and last weeks-bearish market behavior. The current hold positions are annualizing at a 56.6% growth rate, which are up from 54.1% two weeks ago. The Indicant has been holding these stocks an average of 8.9 weeks, which is down from 15.0 weeks two weeks ago. The Mid-term Indicant is not avoiding any of the Dow 30 stocks.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

There were no buy signals and no sell signals. You received a report earlier this weekend about these Indicant signals. The Dow Utilities Index appears to have bottomed and is on the rise. As stated the past several weeks, there are good dividend opportunities in this group of stocks.

The Indicant recommends holding fourteen of the fifteen utility stocks. These 14 stocks are up 22.9% since their individual buy signals. Last week they were up 28.0%. The buy signals were generated an average of 27.5 weeks ago. This annualizes to a 43.3% gain for these stocks. The Indicant has signaled "avoid" for the remaining stock (Enron) for an average of 55.0 weeks. This stock is down 99.9% since the sell signal 55.0 weeks ago at $70.47 on February 23, 2001. Enron is no longer listed in the Dow Utilities. We will track its replacement as soon as it is available.

Click the following hyperlink to view the entire group of these stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - NASDAQ100 Stocks

There was 1 "buy" signal and 3 sell signals.

You were advised of the specific "buy" and "sell" signals in an earlier email this weekend.

In addition to the buy signal, the Mid-term Indicant now recommends "holding" 92 of the NASDAQ100 stocks. These stocks are up an average of 12.0% with an average "holding" period of 6.4 weeks. That is down from 13.5 weeks two weeks ago. The annualized gain of the stocks being held is 98.4%, which is down significantly from 145.2% two weeks ago. This deterioration is due to the recent inclusion of several "buy" signals the past three weeks and the markets bearish behavior last week. In addition to the three "sell" signals, the 4 stocks being avoided are down 41.4% since the Indicant signaled "sell" an average of 32.5 weeks ago.

Click the following link to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Index Options

The Indicant generated no new "bull" and new "bears" signals.

Of the thirty-nine index options the Indicant tracks, 38 have been "bulls" for the past 16.2 weeks (average). They are up an average of 19.6% since the bull signals. This is an annualized gain of 62.7%. The only bear market at this time is the volatility index, which runs counter to the markets. So, when it is bearish, the market is bullish.

To view the status and charts of these markets, please click the following:

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

Long Term Indicant Positions - Dow Jones Industrial Average

Indicant Conclusion

We remain in the early stages of a bull market. It has support from the Quick-term Bull, Mid-term Bull, and Long-term Bull. Also, the Dow has support from the Short-term Bull. There are no international bear markets. There are no index option bear markets. We are holding all 30 of the Dow Stocks and buying or holding 93 of the NASDAQ100 stocks. We are only avoiding two mutual funds and one of those moves inversely with the market.

Keep in mind that many baby bulls did not mature. Conditions can change. That is why we developed a Quick-term Indicant and its corresponding support variables. We will advise you the minute the attributes change to bear status.

Hyperlinks

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

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

Also, once you are inside www.indicant.net, 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

03-17-02

March 10, 2002 Indicant.Net Weekly Update

Volume 3, Issue 2 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

A Crystal Clear Bull Market - Buy-Buy-Buy

After generating a record number of "buy" signals last weekend, we asked the question. "Will the next bull market start with a whimper?" It did. But the whimper is being replaced with some robustness. As this bull leg develops we will keep you posted with our daily email alerts.

The Mid-term Indicant has all international markets as bulls. All the option indexes are bulls. All eight of the major U.S. Markets are bulls. All eight Quick-term Markets are bulls. We are holding/buying 97 of the NASDAQ100 stocks. We are holding/buying all 30 of the Dow Stocks. We are holding/buying all of the Dow Utility stocks. We are holding/buying all but two of the Indicant Selected Mutual Funds. The Indicant Volume Indicator is moving bullishly. The vectors of force and pressure are bullish. The concavity of market bottoms is solidifying. All of this happened in just the past three weeks. It has all come together.

Do not be concerned about market drops next week. There will be some profit taking, but that is all it will be. Use those down days for additional buying opportunities. And we will keep you posted in the event the current configuration changes.

The buying surge continued this weekend. Although the Indicant does not forecast, expect the NASDAQ to rise at least another 20% in the next few weeks. Never forget the 80-20 rule. That is 80% of a bull market's move occurs on only 20% of the trading days. So, buy-buy-buy. On any market weakness, buy more. We'll keep you posted. The market's configuring of its attributes are leading more and more toward extreme bullish behavior.

