March 2010 Indicant Weekly Stock Market Reports

Mar 28, 2010 Indicant Weekly Stock Market Report

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

Universal Rights

Universal healthcare proponents argue that U.S. Presidents since Teddy Roosevelt have desired universal healthcare. Contemporaries argue that all attempts until recently have failed. Apparently, there is considerable jubilation at achieving something that has been elusive for such a long period, regardless of how stupid that achievement is. An idea confronting resistance for over one-hundred years may indeed be a bad idea.

Contemporary political leaders are poor at math. Some may argue they do not care, but after listening to them for several months, it is obvious none of the political leaders ever confronted differential equations. Actually, some may have cheated to get past their eighth-grade algebra. Creating a potential of thirty-million new patients against the finite capacity of medical practitioners is not going occur without notice. Politicians have a unique ability of creating long lines in every economic sector they engage; that is, for everyone but them.

Everyone agrees that the healthcare system is broken; do they mean the Canadian system is broken? Newfoundland’s Canadian Premier, Danny Williams, visited the U.S. for heart surgery several weeks ago. Doctors in Toronto said they could have done it, but as the Premier said, it is his heart and his own doctors recommended the surgery in the U.S. He had the money and the resources and made his choice. That is the way it should be. That takes on the appearance of a universal right, but one can suppose there could be arguments to that.

What are universal rights? Using that term suggests that such rights have existed since the dawn of time. However, some politician with a three and a half brain brought it up about a hundred years ago. All successor politicians since then saw this as a way to garnish a few more votes and kept talking it up to get a few more duped souls to the election booths for their votes.

There are some obvious universal rights. Animals have a universal right to inhale oxygen, process the gas, and then exhale carbon dioxide. Plants have an equal universal right to inhale carbon dioxide, process the gas, and exhale oxygen. It seems universal rights are co-dependent on one another and they have existed since the dawn of time. Healthcare, as a universal right, just got started in the U.S. It seems that some other universal rights were sacrificed to elevate his new universal right. This assumes there is a universal right to not be coerced and over-taxed by one’s government. History suggests that when such coercion oversteps certain boundaries, the elite souls who directed it are eliminated from their elite status.

The famous Italian economist, Vilfredo Pareto, noticed that 20% of the people owned 80% of the land. Since his observation in the late 1800’s Pareto principles have been applied in several applications, including and excluding economics.

Pareto’s 80-20 rule during his era more or less identified that 20% of the population are rich and 80% are poor. Do-gooders feel sorry for the low-end of the 80%, but as was the case with Castro, only he and his cronies live like the 20%-group while the other 99% live in more misery than the original 80%-group. Castro is just one example of many.

In essence, there seems to be two primary forces in human nature; 1) control as many people as you can and 2) accept such controls. Civil strife occurs when those two forces become imbalanced. This is one reason why the founding fathers suggested the right to bear arms. The most likely enemy is not foreign armies, but those who lead you. Castro and others like him would not live the good life very long if the masses were all well armed.

Interestingly, Pareto was a liberal. The term, liberal, during his era is not the same as that used today. He expressed disdain for any governmental intervention in the free market. He directed much of his frustrations at government regulators. Contemporaries would say that Pareto was a conservative; not a liberal. These abstract terms have no real meaning; just jibber-jabber from people who have too much time on their hands.

Regulators are mere people, who by some magical power, have a right to regulate other people; the regulated. So far, there is no known study identifying which group of people are better; the regulators or the regulated.

There is one known fact, though. No regulator ever invented a product of value or produced anything of value while practicing regulation. Harvey Firestone was not a regulator. He manufactured tires for the automobile. Henry Ford and Alfred P. Sloan were not regulators. They produced automobiles. Thomas Edison was not a regulator. He produced a variety of products, but the one that we all use today is the light bulb. Nicola Tesla invented several products, such as the X-Ray machine, electric motors, and the radio to name a few. None of these folks were regulators. Nearly all of their inventions, processes, and systems were eventually regulated. These great people are among the regulated group.

