March 2007 Indicant Weekly Stock Market Reports

March 25, 2007 Indicant Weekly Stock Market Report

Volume 03, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Is Bullish Behavior Sustainable?

In last weeks Weekly Stock Market Report, the question was asked, "is bearish behavior sustainable?" The answer was “not likely.” Reasons were cited in last week’s stock market report. The stock market did not wait too long to support the answer to last week’s question. Last week’s bullishness was the strongest in nearly a year.

One week’s performance is not a trend. However, last week’s bullishness conformed to the expectations from historical standards and current economic fundamentals. In other words, last week’s bullishness conformed to the underlying bullish bias while recent bearish aggressions were a mere bearish spurt in the face of a strong bull market.

Force Vector behavior was surprising last week. The configuration that unfolded is uncommon for this time of year. Last week’s report noted that Force Vectors shifted back to the south. The Quick-term Indicant expected that southerly trek to continue for a few days. However, rather than following seasonal normalcy, they took off to the north and even developed a robust bullish cycle. That configuration prevented the expectation of bearish behavior last week.

The Daily Stock Market Report suggested that more bearishness was immediate with this anticipated drop in Force Vectors. That did not happen. As previously stated, Force Vectors only endured two days of decline and then zoomed northward ahead of bullish aggressions. The error detection process was within a day and that requires improvement.

The Daily Stock Market Report has been consistent in pointing out the strength of the underlying bullish bias. The error was attempting to predict a bearish spurt in the face of an underlying bull market. The Quick-term Indicant only signaled sell for just one ETF, which was configured with strong bearish attributes at the time. The bull occasionally will respond to such bearish configurations, while at other times, the bull succumbs to bearish dominance. In this particular case, the bull responded with a savage-like onslaught against bearish ambition.

The Quick-term Indicant continued signaling hold for the remaining ETF’s, even though there was an anticipated bearish spurt in the offing. That is because the hold positions were stronger than any damage offered by a bearish spurt. Fortunately, that bearish spurt did not occur. It is unfortunate for the put option signals generated early last week.

Last week’s theme was to monitor the downward cycle of the Force Vectors. Rather than enduring a significant downward cycle, the Force Vectors galloped strongly to the north. Click the following link and continue reading.

http://www.indicant.net/Members/Updates/QTI-ETF-Charts/QTI-ETF1-Charts.htm#1

You will notice declining Force Vectors in May 2006. You will notice a rise shortly thereafter when they pinnacled near the Indicant line. Force Vectors then shifted back to the south and more bearishness followed. A major difference was this was a yellow bear, while current configurations are not yellow bears. On the contrary, red bulls existed.

Looking back at the chart again, you will notice rising Force Vectors after July 2006. You will notice the first up cycle was followed by a small downward cycle that was followed by another robust northerly cycle. That configuration detected the shift from bearish bias to bullish bias in August 2006.

You will notice a similar configuration occurred just last week. It configured with even stronger bullish sentiment than the double north cycle last August.

Southerly moving Force Vectors in bullish domains (above the Indicant Line) are irrelevant. This is especially true when the ETF’s are predominantly red bulls and Vector Pressure is positive. Bearish Force Vector relevancy is when the ETF’s are yellow bears and with negative Vector Pressure. That was a predominant configuration prior to August 2006. As you will later see, those bearish cycles were still contained within the broader indexes trading ranges.

There will be bearish spurts from time to time. The trick is being able to differentiate spurts from sustainability to the underlying theme. Right now, the theme remains bullish bias and any bearish expressions are considered as bearish spurts. It appears bearish behavior two weeks ago was orchestrated and the resulting damage was a mere bearish spurt.

Let’s look at the broader indexes trading ranges. Click on the following link.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

As you can see, the NYSE’s bullish response to recent bearish threats has repositioned prices near the upper limit of the trading range. The same is true for the NASDAQ.

As previously stated, do not be surprised at a retreat to the lower limit of the trading range. Since the trading range is northerly sloped, aggressive bearish behavior toward the lower limit of the trading range would trigger only a few sell signals for weaker securities.

It is not likely the upper limit of the trading range will be penetrated. If current bullish expressions penetrate the upper limit of the trading range, one would expect even more bullish aggressions. Probabilities suggest the broader indices will be biased toward the lower end of the trading ranges. This is mostly due to seasonal forces, as opposed to economic fundamentals. However, the market always eventually breaks out of any pattern it establishes. It will be interesting to see how this market reacts to its near contact with the upper trading range limit.

Keep your eye on the daily stock market report as it will track the above attributes and keep you informed.

Weekly Buy/Sell Summary – Stocks and Funds

The Mid-term Indicant generated eight buy signals and no sell signals. Some of last week’s sell signals were reversed by last week’s bullish aggression.

Although there were no sell signals, the Mid-term Indicant is avoiding only 68-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 5.9% since the Mid-term Indicant signaled sell an average of 13.0-weeks ago.

There were 57-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 8.0% since their respective sell signals an average of 23.2-weeks earlier.

Two years ago, on March 25, 2005, the Mid-term Indicant was avoiding 84-stocks and funds that were down an average of 28.6% since their respective sell signals an average of 52.3-weeks earlier. Three years ago on March 27, 2004 there were only 43-avoided stocks and funds. They were down by an average of 24.7% from their respective sell signals an average of 39.3-weeks earlier. On March 22, 2003, the Mid-term Indicant was avoiding 36-stocks and funds out of 296-tracked. They were down by an average of 28.3% since their sell signals an average of 26.6-weeks earlier.

In addition to the buy signals this weekend, the Mid-term Indicant is signaling hold for 266 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 126.8%. That annualizes to 63.2%. The Mid-term Indicant has been signaling hold for these 266-stocks and funds for an average of 104.3-weeks.

One year ago, on March 24, 2006, the Mid-term Indicant was holding 288-stocks and funds out of the 345 tracked at that time for an average of 96.3-weeks. Those 288-stocks and funds were up by an average of 115.4% (annualized at 62.3%). The Mid-term Indicant was signaling hold for 232-stocks and funds of the 320-tracked two years ago on March 25, 2005. They were up by an average of 85.8% (annualized at 59.3%) since their respective buy signals an average of 75.3-weeks earlier. There were 249-stocks and funds with hold signals on March 27, 2004 since their buy signals an average of 48.7-weeks earlier. They were up by an average of 71.0% (annualized at 75.8%). The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On March 22, 2003, the Mid-term Indicant was signaling hold for 141-stocks and funds out of 296-tracked. They were up by an average of 29.8% (annualized at 74.8%) since their buy signals an average of 20.7-weeks earlier.

There were 119-buy signals on March 22, 2003.

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

This section is a repeated each week with a few modifications, reflecting recent secular influences and performance data. Although appearing redundant at times, it is important to read this section to keep abreast of secular market shifts. Quantifications and qualifications are updated, weekly. Remember, secular shifts can last twenty-five or more years. Fortunately, secular market movements do not deter mid-term, short-term, and quick-term profit opportunities. However, they can wreak havoc to the long-term investors’ plans and those that buy and hold.

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. That contrasts to the meandering bear market from late January through mid-August 2006 in the more recent mid-term election year.

Deep bearish seasonality was not influential this past year, which usually occurs from late August through early October. Last August, the Quick-term Indicant obviated a bullish bias, contrary to the historical pattern of deep bearish seasonality. Many buy signals were executed in late August - early September 2006, which is usually a period of intense selling.

The market synchronized with near perfection to normal seasonality in the mid-term election year of 2002. The rolling half of May-October 2002 was typically bearish. The 2002 seasonal bear leg was dynamic and configured perfectly to historical standards, although the depth of that bearish cycle was deeper than normal. That NASDAQ bear cycle approached the magnitude of the 1930-32 Dow bear cycle but the 2000-2002 NASDAQ bear leg lasted several weeks longer.

The recently completed mid-term election year of 2006 fundamentally supported historical standards for the first two thirds of 2006. Although mild bearishness exerted its historical influence in 2006, it was nowhere as deep as 2002’s bearishness. The meandering bear in the first two-thirds of 2006 supported the historical standard. That support was extremely mild.

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. The one week of bullishness, week of March 5, sandwiched between two bearish weeks (February 26 and March 12), provided some insight on bearish sustainability. The bullish bounce on the week of March 5 suggests the bearish aggressions are either going to be mild or not significantly sustainable. In other words that bearish behavior was a mere bearish spurt.