This email will be shorter than most. (Well, one page shorter). Why? Not too much else to say other than the above. You will read how we are "buy/hold" in 97 of the 100 NASDAQ100 stocks. The Indicant Selected Stocks are poised to rise even more than the NASDAQ100 stocks. Last week one employee of the Indicant enjoyed a 40% increase on just one stock, LVLT. Her combined gain last week was 26%. Several of the Indicant Selected Stocks are very cheap. Many of them are former NAS100 stocks. Management stupidity is being replaced by the more profitable "management humbleness" and hard work. The former tech millionaires had a short taste of wealth and fame. Then lost all that. Want it back. So, they are hard at work right now. That is what we need. What works is working.

Greed vs. Fear, Smart vs. Stupid

On any profit taking and corresponding down days, buy more stock and mutual funds. This bull leg is as real as they come. Forget about voodoo accounting, political thievery a la protectionism, and the other bearish themes. There is no doubt that the bearish themes will ultimately impact the market, but not right now. And we will keep you informed as to when that stupidity will kick in and drive the market south. Too many other economic developments are overriding those bearish themes. The force of greed is overcoming the force of fear. Smart is over-coming stupid (except on the political front).

Market Themes

Economic fundamentals are overriding the bearish themes. As soon as the current Quick-term Bull market begins to fade we will start to analyze the bearish themes again. But until then, let's be positive about the bull market that is underway.

Mid-term Indicant Stock and Mutual Fund Trade Signals

There were a tremendous number of buy signals generated last weekend and this weekend. So buy buy buy.

As mentioned earlier, the Indicant Selected Stocks offer you an opportunity to diversify your portfolio with some significantly cheap stocks. Some examples of performance after last week's "buy" signals were: #4-CNET (up 27.5%), #6-LVLT (up 40.5%), #7-CTEC (up 33.9%), #8-RNWK (up 24.9%), #9-CPQ (up 13.0%), #11-ARBA (up 14.0%), #14-MCAF (up 19.6%), #17-BVSN (up 13.4%), #18-PALM (up 10.0%), #22-RETK (up 14.0%), #25NOK (up 12.3%), etc.… The number preceding the symbol is the position of that stock in the tables. You can click on the table to study the charts. Many of these stocks are under $10. And at one time some were well over $50. We are in a "buy/hold" position on 67 of the 74 Indicant Selected Stocks.

But if you want a little more blue chip orientation to your portfolio, we are "buy/hold" in 97 of the NASDAQ100 stocks. Some "buy" signals generated this weekend, as was the case last weekend, were for some stocks we have been avoiding for nearly two years. Also, some of these stocks are under $10. For example, #84-VTSS was sold on Feb 9, 2001 at $62.13. It closed last Friday at $9.76 and the Mid-term Indicant generated a "buy" signal. #11-JDSU was sold on September 15, 2000 at $103.62. It closed last Friday at $6.37. The Mid-term Indicant generated "buy." #15-JNPR was sold on December 8, 2000 at $159.25 and closed this past week at $13.31. It also has a buy signal. There are several others.

Many of the NASDAQ100 stocks were up after last week's buying spree as well. #8-CHTR (up 16.0%), #12-PSFT (up 12.2%), #23 LLTC (up 14.4%), #31-MCHP (up 15.7%), #42-DELL (up 9.3%), MERQ (up 10.7%), #49-ATML (up 16.2%), etc……………

Some stocks went down. If the Indicant signaled "hold" then you should buy the stock. If the Indicant signaled "sell" or "avoid" you should not own those stocks.

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

As always, remember to never have more than 10% of your investment resources into a single stock. And try your best to never have more than 20% of your investment resources in a single mutual fund.

Political Influence

A special update was written to you in last Thursday's Quick-term Update about how tariffs are a huge threat to the market and international commerce. If politicians were 90% less influential on world commerce, we'd be looking at a Dow of at least 100,000. For those of you who may have missed that report, you can click the following link to see it.

http://www.indicant.net/Non-Members/Back%20Issues/Archives/March/Mar02-Day.htm

Scroll to the March 7, 2002 report.

There is seldom anything positive to say in this section, so we'll proceed to the next section.

Economic Outlook

Economic data suggests continuing bullish outlooks. The market is reacting bullish to recent reports and that is good. Greed is overcoming Fear right now. The Fear Investments, such as the gold mutual funds are beginning to soften.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Two weeks ago it was up 25.0% since the "buy" signal. Last weekend's close left it up on 20.1%. Vanguard Gold and Precious Metals (VGPMX) - #19 was up 37.1% two weeks ago since the Indicant signaled "buy" on April 13, 2001. It is now up 36.0%. As you can see, there is some money rotation out of fear and into good old fashion greed, which is what a bull market needs.