Which came first, the regulator or the regulated? The group that came second, the regulators, is proof they are not needed. They would not exist if the regulated group never existed. If that were the case, we would still be in the forest with an average life expectancy of about 25-years of age.

So, one can suppose that the better group of people are the regulated group. That leads to another question; would the regulated folks be even better if there were no regulators? Progress would move faster, as regulators, when not yawning, tend to slow activity.

When observing people of normalcy and segregating into various groups, none of the groups would be comprised entirely of bad people. For example, if one identified only two groups of people, regulators and the regulated, both groups would have good and bad people. However, there is an underlying perception that all regulators are on the side of good. Reality suggests the regulators are biased in favor of laziness and ineptness, while the regulated may be biased with sneakiness and manipulation, but also with profound productivity advantages over the regulator.

Bernie Madoff is in the regulated group. Bernie violated nearly every conceivable regulation imaginable for many years. The 2007-08 bear market exposed his scheme. Yawning regulators had nothing to do with the detection of Madoff’s evil. He openly confessed to his cheating ways. Some really dumb people pronounced the need for yet more regulations in the wake of the Madoff scandal. The prior paragraph indicated regulators are biased toward laziness and ineptness. Therein lays the problem with regulators. It is a phony idea that enhances the power of politicians and their bureaucrats. That is the sole purpose of employing regulators.

It will be interesting to see how many new crimes and increased corruption from the ten thousand-plus new IRS agents created from the healthcare bill. Rest assured there will be more bad than good. Right off the bat, 10,000+ new economic leeches will be created, as absolutely nothing in government, by government, and from government produces any wealth. It is entirely consumptive and anti-wealth.

Many large caps have determined their expenses from the healthcare bill passed by elected economic leeches. Some, such as Caterpillar, have announced significantly higher expenses. Since bottom lines must be protected, expenses must be cut. One of the favored targets by large caps is work force reductions. There will be more people unemployed as a direct result of the passage of healthcare.

Workforce reductions seldom lead to increased profits. They are executed for survivability purposes. High fixed cost operations need volume to make money. Reducing workforces tends to depress volume potential. Most large caps are high fixed costs. The stock market has not yet behaved in a way to suggest an expectation of significantly reduced earnings. Earnings estimates will be interesting in the coming weeks and months. If the stock market does not sense a repeal of the healthcare bill or defunding tactics, do not be surprised at it adjusting to the new earnings estimates, which will influence bearish biases.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 226 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 31.5%. That annualizes to 42.5%. The Mid-term Indicant has been signaling hold for these 226-stocks and funds for an average of 38.5-weeks.

The Mid-term Indicant is avoiding 89-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 37.3% since the Mid-term Indicant signaled sell an average of 81.3-weeks ago.

One year ago, on Mar 27, 2009, the Mid-term Indicant was holding 22-stocks and funds out of 344 tracked for an average of 94.2-weeks. They were up by an average of 106.1% (annualized at 58.6%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 35.5% since their respective sell signals an average of 42.7-weeks earlier.

The Mid-term Indicant was signaling hold for 202-stocks and funds of the 345-tracked two years ago on Mar 28, 2008. They were up by an average of 128.8% (annualized at 55.4%) since their respective buy signals an average of 120.9-weeks earlier. The Mid-term Indicant was avoiding 140-stocks and funds at that time. They were down an average of 21.8% since their respective sell signals an average of 24.1-weeks earlier.

There were 266-stocks and funds with hold signals on Mar 23, 2007 since their buy signals an average of 104.3-weeks earlier. They were up by an average of 126.8% (annualized at 63.2%). There were 68-avoided stocks and funds at that time. They were down by an average of 5.9% from their respective sell signals an average of 13.0-weeks earlier.

On Mar 24, 2006, the Mid-term Indicant was signaling hold for 288-stocks and funds out of 345-tracked. They were up by an average of 115.4% (annualized at 63.2%) since their 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 by an average of 28.6% since their sell signals an average of 52.3-weeks earlier.