The heart and soul of bullish seasonality from mid-October 2005 through January 31, 2006 demonstrated bullish normalcy. The market was a meanderer from January 31, 2006 until mid-August 2006, when the Quick-term Indicant shifted from bearish to bullish bias.

The heart and soul of bullish seasonality, ending on January 31, 2007, produced significant and expected gains since the August 15, 2006 bullish bias shift. The Dow, S&P500, and NASDAQ finished up by 12.4%, 11.9%, and 16.5% at the conclusion of that heart and soul of bullish seasonality.

How has market fared after the conclusion of the heart and soul of bullish seasonality? From January 31, 2002 through September 30, 2002, the Dow fell 23.5%. The NASDAQ was down 39.4%. The bull market of 2003 did not incur normal seasonality. From January 31, 2004 until September 30, 2004, the NASDAQ fell 8.2%, while the Dow was down 3.9%. From January 31, 2005 to June 30, 2005, the Dow was down 2.0% and the NASDAQ down 0.4%. From January 31, 2006 through August 1, 2006, the NASDAQ was flat while the Dow was up a respectable 6.1%.

From January 31, 2003 through September 30, 2003, the Dow was up 15.2%, while the NASDAQ was up 35.3%. The last presidential pre-election year was 2003. Presidential pre-election years are traditionally bullish. So far this year, the Dow is down 1.5% since January 31, 2007 and the NASDAQ is down 0.3%. Aggressive bearish expression four weeks ago and two weeks ago pushed the major indices into negative territory, which can happen after the heart and soul of bullish seasonality expires. Keep your eye on the Quick-term Indicant, which right now, suggests this is a simple correction. Historical standards suggest the market will go much higher this year. Economic fundamentals also support this prognosis.

As you can see, until mid-August 2006, most major market indices have been slightly bullish since late 2003 with pronounced meandering behavior. The only significant bullish expressions, not followed by bearish expressions, occurred in the heart and soul of bullish seasonality (Nov-Jan) in 2004, 2005, and 2006. Other than those “heart and soul” bullish cycles, the market was relatively flat from early 2004 through August 2006. However, this is a presidential pre-election year, where meandering to bearish behavior should not occur. The theme is bullish expectations even in the face of bearish behavior four weeks ago and two weeks ago.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006 was minimal and not sharp when compared to that of 2002. The Dow is up 71.3% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 122.2% since October 9, 2002. The S&P600, small caps, is up even more by 143.8% since October 9, 2002.

The NASDAQ is down 51.3% from its historical weekending high of 5048.62 on March 9, 2000. The Dow is up by 6.5% from its previous weekending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 6.0% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 105.5% and S&P500 by 6.4% to establish new weekly closing highs.

Historical standards suggest the NASDAQ will not return to its historical high until 2025 or so. A 2000 buyer and holder will not be back to break-even until then. Including inflation, a thirty-year-old investor will be in his or her eighties before the NASDAQ profits from early 2000 investment dollars, which assumes minimal inflation. However, the late 2002 investor is up triple digit amounts. Timing is indeed important.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness.

The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed dynamic follow-on bullish behavior due to this lack of demand. As you can see from the NYSE trading range, the northerly sloping cycle is not a strong as the trading ranges from late 2002 through most of 2003. However, bullish expressions occur during the heart and soul of bullish seasonality regardless of any technical or fundamental reason. The meandering segments of 2002, 2003, 2004, 2005, and 2006 were appropriately followed by historically significant bullishness in each of those years.

As earlier stated, the Indicant began its buying barrage in October – November 2002 just after the market bottomed from the severe 2000-2002 Bear Market. There were 239-buy signals between October 5, 2002 and November 9, 2002 out of the 296 stocks and funds tracked by the Mid-term Indicant at that time. Even badly managed companies received a buy signal, which is a common attribute of sustainable new bull markets. As many of you noticed, those companies eventually dipped back to the south after the euphoria of new bullishness.

Since August 18, 2006, the Mid-term Indicant generated 169-buy signals and only 71-sell signals up until this past week. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003. Now that the heart and soul of bullish seasonality has expired, the resistance to generate sell signals has softened. Buying stimulants within the Mid-term Indicant are more reserved, but not as much during post election years.

Some of you recall the Indicant Stock Market Report tracking the Short-term Indicant Bear for the NASDAQ in 2002. It was the longest in history. It even exceeded the Dow’s 1929-1932 Short-term Indicant Bear in breadth and approached it in magnitude. The good news is that the NASDAQ’s decline did not lead to a depression, which is a clear indication of how little influence tech stocks have on the economy.

There are two important axioms to remember and are always repeated in this report. 1) Real economic wealth is created in only three ways - manufacturing, agriculture, and extraction. 2) The only positive influence politicians have on the economy is to undo their prior damage. That is also why the presidential pre-election year is historically the most bullish on the four-year cycle. If the strength of the current Mid-term Bull can be subjected only to meandering behavior, like 2004, 2005, and 2006, then it is possible for the current Mid-term Bull to be a record setting one in terms of duration. However, as earlier stated in this report, this historical standard is being threatened.

Political institutions reduce wealth. Politicians continually attempt to redistribute wealth, which flies in the face of the laws of nature. They promote “middle class” attainment. The larger the middle class, the more power politicians and their academic brethren have. The communists tried that, resulting 99% poverty, while the ruling 1% lived like kings. In other words, socialism rewards an ability to intellectualize, while capitalism rewards the results of appealing effort.

The remainder of this section, Secular Market Blend, is repeated, in part, from the past several months, but it does not hurt to reread it each week. As time progresses and conditions change, there will be modifications to it to maintain a balanced frame of reference.

You will notice many of the mutual fund buy signals occurred in March 2003. Many of them endured sell signals for the first time since early 2003 during the mildly bearish meandering behavior in mid-2005. However, recent bullish spurts and the bull’s resiliency have minimized selling activity. The Mid-term Indicant is now signaling hold for nearly all mutual funds it tracks with the exception of contrarian funds.

Many of you recall how the market did not synchronize with the heart and soul of bullish seasonality from November 2002 through February 2003. December 2002 was the most bearish since 1931, but not nearly as dynamic as the 1931 bearish expression. After the asynchronous behavior in the November 2002 rolling third of the year, the market turned bullish in March 2003 and again did not synchronize with normal seasonality. The Mid-term Indicant continued signaling bull/hold during bearish seasonality in 2003. The market continued moving north during that time, contrary to historical standards. As stated in most of 2004, bearish expressions on a Mid-term basis between May and October 2004 should not be surprising. That is exactly what occurred. The result was a meandering market with a slight bearish bias during most of 2004 and 2005 and the first two-thirds of 2006. This presidential pre-election year will be fundamentally tested in the face of war, terrorists threats, and rising oil prices.

The Quick-term Indicant’s bearish bias during most of 2006 was replaced with a bullish bias in mid-August 2006. Several buy signals ensued shortly after that bias shift. Bullish behavior occurred, as expected, since mid-August 2006. The various Indicant models, economic fundamentals, and historical standards suggest significant bullishness in the coming months, but keep your eye on the Quick-term Indicant.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias and bullishly evolving economic fundamentals.

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

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

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

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

Stock and Fund Update

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

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated last week, interest rates continue to meander, but with a slight southerly bias. That southerly bias supports the underlying bullish bias. The Fed apparently needs to threat of recession or significant cooling to justify greater aggressions in reducing rates.

Commodity prices remain mixed, although some are cycling favorably to the stock market. Some continue hovering near their record highs. This, along with a healthy economy, depresses the opportunity for aggressive interest rate reductions.

As stated the past three weeks, the U.S. Dollar remains mixed with other currencies, but the bias is a slight strengthening trend. This strengthening is due, in part, to the meandering interest rates. Expect the dollar to weaken if interest rates decline.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 305.9% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 50.7%. It moved to the north in 17 of the past 23-weeks. This fund moved north for three consecutive weeks.

Fidelity Gold, Fund #28, is up 43.7% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 27.4%. This fund moved mildly north the past two weeks after two weeks of moving aggressively to the south.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 262.3% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 56.2%.

Vanguard Energy #18, VGENX, is up 175.5% (annualized at 43.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 139.3% (annualized at 41.7%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 134.7% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 36.9%.