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

Quick-term Indicant - Markets

The markets continue to configure themselves away from the 1929-1933 configuration. Volume is beginning to support this Quick-term Bull Market. The maturity of the bullish forces has brought on bullish pressure. That is extremely bullish. See more next week in the daily updates.

Short Term Indicant Positions - Markets

The Short-term Indicant signaled "bull" for the Dow Jones Industrial Average last Monday. But the NASDAQ has yet to receive a "bull" signal. But it did get some Indicant points and all it needs is one more. The NASDAQ is down 54.3% since the Short-term Indicant signaled "bear" on March 31, 2000 at 4223.68. Watch your Quick-term daily reports for continued progress on this.

Mid-term Indicant Positions - Major U.S. Markets

After much deliberation and investigation, we decided to employ the modified Mid-term Indicant for major markets. With the unfavorable political movements in Washington DC on protectionism, the future market movements will be even more shallow than previously believed. Since the NASDAQ is at very low levels, each bull/bear cycle can have 30%+ swings, which is shallow. And with those swings money can be made. The modified Mid-term Indicant will generate more signals. But it is important we provide this service in the event one of those shallow bear legs turns into one of those sixty-percent drops or more. The threat of trade wars could have this impact.

We decided to retrofit the market's attributes to the modified Mid-term Indicant. Many of you take a look at those market charts and we felt there would be less confusion if the arrows were consistent with the model. You will still be able to get a "feel" for general direction with the new charts. The modified model's primary purpose is to get you into the markets very close to the bottom of each cycle. This approach coupled with the "Quick-term Indicant" should work very well for your future profitability.

Over the next few months you will see the development of yellow bulls, green bulls, and red bulls. The same is true for bear markets, except there is no such thing as a red bear. When the market is in a yellow bull (just as the market moves above the yellow curve), you will want to maintain market vigilance. This is an embryonic bull. When the market crosses above the green curve, you can relax a little more. If the market crosses below the green curve, then it will become a green bear. If the market is above the red curve, enjoy life. The red bull is the finest of all bulls. During "red bulls" these weekly reports will be short and as there is nothing to worry about. There will be more about that in the coming months.

The retrofitted Mid-term Indicant for major markets is as follows:

The Dow Jones Transports is the only red bull market. It is up 36.2% since the MTI signaled bull on October 5, 2001. All the other markets are green bulls.

The NASDAQ, NASDAQ100, S&P100, and Dow Jones Utilities received new bull signals this weekend. Interestingly, these markets' green curves are just above their respective yellow curves. By taking a look at the charts, you can see these markets have collapsed a significant amount from their previous highs. These markets are at near bottoms, based on the current configurations.

The other four markets are up a combined 18.8% (annualized at 48.2%) since the respective Mid-term Indicant Bull signals an average of 20.3 weeks ago. There are no bear markets at this time.

The average investor will not get into the markets at this time. If this bull takes the NASDAQ to 3200, that is about the time the average investor will get in. He or she will most likely be the buyers to our sells, unless of course, we don't get any sell signals.

To view these charts, please click here.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

As stated every week, the Russian and Slovakian stock markets continue to soar. They are up 95.9% and 24.6% since their respective bull signals on December 29, 2000 and April 6, 2001. Note these charts were also retrofitted to the aforementioned modification to the Mid-term Indicant.

These markets will continue to zoom to the top. The Russians incorporated a flat tax. There markets have the potential to leave ours in their dust.

The Mid-term Indicant signaled two new bulls and no new bears this past week.

In addition to the two new bull markets the Indicant has identified 20 bull markets. They are up 32.7% since the Mid-term Indicant signaled bull an average of 21.8 weeks ago. There are no international bear markets of the twenty-two markets the Indicant tracks.

Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were 19 "buy" signals and one "sell" signal. In addition to the 19 "buy" signals we are holding fifty-five funds. You received an email earlier this weekend advising you of the recent Indicant signals.

The 55 funds we are holding are up an average of 8.8%. This is depressed from the 10.4% reported last week due to the several funds new funds bought last week. The average period of time we have been holding these funds is 7.3 weeks, which is down from the 15.6 weeks reported last week due to several funds being held for only one week. The 8.8% average gain annualizes to 63.1%, which is up from 31.1% nine weeks ago. In addition to the "sold" fund the Indicant recommends avoiding only one other fund. It is down only 0.7% since the Indicant "sell" signal. The Indicant has been avoiding this "bearish" fund for 14.0 weeks.

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

Always remember to never 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.