Five years ago, on Mar 25, 2005, there were 232-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 85.8% (annualized at 59.3%) since their respective buy signals an average of 75.3-weeks earlier. There were 84-avoided stocks and funds then. They were down an average of 28.6% since their respective sell signals an average of 52.3-weeks earlier.

On Mar 26, 2004, there were 249-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 71.0%, annualizing at 75.8%, since their respective buy signals an average of 48.7-weeks earlier. There were 30-avoided stocks and funds then. They were down by an average of 24.7% since their sell signals an average of 39.3-weeks earlier.

There were 241-stocks and funds with hold signals on Mar 28, 2003. They were up by an average of 18.3%, annualizing at 75.6%, since their buy signals 27.5-weeks earlier. The 36-avoided stocks and funds were down an average of 29.7% since their respective sell signals an average of 27.5-weeks earlier.

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

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

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

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

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

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

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

The Long-term, Mid-term, and Quick-term attributes have not yet succumbed to the stock market bear’s ambition. The Near-term cycle shifted in support of bearish inclinations in early Feb 2010, but quickly abandoned bearish bias in early March 2010. The Dow Utilities also shifted in favor of the bear on a Mid-term basis in early Feb 2010. It remains pathetically configured with respect to bullish ambition.

With the exception of the DJU, most prices and major indices remain solidly above their respective bearish yellow curves. Bear and sell signals will not occur on these slower moving models until price interactions with bearish yellow.

The bull attacked the Near-term Indicant bearish attributes several weeks ago. This prevented additional sell signals by the Mid-term Indicant and has steadied the turbulence of the Near-term Indicant.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

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

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a common bouncing point so a stop loss a percentage below its value could be considered.

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 48.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 115.0% and the S&P500 is up 50.2% since then. The small cap index, S&P600, is up 111.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 52.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 23.6% since its similar secular peak on March 23, 2000. The Dow is down by 7.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny by the stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority.

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

The NASDAQ year-to-date performance was bearish by 22.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 6.5% 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 bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 3.9%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 2.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 8.5% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 1.7% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 1.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 12.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 0.9% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 9.7% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post election bullishness.

The Dow is down 23.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 16.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 18.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The next Near-term Bear cycle may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

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

The Dow is up 65.7% since March 9, 2009. The NASDAQ is up 88.8% and the S&P500 is up 72.4% since then. The S&P600, Small Cap Index, is up a whopping 98.6% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates are holding relatively constant. The discount rate is inching up. It is no longer a yellow bear. These sinusoidal waves suggests interest rates are anxious to start rising again. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold.

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

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Greece.

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

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed will take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate a few weeks ago.

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

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

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

Although bearish the past several days, gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

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

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

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama if this continues. Union labor management does not understand this phenomenon. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large block of votes, but those large blocks will continue to shrivel. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Recently softening gold prices is mere profit taking and a strengthening dollar. Gold has been relatively bearish the past few days. The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The “meandering” forecast is holding steady at $1000. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 78-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

The heart and soul of bullish seasonality concluded a bit earlier this year. The pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality near the end of January 2010 with the president’s state of the union address. Bearishness typically follows those speeches and there was no exception this year.

The above and below paragraph may become obsolete, based on Blue Dog Democrats and a general populace movement against the always damaging singularity in political party voice, upsetting the assumed control of Congress by socialists, communists, and creeps. If the Blue Dogs and populist movement back down and join the evil ones, then the paragraphs remain in tact. The senatorial election in the state of Massachusetts revealed the genius of Thomas Jefferson, while exposing the stupidity of contemporary, soft-handed/slow thinking politicians and their academic brethren. That was bullish at the time and potentially obsoletes bearish commentary contained herein.

