Mar 2008 Indicant Weekly Stock Market Report

March 30, 2008 Indicant Weekly Stock Market Report

Volume 03, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

The Stock Market Only Wants Four Simple Things Plus One

The four simple things are 1) economic growth, low interest rates, low inflation, and no deflation. So far, three of the four are in good shape. The plus one popped up again; that is voodoo bookkeeping, lying, and/or stupidity. It is unknown when voodoo bookkeeping originated, but it gained prominence with Enron. Apparently, Bear Stearns read the Enron manual and unleashed its misery. Other big banks are most likely in trouble, along the lines of Bear Stearns. It will be interesting to see if they are forthcoming about that ineptness versus voodoo bookkeeping. Keep in mind that many big banks lost hundreds of millions on the Enron scandal. That was just one company. The ma and pa real estate operations are many.

Free markets impose complete and appropriate disdain for voodoo bookkeeping. Some may prefer to see words, such as deception, dishonesty, or softer terms, other than lying. It is lying. There is no gray in assigning debits and credits and reporting numbers. Numbers were invented because of their clarity. Debits are on the left hand side and credits are on the right hand side of the ledger or T-account. A debited asset is equal to the credited cash or debt incurred. Sure, there are funny accounts called goodwill, etc., but they are clearly expressed on the balance sheet so that a viewer can subtract their value if there is an “opinion” as opposed to simple arithmetic that assigns that value. It only takes a few seconds to assign a $750,000 value to a home, but when no one is willing to pay that prices, the books are cooked. When the bookkeeper does not adjust it downward, to say, $450,000, that bookkeeper is a simple liar and should be tossed into jail-a real one. That is because the bookkeeper got his or her salary, probably received a bonus because of the phone $300,000 profit, and the shareholder lost money on the value of the stock when the truth was learned. Some can rob a bank and some can rob shareholders. Either way, it is stealing.

Voodoo bookkeeping’s impact on the stock market remains unknown. Rest assured, though, it will be strategically unfavorable. It appears that a lying president, such as Bill Clinton, has imparted social acceptance of that practice in contemporary U.S. society.

Analysts may start peering more at bank balances, as opposed to income statements, balance sheets, and cash flow statements released by corporate bookkeepers. Accounting is one of the most structured professions, while those of weak character and of the moral judgment of a reptile have corrupted the standards of accounting. Now, politicians think they are going “solve the problem.” They will not. They will only exacerbate the problem. A significant amount of their political donations are derived from voodoo bookkeeping type of organizations. In other words, they are all pals.

Capitalistic thinking solves all problems. Politicians on create problems. Bear Stearns voodoo bookkeeping and the idiots who created the subprime mess opened up Pandora’s Box for political intervention. Politicians love it when a huge number of people have problems. That way they can tell those huge numbers of poor souls what they want to hear and garnish all those votes. Of course, those poor souls position in life will not change in the long run. After all, they actually believe what the political voices say. And there is nothing there. So, watch for more regulation. Watch for socialistic minimization of risks. With that, there will be the offsetting minimization of reward. Following that, the bull’s potential will be dampened.

The magnitude of the bull is influenced by those few who escaped the pitfalls of risk. Without the risk, the reward is muted. The quality of life will take on the dreaded “flat line.”

However, even with that, the Short-term outlook for the stock market is bullish. There are times when the stock market forgets about the big picture, which is what the first few paragraphs of this section addressed. The market will focus on three of the four simple things as being okay.

The damper on the economy is the consumer. That $300,000 equity they thought they had is not there. Many already spent that phony $300,000. Their inability to buy is becoming more apparent each day. They have depressed retail sales. That will depress production. That will lead to layoffs and further reduce consumer spending. That is how depressions get started. After that, deflation sets in. When that happens the stock market crashes to extremely low levels. It will take some time, however, for that scenario to unfold. Political influences will most likely accelerate that sadness in 2009.

There is a silver lining for 2008, though. The “cheap U.S. dollar is offering some bullish potential. This offers two scenarios, one of which is underway right now. Those with a penchant for exporting products and services should add to the payrolls. The balance of trade is approaching parity. The U.S. may become the “poor country.” Just as the dilettantes export jobs overseas, many foreign managers have imported plenty of jobs in the U.S. and are positioned to reap financial benefit. Keep in mind, the U.S. worker is among the most productive in the world.

The U.S. has been headed in the wrong direction for over ten years. Organizations, such as the United States of America, who head in the wrong direction, always pay a price….

Dilettante management moved labor operations overseas over the past several years. There is nothing wrong with that since it helps the bottom line. But what these dilettantes are doing is setting the framework for their replacements. Rest assured, the next big wave of lost jobs in the U.S. will be middle management first and then the upper crust will feel the ax. Those ridiculous seven digit salaries are going to become obsolete in a few years. That is fine. It will help the bottom line and get rid of those who get fat “unearned pay checks.” A Chinaman with the same or even sharper skills will be happy to garnish $50,000 or so. That has been occurring in India for quite some time. The Russians are not resting either. Those concerned about Wolverine football have no chance at those who do not have Saturday afternoon distractions in the autumn.

Shareholders will opt to pay a foreign manager wages to one who is more capable than the U.S. manager. There is not one hireling who is worth more than $250,000 per year in the United States. The only exceptions to this are those who put their entire life savings into their organizations, as well as their body and soul, such as the Bill Gates, Michael Dell types. Resume writers’ who luck into those seven digit salaries days are numbered. Those types lined the hallways of Enron and Bear Stearns. We have seen their true capabilities, moral fiber, and unbelievable ineptness.

It is difficult to assess who owns corporations with foreign investments ebbing and flowing into and out of corporations. More foreigners should find tremendous economic opportunity at buying stocks through U.S. stock exchanges. That should depress the supply of stocks available to buy and thus impart upward pricing pressure on stocks as long as the U.S. dollar is weak.

The Dow is down 7.9% so far this year. The last bearish election year was Bill Clinton’s 1997 with a 6.2% drop in the Dow. Since World War II, there have only been four bear markets in post election years. The worse was Eisenhower’s 9.3% drop in 1957. The stock market is obviously sensitive to the destructive behavior of politicians. It also knows that politicians and their appointees bias policy in favor of fat pocket books and purses on Election Day. That is why the post election year since 1832 loses money. This is also one reason to expect bullish stock market behavior before the end of this year. And that is also the reason to expect 2009 to be bearish.

Keep in mind if the bear regains momentum, the Quick-term and Short-term Indicant will advise. Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated no buy signals and three sell signals. This brings the total buy signals to 65 since February 1, 20008. The number of sell signals is at 185 since October 26, 2007.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 202 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 128.8%. That annualizes to 55.4%. The Mid-term Indicant has been signaling hold for these 202-stocks and funds for an average of 120.9-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 140-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 21.8% since the Mid-term Indicant signaled sell an average of 24.1-weeks ago.

One year ago, on Mar 30, 2007, the Mid-term Indicant was holding 273-stocks and funds out of the 345 tracked for an average of 103.4-weeks. They were up by an average of 121.9% (annualized at 61.3%). There were 70-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 5.6% since their respective sell signals an average of 12.0-weeks earlier.

The Mid-term Indicant was signaling hold for 282-stocks and funds of the 345-tracked two years ago on Mar 31, 2006. They were up by an average of 129.4% (annualized at 68.3%) since their respective buy signals an average of 98.6-weeks earlier. The Mid-term Indicant was avoiding 56-stocks and funds at that time. They were down an average of 9.0% since their respective sell signals an average of 24.3-weeks earlier.

There were 230-stocks and funds with hold signals on April 1, 2005 since their buy signals an average of 76.5-weeks earlier. They were up by an average of 87.2% (annualized at 59.3%). There were 87-avoided stocks and funds at that time. They were down by an average of 29.1% from their respective sell signals an average of 52.3-weeks earlier.

On Mar 27, 2004, the Mid-term Indicant was signaling hold for 249-stocks and funds out of 296-tracked. They were up by an average of 71.0% (annualized at 75.8%) since their buy signals an average of 48.7-weeks earlier. The Mid-term Indicant was avoiding only 43-stocks and funds. They were down by an average of 24.7% since their sell signals an average of 39.3-weeks earlier.

Five years ago, on Mar 2, 2003, there were 241-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 29.7% (annualized at 75.6%) since their respective buy signals an average of 27.5-weeks earlier. There were 36-avoided stocks and funds then. They were down an average of 29.7% since their respective sell signals an average of 26.6-weeks earlier. There was one buy signal and 18-sell signals on this weekend five years ago.

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 on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is imbedded in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months.

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

The Dow is up 67.7% since its secular low on October 9, 2002. The NASDAQ is up 103.0% and the S&P500 is up 69.3% since then. The small cap index, S&P600, is up 112.0%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 13.8% since its last weekly closing peak in 2007. The NASDAQ is down 20.9% since its last cyclical peak in 2007. The S&P600 is down 18.7% since its last closing weekly peak value in 2007. The Small Caps Index was mildly bearish last week with a 0.1% decline, while the blue chips were slightly more bearish with a 1.2% loss.

The NASDAQ is down 55.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 13.9% since its similar secular peak on March 23, 2000. The Dow is up by a mere 4.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 123.3% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 7.9% so far this year. The NASDAQ is down 14.7% this year.

The NASDAQ year-to-date performance was bearish by 24.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So far, this year looks similar to that of 2001. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles. The NASDAQ was down by 5.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 2.6%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 2.2% and down 8.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 4.5% and up by 0.1% at this time last year. As previously stated, so far this year, the DOW30 is down 7.9% and the NASDAQ down 14.7%. The NASDAQ and Dow are down at this time of year more than any other year this century with the exception of 2001.

Bearish behavior this year contradicts historical standards whereby the presidential election is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates, but the stock market is short of buyers who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus. So, many are losing their homes and having to incur the wrath of the bear at the same time. Even with that being said, the Quick-term and Short-term Indicant are configured for a bullish spurt on the immediate horizon. As earlier stated, and repeated from last week, those configurations are in a precarious position and could evaporate at any time.

The bullish bias shift on August 15, 2006 expired on January 4, 2008. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%. The NASDAQ was down 9.9% since the expiration of that bullish bias shift on March 11, 2008. The Dow was down 5.0%. The ensuing bearish bias expired on March 11, 2008. The Dow is up 0.5% since the March 11, 2008 bullish bias shift. The NASDAQ is up 0.2% since then.

As stated last week, the presidential pre-election year of 2007 was below average (+10.5%) with the Dow gaining 6.4%. This was the smallest gain since Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in October of that year.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The required avoidances are inflation and economic stabilization.

Three of the big four are okay for the time being; inflationary threats have cooled, interest rates are low, and deflation is not yet threatening. The only unfavorable condition for stock market bullishness is the weak economy. The unknown is voodoo bookkeeping. The market reacts to corporate earnings. If those earnings are perceived as fiction, the market will move bearishly. Fictional financial representations and the stock market do not mix at all.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to bearish tendencies. Although the market is positioning for a bullish rebound, it has yet to demonstrate that directional intensity.

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 the past twenty weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation.

Although demand is softening and recent data suggest inflationary threats are resigning, it is remains a primary threat. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Commodity prices rebounded this past week, after falling precipitously last week. It is too early to tell if last week’s behavior was an aberration or the beginning of a southerly trend. The bounce north did not set new highs.

Interest rates rebounded somewhat last week, but remain at historically low levels.

The U.S. Dollar again weakened this past week. Continuing weakness should stimulate some increased demand for U.S. based stock by foreign investors. Also, U.S. exporters should enjoy increased demand for their products.

As stated last week, 2009 is setting up to be a solid recession.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 373.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 52.9%. It moved to the north in 49 of the past 81-weeks. It has been bullish in 20 of the last 32-weeks. This fund has been bullish in five weeks of the last seven weeks. It was solidly bullish last week, following solid bearishness in the previous week.

Fidelity Gold, Fund #28, is up 15.8% since its buy signal on September 7, 2007. It is annualized at 27.9% since that buy signal. This fund was solidly bullish in four of the past six weeks. It was bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 307.0% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 53.9%. This fund was bullish last week, following solid bearishness in the previous three weeks.

Vanguard Energy #18, VGENX, is up 219.6% (annualized at 43.5%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 203.2% (annualized at 46.5%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 180.4% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.5%.

These energy related funds were extremely bullish last week after being equally bearish in the previous week.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. 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.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 111.1% since then. It is annualized at 41.3%. This fund has been bullish in twenty-three of the past thirty-one weeks. It has been solidly bullish in four of the last six weeks. It was bullish last week, following significant bearishness in the previous week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 242.3% (annualized at 47.7%). This fund has been bearish in six of the past twelve weeks. It was bullish last week.

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

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

The Mid-term Indicant signaled bull for all ten major indices it tracks on March 20, 2008.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,681,066

That beats buy and hold performance of $1,858,573 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $174,196. That beats buy and hold’s $128,829 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,851. That beats buy and hold’s $78,404 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the 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% covering 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.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for this fund on March 20, 2008 after it garnished 8% gain since its buy signal last January. It is down 2.3% since the March 20 sell signal.

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 322.0% (annualized at 19.6%) since the Long-term Indicant signaled bull 856-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. 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: Two of thirty; neither are non-contrarian, losing mild bullish support. This should annoy the bull enough for it to exert some influence early next week.

Quick-term Yellow Bears/Threats: Twenty-one of thirty with continuing, but diminishing bearish support.

Quick-term Non-Bearishness: QTI differential is bearish 8.5%. Bearish support continues to relax.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 6.5%. Bearish support continues to diminish.

Force Vectors: The recent bullish cycle is mature, but many nestled deep inside bullish domains. Although not a strong offensive position for the bull, it has afforded a strong defensive position against bearish aggression. As stated the past three days, do not be surprised at bearish behavior on a near-term basis, which should be mild, based on current configurations. Unfortunately, this was an accurate prognosis. Configurations are setting up for some bullish behavior. Please read on.