Mid-term Indicant Positions - Indicant Selected Stocks

There were 34 "buy" signals and 3 "sell" signals last week. This week there are an additional 13 buy signals and only one "sell" signal. In a few months one of two things are going to happen. Either the energy related stocks will propel to higher ground or the rest of the market will. It is absolutely impossible for energy stocks and the general stock market to perform well. But right now, they both are and we'll enjoy their continued growth. Keep a close eye on this. The general market is behaving nicely in the face of favorable economic news and the energy related stocks are performing on the basis of some anticipated petro supply shortage.

In addition to the 13 buy signals, the Mid-term Indicant now recommends holding 54 of the 74 stocks it tracks. Keep in mind this listing of stocks contains several companies that were removed from the NASDAQ100 listing late last year. They were booted off that listing last December and as promised we will track them for at least one year from the time they were booted. A few of them are no longer traded and we continue searching for good replacements.

The 54 stocks with a "hold" recommendation are up an average of 20.6%, which is down from last week's 29.5% since the Mid-term Indicant signaled "buy." Again, this decrease is due to the inclusion of several new stocks in the "hold" position. The average period of time the Indicant has signaled "hold" for these stocks is 5.6 weeks, which is down from last weeks reported 11.9 weeks. This is an average annual gain of 191.7% which is up from last week's 128.9% and up from 117.6% nine weeks ago. The remaining stocks the Indicant recommends avoiding are down an average of 46.9%. The Indicant has avoided these stocks for an average of 59.7 weeks.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

There were 2 "buy" signals and no "sell" signals this past week. We are now either buying or holding all 30 of the Dow stocks.

In addition to the 2 "buy" signals the Mid-term Indicant is signaling "hold" for28 of the 30 Dow Industrial stocks. These 28 stocks are up an average of 10.1%, which is down from 21.0% last week. The current hold positions are annualizing at a 61.9% growth rate, which is up from last week's 54.1%. The Indicant has been holding these stocks an average of 8.5 weeks, which is down from last week's 15.0 weeks. The Mid-term Indicant is not avoiding any of the Dow 30 stocks.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

There were two "buy" signals and no sell signals this past week. You received a report earlier this weekend about these indicant signals. The Dow Utilities Index appears to have bottomed and is the rise. As stated periodically the past several weeks, there are good dividend opportunities in this group of stocks.

In addition to the buy signals, the Indicant recommends holding twelve of the utility stocks. These 12 stocks are up 28.0%, which is up from last week's 23.9%. The buy signals were generated an average of 30.9 weeks ago. This annualizes to a 47.1% gain for these stocks. The Indicant has signaled "avoid" for the remaining stock (Enron) for an average of 54.0 weeks. This stock is down 99.9% since the sell signal 54.0 weeks ago at $70.47 on February 23, 2001.

Click the following hyperlink to view the entire group of these stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - NASDAQ100 Stocks

There were 38 "buy" signals and 2 sell signals. Last week there were 26 buy signals.

You were advised of the specific "buy" and "sell" signals in an earlier email this weekend.

In addition to the 38 buy signals, the Mid-term Indicant now recommends "holding" 57 of the 100 NASDAQ stocks. These stocks are up an average of 24.6% with an average "holding" period of 8.8 weeks which is down from last weeks 13.5 weeks. The annualized gain of these stocks being held is 145.2%. In addition to the two "sell" signals, the 3 stocks being avoided are down 58.0% since the Indicant signaled "sell" an average of 42.3 weeks ago.

Click the following link to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Index Options

The Indicant generated 3 new "bulls" and no new "bears."

Of the thirty-nine index options the Indicant tracks, 36 have been "bulls" for the past 15.6 weeks (average). They are up an average of 20.7% since the bull signals. This is an annualized gain of 69.1%. There are no bear markets at this time.

To view the status and charts of these markets, please click the following:

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

Long Term Indicant Positions - Dow Jones Industrial Average

Indicant Conclusion

There is nothing hard about evaluating this coming week. This is a definite bull market. It has support from the Quick-term Bull, Mid-term Bull, and Long-term Bull. Also, the Dow has support from the Short-term Bull. There are no international bear markets. There are no index option bear markets. We are holding all 30 of the Dow Stocks and buying or holding 97 of the NASDAQ100 stocks. We are only avoiding two mutual funds and one of those moves inversely with the market.

The inflection point was a long and difficult one. There was quite a bit of confusion for a couple of weeks, but this bull is crystal clear.

Hyperlinks

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

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

Also, once you are inside www.indicant.net, 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

03-10-02

March 3, 2002 Indicant.Net Weekly Update

Dear Indicant Members:

Will The Next Bull Leg Start With A Whimper?