In the face of defeat, the Democratic Politburo changed the rules. If they are successful, the bear will roam again. It is now only a matter of time.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gained, do not be surprised at a 1,000 Dow by 2010.” The bear was passive between March 2009 and January 2010. It has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs and grass roots movements against big government have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few weeks/months.

As stated the past 30-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 4.4% since then, annualizing at 9.9%. It has been bearish in four out of the last ten weeks, but solidly bullish in three of the last four weeks. All commodities, including gold, are under pressure from a strengthening U.S. dollar.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is down 1.8% since then, annualizing at -1.8%. It was also solidly bearish last week. This particular fund marches to its own drumbeat.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 8.4%, annualizing at 12.7% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is down 1.3% since that buy signal, annualizing at -1.1%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is down 1.1% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was aggressively bearish the past two weeks.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 4.9% since its buy signal on Sep 11, 2009, annualizing at 9.0%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 9.1% since then, annualizing at 13.9%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is down 2.3% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 34.6% since that buy signal, annualizing at 26.5%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is down 2.2% since that buy signal.

Most commodities were bearish last week and they were contrarian for the first time in several months.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 3.2% since that bear signal. The DJU was solidly bearish last week, while the other major indices were mildly bullish.

The nine remaining major indices retaining bull signals are up by an average of 20.0% since there respective bull signals an average of 34.0-weeks ago. That annualizes at 30.6%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the overall stock market peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,163,322. That beats buy and hold performance of $1,650,747 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $151,756. That beats buy and hold’s $114,271 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $218,825. That beats buy and hold’s $83,049 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

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 ProFunds Ultra Short on April 3, 2009. It is down 60.4% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 274.8% (annualized at 14.9%) since the Long-term Indicant signaled bull 960-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Focal points remain with prices, relative to the NTI Green curve, and Vector Pressure. As long as the former increases on the charts and the latter remains in bullish domains, the bear cannot find success. QTI Red Bulls are offering additive assurances against dynamic bearish potential. So far, any bearish expressions should be considered a mere bearish spurts.

Several Force Vectors continue moving to the south. Several dipped into bearish domains this past week, opening a narrowed window of opportunity for the stock market bear. GLD contacted NTI Green last Thursday, but the gold bull countered very well on Friday. GLD remains above tangential protection, where no sell signal can occur. Gold, along with other commodities, is under cyclical pressure from a strengthening U.S. dollar. Several short-term attributes remain positioned to prevent dynamic and long-lasting bearishness. Although weakened, they are holding firm against bearish inclinations.

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

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

The Near-term Indicant is signaling bull for 10-major indices. They are up 4.4% since their bull signals on Mar 3, 2010. There are two indices enduring bear signals. They are down by an average of 3.1% since their respective bear signals an average of 5.6-weeks ago.

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

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 28.4%, annualizing at 35.7%, since their bull signals an average of 41.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are down by an average of 1.4% since their respective bear signals an average of 4.9-weeks ago.

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

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

QTI-Red Bull Count; Ten non-contrarian; solid bullish support.

QTI-Bullish Red Curve Trend; Eleven non-contrarians; solid bullish support.

QIT-Yellow Bear Count; None of the non-contrarians is inflicted with this attribute and thus non-bearish. Longer-term holders should focus on this attribute; especially if you enjoy the fundamentals of your holdings and have accumulated significant gains.

QTI-Bearish Yellow Curve Trend; Non-bearish majority with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

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

NTI-Blue Bull Count; Ten non-contrarians and arguing with them is not profitable.

NTI-Bullish Blue Curve Trend; Eleven non-contrarian; bullish support.

NTI-Bearish Green Curve Trend; Eleven non-contrarian moving north; non-bearish. Ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; Ten non-contrarians in bullish domain; supporting bull.

STI-Force Vector Position Relative to Vector Pressure; Six non-contrarians above Pressure and with mild increasing bearish threats. (Six fell below Pressure the past three days).

STI-Force Vector Direction; The gentle southerly cycle is shifting with a bit more bearish aggression, but still non-threatening. (All are shifting south, but with mild bearish threat).