These energy related funds moved aggressively to the north last week.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times. Fundamentals appear to be shifting in favor of selling the above funds (09/10/06). Do not sell until the Mid-term Indicant signals sell. They continue to rebound and are enduring fluttering. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate at this time.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 49.7% since then. It is annualized at 29.9%.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 180.1% (annualized at 44.5%).

Both of these contrarian ETF’s moved aggressively to the north last week.

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

There were no new bull signals and no new bear signals. Last week’s bullishness removed the bear signal threat.

All ten major indices are bulls. They are up by an average of 24.2% since the Mid-term Indicant signaled bull an average of 87-weeks ago. That annualizes to 14.4%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

Dynamic bullish statistics were also eliminated due to the Dow Transports bear signal and a new bull signal on January 19, 2007. The Dow Transports enjoyed a 23.1% gain from its March 21, 2003 bull signal until its bear signal on March 19, 2004. It fluttered with a new bull signal one week later on March 26, 2004 and enjoyed an 80.0%-gain until a new bear signal on December 22, 2006.

Also, the Dow Utilities increased by 104.4% from its October 25, 2002 bull signal to the March 21, 2006 bear signal. After some fluttering, it received a new bull signal on June 2, 2006. Interestingly, the Dow Utilities was the best performing index since the October 25, 2002 Mid-term Indicant bullish bias shift.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,807,971

That beats buy and hold performance of $ $1,908,830 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $ $185,422. That beats buy and hold’s $140,671

on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $205,511.

That beats buy and hold’s $85,166 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.7%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

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

Divergence versus Convergence

Bullish convergence occurred last week with bullish expressions in all sectors including contrarian sectors. The stock market does not foresee economic recession.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 17.9% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 331.2% (annualized at 21.4%) since the Long-term Indicant signaled bull 803-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty of thirty; bullish support has resumed.

Quick-term Yellow Bears: None and therefore non-bearish.

Short-term/Quick-term Non-Bearishness: Countering “sustainable” deep bearish ambition.

Force Vectors: Supportive of bullish bias.

Vector Pressure: Resistance to bearish dominance has been weakened, but resuming strength.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Non-bearish.

Overall Market Status: Short-term Indicant bear signal on March 13, 2007 for NYSE and NASDAQ. The Short-term Indicant is waiting for Force Vectors to retreat before re-signaling bull

Profit Potential from Naked Options: Improving with increasing volatility.

Volume: Configurations remain in support of bullish bias.

Special Comments Continued from Monday, March 23, 2007

Current Force Vector configurations suggest bearish behavior two weeks ago was a mere bearish spurt in the face of a powerful bull. Force Vector usually meets resistance when crossing from bearish domains to bullish domains. There was some resistance, but it was exceedingly minor. They have continued to skyrocket to the north and thus support a continuation of the underlying bullish bias.

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

The Short-term Indicant signaled bear on March 13, 2007 for both the Dow and NASDAQ. Click here to see the Short-term Indicant’s history. The market rebounded with solid bullish expressions after this bear signal. The Short-term Indicant has yet to signal back to bull. It is still detecting a high probability the market will track toward the lower limit of the trading range. You will notice the NYSE has nearly climbed back to its upper limit on the trading range. It is busts through that upper limit, even greater aggressions by the bull would be enjoyed.

The NYSE volume was modest on today’s mixed market, contrasting previous day’s high volume on bullish aggressions, The NASDAQ volume was again modest. The NASDAQ Indicant Volume Indicator is solidly into a lethargic pattern, while the NYSE remains robust. A lethargic configuration is favorable to the underlying bullish bias if, in fact, the market turns south toward the lower limit of the trading range.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 64.5% (annualized at 31.2%) since their respective buy signals an average of 106.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 66.3% (annualized 33.0%) since the STI signaled, buy, an average of 103.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 16.6% (annualized at 21.7%) since the QTI signaled buy an average of 39.4-weeks ago. The Quick-term Indicant is avoiding one ETF. It is up 2.8% since its sell signal four days ago.

Conflicts Between the Short-term and Quick-term Indicants

There is one conflict, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull even though bearish behavior would not be surprising over the next few weeks. Current configurations suggests that this bearish behavior will be without deep magnitude. Recent bullishness has more than offset impending bearishness.

There are 89 hold signals out of a possible 90. There is one avoid signal. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curve. The average position of all thirty ETF’s is above bearish yellow by 8.7%. This is maintaining the market’s non-bearish posture. This non-bearish configuration persists. There is minimal support of any significant bearish assertions.

Twenty ETF’s are above their respective bullish red curves. This supports the underlying bullish bias. This is again a very healthy Quick-term bull.

All thirty ETF average positions are 0.8% above their bullish red curves. This attribute is now positive/bullish and in full bull support.

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

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

One of the ETF’s is contacting its breakout line. As stated the past several months, the high concentration of breakout-contact the past several months is solidly bullish. Although bearish behavior for a two-week period disrupted this bullish attribute, contact in two of the past three days with one ETF is certainly non-bearish overall. It is bullish for the ETF#12, Utilities, which is the one ETF making contact in two of the past three trading days.

The average distance from breakout contact is at 2.8%. This is approaching bullish exuberance again, but do not be surprised at a pull-back.

None of the ETF’s are contacting their respective breakdown lines. The average distance from the price and breakdown is 22.4%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. There have been several bearish “spurts” since then, but always remained just a mere spurt. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish, regardless of recent bearish behavior.

ETF Force Vector Configurations

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

Twenty-nine of the thirty ETF Force Vectors continue toward bullish domains. That is a significant increase the past four trading days and remains in full bullish support. This Force Vector behavior is a testament to the strength of the underlying bullish bias.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option signals today for the third consecutive days,

Twelve ETF Vector Pressures are in bullish domains, which is down considerably since last August, but up from four on March 16. This configuration continues to support the bullish bias shift from August 15, 2006. This bull’s resiliency the past four days have minimized immediate probability of bearish dominance.

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

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

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias since early February 2006. The Quick-term and Short-term Indicant models continue suggesting a bullish bias. This bias weakened two weeks ago, but has regained its bullish strength.

Force Vectors have moved into bullish domains. Do not write covered call options, as the current configuration does not support meandering or bearish behavior.

The Quick-term Bull remains in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is no longer avoiding QQQQ, which no longer supports holding contrarian fund, ProFunds Ultra Short.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Force Vector behavior prevented last week’s assumption that bearish behavior was on the immediate horizon. On the contrary, configurations shifted in support of bullish behavior early last week.

The Quick-term and Short-term Indicant continue to express bullish bias, even though the Short-term Indicant signaled bear. The bullish bias persists.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/25/07

March 18, 2007 Indicant Weekly Stock Market Report

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

This Week’s Report

Is Bearish Behavior Sustainable?

The answer is “not likely,” as opposed to a firm yes or no. Here is why bearish behavior is most likely not sustainable.

This is a presidential pre-election year. It is the most bullish on the four-year cycle. No political incumbent is re-elected during economic recessions regardless of political party. This includes congressional representatives. So, during presidential pre-election years, politicians will do all they can to support prosperity, including jaw-boning interest rate reductions.

The stock market typically anticipates economic behavior six to nine months ahead of economic activity. That is why the stock market is traditionally bullish in the pre-election year. It is as if it knows politicians will support economic prosperity leading into the election and thus the bullishness.

Historical standards would be a wonderful predictor to use if they were always accurate. Unfortunately, the market takes delight in aborting any tradition when given the opportunity. For example, the Dow collapsed 52.7% in the presidential pre-election year of 1929. The Fed or politicians could not stop that collapse. Too many years of stupid politics preceded that particular stock market collapse. It takes many years to overcome many years of cumulative stupidity, which was the case leading into the Great Depression.

There is a potential problem with this particular historical standard. Several weeks ago, there were widely published reports regarding the historical bullishness of the presidential pre-election year. If a critical mass of investors and potential investors act on this widely published report, rest assured the phenomena of commonality will exert itself and impose bearishness. The majority of stock market traders cannot be successful in the stock market. Sure enough one week after this widely published report the stock market endured significant bearish aggressions.

Residential properties and associate financing are soft right now. Much of the stock market’s bullishness since 2003 and a healthy economy has been triggered by people re-financing their homes for cash. That cash circulated through the economy and in one way or the other, stimulated bullish behavior. This phenomenon is chalked up in favor of the bear. This is a relatively new phenomenon, but the related law of supply and demand for stocks is not new.