Vector Pressure: Eight in bullish domains, which is non-bullish, but increases by three since last Wednesday is supporting bullish behavior. The key indicator for bullish dominance on a Quick-term basis is for Vector Pressure to cross into bullish domains more thoroughly than the recent increase. If Force Vectors turn sharply to the south, the expected bullish response will be delayed for several days.

Immediate Tactics: Buy aggressively with the mind set that 2009 will most likely be extremely bearish. Although the current cycle may indeed be a bullish spurt, it could last for several months. If not, the Indicant’s daily stock market report will advise.

Current Quick-term Bias: Many ETF’s contacted bearish yellow (or in near contact) last Tuesday. As stated the past three days, such interactions typically incite bull/bear battles. Be prepared for some volatility in the next few days. Many of the major indices’ Vector Pressure is nearing bullish domains. Such proximity also induces bull/bear battles. So, do not be surprised at increased volatility, but with a slight edge to the bull in the next few days.

Overall Market Status*: 8/15/06-bullish-bias expired on 01/04/08; Bearish bias expired March 11, 2008.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Preparing for lethargy, which supports mild bullishness. This means the Dow could enjoy a 200 point gain followed by a 180 point loss. In other words, lethargy does not necessarily mean market stability. There point here is there is little interest in directional intensity in either direction. Bearish behavior the past three days was not supported by volume.

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

Click this sentence to view the VIX chart. As you can see, it remains in position for cyclical behavior supporting a Quick-term Bull cycle.

Even with today’s mild bearish expression, the S&P600 Force Vector continued to rise. It eclipsed bearish domains three days ago. As originated in the March 24, 2008 daily stock market report, it was stated to not be surprised at bearish pressure in the next few days. As stated the past three days, the Force Vector eclipsing of bearish domains is predecessor to bearish expressions of varying magnitude and do not be surprised at bearish pressure in the next few days. Click this sentence to view the S&P600 chart.

As stated last Wednesday, you can see from the chart, there is a considerable gap between the S&P600 and its bullish red curve. This gap, unfortunately, leaves considerable room for bearish expressions without disrupting the Quick-term Bull now in progress. As of last Wednesday a drop of 2.5% would interact with the bullish red curve. This index fell to bullish red this past Friday. The last three interactions with bullish red resulted in a short bullish spurt. This interaction is expected to provide more bullish sustainability, based on current configurations.

This paragraph from the March 26, 2008 daily stock market report will remain unchanged until configurations obsolete its message. Strong bullish behavior from its current level would cause overheating and thus embellish bearish ambition on a Quick-term basis. Profit-taking by short-term traders would incite more fear and thus cause the market to drop deeply. So, it may sound weird, but those of you desiring bullish behavior should prefer some mild bearishness over the next few days. This will allow the bull to solidify its position for a solid bull cycle for the next several weeks. Most of the recent ETF buy signals remain in winning position, albeit small. So keep your eye on the Daily Stock Market Report. If this “bullish prognosis” is premature, rest assured, sell signals will be unleashed. If the bullish cycle is not imminent, there should be at least one solid bullish cycle this year with declining interest rates and at historically low levels. If this increased liquidity does not inspire economic improvements, the recession will border the next worse term; that is depression.

The expected bullish bounce did not occur on Friday. There should be one early next week. Configurations surrounding such a bounce will add insight as to the substance of the Quick-term Bull cycle prognosis and its potential sustainability. This is a tough uphill battle, but the market has a knack for doing that when fundamentals suggest a downward slope would be more appropriate. Remember, the market does not react to today’s events. It can become optimistic about the future when the common person is depressed about economic outlook. The stock market does not care about personal feelings. It desires a few simple things; economic robustness, low interest rates, low inflation, and no deflation. So far, three are in pretty good shape.

The Short-term Indicant signaled bull on Tuesday, March 18, 2008. The Dow is down 1.4% and NASDAQ is down 0.3%, respectively, since that bull signal.

Please read on. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicators are now falling into a lethargic pattern continuing the cause of little dynamic behavior in either direction. Light volume last Thursday and Friday did not support bearish expressions on those two days. This attribute favors bullish responses.

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 25-ETF’s. They are up by an average of 47.1% (annualized at 34.7%) since their respective buy signals an average of 69.9-weeks ago. Although there were no sell signals, the SQI is avoiding six-ETF’s at this time. They are down by an average of 7.5% since their sell signals an average of 10.2-weeks ago.

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 27-ETF’s. They are up an average of 60.4% (annualized 41.6%) since the STI signaled, buy, an average of 74.7-weeks ago. Although there were no sell signals, there are four ETF’s with avoid signals. They are down by an average of 9.9% since their sell signals an average of 11.5-weeks ago.

The Short-term Indicant is 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 26-ETF’s. They are up by an average of 10.4% (annualized at 33.1%) since the QTI signaled buy an average of 16.1-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding five-ETF’s. They are down by an average of 8.9% since their sell signals an average of 11.6-weeks ago.

Conflicts Between the Short-term and Quick-term Indicants

There is one conflict, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The combined Short/Quick Indicant models identify 80-hold signals and only ten-avoid signals, providing a bullish edge. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008. That bias shift remains in effect, but in precarious position.

Quick-term Indicant Bull/Bear Health Report

Twenty-one of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 1.5%. After configuring with bullish support last Wednesday for the first time since early January, the bear took offense with bearish responses the past two days. This is setting up well for a counter attack by the bull.

Only two of the ETF’s are above their bullish red curves. All thirty ETF average positions are 7.1% below their bullish red curves. Unfortunately, the two red bulls are non-contrarian, which no longer supports bullish bias.

The QTI differential is minus 8.5%, which supports the bear, but diminishing in that 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.

None of the thirty ETF’s are contacting their breakout lines, which is non-bullish.

The average distance from breakout contact is 16.8%. Double digit variances from breakout contact for fifty-seven consecutive trading-days is not supportive of the bull.

None of the thirty ETF’s are contacting their breakdown lines, which is non-bearish.

The average distance between the price and breakdown is 10.3%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support. This is falling precariously close to single digit support. The last time that occurred was in August 2002, near the depth of the great bear leg from late 2000 through October 2002.

The breakout/breakdown differential is bearish 6.5%. This is a bearish attribute, shifting away from bearish support.

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-six Force Vectors are in bullish domains. That is up by sixteen in the last six trading days, which is offering bullish energy. You will notice many appear to have pinnacled. Their impending southerly movement will add insight to directional intensity.

Most of the non-contrarian ETF’s approached their respective bearish yellow curves, which was expected. Timidity is always a problem in catapulting the bearish yellow curve after solid bearish onslaughts. If they start moving southerly again with some crossing above bearish yellow, the bear may regain solid control.

Unfortunately, the two non-contrarian ETF’s with red bull status evaporated with Friday’s bearish expression. If that does not incite an immediate bullish response, the bear may resume dominance, but configurations suggests such a response would be muted and short-lived.

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 after Friday’s close. There have been three call option buy signals and no put option buy signals the past three days. This offers mild bullish support.

Bearish behavior the last Thursday and Friday setup well for deeply discounted buy offers for recent call option buy signals. Do not be surprised at bullish support in the next day or two. However, for profits to manifest, a bullish response is required on Monday as the two day hold period will expire.

Only eight of the thirty ETF Vector Pressures are in bullish domains, which continues configuring in support of the bear. However, that is an increase by three since last Tuesday. As stated last Wednesday, this attribute had been holding steady and should increase in the next few days. Continuing increases with this attribute will enhance bullish strength. Many are on the verge of passing into bullish domains which would be a blow to the bear.

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 bullish bias shift that began on August 15, 2006 expired on January 4, 2008. However, a new bullish bias was born on March 11, 2008. It is not a thoroughbred, though. It is tainted with Enron-like misguidance from Bear Stearns.

Continue avoid writing covered options due to volatility.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is holding QQQQ. You will notice the Mid-term Indicant is signaling sell for ProFunds Ultra Short this past weekend based entirely on the recent buy signal of QQQQ by the Quick-term and Short-term Indicant.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. This ETF is relatively new and has not yet developed enough data to formally track its outlook. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID 1.4-weeks ago. It is no longer configured as a red bull. It is down by 2.4% since all three models signaled sell. You will notice that its Force Vector is deep inside bearish domains.

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

Divergence versus Convergence

The markets have now enjoyed three consecutive weeks of bullish divergence. Energy and commodities were again bullish, while the stock market was mixed.

Indicant Conclusion

On the surface, it appears the stock market is primed for a bullish cycle with plummeting interest rates. Commodity prices were not supportive last week, as they rebounded from the prior week’s bearish behavior. However, a reduction in consumer demand has dampened inflationary threats for the time being. On the other-hand, this could be interpreted as a projection to economic recession/depression. In other words, the threat of deflation may loom. Such a bearish scenario has greater opportunities in 2009 with anticipated political meddling.

Severe bearishness is expected in 2009, as the stock market is expected to conform to historical standards. New political leadership will then be in office and rest assured their focus for economic well being will not be until 2010, the mid-term election year.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/30/08

March 23, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Aberrations and Trends

On Thursday, March 20, 2008, several economic configurations shifted in support of a bullish stock market. Commodity prices fell. Interest rates fell. The stock market was up. The only remaining unknown variables for bullish influence are corporate earnings and economic well-being. This evaluation is superficial in the sense that one day’s performance is not a trend or even a cyclical movement. However, the underlying fundamentals offer increasing potential for bullish behavior.

Declining interest rates, coupled with minimal inflationary threats, is typically a no-brainer when prognosticating a bullish stock market. Those attributes manifested last Thursday. The stock market reacted bullishly, which is a standard expectation based on any fundamental analysis. A continuation of these dynamics should foster bullish market behavior.

Although this is a superficial overview, it is not without substance. Fundamentals are always the eventual force of stock market direction. This should be enough to incite a solid bullish cycle. In other words, the stock market should enjoy bullish behavior for several weeks. Even if such a bullish cycle were a mere spurt, it should be sufficient for a double-digit gain (ten percent or more).

As more data is accumulated over the next few days/weeks, such as corporate earnings and economic health, the market will react accordingly. Those desiring bearish behavior will want to argue on behalf of economic recession/depression and related deflation.

Some folks have been critical of the Federal Reserve raising interest rates in 2006 and 2007. Many blame the Fed’s behavior as the culprit leading to the sub-primed lending crisis. There is little doubt their raising interest rates was influential to the sub-prime crisis. However, in defense of the Fed, inflation could not be ignored. Energy and other commodities were rising at breath-taking rates and thus fostering a valid threat of inflation. The Fed’s job is to minimize inflation to healthy levels of around four percent or less. Keep in mind, the Fed during periods of perceived equilibrium will opt to fend off inflation, when its threat is present. That was an issue when oil prices topped $75/barrel.

Many folks are blaming the Fed but with a blind eye to the inflationary threats. Those folks are economic descendants of those who set policy supporting double-digit inflation and double-digit interest rates in the 1970’s. They are not genius. They are two dimensional, hindsight analysts looking for hype to promote their own well-being. It is easy to be critical “after the fact.”

On the other hand, how much are Fed employees and political appointees paid? Anyone with an eighth grade education can plot commodity prices and then plot paralleling interest rates. These Fed folks have degrees in economics and we all know their record. Most cannot advise of a recession before the recession. Most of the time they confirm economic hardship a couple of years after it ends.

The Federal Reserve’s understanding of human nature and mortgage contracts by the gullible and for the gullible are unknown. It is apparent, though, the Fed’s behavior was reactionary to inflationary threats and then to economic gloom. It took stock market calamity to prompt the recent policy adjustments now unfolding. Reactionary folks’ salaries should be held to a minimum since anyone with an 8^th grade education can do that. The top salary in the Fed should not be more than six digits based on the supply of folks who can do the job versus the demand of the handful of folks “on the job.”

Human nature holds that folks will buy the mansion based on emotion and the “perception of affordable monthly payments.” The blinding emotion is predecessor to the incapability of considering the maximum monthly payments with rising interest rates contributed to the problem. Those who work for a salary and bonuses cannot elevate their income to vacillating mortgage payments. The folks in the mortgage industry who made those deals are not very bright. This is especially obvious when they could not do what an eight grader can do; plot oil prices and interest rates. So, as those idiots were lining up mortgage deals for the gullible and emotionally blind people signing them, chaos unfolded.

Energy is a requirement of contemporary society. No bureaucrat, intellectual, or politician will solve the problem of finite supply against rising demand. They will jibber-jabber about it, but will not solve the problem. They want you to think they know the solution, but every enjoyable possession you have was not provided by a bureaucrat, intellectual, or politician. If enough people think politicians, intellectuals, or bureaucrats are the savior, the stature of these pontificators increases and the net worth of those listening to them decreases.

It will be interesting to see the stock market’s interpretation of economic health, inflation/deflation, and corporate earnings potential in the next few days/weeks. The early interpretation should be a reduced threat of inflation. That, coupled with little income potential from fixed securities, such as CD’s, should bode well for those desiring bullish behavior. The Indicant suggests this will influence at the very worst a bullish stock market spurt. After all who is going to buy a bond or treasury note earning less than the last CPI? And who is going to stuff cash inside the mattress when the CPI is as high as it is? Who is going to buy real estate right now? Stock prices move up and down based on supply and demand in the short-run, while fundamentals guide the longer-term trends. So, with that in mind, the thinking right now is a bullish stock market, even it is just a mere spurt. Fundamentals suggest this spurt has the potential for sustainability.