The 1929-1933 Dow Mid-term Bear Market had six "quick-term" bull/bear cycles. By the completion of the sixth and last cycle, the Dow had collapsed by 89% from its 1929 peak. The Mid-term Indicant signaled "bear" for the NASDAQ in March of 2000 at 4200. That market has crashed by 60% since then. During this Mid-term Bear market for the NASDAQ, there have been four "quick-term" bull/bear cycles.

The last Quick-term Bull leg started on October 3, 2001 and lasted until February 6 when these and other markets fell below the bearish yellow curve. The Quick-term Bull market that began on October 3, 2001 was stimulated with a significant increase in volume. The prior Quick-term Bull market in the spring of 2001 was not stimulated with significant volume. And it lived a short-life. The October 3 Quick-term bull lasted much longer. During its healthy march to the north end of the charts, the NASDAQ and NASDAQ100 rose nearly 30%. They were the strongest markets of the eight major markets. And they have been the weakest markets since February 6.

When the "Quick-term Bull" market started on October 3, 2001 it was believed at that time the markets were going to turn into a full-fledge bull. The Mid-term Indicant signaled "bull" for most of the major markets. The Short-term Indicant signaled bull for a couple of days in early January 2002.

More importantly, the Quick-term Bull of October 3, 2001 was initiated with high volume. None of the prior Quick-term Bull markets was accompanied with any significant volume. So, we were off to the races with a very bullish fervor. But voodoo bookkeeping became the headlines causing that bull leg to fade into a bear leg.

Many investors believed there were checks and balances in the system. The most influential being that of the Securities and Exchange Commission. Well, we found out those checks and balances don't really exist. In an article today in a major newspaper, the SEC admitted that they are only able to follow-up on a fraction of leads to improprieties. And by the time they open a case, the damage is already done. Investors will never see the money they lost when that happens. Lawsuits ensue, but all that does is make one feel better to get back at the evil. They will never collect the money they lost due to voodoo bookkeeping.

Rather than believing hype, potential fictional annual reports, and corporate guidance, just focus on the stock price. When it starts to move up, buy it. When it starts to move down, sell it. Always be cognizant that management stupidity can show up at any time. In today's electronic media, a management blunder hits the stock price very quickly.

Now back to the point. There is an ever-so-slight bullish move on the Indicant Volume Indicator on the NYSE. The NASDAQ does not have this, but there was no increase in volume last week on the NASDAQ down days. That is the first time since early January that NASDAQ volume ran counter to the Index. The volume surge in early October of last year is still providing energy to the markets. When they all fell below the bearish yellow curve in early February of this year, they recoiled, as expected. But the recoiling is taking on bullish attributes. The Dow is above the bullish red curve. That is abnormal for a recoil in a well defined bear market. That means the current Quick-term Bear market is without growl. Watch for your daily email reports. Just because the bear is not growling right now, does not mean it will not growl tomorrow. So, if we get a Quick-term Bull market signal sometimes next week, these recent Mid-term "buy" signals will generate your profits. If the bear growls, make certain you have stop losses in place. In other words, it is looking less and less like the NASDAQ is going to fall below 1000.

A Few Words about the Modified Mid-term Indicant for Stocks and Funds

If you take a look at the stock and fund charts you will see the bearish yellow line is finding higher lows. We modified the Mid-term Indicant for stocks and funds so we could participate in gains these quick-term bull moves provide us. The old Mid-term Indicant generated fewer trades. As commission expenses continue to fall and as future market cycles will be more shallow than in the past, we felt it would be better to modify the model for "quicker" buy signals. To help you avoid the psychological chaos of falling stock/fund prices, we have included the values of the other lines in the charts to help you establish "relative" stop losses. Over the next few weeks, we will be documenting strategies for you to adopt with the modified Mid-term Indicant. As always we will provide "buy and sell" signals. But the management of stop losses is very important with the advent of voodoo bookkeeping. The old Mid-term Indicant signaled "sell" on January 5, 2002 after Imclone closed at $42.96. The next week Imclone closed at $32.80. And the week after that it closed at $18.99. The modified Mid-term Indicant may not signal "sell" like the old one did. That is why it is important to look at the tables and charts and establish a stop loss for each of the stocks you own.

But the modified Mid-term Indicant is more descriptive of what the stocks and funds are doing. There are several stocks that are bouncing just above the bearish yellow curve. Several of these stocks are less than $10 and many of them were at one time near $100.