Fundamentally, economic conditions are still favorable. An economic slow-down will be bullish in the sense the Fed would be forced to lower interest rates. Inflationary threats, of course, will offset such a scenario.

Force Vectors, as expected, shifted back to the south Friday. The market closed on a bearish note Friday, which was also expected. However, Friday’s decline was not as sharp as last Wednesday’s option buyers would have liked. The depth of bearish cycles is difficult to predict, while it was obvious there would be a bearish expression last Friday.

Unfortunately, the Quick-term Indicant suggests more bearish behavior will occur on the immediate horizon. The Quick-term Indicant is recommending covered call options to protect the value of securities that desire continued holding.

The key attribute on this impending Force Vector cycle is its bottom point. If it is below its last minimum, expect sustainable bearishness. If the cycle finishes above its prior minimum, bearishness will be mild. If the cycle following the current one is robustly north, bullish dominance will resume. Seasonal forces will most likely disallow bullish aggression, but at this time of year, a meandering bull will be just fine.

Keep your eye on the daily stock market report as it will track the above attributes and keep you informed.

Weekly Buy/Sell Summary – Stocks and Funds

The Mid-term Indicant generated no buy signals and 35-sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding only 44-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 10.4% since the Mid-term Indicant signaled sell an average of 17.3-weeks ago.

There were 53-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 8.8% since their respective sell signals an average of 23.2-weeks earlier.

Two years ago, on March 18, 2005, the Mid-term Indicant was avoiding 77-stocks and funds that were down an average of 28.7% since their respective sell signals an average of 52.6-weeks earlier. Three years ago on March 19, 2004 there were only 30-avoided stocks and funds. They were down by an average of 25.4% from their respective sell signals an average of 38.7-weeks earlier. On March 15, 2003, the Mid-term Indicant was avoiding 141-stocks and funds out of 296-tracked. They were down by an average of 11.0% since their sell signals an average of 8.3-weeks earlier.

Although there were no buy signals this weekend, the Mid-term Indicant is signaling hold for 266 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 118.9%. That annualizes to 59.9%. The Mid-term Indicant has been signaling hold for these 266-stocks and funds for an average of 103.3-weeks.

One year ago, on March 17, 2006, the Mid-term Indicant was holding 286-stocks and funds out of the 345 tracked at that time for an average of 96.1-weeks. Those 286-stocks and funds were up by an average of 117.6% (annualized at 63.6%). The Mid-term Indicant was signaling hold for 235-stocks and funds of the 320-tracked two years ago on March 18, 2005. They were up by an average of 88.6% (annualized at 62.0%) since their respective buy signals an average of 74.4-weeks earlier. There were 249-stocks and funds with hold signals on March 19, 2004 since their buy signals an average of 47.8-weeks earlier. They were up by an average of 71.1% (annualized at 77.4%). The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On March 15, 2003, the Mid-term Indicant was signaling hold for 141-stocks and funds out of 296-tracked. They were up by an average of 25.3% (annualized at 56.7%) since their buy signals an average of 23.3-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. The one week of bullishness, week of March 5, sandwiched between two bearish weeks (February 26 and March 12), provided some insight on bearish sustainability. The bullish bounce on the week of March 5 suggests the bearish aggressions are either going to be mild or not significantly sustainable. As mentioned earlier in this stock market report, bearish behavior on the immediate horizon should not be surprising.

From January 31, 2003 through September 30, 2003, the Dow was up 15.2%, while the NASDAQ was up 35.3%. The last presidential pre-election year was 2003. Presidential pre-election years are traditionally bullish. So far this year, the Dow is down 4.1% since January 31, 2007 and the NASDAQ is down 3.7%. Aggressive bearish expression three weeks ago and last week pushed the major indices into negative territory, which can happen after the heart and soul of bullish seasonality expires. Keep your eye on the Quick-term Indicant, which right now, suggests this is a simple correction, while it is also suggesting additional bearishness on the immediate horizon. Historical standards suggest the market will go much higher this year. Economic fundamentals also support this prognosis.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006 was minimal and not sharp when compared to that of 2002. The Dow is up 66.2% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 113.0% since October 9, 2002. The S&P600, small caps, is up even more by 121.0% since October 9, 2002.

The NASDAQ is down 53.0% from its historical weekending high of 5048.62 on March 9, 2000. The Dow is up by 3.3% from its previous weekending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 9.2% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 112.8% and S&P500 by 10.1% to establish new weekly closing highs.

The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed dynamic follow-on bullish behavior due to this lack of demand. However, bullish expressions occur during the heart and soul of bullish seasonality regardless of any technical or fundamental reason. The meandering segments of 2002, 2003, 2004, 2005, and 2006 were appropriately followed by historically significant bullishness in each of those years.

As earlier stated, the Indicant began its buying barrage in October – November 2002 just after the market bottomed from the severe 2000-2002 Bear Market. There were 239 buy signals between October 5, 2002 and November 9, 2002 out of the 296 stocks and funds tracked by the Mid-term Indicant at that time. Even badly managed companies received a buy signal, which is a common attribute of sustainable new bull markets. As many of you noticed, those companies eventually dipped back to the south after the euphoria of new bullishness.

Since August 18, 2006, the Mid-term Indicant generated 161-buy signals and only 36-sell signals up until this past week. There were 35-sell signals this weekend. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003. Now that the heart and soul of bullish seasonality has expired, the resistance to generate sell signals has softened. Buying stimulants within the Mid-term Indicant are more reserved, but not as much during post election years.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias and bullishly evolving economic fundamentals. Even though the Quick-term Indicant is suggesting immediate bearish influences, it retains a bullish bias. Regardless of the news the past few weeks, nothing fundamentally has changed the economic outlook.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated last week, interest rates continue to meander, but with a slight southerly bias. Although the meandering behavior disappoints the stock market, the probability of increasing has diminished considerably.

Commodity prices remain mixed, although some are cycling favorably to the stock market. Some of the continue hovering near their record highs. This depresses the opportunity for aggressive interest rate reductions.

As stated the past two weeks, the U.S. Dollar remains mixed with other currencies, but the bias is a slight strengthening trend. This strengthening is due, in part, to the meandering interest rates. Expect the dollar to weaken if interest rates decline.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 293.4% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 48.8%. It moved to the north in 16 of the past 22-weeks. This fund moved north for two consecutive weeks.

Fidelity Gold, Fund #28, is up 38.7% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 24.6%. This fund moved mildly north last week after two weeks of moving aggressively to the south.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 241.3% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 51.9%.

Vanguard Energy #18, VGENX, is up 163.8% (annualized at 40.9%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 125.9% (annualized at 37.9%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 119.7% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 33.0%.

These energy related funds fell mildly to the south last week after enduring significant bearishness three weeks ago, interrupted by mild bullishness two weeks ago.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 47.0% since then. It is annualized at 29.7%.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 166.0% (annualized at 41.2%).

Both of these contrarian ETF’s moved mildly to the south last week.

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

There were no new bull signals and no new bear signals. They are barely hanging on to their bullish status.

All ten major indices are bulls. They are up by an average of 19.8% since the Mid-term Indicant signaled bull an average of 87-weeks ago. That annualizes to 11.9%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $36,685,334

That beats buy and hold performance of $ $1,852,448 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $ $179,075. That beats buy and hold’s $135,856

on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $198,522.

That beats buy and hold’s $82,270 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

Bearish divergence occurred last week, which is not as threatening to the bullish bias with the bearish convergence three weeks ago. Some commodity prices rose last week, hinting at some economic optimism. Of course, that excited inflationary concerns, but that is better than serious economic concerns.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 13.4% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 318.4% (annualized at 20.6%) since the Long-term Indicant signaled bull 802-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Only three of thirty; watch-out if all fall below red.

Quick-term Yellow Bears: None, but one ETF is below yellow, threatening bull status.

Short-term/Quick-term Non-Bearishness: Countering “sustainable” deep bearish ambition, but approaching no support for bullish bias.

Force Vectors: Technically, still supportive of bullish bias, but appears nearing expiration.

Vector Pressure: Resistance to bearish dominance has been weakened and nearing expiration.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Non-bearish, but nearing full support of bear.

Overall Market Status: Short-term Indicant bear signal on March 13, 2007 for NYSE and NASDAQ.