If, and when, data streams start indicating serious economic weakness with reduced corporate earnings and the potential for deflation, the bullish spurt will expire and be followed by a severe bearish cycle. Well, there may be a critical mass that will convert their cash to gold, but not right now. Defaulting on commodity margin calls is a demand depressant and thus downward pricing pressure. That also happened last week.

The economy is much more diverse and expansive with an increasing number of capitalist around the planet. That contrasts to the serious increase in socialism from the FDR era and communism around the planet in the 1930’s. FDR was one of those intellectuals who had the masses believing in him. Economic hardship has a way of allowing “control freaks” to influence masses of humanity. The price for the idiots believing in an idiot was about twenty years of economic hardship and World War II.

At any rate, let’s take a look at the technical data. The S&P600 finally broke out of that bearish trading range. Click the below sentence to view the S&P600 Mid-term Indicant Chart.

http://www.indicant.net/Non-Members/Back%20Issues/Supplements/Mar/2008-03-23%20Supplement.htm

The Short-term Indicant continues configuring with bullish attributes for the S&P600. As stated last week, it remains in a precarious configuration, which is common to such embryonic attributes. This could be another short-lived bullish spurt, but even if so, a bearish cycle would also be short-lived. However, the Indicant is never tolerant of bearish cycles. The first hint of trouble will be accompanied by sell signals. Click this sentence to view the Short-term Indicant’s chart for the S&P600 Index.

The problem with the rising Force Vector is the maturity of the current cycle. It current cycle is longer than average. However, it elevated itself above Force Vectors. So, a dip to the south has resistance potential from bearish onslaughts.

Click this sentence to view the Short-term Indicant’s chart for the VIX Index. As stated most of last week, the VIX is configured for bearish behavior, which is contrarian to the stock market. Although the VIX is reactionary to the stock market, as opposed to the other away around, its technical position from time to time is considered during inflection points, which is now underway. Such inflection points are always required for shifts in directional intensity. That does not mean sustainability, but worthy of taking some abnormal risk.

Most of the other indices escaped their similarly bearish sloping trading ranges, as well, this past weekend, prompting early bull signals by the Mid-term Indicant.

The stock market’s bear early this year has offered the potential for significant gains this year. The inherent risk of being aggressive with early participation of a potential bullish gain outweigh the risk of “waiting” for additional confirmations. It is unlikely this year will be very bullish, overall, but from the current depth of this bear, the gains could be significant, but only to the extent of early participation.

Keep in mind if the bear regains momentum, the Quick-term and Short-term Indicant will advise.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated forty-seven buy signals and one sell signal. This brings the total buy signals to 65 since February 1, 20008. The number of sell signals are at 182 since October 26, 2007. Selling has stabilized somewhat.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 158 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 175.3%. That annualizes to 57.3%. The Mid-term Indicant has been signaling hold for these 158-stocks and funds for an average of 159.2-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 139-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 21.6% since the Mid-term Indicant signaled sell an average of 23.0-weeks ago.

One year ago, on Mar 23, 2007, the Mid-term Indicant was holding 266-stocks and funds out of the 345 tracked for an average of 104.3-weeks. They were up by an average of 126.8% (annualized at 63.2%). There were 68-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 5.9% since their respective sell signals an average of 13.0-weeks earlier.

The Mid-term Indicant was signaling hold for 296-stocks and funds of the 345-tracked two years ago on Mar 24, 2006. They were up by an average of 115.4% (annualized at 62.3%) since their respective buy signals an average of 96.3-weeks earlier. The Mid-term Indicant was avoiding 57-stocks and funds at that time. They were down an average of 8.0% since their respective sell signals an average of 23.2-weeks earlier.

There were 232-stocks and funds with hold signals on Mar 25, 2005 since their buy signals an average of 75.3-weeks earlier. They were up by an average of 85.9% (annualized at 59.3%). There were 84-avoided stocks and funds at that time. They were down by an average of 28.6% from their respective sell signals an average of 52.3-weeks earlier.

On Mar 13, 2004, the Mid-term Indicant was signaling hold for 249-stocks and funds out of 296-tracked. They were up by an average of 77.4% (annualized at 77.4%) since their buy signals an average of 47.8-weeks earlier. The Mid-term Indicant was avoiding only 30-stocks and funds. They were down by an average of 25.4% since their sell signals an average of 38.7-weeks earlier.

Five years ago, on Mar 2, 2003, there were 141-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 28.3% (annualized at 74.8%) since their respective buy signals an average of 20.7-weeks earlier. There were 36-avoided stocks and funds then. They were down an average of 28.3% since their respective sell signals an average of 26.6-weeks earlier. There were 119-buy signals on this weekend five years ago.

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

The Dow is up 67.9% since its secular low on October 9, 2002. The NASDAQ is up 102.7% and the S&P500 is up 71.2% since then. The small cap index, S&P600, is up 112.1%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 12.7% since its last weekly closing peak in 2007. The NASDAQ is down 21.0% since its last cyclical peak in 2007. The S&P600 is down 18.6% since its last closing weekly peak value in 2007. The Small Caps Index was mildly bullish last week with a 0.2% increase, while the blue chips were slightly more bullish 1.8% gain.

The NASDAQ is down 55.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 13.0% since its similar secular peak on March 23, 2000. The Dow is up by a mere 5.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 123.6% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 6.8% so far this year. The NASDAQ is down 14.9% this year.

The NASDAQ year-to-date performance was bearish by 25.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So far, this year looks similar to that of 2001. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles. The NASDAQ was down by 4.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 6.4%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 3.1% and down 7.7% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 4.0% and up by 1.7% at this time last year. As previously stated, so far this year, the DOW30 is down 6.8% and the NASDAQ down 14.9%. The NASDAQ and Dow are down at this time of year more than any other year this century, 2000-inclusive, with the exception of 2001.

Bearish behavior this year contradicts historical standards whereby the presidential election is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates, but the stock market is short of buyers who at one time refinanced their homes to buy stocks. So, many are losing their homes and having to incur the wrath of the bear at the same time. Even with that being said, the Quick-term and Short-term Indicant are configured for a bullish spurt on the immediate horizon. As earlier stated, and repeated from last week, those configurations are in a precarious position and could evaporate early this coming week.

As you can see, this is the most bearish start of any year this century, with the exception of 2001.

The bullish bias shift on August 15, 2006 expired on January 4, 2008. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%. The NASDAQ was down 9.9% since the expiration of that bullish bias shift on March 11, 2008. The Dow was down 5.0%. The ensuing bearish bias expired last Tuesday, March 11, 2008. The Dow is up 1.7% since the March 11, 2008 bullish bias shift. The NASDAQ is up a paltry 0.1% since then.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The primary required avoidance is inflation, coupled with economic stabilization.

As earlier stated, on Thursday, March 20, 2008, several economic configurations shifted in support of a bullish influence. Commodity prices fell. Interest rates fell. The stock market was up. The only remaining variables for bullish influence are corporate earnings and economic well-being.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to bearish tendencies. Although the market is positioning for a bullish rebound, it has yet to demonstrate that directional intensity.

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 the past nineteen weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat at this time. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Commodity prices tumbled last Thursday. Falling demand was cited as the cause. A few data points does not constitute a trend. Commodities prior to last Thursday were red hot. In other words they were so far above their bullish red curves, it was a matter of time from them to cool down. Even with last Thursday’s significant decline in commodity prices, they are still flaming red bulls. As stated in the first paragraph of this section, the cycle and underlying trend will be the operative on future fiscal policy. Rest assured, if commodity prices do not continue to fall, watch the Fed raise rates in 2009 after the elections. The economy will take a back seat to inflation in post election years, where political leadership does not care about economic conditions. They only care about that on Election Day, which will not be until late 2010.

Interestingly, some Chinese investors defaulted on their margin calls for commodities last Thursday. Distrust in payment reliability should deflate demand for buying regardless of the scarcity of physical supply. Distrust could lead to serious declines in commodity prices. Keep in mind, any inkling of a bull will evaporate at the first signs of deflation. The stock market will not tolerate either inflation or deflation. A few more defaults on margin calls could ignite concerns regarding deflation if the so-called impending recession is deep and vast.

After four stable weeks, interest rates plummeted last week. This should be bullish for the stock market. The threat of inflation requires money to be put to work. Bonds and commercial paper will not cover the current rate of inflation.

The U.S. Dollar strengthened this past week. The will not likely continue as its strengthening violates the correlation to decline interest rates. The Chinese default, though, introduces the element of distrust and the USA has always provided that.

The year 2009 is setting up to be a solid recession, coupled with tremendous inflation and now possibly deflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 360.7% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 51.2%. It moved to the north in 48 of the past 80-weeks. It has been bullish in 19 of the last 31-weeks. This fund has been bullish the past four weeks of the last six weeks. It was solidly bearish last week.

Fidelity Gold, Fund #28, is up 10.9% since its buy signal on September 7, 2007. It is annualized at 20.0% since that buy signal. This fund was solidly bullish in three of the past five weeks. It was aggressively bearish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 280.1% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 49.4%. This fund was solidly bearish the past three weeks.

Vanguard Energy #18, VGENX, is up 214.4% (annualized at 42.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 182.3% (annualized at 41.9%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 166.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 35.6%.

These energy related funds were extremely bearish last week. This behavior relaxes inflationary threats, but supporting a prognosis of economic recession and the potential for deflation.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 106.6% since then. It is annualized at 40.0%. This fund has been bullish in twenty-two of the past thirty weeks. It has been solidly bullish in three of the last five weeks, but down significantly last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 231.6% (annualized at 45.8%). This fund has been bearish in six of the past eleven weeks. It was solidly bearish last week.

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

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

The Mid-term Indicant signaled bull for all ten major indices it tracks this weekend.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,880,621 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $130,229 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $78,298 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, 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.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for this fund this weekend after it garnished 8% gain since its buy signal last January.

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 327.0% (annualized at 19.9%) since the Long-term Indicant signaled bull 855-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. 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: Three of thirty; one is non-contrarian, offering mild bullish support.

Quick-term Yellow Bears/Threats: Twenty-three of thirty with continuing bearish support.

Quick-term Non-Bearishness: QTI differential is bearish 9.8%. The developing bullish support late last week has waned, but not completely expired.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 7.0%. The developing bullish support from last week was re-invigorated this week.

Force Vectors: Continue to rise, but bullish cycle is maturing. A solid robust follow-through is now needed to fuel the bull.

Vector Pressure: Five in bullish domains, which is non-bullish.

Current Quick-term Bias: Configurations are mixed with some supporting bear and some supporting bull. Those supporting bear continue in their attempt to shift away from that support.

Overall Market Status*: 8/15/06-bullish-bias expired on 01/04/08; Bearish bias expired March 11, 2008.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Mixed bias, supporting bear on Wednesday, but more support for bull was detected on Thursday.

* The Overall Market Status represents a short-term view. The phrase, long-term, was removed. This is not the Long-term Indicant position.

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

As stated the past few days, the VIX Force Vectors continue in an unusual pattern of shallow wavering. There is some obvious difficulty is shifting out of that configuration and moving to support bullish market behavior. However as stated the past few days, odds favor bullish market support over dynamic bearish support on a near-term basis. Click this sentence to view its chart as of today.

The small cap indices are more bearish than other indices during bear markets and conversely more bullish during bull markets. The S&P600 has been selected to help you understand the high risk of stock market investing at this time. As stated on Wednesday’s Indicant Stock Market Report, the S&P600 did not succumb to outright bearish influences with today’s (Wednesday) aggressive bearish behavior. As long as the “weaker” indices during bear markets offers resistance, a bullish cycle should unfold. Sour economic fundamentals do not support a sustainable bull market, but the impending bullish cycle should last longer than a normal bullish spurt. Remember, the market does not always behave as it should with respect to fundamental reason. Click this sentence to view the S&P600-Small Cap-Index chart.

The Short-term Indicant signaled bull on Tuesday, March 18, 208. As stated yesterday, fluttering (or jittery) market behavior is in vogue for the time being, as reports from formerly “trusted” institutions now have to be differentiated between fact and fiction. The probability of bullish sustainability shifted to approximately 75% last Wednesday from Tuesday’s 65% and last Monday’s 50%.

Please read on. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicator’s are now solidly in a robust cycle. As stated most of this past week, this robustness is mixed with bullish and bearish support. That configuration, if remains mixed, typically supports a bearish return. In other words, the newly developing bullish bias may be another bullish spurt of a short duration. Last Wednesday’s aggressive bearish behavior was accompanied with significant volume, suggesting a bearish bias. However, the bull/bear battle during this fluttering phase is not over. Thursday’s aggressive bullish behavior was accompanied with tremendous volume, supporting bullish bias. As you can see, the bull/bear battle continues.

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 23-ETF’s. They are up by an average of 46.4% (annualized at 31.8%) since their respective buy signals an average of 74.9-weeks ago. Although there were no sell signals, the SQI is avoiding eight-ETF’s at this time. They are down by an average of 2.6% since their sell signals an average of 7.2-weeks ago.

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 24-ETF’s. They are up an average of 66.1% (annualized 41.1%) since the STI signaled, buy, an average of 82.8-weeks ago. Although there were no sell signals, there are seven ETF’s with avoid signals. They are down by an average of 1.6% since their sell signals an average of 6.4-weeks ago.

The Short-term Indicant is 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 24-ETF’s. They are up by an average of 10.6% (annualized at 33.3%) since the QTI signaled buy an average of 16.4-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding seven-ETF’s. They are down by an average of 3.2% since their sell signals an average of 7.9-weeks ago.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This suggests market disharmony. The combined Short/Quick Indicant models identify 72-hold signals and only 18-avoid signals, providing a bullish edge. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008. That bias shift remains in effect, but in a very precarious position.

Quick-term Indicant Bull/Bear Health Report

Twenty-three of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 2.1%. As stated since March 11, 2008, this attribute continues with bearish support, but shifting in favor of bullish support.