As you review the charts, notice that some of them are logarithmic. That is necessary with the modified Mid-term Indicant. For example, GMCI closed at $1.43 last week. It has been as high as $138.44 in the past two years. The Mid-term Indicant generated its last sell signal at $37 on August 4, 2000. Since that sell signal the stock collapsed by 96.1%. But in the last Quick-term Bull, the old Mid-term Indicant never signaled "buy" for this and other depressed stocks. This stock rose from $0.51 on October 5, 2001 to over $2.00 before the recent Quick-term Bull died. The old model is much more secular in the observations of stock prices. And this has been an excellent model to use during the 1980's and 1990's. The nature of market moves will be different in the future and the modified Mid-term Indicant will help you spot investment advantages for these low priced, as well as higher priced stocks much more quickly. The disadvantage is that more buy/sell signals will be generated. But in the case of GMCI, as well as several other stocks, we'll take a 100%+ gains minus commission any day over just setting on sidelines.

We recognize this is new for several of you, who are use to looking at the old charts. Over the next few weeks, we will be sending you links for various strategies around the various curves and lines on the charts. Also, the modified Mid-term Indicant outperforms "buy and hold" by over 50%. We'll be sending you some examples this with appropriate qualifications to this claim.

Market Themes

Voodoo bookkeeping seems to be on the slide right now. That is good for those of you who prefer bull markets.

Seven weeks ago we advised you that voodoo accounting could bring the markets down. The Quick-term Indicant revealed this fact when all the major markets fell below the bullish red curve about seven weeks ago. A few weeks after that all the major markets fell below the bearish yellow curve, signaling the beginning of a new quick-term bear market. Up until last Friday, the NASDAQ and NASDAQ100 were demonstrating profound bearish tendencies.

There are no new major market themes this week. It appears the markets are making a gallant effort to climb the many walls of worry. We will update the themes week for you next week. If the Mid-term Indicant signals bull for the remaining markets, it will be an excellent footnote for those of you who may be too young to remember prior bulls in the face of walls of worry.

Mid-term Indicant Stock and Mutual Fund Trade Signals

There were a tremendous number of buy signals generated. Most were due to the change in the Mid-term Indicant model for stocks and funds. Several were generated late into the mid-term cycle. So, you may prefer to invest in those that are closer to the yellow line.

The "Quick-term Indicant" for the stock market is not obviating bullish sentiments. So these "buy" signals could be followed by "sell" signals next week. See the "Quick-term Indicant - Markets" section later in this report. You will see that it is not necessarily signaling "bull" right now, but it is saying quite a bit about the market expressing anti-bearish behavior.

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

As always, remember to never have more than 10% of your investment resources into a single stock. And try your best to never have more than 20% of your investment resources in a single mutual fund.

Political Influence

With the impending election year and Bush/Cheney "perceived" relationships with Enron executives, expect the animosities to continue to build. The General Accounting Office has not gotten into the act by demanding meeting minutes from Cheney's office. The White House is fighting that. This should fuel greater speculation about the executive branch of government being engaged in mischievous activities. With the growing animosities between the legislative and executive branches of the Federal Government comes growing threats of a "do-nothing" government. And that is good for the stock market.

Economic Outlook

We've been saying now for several months, there is not much difference from last week's report on inflation. All indicators remain between stagflation and deflation ranges. Gold prices softened last week, but remain in bullish territory as far as gold is concerned. It remains in inflationary territory. Some other commodities are moving up as well, but all remain in neutral or stagflation territory. There is a developing correlation between gold prices and the number of reporting cases of voodoo bookkeeping. Last week the number of reported cases (rumors) were down from the previous week and gold was also down the previous week. This tidbit of information is not a moneymaking opportunity. It is interesting that gold prices increased by a greater rate during the voodoo bookkeeping scares than due to terrorist threats.

The Indicant signaled "buy" for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. It is up 25.0% since the "buy" signal. Vanguard Gold and Precious Metals (VGPMX) - #19 is up 37.1% since the Indicant signaled "buy" on April 13, 2001. Fear related investments remain in bullish territory.

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

Quick-term Indicant - Markets

Conditions today are not as bad as they were in 1929-1933. But the four quick-term bull legs in the face of the Mid-term bear market for the NASDAQ had the same geometric configurations of the 1929-1933 DJIA bear. When we started the fifth quick-term bear leg on February 6, there was some concern. The NASDAQ bear market began in March 2000 per the Mid-term Indicant. So, when you think of fundamental factors, one has to ask, why would the NASDAQ crash in the new century look like the Dow crash seventy years ago? The only answer is that the NASDAQ bull in the late 1990's was stimulated primarily by speculation. There is no underlying economic or political reason like there was in the 1920's and 1930's. The biggest "political" contributor to the great depression was protectionism, which ultimately led to WWII.