Profit Potential from Naked Options: Improving with increasing volatility.

Volume: Configurations are now neutral to slight bearish support. If a robust cycle resumes on more bearishness, expect increased sustainability and depth of bear cycle.

Special Comments Continued from Monday, March 12-16, 2007

Force Vectors, as expected and stated in Thursday’s daily stock market report, shifted back to the south. This excited bearish ambitions Friday. They are configured in support of additional bearish expressions in the next few days. This does not mean the market will turn deeply bearish for a sustainable period of time. However, do not be surprised at increased bearish behavior over the next few days.

The ETF’s remain with a bullish bias in the sense they are up significantly since most of their buy signals.

There are two key attributes to watch. If Force Vectors fall below their most recent minimum point, expect protracted bearishness. If they drop and turn back to the north above their most recent minimum, expect the bull to resume its power or at worse, mild bearish dominance.

Keep your eye on the NYSE and NASDAQ trading ranges. If the indexes fall below the lower limit, expect protracted bearish expressions. So far, these indices are contained within the northerly sloping trading range.

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

The Short-term Indicant signaled bear on March 13, 2007 for both the Dow and NASDAQ. Click here to see the Short-term Indicant’s history.

Friday’s volume was relatively high on mildly bearish expressions, contrasting with lighter volume on mildly bullish behavior in the middle of this past week. That relationship adds to bearish ambitions. Both Indicant Volume Indicator’s were configuring toward a lethargic cycle, but high volume today has generated fluttering on the cycle. For those desiring bullish behavior, you do not want to see a rising Indicant Volume Indicator on bearish expressions.

As you can see from the charts, the lower trading range limit line is the current target. The question is, will the lower limit trading range stop the bearish onslaught? The answer rests in observation at the time of contact.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 58.1% (annualized at 28.4%) since their respective buy signals an average of 105.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 59.8% (annualized 30.1%) since the STI signaled, buy, an average of 102.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.2% (annualized at 16.5%) since the QTI signaled buy an average of 38.0-weeks ago. The Quick-term Indicant is not avoiding any of the ETF’s at this time.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicts, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull even though bearish behavior would not be surprising over the next few weeks. Current configurations suggests that this bearish behavior will be without deep magnitude.

There are ninety hold signals out of a possible 90 and there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

Only one of the 30-ETF’s is below its bearish yellow curve. The average position of all thirty ETF’s is above bearish yellow by 5.1%. This is maintaining the market’s non-bearish posture. This non-bearish configuration persists but no longer with near-zero threat of sustainable and deep bearish behavior.

Only three ETF’s are above their respective bullish red curves. This supports the underlying bullish bias. Even though this is a small number of red bulls, it is enough for bullish encouragement. However, if all thirty fall below bullish red, then the market is more susceptible to deep bearish expressions.

All thirty ETF average positions are 2.6% below their bullish red curves. This attribute has been severely weakened in its support of the bullish bias. A negative value is not bearish, but it is certainly non-bullish.

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

None of the ETF’s are contacting their respective breakout lines. As stated the past several months, the high concentration of breakout-contact the past several months is solidly bullish, while the past few days have configured an absence of contact. It appears contact will not be made for several more weeks or months. New money should avoid the stock market at this time.

The average distance from breakout contact is at 6.2%. This no longer is safely tied to bullish exuberance latitudes, but remains close enough to re-position itself to that level. However, the distance is increasing and little likelihood of bullish exuberance is on the immediate horizon.

None of the ETF’s are contacting their respective breakdown lines. The average distance from the price and breakdown is 18.1%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. There have been several bearish “spurts” since then, but always remained just a mere spurt. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish, regardless of recent bearish behavior.

ETF Force Vector Configurations

Twenty-five of the thirty ETF Force Vectors are directed toward bullish domains. That is a decrease of four from yesterday. As stated last Thursday, this configuration suggests a bearish bias is about to emerge.

As stated last Monday, do not be surprised at bearish yellow gravitational pull on the market and ETF’s. That happened Tuesday with a significant bearish expression. Bearish bias is unfolding and this will be especially prevalent in the next few days.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were four put option buy signals Friday in addition to four last Thursday. Wednesday’s put option signals should prove profitable to you depending on your stalking and the timing of the buy today.

As stated last Wednesday put option buyers should set the sell target date for Friday, March 16. Thursday’s put option buy signals on Friday will not take if Friday is bearish, which is expected. Sure enough, Friday’s market closed on a bearish note.

Four ETF Vector Pressures are in bullish domains, which is down considerably and at the lowest levels since last summer. This configuration, however, continues to support the bullish bias shift from August 15, 2006. Unfortunately, this configuration appears temporary. If all fall into bearish domains in the next few days, and that is highly likely, sell signals will be generated.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations, you can write covered call options at this time to protect your gains. There is little probability of bullish behavior on a Quick-term or Short-term cycle in the immediate future.

The Quick-term Bull remains in tact, but weakening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

As stated in last week’s report, do not be surprised at impending bearishness. You saw that last week and you will most likely see more of the same in the immediate future. The key attribute at this time is Force Vector behavior. If they cycle down below the prior minimum point, the bear will exert its influence on the stock market.

If they fall above their prior minimums and shift robustly to the north, the bear will retreat to humbling status.

Impending standard seasonal pressures do not support bullish aggressions at this time even though we are now into a normally bullish presidential pre-election year.

The Quick-term and Short-term Indicant continue to express bullish bias.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/18/07

March 11, 2007 Indicant Weekly Stock Market Report

Volume 03, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Trading Ranges

From time to time, you hear analysts speak about trading ranges. Many conceptualize two parallel lines on a chart. Trading ranges do not have to be parallel. They do not even have to be linear.

Regardless of the type of trading range, it is rare for the stock market or any marketable security to present a clear trading range on a consistent basis. However, from time to time, they do. When available, it does not hurt to look at them.

The NYSE Index has been configuring in a well-defined trading range since the summer of 2003. It is linear with an upward (to the northeast) slope. Click the following link.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

You will notice two parallel lines neatly connected to this particular index’s minimum and maximums. Those two parallel lines represent the trading range. You should also notice the last maximum point redefined the upper limit to this trading range. The symmetry is perfect. That does not mean it is reliable, but it is worthy of review at this time.

Trading ranges are very simple to construct. All one has to do is draw a line through the last two to four minimums and maximums. You can connect more points if available, but trading ranges seldom last through more than four connecting upper or lower points. If the lines are relatively parallel to one another, you have a well-defined trading range. If they are narrowing, you have an increasingly tighter trading range. If the two lines are separating at a greater distance, you have an increasingly wider trading range. These non-parallel types of trading ranges are usually irrelevant, when viewing them linearly.

However, the NYSE Index has formed a nicely configured trading range. It has two upward sloping parallel lines. As long as the index finds its minimum cycle point and its maximum cycle point on the two lines, the trading range remains in tact. If either the cyclical high or low crosses either line, that trading range becomes obsolete.

You will notice on the aforementioned link that the NASDAQ has not configured with a symmetrical trading range. Therefore, minimums and maximums are not as easily detectable.

As you can see from the NYSE trading range, the index appears cycling toward the lower trading range. It may not hit that limit on this cycle. This index is about one-half the distance between the upper limit and the lower limit. It can move for a long period, never touching either line. As long as it does that, the market will continue to be bullish since this trading range is sloping to the northeast.

Why are trading ranges important? They occur very rarely and many times, they are irrelevant in the sense they all eventually abort nice symmetry. In this particular case, the trading range is not irrelevant. You can use it to help in your decision to hold or not. In other words, if this index falls below the minimum line, the trading range will be violated. In that case, it becomes obsolete and meaningless. However, as long as this index does not fall below the minimum point, you will know the trading range has meaning and supports continued holding.

Suppose the market is bearish next week. That could be unsettling for many. However, if that bearishness did not fall below the minimum line, then you can find comfort with the continuing life of the trading range. If the market meanders or even turns bearish within the confines of this trading range, you will have a referential point of understanding how far into bearishness you are willing to go.

Some use the lower limit of trading ranges as a sell signal point. That would not be a bad idea in this particular case for those of you who are short to mid-term oriented. The longer-term investor will not worry about that, as the Long-term Indicant will be their predominant guide. The Long-term Indicant is driven primarily by economic fundamentals whereby stock market cyclical swings are considered a mere nuisance and irrelevant to long-term goals.