Only three of the ETF’s are above their bullish red curves. All thirty ETF average positions are 9.8% below their bullish red curves. One of those above bullish red is non-contrarian, which supports bullish bias.

The QTI differential is minus 9.8%, which supports the bear.

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

One of the thirty ETF’s are contacting their breakout lines. It is contrarian ETF#14-Long Government. This does not support bullish bias, but markets are shifting relationships. It is possible for this ETF to become non-contrarian.

The average distance from breakout contact is 17.1%. Double digit variances from breakout contact for fifty-two consecutive trading-days is not supportive of the bull.

None of the thirty ETF’s are contacting their breakdown lines, which is non-bearish.

The average distance between the price and breakdown is 10.2%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is bearish 7.0%. This is a bearish attribute, shifting away from bearish support.

ETF Force Vector Configurations

Ten Force Vectors are in bullish domains. That is up by seven from last Friday, which offers mild support for bullish expressions. It increased by three on Thursday’s aggressive bullish behavior.

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 two put option buy signal after Thursday’s close. That brings the total put option buy signals to three the past two days. This is supporting a bearish bias, but mildly so.

Aggressive bullishness today was friendly for yesterday’s QQQQ put option buy signal. Discounted price offers were probably expected. A bearish drop early next week would be profitable.

Only five of the thirty ETF Vector Pressures are in bullish domains, which continues configuring in support of the bear. This attribute had been holding steady, but it decreased by two today, supporting bearish bias.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008. However, a new bullish bias is giving birth as of March 11, 2008.

Continue avoid writing covered options due to volatility.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is again holding QQQQ. You will notice the Mid-term Indicant is signaling sell for ProFunds Ultra Short this weekend based entirely on the recent buy signal of QQQQ by the Quick-term and Short-term Indicant.

The Indicant signaled sell for QID last Wednesday. It remains configured as a red bull and it is unusual for the Quick-term Indicant to signal sell for a security with red bull status. However, several attributes suggested this red bull was overheated and at the very least fall back to its bullish red curve.

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

Divergence versus Convergence

The markets enjoyed bullish divergence for the second consecutive week. Sector behavior was mixed last week. Energy and commodities were extremely bearish, inviting stock market bullishness.

Indicant Conclusion

On the surface, it appears the stock market is primed for a bullish cycle with plummeting interest rates and commodity prices. This has suddenly reduced the threat of inflation. On the other-hand, this could be interpreted as a projection to economic recession/depression. In other words, the threat of deflation may loom.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/23/08

March 16, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Integrity versus Arrogance and a 10,000 Dow by August

Make certain you read the last paragraph of this section if you paid any attention to the above heading.

The Indicant, for the most part, ignores the news, which is too reactionary for stock market investing. However, when the market moves contrarian to a probabilistic expectation exceeding 94.395%, rest assured one must understand the nature of error.

Since last Tuesday’s dynamic bullish expression, several Indicant attributes configured with a 94.395% probability of a bullish spurt. The Quick-term and Short-term Indicant models do not signal buy or bull on such configurations unless a measure of sustainability of detected. Many of you recall over the years that the Indicant has identified several bullish spurts as fake, including those in January and February of this year.

Since the Indicant rarely cares what the news is about, it is unusual to refer to a news release. This is one of those rare exceptions where such a reference is necessary. AP economics writer, Martin Crutsinger reported the following statement last Friday morning:

"It was seen as a last-ditch effort to save the investment bank (Bear Stearns), which on Friday acknowledged its serious financial problems after a week of denials."

Most business leaders possess a very narrowed, but yet very thorough understanding of their area of expertise. For example, Henry Ford understood nearly every detail in building a car, but did not know who the first president of the United States was. He reasoned that he did not need to know who the first president was in the production of automobiles. It is reasonable to speculate he did not understand ROACE (Return on Average Capital Employed).

One would think that Investment Banking professionals would understand the financial health of an organization. After all, that ability is a representation of their livelihood, much like Ford’s production of automobiles. Apparently, from Monday through Thursday last week, employees at Bear Stearns denied financial problems at their company.

Then last Friday morning, it was discovered that Bear Stearns required a huge cash infusion to prevent its extinction. Bear Stearns is not a physical entity. It is a legal entity, which is man made. Consequently, it will some day expire. Bear Stearns cannot make a statement, although the press quotes companies as making a statement. It is physically impossible for companies to make statements. It was people, who were claiming that Bear Stearns was without serious problems on Monday through Thursday of last week.

There are two questions about those people at Bear Stearns. 1) Are they stupid? 2) Are they deceitful? One of those questions has the answer “yes” tied to it. If they had been honest or smarter early last week, the markets could have continued nicely along their expected bearish path. One has to wonder how many of those Bear Stearns folks bought puts and other shorts after Tuesday’s bullish close.

The Bear Stearns “surprise” invoked bearish behavior last Friday. The reason for the surprise was either “stupidity” or “deceit” by employees of Bear Stearns. They should be fired, since socialistic causes are now needed to assist a continuation of Bear Stearns.

The Federal Reserve is using a Great Depression process to provide cash infusions into Bear Stearns. Socialism creeps. Behavior like this slowly erodes capitalistic momentum. In essence, the stupid and/or deceitful get away with their inabilities. Such behavior eventually devours the assets built by capitalists. The termination of Bear Stearns employees will extend the creep since the Fed is going to ensure a continuation of the creep. Their retention on the payroll will accelerate the creep. If the dishonest individuals or idiots who caused the problem and then demonstrated an inability to recognize the problem and honestly convey it in a timely manner are retained in their positions, expect more of the same forever. Penalties for failed risk-taking are part of the process. Any attempt to obsolete that process erodes the fabric of rising standards of living.

Institutions from family to academic to societal institutions have raised some pretty bad people, ranging from Enron executives to now Bear Stearns. Capitalism in its purest form always punishes those incapable of delivering the results of their appealing effort to their customers. Any deliverable outside those parameters of appeal is beyond the scope of this weekly report. It does not take much thought to boil it down to being either good or bad. A capitalist delivered everything that you have that provides pleasure to you. If your spouse provides pleasure, he or she has capitalistic tendencies. If that spouse tries to “control” you, then you are seeing the vestiges of socialism or worse. All existent has either appeal or an absence thereof.

Arrogance is bad when the gap between ability and perception-of-ability is wide. An investment banker when visiting Google a few years ago stated, “he had never encountered an organization that was more arrogant than investment bankers.” If Google folks were arrogant, they at least delivered a product of value with appealing effort backing that perception. The bankers benefit from the effort of Google; not the other away around. Most investment banker’s personal risk was merely writing a resume and “getting a job.” The Google folks created jobs. Arrogance without performance is nonsensical.

When illegitimate arrogant types get into trouble, their phony self-perceptions of greatness apparently stand in the way of announcing their failures.

Now that the Bear Stearns fiasco is out of the way, let’s get back to the stock market.

The Indicant’s Daily Stock Market Report erred last Tuesday with buy signals for three ETF’s. Although the market enjoyed synergistic convergence that day, the Indicant missed a major fundamental. Foreign producers who rely on exporting to the United States are vulnerable to the weakening dollar. Those funds are down by 6% since those buy signals. The Quick-term, Short-term, and Consolidated Indicant signaled sell after Friday’s close for those three ETF’s. There is no arrogance here. A 6% loss, or so, is much better than needing billions to stay afloat.

It is strongly advisable to sell when all three models signal sell. Click the following link that will take you to the Quick-term Indicant summary page for the ETF’s. The three with the sell signals are highlighted in yellow.

However, the other buy signals from last Tuesday remain in a hold position. You will notice several hold positions are unfavorable. However, they are down only slightly.

Several Indicant attributes continue favoring bullish expectations. Although weakened by the Bear Stearns-surprise on Friday, it did not completely disrupt their bullish configurations. It did however reassign them to a more precarious configuration.

The S&P600 Short-term Indicant is influential determining bull or bear directional intensity. Click this sentence to view its chart. Its rising Force Vector, when coupled with several other factors, supports bullish expectations. Some of the other factors were reconfigured away from bullish support after Friday’s stock market close. However, not all of them shifted away from bullish configurations, but enough were to trigger sell for Asian related ETF’s.

One of the attributes that shifted away from direct and immediate bullish support was the VIX Index. Although not shown that often in the past few years, it is still tracked daily through the Short-term Indicant model. It is a contrarian index that moves inversely to the stock market similar to that of QID and ProFunds Ultra Short. Click this sentence to view its chart. With your trained eye, look at its Force Vector. You can see it wavering at a peak. If you scan to the left, you will notice that wavering only one other time on this particular chart. That wavering is common when the market is confused and distracted from its normal desire to move either bullishly or bearishly.

You should notice one other attribute. VIX has hit its two-year high for the third time since July 2007 when the sub-prime lending crisis started influencing stock market behavior. The current configuration favors a bearish VIX and a bullish stock market. However, if it nudges north of this maximum point early next week, be prepared for several sell signals from the Quick-term and Short-term Indicant. Again, this configuration favors a bullish stock market in the immediate future. If that configuration is violated, the market will shift bearishly. The answer will be determined after Monday’s close.

Because of the abnormal 1930’s type behavior last Friday from the Fed, the S&P600 did not escape from its bearish trading range. Click this sentence to view its chart as of last Friday. Either scroll down or click this sentence to view the Dow Jones Composite Index chart. You can see it is infected with the same trauma.

Although some will argue, there are solid arguments that governmental economic meddling before and after the stock market crash of 1929 created the depression for over ten years and the only differential that brought the world out of that governmental induced depression was World War II. Economic misery was replaced by the death of millions. Regardless of the cause, such economic or military calamity always originates with political mumbo-jumbo. It is amazing so many people attend political rallies. They, for the most part, are not producers; but consumers. Your plumber adds more to economic well being than all the political people, combined, on this planet.

Although not shown very often, the Short-term Indicant has the Dow below 10,000 by July if the current inflection point extensions are not violated. Click this sentence to view its chart. That violation was expected on Friday. The Bear Stearns announcement of nearing bankruptcy prevented that violation. Although the desired violation can still occur early this coming week, we are now in a position to have to wait for the market’s close on Monday. Without that violation, there may be a Mid-term Indicant adjustment advising to sell everything that is not above its bullish red curve.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated four buy signals and no sell signals. This brings the total buy signals to 45 against 181-sell signal since October 26, 2007.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 155 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 182.8%. That annualizes to 59.5%. The Mid-term Indicant has been signaling hold for these 155-stocks and funds for an average of 159.8-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 186-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 17.2% since the Mid-term Indicant signaled sell an average of 18.4-weeks ago.

One year ago, on Mar 16, 2007, the Mid-term Indicant was holding 266-stocks and funds out of the 345 tracked for an average of 103.3-weeks. They were up by an average of 118.9% (annualized at 59.9%). There were only 44-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 10.4% since their respective sell signals an average of 17.3-weeks earlier.

The Mid-term Indicant was signaling hold for 296-stocks and funds of the 345-tracked two years ago on Mar 17, 2006. They were up by an average of 117.7% (annualized at 63.6%) since their respective buy signals an average of 96.1-weeks earlier. The Mid-term Indicant was avoiding 53-stocks and funds at that time. They were down an average of 8.8% since their respective sell signals an average of 23.2-weeks earlier.

There were 235-stocks and funds with hold signals on Mar 18, 2005 since their buy signals an average of 74.4-weeks earlier. They were up by an average of 88.6% (annualized at 62.0%). There were 77-avoided stocks and funds at that time. They were down by an average of 28.7% from their respective sell signals an average of 52.6-weeks earlier.

On Mar 13, 2004, the Mid-term Indicant was signaling hold for 263-stocks and funds out of 296-tracked. They were up by an average of 68.4% (annualized at 77.2%) since their buy signals an average of 46.1-weeks earlier. The Mid-term Indicant was avoiding only 15-stocks and funds. They were down by an average of 27.4% since their sell signals an average of 39.2-weeks earlier.

Five years ago, on Mar 15, 2003, there were 124-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 25.3% (annualized at 56.7%) since their respective buy signals an average of 23.3-weeks earlier. There were 141-avoided stocks and funds then. They were down an average of 11.0% since their respective sell signals an average of 8.3-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

The Dow is up 64.0% since its secular low on October 9, 2002. The NASDAQ is up 98.6% and the S&P500 is up 66.8% since then. The small cap index, S&P600, is up 106.9%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 15.6% since its last weekly closing peak in 2007. The NASDAQ is down 22.6% since its last cyclical peak in 2007. The S&P600 is down 20.6% since its last closing weekly peak value in 2007. The Small Caps was mildly bullish last week with a 0.3% increase, while the blue chips were slightly more bullish 0.5% gain.

The NASDAQ is down 56.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 15.7% since its similar secular peak on March 23, 2000. The Dow is up by a mere 1.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 128.2% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 9.8% so far this year. The NASDAQ is down 16.6% this year or about the same as last week.

The NASDAQ year-to-date performance was bearish by 20.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So far, this year looks similar to that of 2001. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles. The NASDAQ was down by 4.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 0.4%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 0.4% and down 5.7% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 4.1% and down by 1.8% at this time last year. As previously stated, so far this year, the DOW30 is down 9.9% and the NASDAQ down 16.6%. The NASDAQ and Dow are down at this time of year more than any other year this century, 2000-inclusive.

This bearish behavior contradicts historical standards whereby the presidential election is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates, but the stock market is short of buyers who at one time refinanced their homes to buy stocks. That is no longer available to them. So, many are losing their homes and having to incur the wrath of the bear at the same time. Even with that being said, the Quick-term and Short-term Indicant are configured for a bullish spurt on the immediate horizon. As earlier stated those configurations are in a precarious position and could evaporate early this coming week.