There is tremendous volatility around the bearish yellow curve on the current quick-term bear. The markets are reacting violently to the quick-term bearish yellow curve. During the fourth quick-term bear leg in the spring of 2001, the markets hovered around the bearish yellow curve as if they were just sparring with it. But the markets were not in good shape, got winded, and fell another 20%. That particular quick-term bull leg was not introduced with significant volume.

The fifth quick-term bull leg that started on October 3, 2001 was introduced with significant volume. That volume gave it enough energy to get the NASDAQ and NASDAQ100 to move up by 30% since the Quick-term Bull signal on October 3, 2001. During the early stages of that particular Quick-term Bull, it was believed that the markets would propel higher. But the volume leveled and no new energy was provided. But the energy from the origination of the last "Quick-term Bull" is enough that the markets are slapping the bearish yellow curve with some significant indication. The NASDAQ and NASDAQ100 markets were the strongest during the last Quick-term Bull and are the weakest on the current Quick-term Bear.

So, how do we respond to the problem with the lack of volume? Set you "stop losses" a little higher than normal. The NYSE volume has indicated a very slight bullish behavioral pattern. It is ever so slight and hardly visible on the graph. Some bear markets start with a whimper. This may be the one.

There is another issue. The volatility index is at a cyclical low. It runs counter-cyclical to the market. But there is room for a quick market spurt to the north. If that occurs, we'll get another Quick-term Bull market. That will elevate your investments to a new plateau. That will afford you the opportunity to reestablish your stop losses at a higher level. Of course, we will keep you informed. You will receive daily email updates next week about the quick-term indicant.

Short Term Indicant Positions - Markets

We will update you more about this on the daily update next week.

Mid-term Indicant Positions - Major U.S. Markets

The Dow Jones Industrial Average, Dow Jones Transports, and Dow Jones Composites are the only three remaining bull markets. The Dow Jones Composite was a newly added bull market this past week.

The Industrials and Composites are up by a combined 7.7%. Excluding the Dow Jones Composites, the remaining five bear markets are down a combined 3.5% since the Mid-term Indicant signaled bear an average of 8.5 weeks ago. Last week those Mid-term Bear markets were down a combined 6.2%.

Just as we expressed concern in the past about the embryonic nature of the mid-term bull markets, keep in mind the current bear market is in the same condition. Although not likely, it is very possible we could get a bullish signal in a week or two. The markets have climbed many walls of worry in the past. But we don't anticipate it. We only act on it when the direction is clearly demonstrated.

Mid-term Indicant Positions - International Markets

The Russian and Slovakian stock markets continue to soar. They are up 81.7% and 23.1% since their respective bull signals on October 5, 2001 and May 11, 2001.

The Mid-term Indicant signaled four new bulls and no new bears this past week. The general movements of the international markets continue to display bearish attributes, but are bouncy, just as is the case with the U.S. markets.

In addition to the four new bull markets the Indicant has identified eleven bull markets. They are up 18.6% since the Mid-term Indicant signaled bull an average of 14.7 weeks ago. Seven international markets are bears of the twenty-two international markets tracked. These seven bear markets are down a combined 12.0% since the Mid-term Indicant signaled bear an average of 14.2 weeks ago.

Click the following hyperlink to view the status and charts.

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

Mid-term Indicant Positions - Mutual Funds (Timing the Sectors)

There were 32 "buy" signals and no "sell" signals generated. In addition to the 31 "buy" signals we are holding twenty-five funds. Four weeks ago we were holding fifty-one funds. Next week, if there are no "sell" signals, we'll be holding fifty-seven funds. You received an email earlier this weekend advising you of the recent Indicant signals.

The 25 funds we are holding are up an average of 10.4%. The average period of time we have been holding these funds is 15.6 weeks. The 10.4% average gain annualizes to 38.8%, which is up from 31.1% eight weeks ago. The Indicant recommends avoiding 20 funds. They are down an average of 11.3% since the Indicant "sell" signals. The Indicant has been avoiding these "bearish" funds for an average of 18.7 weeks. Three weeks ago it was 34.0 weeks, but several funds have received volatile signals the past few weeks. The modified Mid-term Indicant has no doubt added to that volatility.

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

Always remember to never 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.

Mid-term Indicant Positions - Indicant Selected Stocks

There were 34 "buy" signals and 3 "sell" signals this past week. The Indicant is continuing to signal "buy" for oil related stocks. There is no fundamental reason for this. The energy services stocks have historically run counter cyclical to the stock market. We're still in a bear market and these stocks continue to perform very well. In the long run, though, the market in general and these stocks will not move in a harmonious direction. We track these stocks because they typically perform well in bear markets.