Keep your eye on the Daily Stock Market Report. The NYSE trading range is identified and tracked on the Big Board’s Indicant Volume Indicator. You can monitor this each day. The Website is updated every evening and the Daily Stock Market Report will keep you posted.

Weekly Buy/Sell Summary – Stocks and Funds

The Mid-term Indicant generated one buy signal and two sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding only 42-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 9.9% since the Mid-term Indicant signaled sell an average of 17.0-weeks ago.

There were 54-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 9.6% since their respective sell signals an average of 23.0-weeks earlier.

Two years ago, on March 11, 2005, the Mid-term Indicant was avoiding 68-stocks and funds that were down an average of 28.8% since their respective sell signals an average of 52.4-weeks earlier. Three years ago on March 6, 2004 there were only 17-avoided stocks and funds. They were down by an average of 26.2% from their respective sell signals an average of 44.7-weeks earlier. On March 8, 2003, the Mid-term Indicant was avoiding 131-stocks and funds out of 296-tracked. They were down by an average of 12.0% since their sell signals an average of 7.9-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 300 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 111.2%. That annualizes to 58.6%. The Mid-term Indicant has been signaling hold for these 300-stocks and funds for an average of 98.6-weeks.

One year ago, on March 10, 2006, the Mid-term Indicant was holding 290-stocks and funds out of the 345 tracked at that time for an average of 94.6-weeks. Those 290-stocks and funds were up by an average of 111.0% (annualized at 61.0%). The Mid-term Indicant was signaling hold for 241-stocks and funds of the 320-tracked two years ago on March 11, 2005. They were up by an average of 86.2% (annualized at 61.9%) since their respective buy signals an average of 72.4-weeks earlier. There were 275-stocks and funds with hold signals on March 6, 2004 since their buy signals an average of 44.7-weeks earlier. They were up by an average of 73.1% (annualized at 85.1%). The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On March 8, 2003, the Mid-term Indicant was signaling hold for 135-stocks and funds out of 296-tracked. They were up by an average of 22.5% (annualized at 55.6%) since their buy signals an average of 21.1-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. As stated in last week’s report, historical standards suggests aggressive bearishness week before last was not sustainable. Last week’s bullishness supports that thesis. Of course, historical standards alone are not a sufficient prognosis. However, when coupled with known economic fundamentals, such as they are, last week’s bullish response was not surprising.

From January 31, 2003 through September 30, 2003, the Dow was up 15.2%, while the NASDAQ was up 35.3%. The last presidential pre-election year was 2003. Presidential pre-election years are traditionally bullish. So far this year, the Dow is down 2.7% since January 31, 2007 and the NASDAQ is down 3.1%. Aggressive bearish expression two weeks ago pushed the major indices into negative territory, which can happen after the heart and soul of bullish seasonality expires. Keep your eye on the Quick-term Indicant, which right now suggests the market endured simple a simple correction last week. Historical standards suggest the market will go much higher this year. Economic fundamentals also support this prognosis.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006 was minimal and not sharp when compared to that of 2002. The Dow is up 68.5% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 114.3% since October 9, 2002. The S&P600, small caps, is up even more by 135.5% since October 9, 2002.

The NASDAQ is down 52.7% from its historical weekending high of 5048.62 on March 9, 2000. The Dow is up by 4.7% from its previous weekending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 8.2% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 111.5% and S&P500 by 8.9% to establish new weekly closing highs.

Since August 18, 2006, the Mid-term Indicant generated 160-buy signals and only 36-sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003. Now that the heart and soul of bullish seasonality has expired, the resistance to generate sell signals has softened. Buying stimulants within the Mid-term Indicant are more reserved, but not as much during post election years.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias and bullishly evolving economic fundamentals. Regardless of the news last week, nothing fundamentally has changed the economic outlook.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue to meander, but with a slight southerly bias. Although the meandering behavior disappoints the stock market, the probability of increasing has diminished considerably.

Commodity prices remain mixed. Some of the continue hovering near their record highs. This depresses the opportunity for aggressive interest rate reductions.

As stated last week, the U.S. Dollar remains mixed with other currencies, but the bias is a slight strengthening trend. This strengthening is due, in part, to the meandering interest rates. Expect the dollar to weaken if interest rates decline.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 291.0% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 48.6%. It moved to the north in 15 of the past 21-weeks. This fund moved sharply to the north last week after participating in aggressive bearish expressions two weeks ago.

Fidelity Gold, Fund #28, is up 38.2% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 24.6%. This fund was not bullish last week. It has now moved south in the last two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 247.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 53.5%.

Vanguard Energy #18, VGENX, is up 167.9% (annualized at 42.2%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 126.9% (annualized at 38.4%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 122.3% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 33.8%.

These energy related funds rebounded mildly to the north last week after enduring significant bearishness two weeks ago.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 47.6% since then. It is annualized at 29.4%.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 168.0% (annualized at 41.9%).

Both of these contrarian ETF’s moved mildly to the north last week.

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

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

All ten major indices are bulls. They are up by an average of 20.7% since the Mid-term Indicant signaled bull an average of 86-weeks ago. That annualizes to 12.6%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

Dynamic bullish statistics were eliminated due to the Dow Transports bear signal and a new bull signal on January 19, 2007. The Dow Transports enjoyed a 23.1% gain from its March 21, 2003 bull signal until its bear signal on March 19, 2004. It fluttered with a new bull signal one week later on March 26, 2004 and enjoyed an 80.0%-gain until a new bear signal on December 22, 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $ $37,187,916

That beats buy and hold performance of $ $1,877,689 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $ $181,128. That beats buy and hold’s $ $137,413

on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $ $199,768.

That beats buy and hold’s $82,786 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

Mild bullish convergence last week offset the prior week’s solid bearish convergence. Last week’s rebound suggests bearish aggression two weeks ago is not sustainable.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 324.1% (annualized at 21.0%) since the Long-term Indicant signaled bull 801-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Only five of thirty; watch-out if all fall below red.

Quick-term Yellow Bears: None, but one ETF is below yellow, threatening bull status.

Short-term/Quick-term Non-Bearishness: Countering “sustainable” deep bearish ambition.

Force Vectors: Support for sustainable bullish behavior continues but being threatened.

Vector Pressure: Resistance to bearish dominance has been weakened, but resisting nonetheless.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Improving with increasing volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Monday, March 5, 2007

The expected rebound occurred with today’s largest market gain of the year. The Quick-term Indicant will form configurations over the next few days that will identify if today’s profound bullishness is a continuation of the underlying bull bias or a mere bullish spurt in the face of bearish dominance.

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

The Dow is up 6.8 % since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 7.8% since the Short-term Indicant signaled bull on the same day. They are annualizing at 13.9% and 15.9%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicator’s are completing their respective robust cycles. A lethargic configuration will not be supportive of bullish or bearish direction. As stated the past few days, a shift into a lethargic cycle will help the grip on the underlying bullish bias. Resumption of robustness with bearish expressions will encourage the bear to dominate. So far, the configuration is forming lethargically.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 60.2% (annualized at 29.7%) since their respective buy signals an average of 104.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 62.0% (annualized 31.5%) since the STI signaled, buy, an average of 101.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 13.5% (annualized at 18.7%) since the QTI signaled buy an average of 37.0-weeks ago. The Quick-term Indicant is not avoiding any of the ETF’s at this time.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicts, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull.

There are ninety hold signals out of a possible 90 and there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

Only one of the 30-ETF’s is below its bearish yellow curve. The average position of all thirty ETF’s is above bearish yellow by 6.5%. This is maintaining the market’s non-bearish posture. This non-bearish configuration remains strong but no longer with near-zero threat of sustainable and deep bearish behavior.

Only five ETF’s are above their respective bullish red curves. This supports the underlying bullish bias. Even though this is a small number of red bulls, it is enough for bullish encouragement.

All thirty ETF average positions are 1.3% below their bullish red curves. This attribute has been severely weakened in its support of the bullish bias. A negative number is not bearish, but it is certainly non-bullish.

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

None of the ETF’s are contacting their respective breakout lines. As stated the past several months, the high concentration of breakout-contact the past several months is solidly bullish, while the past few days have configured an absence of contact with recent bearish expressions. Although the bullish rebound was predicted, its magnitude remains shy of the bearish expression last week.