As you can see, this is the most bearish start of any year this century.

The bullish bias shift on August 15, 2006 expired on January 4, 2008. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%. The NASDAQ is down 11.7% since the expiration of that bullish bias shift. The Dow is down 6.6%. The ensuing bearish bias expired last Tuesday, March 11, but may be re-born early next week.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The primary required avoidance is inflation, coupled with economic stabilization. Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to bearish tendencies. Although the market is positioning for a bullish rebound, it has yet to demonstrate that directional intensity.

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 the past eighteen weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat at this time. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Unfortunately, commodities continue skyrocketing at a breakneck pace. Gold is heading toward $1,000 per ounce and some futures transacted above $1,000 this past week. Oil has now established solid comfort above $100 per barrel. Do not be surprised when it tops $200 per barrel within the next five years. Supply is finite and demand continues unabated. Strong economies stimulate increasing demand. That should encourage capital infusion, but without productivity and hard working effort, that capital infusion becomes inefficient and thus inflation. Bubbles of all kinds invite incompetence, waste, and are a leading indicator into the eventual burst.

Interest rates moved south last week after stabilizing in the previous four weeks. The Fed’s action remains biased against recession. If it were not a political election year, the Fed would opt for recession over inflation. As the election nears, watch for a policy shift. The soft economy of 2008 will be replaced with solid recessionary behavior and/or unfavorable inflation in 2009.

The U.S. Dollar continues to weaken. This weakness will result in “imported inflation” in addition to the reactionary methods imposed by the political process. Strategically, this will add productive fuel to small caps in the next decade. Ma and Pa operations will sprout throughout the U.S. Some of those operations will move to small caps and a few will move onto large caps.

The year 2009 is setting up to be a solid recession, coupled with tremendous inflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 414.7% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 59.1%. It moved to the north in 48 of the past 79-weeks. It has been bullish in 19 of the last 30-weeks. This fund has been bullish the past four weeks of the last five weeks. It was mildly bullish last week.

Fidelity Gold, Fund #28, is up 30.5% since its buy signal on September 7, 2007. It is annualized at 58.1% since that buy signal. This fund was solidly bullish in three of the past four weeks. It was aggressively bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 311.0% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 55.0%. This fund was solidly bearish the past two weeks.

Vanguard Energy #18, VGENX, is up 234.7% (annualized at 46.8%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 200.9% (annualized at 46.4%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 183.7% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 39.6%.

These energy related funds were mixed last week but with a slight bullish advantage. This behavior supports economic recession, as opposed to inflationary behavior.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 126.8% since then. It is annualized at 47.8%. This fund has been bullish in twenty-two of the past twenty-nine weeks. It has been solidly bullish in three of the last four weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 247.7% (annualized at 49.1%). This fund has been bearish in five of the past ten weeks. It was mildly bullish last week.

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

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

The Mid-term Indicant is signaling bear for all ten major indices it tracks. They are down by an average of 6.6% since their bear signals an average of 10.0-weeks ago. The S&P600 is down 11.7% since its bear signal 18-weeks ago. It was mildly bullish last week, following two weeks of bearish behavior. It remains nestled against its upper trading range limit of a steep bearish slope. If it crosses above this upper limit, the current bearish cycle will become disrupted. That disruption or violation to bearish influences was expected this week, but the Bear Stearns surprise slowed this process down somewhat.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,818,209 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $126,177 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $76,716 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,941.4%, 39.6%, and 173.2%, 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.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009. However, the recent bear signal for several major indices facilitated an earlier buy signal. Do not be surprised if this buy signal is reversed ahead of seasonal normalcy.

At this time, this fund is up by 13.8% since the Mid-term Indicant signaled buy on January 18, 2008. It is annualizing at 88.2%. Some of you recall it garnishing a 70% gain in one of its hold cycles during the bear market of 2002. Historical norms suggest this would not happen until 2009. Expect a sell signal as lowering interest rates should induce bullish stock market behavior unless inflation and/or recession become prevalent.

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 312.9% (annualized at 19.1%) since the Long-term Indicant signaled bull 854-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. 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: Two of thirty, increasing bullish support.

Quick-term Yellow Bears/Threats: Twenty-four of thirty, with diminishing bearish support.

Quick-term Non-Bearishness: QTI differential is bearish 12.9% with diminishing bearish support. Bullish support is not yet there, but developing.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 8.8% with diminishing bearish support. Bullish support remains absent, but non-bearish is a common predecessor to bullish support after aggressive bearish cycles.

Force Vectors: As stated on Monday, March 10, 2008, the current cycle is maturing, which offers some opportunity for bullish expressions. The 400-plus Dow gain on March 11, 2008 is indicative of the conclusion of such maturity. They continue configuring in favor of bullish aggression.

Vector Pressure: Seven in bullish domains with diminishing bearish support.

Long-term Hold Positions: Continue holding and buy aggressively on signals.

Current Quick-term Bias: Configurations continue favoring the bear.

Overall Market Status*: 8/15/06-bullish-bias expired on 01/04/08; Bearish bias expired March 11, 2008.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Bullish bias forming, but embryonic and thus vulnerable.

* The Overall Market Status represents a short-term view. The phrase, long-term, was removed. This is not the Long-term Indicant position.

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

The Short-term Indicant signaled bull last Tuesday. The embryonic condition of this new bull remains vulnerable. However, Indicant attributes continue configuring in favor of bullish behavior in spite of Friday’s bearish behavior due to the Bear Stearns liquidity problems.

The balance of the Short-term Indicant section is repeated from March 12, 2008. The stock market’s ultimate direction is a function of economic and corporate fundamentals. The bull prefers economic robustness and increasing corporate profitability. The problem here is that neither fundamental is all that great. However, from time to time, technical factors outweigh weak economic or corporate fundamentals.

Last Tuesday’s aggressive bullish expression was accompanied by technical attributes favoring bullish bias. Most of the ETF Force Vectors are moving north. Force Vector cycles are very short and can change quickly. Even with what some may refer to as the Bear Stearns scandal, none of these technical indicators shifted in favor of the bear after Friday’s close. The Indicant does not forecast, but its Quick-term attributes suggest the ETF’s will elevate to their bearish yellow curves. That should result in an approximate 8% to 10% increase, on average.

However, if Force Vectors shift back to the south from a bearish domain, this bullish spurt will be short-lived. The Quick-term Indicant will not hesitate in signaling sell at the first sign of enhanced bearish support.

Sometimes, technical factors assist fundamental factors. So, this does not mean that the bearish yellow curve is the only target for assessing directional intensity. When and if bearish yellow is contacted, these Quick-term attributes will advise of directional intensity beyond that point.

Please read on. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicator’s remain in their embryonic state of robustness.

As stated last Monday, a bullish bounce would not be surprising. After Tuesday’s aggressive bullish behavior, it was configured with support for another bullish spurt. However, this spurt could last six weeks or more an elevate the market by 8-10%.

Also, as stated last Monday, The Quick-term Indicant is quicker to signal buy/bull during presidential pre-election years and election years. With Tuesday’s aggressive bullish bounce, if this were 2009, rest assured Tuesday’s buy signal would not have been as many, if any. The political incumbents are pressuring any resource available to them to ensure economic soundness by Election Day. However, once the elections are over, watch out.

Friday’s volume is somewhat discerning. It was up aggressively on aggressive market behavior. That configures in support of the bear. However, cumulatively, the bull still has the edge with respect to this attribute.

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

There were no buy signals and three sell signals. Although there were no buy signals, the SQI is signaling hold for 23-ETF’s. They are up by an average of 53.1% (annualized at 36.7%) since their respective buy signals an average of 74.4-weeks ago. In addition to the sell signals, the SQI is avoiding 5-ETF’s at this time. They are down by an average of 10.0% since their sell signals an average of 10.4-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and three sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for twenty-five-ETF’s. They are up an average of 66.7% (annualized 43.3%) since the STI signaled, buy, an average of 79.2-weeks ago. In addition to the sell signals, there are three ETF’s with avoid signals. They are down by an average of 13.1% since their sell signals an average of 13.5-weeks ago.

The Short-term Indicant is 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 three sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for only twenty-three-ETF’s. They are up by an average of 11.7% (annualized at 35.7%) since the QTI signaled buy an average of 16.9-weeks ago. In addition to the sell signals, the Quick-term Indicant is avoiding five-ETF’s. They are down by an average of 9.1% since their sell signals an average of 10.1-weeks ago.

Repeated from March 12, 2008 - Several Quick-term and Short-term attributes shifted back to bullish bias on Tuesday, March 11, 2008. This may indeed be another bullish spurt. If it is, it should not be short-lived. Recent bullish spurts expired within a couple of weeks. This one is configured with some gusto. The ETF’s and major market indices should at the very least move back to bearish yellow. That movement, overall, will provide gains. The various Indicant attributes will assess probability of directional intensity at that time.

March 14, 2008 – Sell signals today (Mar 14) were directed at Asia ETF’s. There Force Vectors shifted south, while most of the other ETF’s continued rising in spite of bearish market behavior. Fundamentally, a weak dollar that will get weaker is not fundamentally friendly for organizations dependent upon exporting to the United States.

Conflicts Between the Short-term and Quick-term Indicants

There are two conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This suggests mild market disharmony. The combined Short/Quick Indicant models identify 73-hold signals and only eight-avoid signals, providing a bullish edge. This is the first bullish advantage since January 4, 2008, as of March 11, 2008. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty-four of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.5%. This attribute continues with bearish support, but shifting in favor of bullish support.

Only two of the ETF’s are above their bullish red curves. All thirty ETF average positions are 9.4% below their bullish red curves. Both of those above bullish red are contrarian and thus this attribute supports the bear. However, as stated most of this week, bearish support is waning.

The QTI differential is minus 12.9%, which supports the bear, but shifting away from that support in spite of Friday’s bearish behavior.

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

One of the thirty ETF’s is contacting its breakout line, which is non-bullish.

The average distance from breakout contact is 18.2%. Double digit variances from breakout contact for forty-eight consecutive trading-days is not supportive of the bull, but this non-support is evaporating.

One of the thirty ETF’s is contacting its breakdown line, which is in stark contrast to the seventeen making contact last Monday. This is supporting a resumption of bullish bias with the exception of concentrations dependent on U.S. exports.

The average distance between the price and breakdown is 9.4%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support due to recent bearish aggressions. However, last Tuesday’s aggressive bullish behavior is offering bullish support with some sustainability.

The breakout/breakdown differential is bearish 8.8%. This is a bearish attribute, but weakening and lending support to sustainable bullishness.

ETF Force Vector Configurations

Only three Force Vectors are in bullish domains. That is up by one from Tuesday and could be configuring for a strong bullish statement over the next few days.

The current bullish cycle is immature and supportive of bullish behavior for the next few days as of last Wednesday. It is more mature as of Friday and running out of time for the desired bullish support. However, it still has time to demonstrate bullish support, but not as strongly as believed last Wednesday.

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 was one call option buy signal after Friday’s close. This was for a contrarian ETF and not expected to perform well.

The absence of put option signals is non-bearish, which should continue. It will be difficult for the Quick-term Indicant to signal many call option buy signals as long as most of the ETF’s are in yellow-bear positions and Vector Pressure is in bearish domains.

Only seven of the thirty ETF Vector Pressures are in bullish domains, which continues configuring in support of the bear. Bearish support is diminishing, though.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008. However, a new bullish bias is giving birth as of March 11, 2008.

Continue avoid writing covered options due to volatility.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is now holding QQQQ. You will notice the Mid-term Indicant is signaling hold for ProFunds Ultra Short. Yesterday’s report recommended selling ProFunds Ultra Short even though the Mid-term Indicant will not be updated until this weekend. As of Friday, March 14, 2008, the Mid-term Indicant did not signal sell for ProFunds Ultra Short. Normally it would with the holding of QQQQ, but Friday’s bearish behavior with fundamental influences in support of that bearish behavior prevented the sell signal. Also, the Quick-term Indicant is centered on a bullish spurt as opposed to a sustainable bull with signification breadth.

The Indicant signaled sell for QID on March 11, 2008. Keep your eyes on this fund as it still a technical red bull. Its behavior, when contacting the bullish red curve, will be interesting and informative regarding directional intensity.

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

Divergence versus Convergence

The markets enjoyed mild bullish divergence last week. Sector behavior was mixed last week.

Indicant Conclusion

As stated the past few weeks, the market’s perception is confrontation with only two choices; inflation or recession. The political establishment continues biasing forces in favor of inflation by unleashing policies to stave off recession. The only salvation to the short-term gluttony of politicians is massive increases in productivity to offset the anti-economic growth posture of politicians.

Adding to longer-term problems is the Fed cash infusion into Bear Stearns. That will depress economic performance for quite some time, but it does not detract from immediate bullish behavior. Remember to pay close attention to Monday’s Daily Stock Market Report.

Also, as stated the past four weeks, interest rates are plummeting, which is common company to bull markets. That, coupled with traditional election year bullishness should invite a bull market this year. The primary threat to this is inflation. If the CPI or PPI rise too rapidly, the bear will gain secular influence. It is more difficult for policy makers to stifle inflation than recession.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/16/08

March 9, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Be Cautious of Potential Bullish Spurts – Part 3

Since the Indicant’s bullish bias expired on January 4, 2008, all bullish micro-cycles have been identified mere spurts in the face of the underlying bear. Spurts fool many. Just as the Greenspan scare in March 2007 caused a deep bearish spurt, the Quick-term Indicant did not signal sell. Spurts are fake movements against the underlying trend or cyclical behavior.

Spurts can create a high number of trades, especially when accompanied by stock market fluttering. That is when the market swings wildly to the north and south in rather quick fashion. Markets do this when confronted with a lack of directional commitment. Such behavior is emotional-based, as opposed to sound economic or corporate fundamentals.