In addition to the buy signals, the Mid-term Indicant now recommends holding 21 of the 74 stocks it tracks. Keep in mind this listing of stocks contains several companies that were removed from the NASDAQ100 listing late last year. They were booted off that listing last December and as promised we will track them for at least one year from the time they were booted. A few of them are no longer traded and we continue searching for good replacements.

The 21 stocks with a "hold" recommendation are up an average of 29.5% since the Mid-term Indicant signaled "buy." The average period of time the Indicant has signaled "hold" for these stocks is 11.9 weeks. This is an average annual gain of 128.9%, which is up from 117.6% eight weeks ago. The remaining stocks the Indicant recommends avoiding are down an average of 48.5%. The Indicant has avoided these stocks for an average of 33.6 weeks.

Click the following hyperlink to view this group of stocks:

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

There were 13 "buy" signals and no "sell" signals this past week

In addition to the 13 "buy" signals the Mid-term Indicant is signaling "hold" for14 of the 30 Dow Industrial stocks. These 14 stocks are up an average of 21.0%, which is up from 10.6% eight weeks ago. The current hold positions are annualizing at a 54.1% growth rate. The Indicant has been holding these stocks an average of 15.0 weeks. The Mid-term Indicant is avoiding 3 stocks. They are up 0.1% since the Mid-term Indicant signaled "sell" an average of 18.9 weeks ago. Last week they were down 11.0%, but the recent buy signals removed several of the low performers from the avoid listing.

Click the following hyperlink to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-DJIA-STKS.htm

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

There was one "buy" signal and no sell signals this past week. You received a report earlier this weekend about these indicant signals. Although the Dow Utilities Index appears sickly, some of the stocks are performing very well. As stated periodically the past few weeks, there are good dividend opportunities in this group of stocks.

In addition to the buy signal, the Indicant recommends holding eleven of the utility stocks. These 11 stocks are up 23.9%% since the buy signals an average of 32.6 weeks ago. This annualizes to a 38.0% gain for these stocks. The Indicant has signaled "avoid" for the remaining stocks for an average of 51.3 weeks. These stocks are down an average of 79.5% since their respective sell signals. These statistics include Enron where the Mid-term Indicant signaled "sell" at $70.47 on February 23, 2001.

Click the following hyperlink to view the entire group of these stocks:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-DJU-Stks.htm

Mid-term Indicant Positions - NASDAQ100 Stocks

Seven weeks ago, the Indicant signaled "sell" for eight of these stocks. Five weeks ago the Indicant generated four more "sell" signals. Four weeks ago the Indicant generated twenty-three sell signals. Nine more sell signals were generated three weeks ago. There were fifteen "buy" signals generated two weeks ago and three more buy signals last week. This week ended with 26 buy signals. There were also 3 sell signals. As you can see, as we passed through the market's inflection point, there was some yo-yoing stock prices.

You were advised of the specific "buy" and "sell" signals in an earlier email this weekend. The Quick-term Bear market that began on February 6 has continued to bring down several good stocks.

In addition to the recent buy signals, the Mid-term Indicant now recommends "holding" 33 of the 100 NASDAQ stocks. These stocks are up an average of 32.2% with an average "holding" period of 13.5 weeks. The annualized gain of these stocks being held is 123.5%. In addition to the three "sell" signals, the 39 stocks being avoided are down 41.6% since the Indicant signaled "sell" an average of 26.9 weeks ago.

Click the following link to view this group of stocks:

http://www.indicant.net/Non-Members/Public%20Updates/UD%20MTI-NAS100-STKS.htm

Mid-term Indicant Positions - Index Options

The Indicant generated 8 new "bull" and no new "bear" signals this past week.

Of the thirty-seven index options the Indicant tracks, nine have been "bulls" for the past 8.3 weeks (average). They are up an average of 6.4% since the bull signals. This is an annualized gain of 35.8%. This is down from over 50% two week's ago, but up slightly from last week. The remaining twentyindex options with bear signals are down 12.0%. These indexes have been classified as bear sectors by the Indicant for an average of 15.5 weeks.

To view the status and charts of these markets, please click the following:

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

Long Term Indicant Positions - Dow Jones Industrial Average

Indicant Conclusion

This coming week again is a difficult one to call, but with a slight slant toward an expectation of bullish behavior. The bearish behavior two weeks ago was easy to see and that is what happened, but with significant volatility. Many of the technical indicators remain in conflict. The down days were not supported with up volume the past two weeks. And there was a slight uptake in volume with increasing NYSE stock prices. The NASDAQ isn't as revealing. Professional traders continue to confuse each other. The day-traders continue to lose their money and with this type of stock market behavior they will lose it even faster.

Hyperlinks

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

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

Also, once you are inside www.indicant.net, 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

03-03-02