The average distance from breakout contact is at 5.2%. This no longer is safely tied to bullish exuberance latitudes, but remains close enough to re-position itself to that level.

None of the ETF’s are contacting their respective breakdown lines. The average distance from the price and breakdown is 19.5%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Twenty-seven of the thirty ETF Force Vectors are directed toward bullish domains. This is bullish on a micro cycle. Several bottomed last Monday. In the next few days, this attribute will help obviate the market’s intended direction. As long as there are no Quick-term yellow bears, non-bullish configurations have minimal relevance. However, if the ETF’s configure to yellow bear status with southerly moving Force Vectors and negative Vector Pressure, the market will be open to solid bearish dominance. Right now there are no yellow bears even though one ETF is below yellow.

As of March 6, 2007 several Force Vectors reversed direction. If they turn back to the south in bearish domains, the probability of sustainable bearish behavior will increase significantly.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today after several put signals two weeks ago. The model worked pretty good two weeks ago with a robust bearish cycle after the first bearish expression. After a meager rebound, which should have triggered your discounted offers into a buy, the market accommodated with another aggressive bearish expression.

Five ETF Vector Pressures are in bullish domains, which is down considerably and at the lowest levels since last summer. This configuration, however, continues to support the bullish bias shift from August 15, 2006. Positive Vector Pressure guards against bearish dominance. As long as Vector Pressure is positive (in bullish domains), bearish expressions are mere spurts without sustainability. If all shift into negative domains in the next few days with declining Force Vectors, the likelihood of bearish dominance will increase significantly.

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Last week’s bullish response to the prior week’s bearish aggression is significant. Although the response was milder than the prior week’s bearish behavior, any panic potential was offset by perceived buying opportunities.

Do not be surprised at bearish influences over the next few weeks/months. The bias suggests tracking toward the lower portion of the trading range mentioned earlier in this report. Such bearishness may not result in a reversal to the underlying bullish bias. This is because the trading range is northerly sloping.

The Quick-term and Short-term Indicant continue to express bullish bias.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/11/07

March 04, 2007 Indicant Weekly Stock Market Report

This Week’s Report

Conspiracy Theory

The phenomenon of commonality will disallow the majority from enjoying victory on a mid-term basis. Long-term investing for successful results can require nearly fifty years of commitment. Most people are not that patient or possess such planning skills to enjoy such success.

The markets punish from time to time. Sometimes that punishment is a mere slap in the face, like the crash of 1987 and sometimes the punishment is more severe like the collapse of 1929 or the NASDAQ collapse in 2000.

Sometimes the market’s punishment is substantive with real economic backing, like that of 1929 and the 1970’s. Sometimes the punishment is directed at the emotionalism that inflicted the punishment.

A few weeks ago, there were several widely published reports in the media about the historically significant bullishness of presidential pre-election years. It was a press release, as opposed to real news. Stock advisories do that sort of thing to stimulate new business. When the press decides to publish it, millions read it. Volume started increasing after these press releases were published. The average investor bought stocks and funds so they too could enjoy pre-election year bullishness.

Although the market did not propel higher due to these press releases and the hype surrounding them, many new investors continued to buy. A week later, Alan Greenspan stated a recession “may be” around the corner. He qualified his commentary that forecasting recessions is nearly impossible, but cited a few economic attributes that commonly occur ahead of economic recession. Shortly after his comments, the Chinese stock market endured significant bearishness. Now, that the world economy is more or less just one, markets around the globe took it on the chin.

Was this orchestrated by Wall Street? Did they get their pals to push bullish commentary to the masses and then await the Greenspan’s bearish commentary? It is highly unlikely Greenspan would be part of any conspiracy, while Wall Street thrives on it. The meandering nature of any market depresses commissions and other Wall Street middle man revenue. The declining Indicant Volume Indicator is never good news for Wall Street. They need high volume.

Conspiracy or not, the result is the bull continues to live. It has been wounded by the bear and may indeed succumb to the bear, regardless of economic reason. The Mid-term Indicant did not signal bear for any of the major indices. The Quick-term, Short-term, and Consolidated Indicant models did not signal bear or sell for any of the underlying ETF’s.

Deep and protracted bearish expressions seldom originate from bullish domains. Some of the ETF’s were red bulls when the market slid deeply to the south. This attribute suggests this is

Keep your eye on the Indicant Daily Stock Market report. The Quick-term Indicant can detect a bias shift quickly, while always attempting to remain immune to contrarian spurts.

Weekly Buy/Sell Summary – Stocks and Funds

The Mid-term Indicant generated one buy signal and 15-sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding only 28-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 12.7% since the Mid-term Indicant signaled sell an average of 21.6-weeks ago.

There were 54-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 9.4% since their respective sell signals an average of 22.0-weeks earlier.

Two years ago, on March 5, 2005, the Mid-term Indicant was avoiding 67-stocks and funds that were down an average of 29.3% since their respective sell signals an average of 53.6-weeks earlier. Three years ago on February 28, 2004 there were only 15-avoided stocks and funds. They were down by an average of 28.7% from their respective sell signals an average of 43.9-weeks earlier. On March 1, 2003, the Mid-term Indicant was avoiding 130-stocks and funds out of 296-tracked. They were down by an average of 10.6% since their sell signals an average of 7.2-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 301 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 108.8%. That annualizes to 57.7%. The Mid-term Indicant has been signaling hold for these 301-stocks and funds for an average of 98.0-weeks.

One year ago on March 3, 2006, the Mid-term Indicant was holding 290-stocks and funds out of the 345 tracked at that time for an average of 93.6-weeks. Those 290-stocks and funds were up by an average of 115.4% (annualized at 64.1%). The Mid-term Indicant was signaling hold for 249-stocks and funds of the 320-tracked two years ago on March 4, 2005. They were up by an average of 87.3% (annualized at 64.8%) since their respective buy signals an average of 70.1-weeks earlier. There were 249-stocks and funds with hold signals on February 28, 2004 since their buy signals an average of 43.6-weeks earlier. They were up by an average of 70.0% (annualized at 83.5%). The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On March 1, 2003, the Mid-term Indicant was signaling hold for 155-stocks and funds out of 296-tracked. They were up by an average of 21.1% (annualized at 58.9%) since their buy signals an average of 18.6-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. Until last week’s aggressive bearish expression, you have observed the historical significance of the political and stock market cycle of bullish behavior. Historical standards suggest last week’s bearishness will not be sustainable.

How has market fared after the conclusion of the heart and soul of bullish seasonality? From January 31, 2002 through September 30, 2002, the Dow fell 23.5%. The NASDAQ was down 39.4%. From January 31, 2004 until September 30, 2004, the NASDAQ fell 8.2%, while the Dow was down 3.9%. From January 31, 2005 to June 30, 2005, the Dow was down 2.0% and the NASDAQ down 0.4%. From January 31, 2006 through August 1, 2006, the NASDAQ was flat while the Dow was up a respectable 6.1%.

From January 31, 2003 through September 30, 2003, the Dow was up 15.2%, while the NASDAQ was up 35.3%. The last presidential pre-election year was 2003. Presidential pre-election years are traditionally bullish. So far this year, the Dow is down 4.0% since January 31, 2007 and the NASDAQ is down 3.9%. Last week’s aggressive bearish expression pushed the major indices into negative territory, which can happen after the heart and soul of bullish seasonality expires. Keep your eye on the Quick-term Indicant, which right now suggests the market endured simple a simple correction last week. Historical standards suggest the market will go much higher this year. Economic fundamentals also support this prognosis.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006 was minimal and not sharp when compared to that of 2002. The Dow is up 66.3% from the 2002 mid-term presidential election year bottom. The NASDAQ is up 112.5% since October 9, 2002. The S&P600, small caps, is up even more by 132.6% since October 9, 2002.

The NASDAQ is down 53.1% from its historical weekending high of 5048.62 on March 9, 2000. The Dow is up by 3.3% from its previous weekending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high. The S&P500 is down 9.2% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 113.2% and S&P500 by 10.1% to establish new weekly closing highs.

The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed dynamic follow-on bullish behavior due to this lack of demand. However, bullish expressions occur during the heart and soul of bullish seasonality regardless of any technical or fundamental reason. The meandering segments of 2004, 2005, and 2006 were appropriately followed by historically significant bullishness in each of those years.