Most sustainable bulls do not originate with fluttering. It is a more common predecessor to sustainable bear markets. The problem here is that some major indices have incurred fluttering while others have not.

The Dow Transports have received several bull/bear signals since 2007. Clicking this sentence will illustrate its chart, as of March 7, 2008. As you can see, it is under the influence of signal number five in the current presidential election cycle. The presidential election year is historically bullish, but so far, this one is enduring an unfavorable variance.

As stated many times in this stock market report, politicians contribute nothing to the economy. Their only contribution is undoing their prior damage. For example, political leadership is pressuring the Federal Reserve Board to cut interest rates and directing the IRS to return money to tax payers. Incumbents in both political parties band together during hard economic times just ahead of the election. They know their re-election is dependent on voter’s pocket books, which is irrelevant after the election. This reactionary behavior is setting up nicely for a great bear market in 2009, if not sooner. The good news is there are more investment alternatives to gain in bear markets.

Rest assured political leadership will not be sensitive to economic decline in 2009. That leadership is comfortably nestled into their new jobs, attending parties, and figuring out their agenda for the next four years. They will focus on economic robustness for the year 2012. That is why the presidential pre-election year is typically the most bullish. The market is always anticipating the next six to nine months of corporate profits. That coupled with the heart and soul of bullish seasonality promulgates pre-election year bullishness. It is not so much about how good politicians do; it is the movement to the north from their damage.

The Federal Reserve will not be under too much political influence shortly after the election. Federal Reserve Board members do not want the history books relating their names to inflation. Economic recessions can spread blame to many factions. For example, the idiots who run the mortgage industry can be blamed for the economic recession the stock market now believes is underway.

However, inflation is directed at policy makers. The easiest way to keep prices under control is to stifle demand. That is, make society poorer so its constituents cannot afford to make purchases. Prices fall when demand drops. Demand drops when people cannot afford to make purchases. So, in a nutshell, the political establishment makes people poorer. They try to time that for their self-gain; that is, reelection.

The Dow Composites on the other hand has not endured fluttering. This index represents blue chip stocks of the Dow30, Dow Transports, and Dow Utilities. These large corporations are so big that management talent is irrelevant to the corporation’s performance. They make a lot of money during economic expansion and make less during economic contraction. Click this sentence to view its chart.

The NASDAQ is contacting its “secular” lower trading range limit line. This is one of the last technical elements with the potential to facilitate a perception of a floor to the bearish onslaught now underway. Click this sentence to view its chart.

The news does not get better for desiring bullish behavior. The Dow30 contacted its breakdown line for the second time this year. Those are the first two breakdown contacts since the October 2002 bottom to this secular bull. A significant number of contacts will only encourage more bearish behavior. Economic fundamentals are simply too sour at this time to expect a bullish resurgence. Click this sentence to view its chart.

Furthering the cause of bad news for those desiring bullish market behavior is the consistency of the S&P600’s containment is an aggressively constructed bearish trading range on a Mid-term Indicant basis. Click this sentence to view its chart.

The NASDAQ is also contacting its breakdown line. A few more technical range limit lines were constructed for referential observation. In other words, there are two potential bottoms remaining. They offer potential non-bearish resistance. Click this sentence to view its chart.

The good news for those of you who bought ETF#31-QID-Bear Market on the Quick-term buy signal are up over 20% since this bear market started. Click this sentence to view its chart. Its cousin, ETF #01-QQQQ-NASDAQ100 is down 12.2% since the Quick-term Indicant signaled sell in early January.

Technical analyses always eventually fail in their intended use as a stock market predictor. The phenomena of commonality ensure this failure. In other words, when a critical mass starts doing the same thing, the system becomes dysfunctional. The simplest way to understand this is to imagine all stock market investors reading the same technical analysis at the same time and all calling their broker, demanding, “Sell” at the same moment in time. Since no one called to “buy”, the system implodes. That, concisely, is the phenomena of commonality with respect to the stock market.

Of course, the extremes in the previous paragraph never happen. However, large numbers of investors/traders, who accumulate from time to time, form the critical mass of “shock and dismay.” When that mass achieves a critical volume, the phenomena of commonality unleash its torment.

Drawing those range limit lines can be helpful. They sometimes accurately inform and at other times invoke investor frownie faces. With that said and with the inherent risk in saying it, the NASDAQ’s lower range limit line is worthy of mention. Its construction is mature. It represents the bottom of capitalistic effort, which is the only source of meaningful output.

Finally, the Mid-term Indicant had to generate some buy signals this past weekend due to technical factors. Not all of these buys will perform well. If you elect to buy on this signals, set your stop losses very close to the buy amount and maintain them on a weekly basis. Even during bear markets, a few stocks will perform well. So, it is possible a few of these buy signals will perform to your delight, but probabilities suggests many of them will be reversed with sell signals in the next few weeks if not sooner.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated seven buy signals and no sell signals. This brings the total buy signals to 41 against 181-sell signal since October 26, 2007.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 148 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 190.7%. That annualizes to 58.8%. The Mid-term Indicant has been signaling hold for these 148-stocks and funds for an average of 168.7-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 190-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 16.1% since the Mid-term Indicant signaled sell an average of 17.2-weeks ago.

One year ago, on Mar 9, 2007, the Mid-term Indicant was holding 300-stocks and funds out of the 345 tracked for an average of 98.6-weeks. They were up by an average of 111.2% (annualized at 58.6%). There were only 42-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 9.9% since their respective sell signals an average of 17.0-weeks earlier.

The Mid-term Indicant was signaling hold for 290-stocks and funds of the 345-tracked two years ago on Mar 10, 2006. They were up by an average of 111.0% (annualized at 61.0%) since their respective buy signals an average of 94.6-weeks earlier. The Mid-term Indicant was avoiding 54-stocks and funds at that time. They were down an average of 9.6% since their respective sell signals an average of 23.0-weeks earlier.

There were 249-stocks and funds with hold signals on Mar 11, 2005 since their buy signals an average of 72.4-weeks earlier. They were up by an average of 86.2% (annualized at 61.9%). There were 68-avoided stocks and funds at that time. They were down by an average of 28.9% from their respective sell signals an average of 52.4-weeks earlier.

On Feb 28, 2004, the Mid-term Indicant was signaling hold for 275-stocks and funds out of 296-tracked. They were up by an average of 73.1% (annualized at 85.1%) since their buy signals an average of 44.7-weeks earlier. The Mid-term Indicant was avoiding only 17-stocks and funds. They were down by an average of 26.2% since their sell signals an average of 44.7-weeks earlier.

Five years ago, on Mar 8, 2003, there were 135-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 22.5% (annualized at 55.6%) since their respective buy signals an average of 21.1-weeks earlier. There were 131-avoided stocks and funds then. They were down an average of 12.0% since their respective sell signals an average of 7.9-weeks earlier.

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

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

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

The Dow is up 63.2% since its secular low on October 9, 2002. The NASDAQ is up 98.6% and the S&P500 is up 66.5% since then. The small cap index, S&P600, is up 106.3%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 16.0% since its last weekly closing peak in 2007. The NASDAQ is down 22.6% since its last cyclical peak in 2007. The S&P600 is down 20.9% since its last closing weekly peak value in 2007. The Small Caps was bearish last week with a 3.2% drop, while the blue chips were equally bearish with a 3.0% drop. As stated the past several weeks, configurations remain in support of those that are consistent with a bear market.

The NASDAQ is down 56.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 15.3% since its similar secular peak on March 23, 2000. The Dow is up by a mere 1.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 128.3% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 10.3% so far this year. The NASDAQ is down 16.6% this year.

The NASDAQ year-to-date performance was bearish by 10.0% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. The NASDAQ was down by 3.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was down by 2.3%, but finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 2.2%, but down 3.9% in 2005. Both 2004 and 2005 were meandering bear markets. In 2006, it was up by 2.9% and down by 1.7% at this time last year. As previously stated, so far this year, the DOW30 is down 10.3% and the NASDAQ down 16.6%. The NASDAQ and Dow are down at this time of year more than any other year this century, 2000-inclusive.

As you can see, this is the most bearish start of any year this century.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The primary required avoidance is inflation, coupled with economic stabilization. Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to bearish tendencies.

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 the past seventeen weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat at this time. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Unfortunately, commodities continue skyrocketing at a breakneck pace. Gold is heading toward $1,000 per ounce. Oil has now established solid comfort above $100 per barrel. Do not be surprised when it tops $200 per barrel within the next five years. Supply is finite and demand continues unabated. Strong economies stimulate increasing demand. That should encourage capital infusion, but without productivity and hard working effort, that capital infusion becomes inefficient and thus inflation. Bubbles of all kinds invite incompetence, waste, and are a leading indicator into the eventual burst.

Interest rates were mixed the past four weeks after falling sharply in the prior four weeks. The Fed’s action remains biased against recession. If it were not a political election year, the Fed would opt for recession over inflation. As the election nears, watch for a policy shift. The soft economy of 2008 will be replaced with solid recessionary behavior in 2009.

The U.S. Dollar fell sharply last week. This weakness will result in “imported inflation” in addition to the reactionary methods imposed by the political process.

The year 2009 is setting up to be a solid recession, coupled with tremendous inflation.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 413.2% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 59.0%. It moved to the north in 47 of the past 78-weeks. It has been bullish in 18 of the last 29-weeks. This fund has been bullish the past three weeks of the last four weeks. It was flat last week.

Fidelity Gold, Fund #28, is up 26.3% since its buy signal on September 7, 2007. It is annualized at 52.0% since that buy signal. This fund was solidly bullish in two weeks of the past three weeks. It was also flat last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 317.3% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 56.3%. This fund was solidly bearish last week.

Vanguard Energy #18, VGENX, is up 232.9% (annualized at 46.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 199.2% (annualized at 46.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 180.8% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 39.1%.

These energy related funds were solidly bearish last week in addition to precious metals and commodities. This behavior supports economic recession, as opposed to inflationary behavior.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 120.7% since then. It is annualized at 45.9%. This fund has been bullish in twenty-one of the past twenty-eight weeks. After solid bullishness in the previous two weeks, it was basically flat last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 243.8% (annualized at 48.5%). This fund has been bearish in five of the past nine weeks. It was solidly bearish last week, following solid bullishness in the previous three weeks.

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

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

The Mid-term Indicant is signaling bear for all ten major indices it tracks. They are down by an average of 6.7% since their bear signals an average of 9.0-weeks ago. The S&P600 is down 11.9% since its bear signal 17-weeks ago. It was bearish the last two weeks. It remains nestled against its upper trading range limit of a steep bearish slope. If it crosses above this upper limit, the current bearish cycle will become disrupted.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,809,477 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $126,689 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $76,716 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,951.2%, 39.0%, and 173.2%, 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.

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.

At this time, this fund is up by 15.4% since the Mid-term Indicant signaled buy on January 18, 2008. It is annualizing at 112.8%. Some of you recall it garnishing a 70% gain in one of its hold cycles during the bear market of 2002. Historical norms suggest this would not happen until 2009. Expect a sell signal as lowering interest rates should induce bullish stock market behavior unless inflation and/or recession become prevalent.

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 310.9% (annualized at 19.0%) since the Long-term Indicant signaled bull 853-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. 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: Two of thirty; One is non-contrarian. Bullish support near nil.

Quick-term Yellow Bears/Threats: Twenty-three of thirty, supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 13.3%, supporting bear.

Short-term Non-Bearishness: Breakout/breakdown differential bearish 9.5%, offering no bullish support.

Force Vectors: Behavior remains shallow with many configuring in favor of the bear.

Vector Pressure: Seven in bullish domains. Increased bearish support.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Sell aggressively on signals.

Current Quick-term Bias: Configurations continue favoring the bear.

Overall (Long-term) Market Status: 8/15/06 –bullish-bias expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Bearish bias dominant.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. The Dow is down 7.1% and the NASDAQ is down 11.7%, respectively, since that bear signal.

Please read on. Click here to see the Short-term Indicant’s history.

Both Indicant Volume Indicator’s are configuring in an embryonic state of robustness. This is occurring parallel to bearish stock market behavior. This suggests an increasing bearish bias.

The market’s so-called comfort zone was abandoned with bearish aggressions this past week.

After a stalling market, the Daily Indicant Stock Market Report advised on March 4, 2008 that Short-term configurations continue favoring the bear.

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 10-ETF’s. They are up by an average of 46.9% (annualized at 14.2%) since their respective buy signals an average of 169.7-weeks ago. Although there were no sell signals, the SQI is avoiding 20-ETF’s at this time. They are down by an average of 7.3% since their sell signals an average of 9.6-weeks ago.

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 12-ETF’s. They are up an average of 140.7% (annualized 44.2%) since the STI signaled, buy, an average of 163.7-weeks ago. Although there were no sell signals, there are 18-ETF’s with avoid signals. They are down by an average of 8.4% since their sell signals an average of 9.9-weeks ago.

The Short-term Indicant is 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 only six-ETF’s. They are up by an average of 50.5% (annualized at 38.3%) since the QTI signaled buy an average of 67.8-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 24-ETF’s. They are down by an average of 9.1% since their sell signals an average of 10.0-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Two ETF’s with Quick-term Indicant avoid signals are up by an average of 0.4%. That means the Quick-term Indicant is wrong on those two ETF’s.

The Quick-term Indicant signaled buy last Wednesday for ETF#28, which was discussed in the previous two daily stock market reports.

As stated on Tuesday, February 26 another key ETF to monitor for the next few days is ETF#31-QID, which is purely contrarian to the stock market; specifically ETF#01-QQQQ. QID is named Bear Market. It only goes up during bear markets. Clicking this sentence will take you to the QTI chart from Monday, March 3 data. As you can see, it remained a red bull. As stated on February 26, it is configuring as a weakening bull, but quite often, such weakening invigorates the bull.