Since August 18, 2006, the Mid-term Indicant generated 159-buy signals and only 34-sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003. Now that the heart and soul of bullish seasonality has expired, the resistance to generate sell signals has softened. Buying stimulants within the Mid-term Indicant are more reserved, but not as much so during post election years.

There are two important axioms to remember and are always repeated in this report. 1) Real economic wealth is created in only three ways - manufacturing, agriculture, and extraction. 2) The only positive influence politicians have on the economy is to undo their prior damage. They are now doing their damage in 2007, which is the current presidential election year. That is why the market typically finds a bottom in the mid-term election year. That is also why the presidential pre-election year is historically the most bullish on the four-year cycle. If the strength of the current Mid-term Bull can be subjected only to meandering behavior, like 2004, 2005, and 2006, then it is possible for the current Mid-term Bull to be a record setting one in terms of duration. However, as earlier stated in this report, this historical standard is being threatened.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0001.htm

Make certain you read the entire pages on the above link. You will see there are exceptions.

Stop Loss Management

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

The stock market’s bearish expression last week suggests that interest rates should soon plummet to the south. They continue to meander to the east. Unless the economy truly shifts into a recession, expect the market to rebound with declining interest rates.

Gold dropped with last week’s market decline. The interpretation is that inflation will be non-threatening during the perceived impending recession. Oil, on the other hand did not participate in last week’s bearishness, but its cyclical shift continues directed toward the southeast on the charts. As stated the past two weeks, do not be surprised at oil’s bearishness over the next few months. Although Gold has not shifted to bearish domains, its bearishness should parallel oil prices. It may not produce the same magnitude in price declines, but the configuration of bearishness should be congruent. This is because Gold has an emotional base, whereas oil supply and demand relationships are more influential on oil pricing.

The U.S. Dollar remains mixed with other currencies, but the bias is a slight strengthening trend. This strengthening is due, in part, to the meandering interest rates. Expect the dollar to weaken if interest rates decline.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 284.2% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 47.6%. It moved to the north in 14 of the past 20-weeks. This fund fell sharply last week after moving with significant bullishness in the previous two weeks.

Fidelity Gold, Fund #28, is up 38.6% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 25.2%. This fund lost nearly half of its gains in last week’s bearish expression after moving north for seven consecutive weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 243.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 52.8%.

Vanguard Energy #18, VGENX, is up 161.3% (annualized at 40.7%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 118.3% (annualized at 36.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 116.8% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 32.5%.

The energy related funds were exceedingly bearish last week as the market’s decline was based on economic pessimism, which would generate less demand for petroleum. Rest assured that is temporary thinking, as capitalism is difficult to dissuade in its earlier stages.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times. Fundamentals appear to be shifting in favor of selling the above funds (09/10/06). Do not sell until the Mid-term Indicant signals sell. They continue to rebound and are enduring potential fluttering. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate at this time.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 46.4% since then. It is annualized at 29.0%. Its bullish position is being threatened on a Quick-term Indicant basis.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 160.7% (annualized at 40.3%). This fund endured the same bearish expression last week.

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

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

All ten major indices are bulls. The Dow Transports again received a bull signal. They are up by an average of 19.5% since the Mid-term Indicant signaled bull an average of 85-weeks ago. That annualizes to 12.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006, where the S&P400 and S&P600 increased by 66.3% and 79.3%, respectively.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $ $36,696,512

That beats buy and hold performance of $ $1,853,009 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $ $179,103. That beats buy and hold’s $ $135,877

on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $ $198,133.

That beats buy and hold’s $ $82,108 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.4%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

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

Divergence versus Convergence

Last week’s behavior was solid bearish convergence. Four consecutive weeks of this configuration will obviate a sustainable bear market. This was preceded by bearish divergence the week before last, but the weekly count is only one. Three more in a row will generate many sell signals and following avoid signals may last for quite some time. Keep your eye on this attribute.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 17.3% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 318.5% (annualized at 20.7%) since the Long-term Indicant signaled bull 800-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Only four of thirty; support for bullish bias continues, but weakened.

Short-term/Quick-term Non-Bearishness: Countering “sustainable” deep bearish ambition.

Force Vectors: Support for sustainable bullish behavior continues but being threatened.

Vector Pressure: Resistance to bearish dominance weakened slightly today, but still strong.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

Overall Market Status: Bullish support on a Quick-term basis.

Profit Potential from Naked Options: Improving with increasing volatility.

Volume: Configurations support bullish bias.

Special Comments Continued from Tuesday, August 15, 2006 – Bias Shift to Bullish

The Quick-term and Short-term Indicant remain bullishly biased.

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

The Dow is up 5.9% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 6.9% since the Short-term Indicant signaled bull on the same day. They are annualizing at 11.4% and 14.7%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

Volume remained high on today’s aggressive bearish expression after similarly high volume on last Thursday’s mild bullish expression. This configuration sometimes relates to an inflection point on a trend shift. This needs to be monitored as a shift in trend usually occurs before the fundamental changes that justify the directional shift, such as economic recession.

As stated yesterday, there is no solid evidence of an impending economic recession. The only reliable predictor of recession is the stock market, itself. It is certainly not economists, including those who are retired.

Both Indicant Volume Indicator’s are firmly entrenched in a robust cycle. As stated in Thursday’s Daily Stock Market Report, the high volume is an exchange between those who embrace Greenspan’s comments and those who remain bullish. Apparently, there is a high number of believers on both sides with most of the weight in favor of Greenspan’s bearish commentary. The stock market will eventually resolve the conflict ahead of economic performance. If the high volume continues on bearish expressions, the direction and economic conclusion to this bearish cycle will be obvious to you.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 56.9% (annualized at 28.3%) since their respective buy signals an average of 103.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 58.7% (annualized 30.1%) since the STI signaled, buy, an average of 100.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 11.7% (annualized at 16.7%) since the QTI signaled buy an average of 36.0-weeks ago. The Quick-term Indicant is not avoiding any of the ETF’s at this time.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicts, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull.

There are ninety hold signals out of a possible 90 and there are no avoid signals. This ratio supports sustainable bullish behavior.

Quick-term Indicant Bull/Bear Health Report

One of the 30-ETF’s is below its bearish yellow curve. The average position of all thirty ETF’s is above bearish yellow by 5.0%. This is maintaining the market’s non-bearish posture. This non-bearish configuration is strong with near-zero threat of sustainable and deep bearish behavior.

Four ETF’s are above their respective bullish red curves. This supports the underlying bullish bias.

All thirty ETF average positions are 2.4% below their bullish red curves. This attribute has been severely weakened in its support of the bullish bias. A negative number is not bearish, but it is certainly non-bullish.

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

None of the ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact the past several months is solidly bullish, while the past three days there has been zero contact.

The average distance from breakout contact is at 6.7%. This no longer is safely tied to bullish exuberance latitudes, but certainly close enough to re-position itself to that level.

The average distance from the price and breakdown is 17.6%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Only one of the thirty ETF Force Vectors are directed toward bullish domains. This is non-bullish, while not yet bearish.

Force Vectors are expressing a significant bearish robust cycle. As long as this occurs, it is not recommended to play aggressively long in the market.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were three more put option buy signals. Aggressive plays should be avoided.

Twenty-three ETF Vector Pressures are in bullish domains, which supports the bullish bias. Positive Vector Pressure guards against bearish dominance. As long as Vector Pressure is positive (in bullish domains), bearish expressions are mere spurts without sustainability. This dropped by five from Wednesday’s close and the lowest it has been since last August. Close surveillance of this attribute is now required.

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

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

Quick-term and Short-term Indicant Summary

Based on Vector Pressure configurations and increasing bullish bias, do not write covered call options at this time.

The Quick-term Bull remains in tact.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

Last week’s bearish behavior endure solid bearish convergence. Three or more consecutive weeks of this configuration will manifest into a sustainable bearish cycle. Furthermore, a robust Indicant Volume Indicator, coupled with bearish expressions will obviate the market’s intention in addition to the identification of economic recession.

The Quick-term Indicant’s Force Vectors are in a robust negative direction for the first time in quite some time. However, the current cycle is maturing and a rebound in stock prices is around the corner. The accompanying configurations will identify if the rebound is a mere bullish spurt to be followed by bearish behavior or bullish sustainability. Keep your eye on the Daily Stock Market Report.

The Quick-term and Short-term Indicant continue to express bullish bias.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/04/07