As of today, March 7, 2008, contrarian ETF#31-QID-Bear Market is up by 9.8% since the February 26, 2008 observation. Sure enough the contrarian bull (bear) was invigorated.

Red bulls should never be challenged. Even when weakening, they can bounce north quickly and viciously. That will happen if the market turns bearish. You saw that with aggressive bearish behavior the past several days. Click the below link view its chart as of today.

http://www.indicant.net/Members/Updates/QTI-ETF-Charts/QTI-ETF6-Charts.htm#31

The past two weeks, you saw it move north without contacting its bullish red curve. That is a solid attribute, which suggests the overall stock market remains under the influence of the bear.

Scroll down to view QQQQ. This is linked to chart data from Monday, March 3. Click this sentence to view today’s chart. As you can see, QQQQ is pathetic. It is not expressing the same bullish strength in terms of configuration as ETF#28. That is what is meant by the absence of synergistic convergence. If all of the non-contrarian ETF’s possessed the same configuration as ETF #28, rest assured a powerful bull market would be in play.

Conflicts Between the Short-term and Quick-term Indicants

There are six conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This suggests market disharmony. The combined Short/Quick Indicant models identify 30-hold signals and 60-avoid signals, providing a bearish edge. The bullish bias shift on August 15, 2006 expired on January 4, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty-three of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.7%. This attribute continues with bearish support.

Two of the ETF’s are above their bullish red curves. All thirty ETF average positions are 9.6% below their bullish red curves. Only one is a non-contrarian red bull, offering extremely mild bullish inspiration to the stock market. Keep in mind QID is not included in this statistic. It is discussed near the end of this report.

The QTI differential is minus 13.3%, which supports the bear.

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

None of the thirty ETF’s are contacting their breakout lines, which is non-bullish.

The average distance from breakout contact is 18.1%. Double digit variances from breakout contact for forty-three consecutive trading-days is not supportive of the bull.

A whopping nine of the thirty ETF’s are contacting their breakdown lines, which is bearish. This is the second consecutive trading day with this extremely bearish configuration.

The average distance between the price and breakdown is 8.6%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is bearish 9.5%. This is a solid bearish attribute.

ETF Force Vector Configurations

Only two Force Vectors are in bullish domains. That is down significantly from thirteen four days ago and down by three from last Wednesday. This triggered many put option buy signals last Tuesday and a few more the past two 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 two put option buy signals after Friday’s close. This brings the total put option buy signals to twenty-two in the last five trading days.

Thursday’s and Friday’s bearish expressions, coupled with last Wednesday’s mild bullishness, setup very well for last Tuesday’s put option buy signals.

Only six of the thirty ETF Vector Pressures are in bullish domains, which continues configuring in support of the bear. As stated last Wednesday, their recent configurations have been increasingly supportive of the bear.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

Continue avoid writing covered options due to volatility.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is now avoiding QQQQ. You will notice the Mid-term Indicant is signaling hold for ProFunds Ultra Short. Continue holding unless you see a buy signal for QQQQ or sell signal for ProFunds Ultra Short or ETF#31-QID, which is discussed below.

The Quick-term Indicant signaled buy on January 8, 2008 for QID. It is up 23.1% since that buy signal (annualized at 140.9%). This remains a red bull and it is advisable to continue holding.

QID is up 9.1% since the Consolidated Indicant signaled buy on January 22, 2008. It is annualizing at 72.3%. It is up 4.4% since the Short-term Indicant buy signal on February 29, 2008, annualizing at 226.1%.

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

Divergence versus Convergence

The markets endured solid bearish convergence last week. All sectors were bearish last week. This suggests the stock market is anticipating economic recession.

Indicant Conclusion

Also, as stated the past three weeks, interest rates are plummeting, which is common company to bull markets. That, coupled with traditional election year bullishness should invite a bull market this year. The primary threat to this is inflation. If the CPI or PPI rise too rapidly, the bear will gain secular influence. It is more difficult for policy makers to stifle inflation than recession.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/09/08

March 2, 2008 Indicant Weekly Stock Market Report

This Week’s Report

Be Cautious of Potential Bullish Spurts – Part 2

Last week’s stock market behavior demonstrated classical quick-term spurt behavior. The folks on CNBC and other “hype media” suggested “the bull is back” with each bullish movement. Many “hype” guests suggested stock prices are cheap right now and buying is in order. Later in the same week, the Dow fell by over 300-points.

The value of a stock price is determined only by what two people think it is worth. Those two people are the buyer and seller. The value of a stock price, for the most part, is not consistently deterministic based on earnings per share, book value, and other common metric. Some analyst may suggest a value on varying metric, but the only real value is determined based on what price one is willing to pay. The buyer has a little more say in the stock price value than the seller during bear markets. The problem, right now, is there are too few buyers. The market will be bearish when sellers exceed buyers, which is the current situation.

Here are a few points for you to remember. Investing is clinical and private. Reading, thinking, analysis, and self-direction are required elements for success. Listening to hype and manipulators is a recipe for disappointment.

Bullish spurts are like a sucker punch in boxing; fake one punch and throw another one. Bullish spurts fool many into the return of the bull, followed by disappointment from the underlying trend or cycle. Last week’s stock market report discussed how bullish spurts contributed to the lost fortune of W. C. Durant of General Motors fame.

Since the bearish yellow curve shifted to a southerly direction in early November 2007, two major indices have produced four bullish spurts. The NYSE, which has tremendous breadth, has generated bullish spurts of greater duration than the NASDAQ index.

Click this sentence to review recent bullish spurts on these two major indices.

The S&P600-Small Cap Index is sliding south just underneath its upper trading range limit. Last week’s report indicated a simple lateral movement would aid in its escape from this bearish trading range trend. Unfortunately, that upper limit is imposing a ceiling to bullish ambition at this time. Click this sentence to view its chart.

The NASDAQ has one technical line of defense to prevent deeper bearishness. As you can see, by clicking this sentence, the lower secular trading range limit is again being threatened. Falling below this range limit could incite a bullish response, but such a response is more likely to be a mere spurt based on current configurations. The lethargic Indicant Volume Indicator continues to suggest little interest in dynamic market behavior in either bullish or bearish direction. This is a favorable configuration to those desiring non-bearish behavior. Desiring sustainable bullish behavior at this time is wasted emotion.

The daily stock market report has been advising to never bet against red bulls. Even when red bulls are weakening, their bullish bounces to the north can be vicious to those desiring a continuation of weakness. ETF#31, QID-Bear Market, was weakened during the first three days last week when the stock market’s bullish spurt was in full swing. However, Thursday’s and Friday’s aggressive stock market bearish behavior, propelled QID solidly to the north. Red bulls should always be respected. They are strong even when appearing weak. Click this sentence to view ETF#31’s, QID-Bear Market, chart.

Scrolling down from QID, you will notice QQQQ remains a pathetic yellow bear. It was not much of a participant in last week’s bullish spurt, but was punished during the bearish expressions late last week. The weak tend to be punished more than the strong during bearish expressions. That is why many get hurt buying what is believed to be cheap securities during bear markets. The cheap become disproportionately cheaper during bearish expressions.

There is one small glimmer of hope for those desiring bullish behavior. ETF#28-EWT-Pacific-Asia-Taiwan’s Force Vector developed a solid bullish base while the its price behavior was bearish. It was a yellow bear; similar to most of the other ETF’s tracked by the Indicant. A few days ago, its Force Vector moved robustly to the north, paralleling a rapid price increase. Last Wednesday, it became a red bull, but that only lasted one day. After catapulted its bullish red curve, this ETF fell below bullish red last Thursday. Click this sentence to view its chart.

Robust Force Vector movement, such as that demonstrated by ETF#28, is a common configuration for sustainable bullish behavior. It is the only non-contrarian ETF demonstrating such a bullish configuration. Most bull markets start with a few such configurations and then others follow. Eventually, synergistic bullish convergence is configured and thus new bull markets are born.

The reason the Quick-term Indicant did not signal buy was the absence of synergistic bullish convergence. Keep your eye on this fund, as its Force Vector should dip back to the south over the next few days. If the price parallels that movement, then it has an increased probability of returning to a yellow bear. Fundamentally, that should be the expectation if indeed the recession is deep and expansive. If there is a local fundamental for this particular fund’s reason for bullishness, the Quick-term configurations will appropriately advise.

Keep your eye on the daily stock market report. It will help you differentiate sustainability versus spurts regardless of the directional intensity underway.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated three buy signals and two sell signals. This brings the total buy signals to 34 against 181-sell signal since October 26, 2007.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 145 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 198.8%. That annualizes to 60.8%. The Mid-term Indicant has been signaling hold for these 145-stocks and funds for an average of 170.0-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 195-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 11.4% since the Mid-term Indicant signaled sell an average of 16.5-weeks ago.

One year ago, on Mar 2, 2007, the Mid-term Indicant was holding 301-stocks and funds out of the 345 tracked for an average of 98.0-weeks. They were up by an average of 108.8% (annualized at 57.7%). There were only 28-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 12.7% since their respective sell signals an average of 21.6-weeks earlier.

The Mid-term Indicant was signaling hold for 290-stocks and funds of the 345-tracked two years ago on Mar 3, 2006. They were up by an average of 115.4% (annualized at 64.1%) since their respective buy signals an average of 93.6-weeks earlier. The Mid-term Indicant was avoiding 54-stocks and funds at that time. They were down an average of 9.4% since their respective sell signals an average of 22.0-weeks earlier.

There were 249-stocks and funds with hold signals on Mar 4, 2005 since their buy signals an average of 70.1-weeks earlier. They were up by an average of 87.3% (annualized at 64.8%). There were 67-avoided stocks and funds at that time. They were down by an average of 29.3% from their respective sell signals an average of 53.6-weeks earlier.

On Feb 28, 2004, the Mid-term Indicant was signaling hold for 275-stocks and funds out of 296-tracked. They were up by an average of 70.0% (annualized at 83.5%) since their buy signals an average of 43.6-weeks earlier. The Mid-term Indicant was avoiding only 15-stocks and funds. They were down by an average of 28.7% since their sell signals an average of 43.6-weeks earlier.

Five years ago, on Mar 1, 2003, there were 155-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 21.1% (annualized at 58.9%) since their respective buy signals an average of 18.6-weeks earlier. There were 127-avoided stocks and funds then. They were down an average of 10.6% since their respective sell signals an average of 7.2-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

The Dow is up 68.3% since its secular low on October 9, 2002. The NASDAQ is up 103.9% and the S&P500 is up 71.3% since then. The small cap index, S&P600, is up 113.0%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid.

The Dow is down 13.4% since its last weekly closing peak in 2007. The NASDAQ is down 20.6% since its last cyclical peak in 2007. The S&P600 is down 18.3% since its last closing weekly peak value in 2007. The Small Caps was bearish last week with a 1.4% drop, while the blue chips were mildly bearish with a 0.9% drop. As stated the past several weeks, configurations remain in support of those that are consistent with a bear market.

The NASDAQ is down 55.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 12.9% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one, which may not occur until after 2025. The Dow is up 4.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, until recently. The NASDAQ needs to climb 122.3% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The NASDAQ year-to-date performance was bearish by 12.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.

The NASDAQ was down by 11.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 0.2%, but finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 1.3%, but down 5.7% in 2005. Both 2004 and 2005 were meandering bear markets. In 2006, it was up by 3.4% and flat at this time last year. So far this year, the DOW30 is down 7.5% and the NASDAQ down 14.4%. The NASDAQ is down more at this time of year more than any other year this century, 2000-inclusive.

This bearish behavior contradicts historical standards whereby the presidential election is typically bullish. The bureaucrats are doing their part with interest rate cuts, but the stock market is short of buyers who at one time refinanced their homes to buy stocks.

As you can see, this is the most bearish start of any year this century.

Where is the market headed in 2008, the presidential election year, which is the second most bullish year on the four-year presidential election cycle? If historical standards prevail, which is bullish, the market is setting up nicely for a tremendous profit this year. All that is needed is a bottom to this bear, as 2008 should finish up on the year, based on historical standards and falling interest rates. The primary required avoidance is inflation, coupled with economic stabilization. Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to bearish tendencies.

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 the past sixteen weeks, falling interest rates typically accompany stock market bullish behavior. The primary exception to stock market bullishness with declining interest rates is inflation or deflation. Inflation is the primary threat at this time. If the CPI continues to rise, falling interest rates will not stimulate bullish behavior. This paragraph will remain until commodity prices demonstrate a cyclical decline on a Mid-term Indicant basis.

Unfortunately, commodities skyrocketed last week and the week before that and the week before that. Gold is comfortably situated above $900 per ounce. Oil is now finding comfort above $100 per barrel. Do not be surprised when it tops $200 per barrel in the next five years. Supply is finite and demand continues unabated. Strong economies stimulate increasing demand. That should encourage capital infusion, but without productivity and hard working effort, that capital infusion becomes inefficient and thus inflation.

Interest rates were mixed the past three weeks after falling sharply in the prior four weeks. The Fed’s action remains biased against recession. If it were not a political election year, the Fed would opt for recession over inflation. As the election nears, watch for a policy shift. The soft economy of 2008 will be replaced with solid recessionary behavior in 2009.

As stated last week, the U.S. Dollar, although weakened, is holding up. That is most likely due to the “masses” betting on the dollars decline. The masses cannot win at that game. So, when they give up after losing money, the dollar will resume its weakening path.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 414.1% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 59.3%. It moved to the north in 47 of the past 77-weeks. It has been bullish in 18 of the last 28-weeks. This fund has been bullish the past three weeks.

Fidelity Gold, Fund #28, is up 26.2% since its buy signal on September 7, 2007. It is annualized at 53.9% since that buy signal. This fund was solidly bullish the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 327.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 58.3%. This fund was bullish the past three weeks, following bearishness in three of the last eight weeks.

Vanguard Energy #18, VGENX, is up 240.2% (annualized at 48.3%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 206.1% (annualized at 48.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 191.4% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 41.6%.

These energy related funds were solidly bullish last week in addition to precious metals and commodities. This supports an inflationary theme.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 121.0% since then. It is annualized at 46.3%. This fund has been bullish in twenty-one of the past twenty-seven weeks. It was solidly bullish the past two weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 254.3% (annualized at 50.8%). This fund has been bearish in four of the past eight weeks, but solidly bullish the past three weeks.

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

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

The Mid-term Indicant signaled bear for the Dow Utilities, which was the lone remaining Mid-term Bull Index.

The Mid-term Indicant is signaling bear for all ten major indices it tracks. They are down by an average of 5.1% since their bear signals an average of 8.9-weeks ago. The S&P600 is down 9.0% since its bear signal 16-weeks ago. It was bearish last week and is now nestled against its upper trading range limit of a steep bearish slope. If it crosses above this upper limit, the current bearish cycle will become disrupted.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,116,204

That beats buy and hold performance of $1,866,178 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,088. That beats buy and hold’s $130,339 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $209,566. That beats buy and hold’s $78,761 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,888.9%, 35.1%, and 166.1%, 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.

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.

At this time, this fund is up by 10.4% since the Mid-term Indicant signaled buy on January 18, 2008. It is annualizing at 89.5%. Some of you recall it garnishing a 70% gain in one of its hold cycles during the bear market of 2002. Historical norms suggest this would not happen until 2009. Expect a sell signal as lowering interest rates should induce bullish stock market behavior unless inflation becomes prevalent.

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 323.8% (annualized at 19.8%) since the Long-term Indicant signaled bull 852-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. 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: Three of thirty; One is non-contrarian. Bullish support near nil.

Quick-term Yellow Bears/Threats: Twenty-two of thirty supporting the bear.

Quick-term Non-Bearishness: QTI differential is -8.4%, supporting bear.

Short-term Non-Bearishness: Breakout/breakdown differential -3.6%, offering no bullish support.

Force Vectors: As stated last Friday, February 24 the bullish bounce the first three days of this past week should not have been surprising. As stated last Wednesday, pinnacled Force Vectors should invite bearishness, which you saw on Thursday and Friday of this past week.

Vector Pressure: Eleven in bullish domains. Nineteen in bearish domains. As stated last Wednesday, the steady rise the past few days has been lethargic, suggesting bullish behavior is a mere bullish spurt.

Long-term Hold Positions: Continue holding, except where sell signals are noted.

Immediate Tactics: Sell aggressively on signals.

Current Quick-term Bias: Configurations continue favoring the bear.

Overall (Long-term) Market Status: 8/15/06 –bullish-bias expired on 01/04/08.

Profit Potential from Naked Options: Volatility is high, enhancing option opportunities.

Volume: Bearish bias dominant.

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

The Short-term Indicant signaled bear on Friday, January 4, 2008 for both major indices. The Dow is down 4.2% and the NASDAQ is down 9.3%, respectively, since that bear signal.

Please read on. Click here to see the Short-term Indicant’s history.

As stated the past several days, both Indicant Volume Indicator’s continue in their lethargic pattern, suggesting diminishing interest in either dynamic bearish or bullish direction. After see-sawing this week, the NASDAQ remains about where it was about seven weeks ago. Friday’s 315.79-point drop put the Dow down by 114.63-points for the week. Volume was high on Friday’s bearish aggression, which supports bearish bias.

As stated the past few days, the market appears nestled in a comfort zone. The angular nature of the deep bearish cycle should be disrupted within a week or two. This should facilitate the development of a new short-trend. That does not mean that trend will be bullish. All this means is that the trend will be different from the bearish one now underway.

The NYSE found discomfort approaching its bullish red curve last Thursday. As stated last Wednesday, the last two times that contact was actually made infuriated the bear. If contact is made, it will be interesting to see how much energy the bear has. As stated last Thursday, the suspense has ended. The bear got infuriated just by it getting close to the bullish red curve Thursday with a 112-point drop in the Dow and a 315.79-point drop on Friday. As stated last Thursday, economic fundamentals are just too sour for bullish inspiration. Unfortunately, the bear has tremendous energy.

Please read on.

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

There were no buy signals and two sell signals. Although there were no buy signals, the SQI is signaling hold for 10-ETF’s. They are up by an average of 56.6% (annualized at 16.4%) since their respective buy signals an average of 177.1-weeks ago. In addition to the sell signals, the SQI is avoiding 18-ETF’s at this time. They are down by an average of 4.2% since their sell signals an average of 10.0-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and two sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 13-ETF’s. They are up an average of 138.6% (annualized 45.5%) since the STI signaled, buy, an average of 156.5-weeks ago. In addition to the sell signals, there are 15-ETF’s with avoid signals. They are down by an average of 6.5% since their sell signals an average of 10.8-weeks ago.

The Short-term Indicant is 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 only five-ETF’s. They are up by an average of 65.0% (annualized at 41.6%) since the QTI signaled buy an average of 80.3-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 25-ETF’s. They are down by an average of 5.5% since their sell signals an average of 9.0-weeks ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Three ETF’s with Quick-term Indicant avoid signals are up by an average of 5.2%. That means the Quick-term Indicant is wrong on three ETF’s. As stated since last Tuesday, one in particular is interesting. It is ETF#28-Pacific-Asia-EX-Japan. Click the link in the preceding sentence to view its chart. It is up a whopping 11.1% since the QTI signaled sell on Dec 17, 2007. It lost a full percentage point on Thursday’s bearishness and nearly two percentage points on Friday’s aggressive bearish behavior. It remains up, though, by a healthy amount. As you can see from the chart, though, its bullish red curve acted as a ceiling.

It has bullish robust Force Vector behavior and was barely a red bull as of last Thursday. Its red bull status expired with Friday’s bearish aggression.

ETF’s cannot be manipulated like stocks. The QTI would have normally signaled buy several days ago, but synergistic convergence was absent from the bullish spurt during the first three days of this past week. The Short-term Indicant, with fewer constraints, signaled buy on February 22, 2008.

As of last Wednesday, the QTI was reading bullish spurt due to the absence of bullish synergistic convergence. This daily stock market report advised last Wednesday, ETF#28’s Force Vector should be at a pinnacle. If so, it will be interesting to see if its Force Vector behavior is congruent with its price behavior. This will be tracked until a foundation for sustainability is formed.

Its Force Vector is moving south, along with the price. Thus it is congruent, which means it will most likely rebound before falling into negative territory. This may become an excellent long-term buy candidate.

As stated last Tuesday, another key ETF to monitor for the next few days is ETF#31-QID, which is purely contrarian to the stock market; specifically ETF#01-QQQQ. QID is named Bear Market. It only goes up during bear markets. Clicking this sentence will take you to its QTI chart. As you can see, it remains a red bull. Last Tuesday it was stated, it is configuring as a weakening bull, but quite often, such weakening invigorates the bull. Red bulls should never be challenged. Even when weakening, they can bounce north quickly and viciously. That will happen if the market turns bearish. You saw that with aggressive bearish behavior on Thursday and Friday of this past week.

Both of these ETF’s will be tracked for the next few days. If ETF#31 loses its red bull status, the market will have an increased probability of moving bullishly with some sustainability. As stated the past few days, keep in mind, the absence of synergistic convergence will prevent dynamic bullish behavior. Solid bulls use the bullish red curve as a bouncing point. Keep your eye on this ETF and see if it bounces or falls below its bullish red curve.

As stated last Tuesday, scroll down to view QQQQ from the ETF#31-QID chart. As you can see, QQQQ is pathetic. It is not expressing the same bullish strength in terms of configuration as ETF#28. That is what is meant by synergistic convergence. If all of the non-contrarian ETF’s possessed the same configuration as ETF#28, rest assured a powerful bull market would be in play.

Conflicts Between the Short-term and Quick-term Indicants

There are ten conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This suggests market disharmony. The combined Short/Quick Indicant models identify 31-hold signals and 55-avoid signals, providing a bearish edge. The bullish bias shift on August 15, 2006 expired on January 4, 2008. Please read on.

Quick-term Indicant Bull/Bear Health Report

Twenty-two of the 30-ETF’s are below their respective bearish yellow curves. That is an increase by four from last Tuesday. The average relative position of all thirty ETF’s is below bearish yellow by 1.1%. After enjoying three successive days of victorious battles with the bear, the bull succumbed to the bear last Thursday and Friday. This attribute is again configured with bearish support.

Only three of the ETF’s are above their bullish red curves. All thirty ETF average positions are 7.4% below their bullish red curves. Only one is a non-contrarian red bull, now offering only extremely mild bullish inspiration to the stock market. Keep in mind QID is not included in this statistic. It is discussed near the end of this report.

The QTI differential is minus 8.4%, which supports the bear. That support was enhanced with bearish aggression on Thursday and Friday.

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

One of the thirty ETF’s is contacting its breakout line. It is contrarian ETF#11,GLD, Precious Metals for the second consecutive day.

After thirty-five consecutive trading day of non-contrarian non-contact, ETF#21-Latin American Stocks made contact on Tuesday and Wednesday of this past week. It is now mired in neutrality.

The average distance from breakout contact is 15.7%. Double digit variances from breakout contact for thirty-eight consecutive trading-days is not supportive of the bull.

None of the ETF’s are contacting their breakdown lines. Non-contact by non-contrarian ETF’s continues in relaxing bearish influence.

The average distance between the price and breakdown is 12.1%. This configuration is providing non-bearish support, which has been the case since March 2003, but barely hanging on to that support.

The breakout/breakdown differential is negative 3.6%. After four consecutive day of bullish support, it reverted to bearish support on Friday’s aggressive bear.

ETF Force Vector Configurations

Twenty-six Force Vectors are in bullish domains. As stated on Friday Feb 24, 2008, a bullish spurt appears to be underway. You saw bullish spurt behavior on Monday, Tuesday, and Wednesday of last week. The 428-point drop in the Dow last Thursday and Friday interrupted the bullish cycle. That is a classical bullish spurt; short-lived and quickly wiped-out.

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 the put option buy signals after Friday’s close.

Eleven of the thirty ETF Vector Pressures are in bullish domains, which continues configuring in support of the bear. However, that is an increase by eight since January 31, supporting recent bullish expressions. However, as stated most of last week, bullish domain participants remain in the minority suggesting minimal sustainability.

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

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008.

January 30, 2008 – The Fed’s cut in interest rates did not stimulate bullish interest, which is bearish. However, it is better to wait for near-term attributes to mature before resuming written covered call options.

February 12, 2008 – Several Quick-term Indicant attributes are suggesting bullish resurgence. It is too risky to write covered call options at this time.

February 14, 2008 – Bullish behavior on Monday, Tuesday, and Wednesday of this week was replaced with bearish aggression on Thursday. It is reiterated no foundational structure has configured to obviate the market’s directional propensity. It remains too risky to write options at this time.

February 21, 2008 – Significant put option buy signals in the recent past has been predecessor to significant bearish behavior.

February 22, 2008 – Although the market was significantly bearish on an intraday basis, several configurations shifted away from immediate bearish support.

February 27, 2008 – The Fed is openly biasing in favor of economic support and ignoring inflation. The stock market does not like inflation so this policy will eventually invigorate the bear. The weakening dollar, which is by-product of relaxing rate policies, will add fuel to inflationary pressures.

February 28, 2008 – Like the February 14, 2008 entry above, bullish behavior on Monday, Tuesday, and Wednesday of this week was followed with bearish aggression today. Bullish spurts are more dramatic than bearish spurts. Thus risks remain high in writing covered call options at this time.

February 29, 2008 – Severe bearishness today, suggests continued volatility and too risky for writing options.

The Quick-term Indicant signaled buy on January 8, 2008 for QID. It is up 17.9% since that buy signal (annualized at 124.0%). This remains a red bull and it is advisable to continue holding.

Feb 4, 2008-QQQQ is approaching its bearish yellow line from below, while QID is approaching its bullish red curve from above. The specific interactions with both of these securities will offer some insight on bearish sustainability.

Feb 5, 2008-Both indices’ behavior was consistent with that of bearish ambition.

Feb 6, 2008-QQQQ reacted bearishly and QID exerted more bullish influence. This behavior is consistent with bearish expectations.

Feb 12, 2008-QID started a quick-term cooling from its red-hot bullish position a few days ago. It is configured to cool. Watch its behavior as it approaches its red bullish curve on the Quick-term Indicant chart. If it bounces north the bear market will persist.

February 28, 2008-QID in fact relaxed, but bounced north before it got to bullish red. Its Force Vector is in bearish domains. Red bulls in bearish domains typically invite more bullishness.

QID is up 4.5% since the Consolidated Indicant signaled buy on January 22, 2008. It is annualizing at 42.8%. The Short-term Indicant again signaled buy today.

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

Divergence versus Convergence

The markets enjoyed bearish divergence last week. Contrarian securities, such as oil stocks and precious metals were bullish last week. This configuration suggests the Fed’s policy of assisting the economy will work. Stock market bearishness is most likely reflective of inflationary threats and a shortage of buyers.

Indicant Conclusion

Also, as stated the past two weeks, interest rates are plummeting, which is common company to bull markets. That, coupled with traditional election year bullishness should invite a bull market this year. The primary threat to this is inflation. If the CPI or PPI rise too rapidly, the bear will gain secular influence. It is more difficult for policy makers to stifle inflation than recession.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/02/08