STI-Vector Pressure Trend; Seven non-contrarians are moving bullishly. (Several shifted direction to the south this Friday), but not yet threatening to the Short-term bull.

STI-Vector Pressure Position; All non-contrarians, except DJU, are with positive (bullish) pressure. Indices remain near convergence and new bull signal may not be long lasting.

Short-term Market Summary

Short-term attributes continue configuring in support of the bull. This is a low volume bull and once it run its course, the next bear cycle has a higher probability of configuring with more breadth and depth. However, if this Near-term Bull gets a volume nudge, it can enjoy significant longevity.

-Tangential Protection – The Dow Composite, Dow Transports, NASDAQ, NAS100, S&P400, and S&P600 have tangential protection. Tangential protection, once formed, helps avoid the pitfalls of fluttering behavior.

-Political Climate – Political disharmony continues and bullish. There is increasing intra-party bickering, which is even more bullish. Although the passage of healthcare has a long-term bearish projection, the market remains bullish. Therefore, in spite of longer-term prognoses, the Near-term and Quick-term bull/hold signals will remain in tact until attributes deteriorate and supportive of the stock market bear.

-Reverse Tangential Bearish Detection – We will have to wait for the next Near-term bear cycle to monitor this tangential phenomenon. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness on this cycle will be high. The Dow Utilities moved toward supporting this phenomenon several days ago. Recent bullish bounces did nothing to challenge this theme.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the Mid-term bull will continue dominance.

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

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

Indicant Volume Indicators

The NYSE has enjoyed a small increase in volume while the NASDAQ has flattened. This trader rotation is chasing ghosts. However, overall, these configurations are supportive of bullish bias, but mildly so. The most recent bearish spurt was accompanied with aggressive volume, while the latest bullish spurt has not been supported by volume. Although this is a classical sucker rally configuration, there is little justification for not holding and participating in this rally. (Recent chronological observations are expressed below in reverse order).

Mar 26, 2010-Fri-Mild volume and flat behavior suggests the stock market is looking for reasons to shift in one direction or the other. This flat behavior, although not surprising, is “unnatural.” However, bias remains the same.

Mar 25, 2010-Thu-Mildly aggressive volume accompanied mild bearishness today, offering no obviations of directional intensity. Therefore, bullish bias prevails.

Mar 24, 2010-Wed-Light volume on today’s mild bearish behavior suggests little interest in shifting bias to bearish.

Mar 23, 2010-Tue-Again, volume was slightly below recent averages on bullish aggression. Bullish bias prevails.

Mar 22, 2010-Mon-Volume was low on mild stock market bullishness. Although not supportive of the NTI/QTI-Bulls, there is no evidence of volume shifting away from bullish bias.

Mar 19. 2010-Fri-Volume was mildly “aggressive” on mild stock market bearishness. Although a bit discerning, there remains an absence of evidence to shift bias from bullish to bearish.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 5.7%, annualizing at 45.2%, since their buy signals an average of 6.5-weeks ago.

The NTI is avoiding three-ETF’s. They are down by an average of 3.6% since their sell signals an average of 5.0-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 32.8% since their buy signals an average of 42.4-weeks ago. Those with hold signals are annualizing at 40.3%.

The Quick-term Indicant is avoiding two ETF’s. They are down by an average of 32.8% since their sell signals an average of 27.6-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; 23-bullish support; losing solidity.

NTI Blue Curve Trend; 28-non-contrarians sloping north; bullish support.

NTI Green Curve Trend; majority of 30-sloping north; strong non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 23-non-contrarian; bullish support.

QTI Bullish Red Curve Trend; majority of 29-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend; 29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction: All moving south, suggesting a bearish influence.

STI Force Vector Position; five-populating bullish domains; 23-fell into bearish domains on Mar 23, but not yet threatening.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; solid bullish support. This attribute is a focal point since Pressure is near zero.

Vector Pressure Trend; 17-moving north; bullish support; some solidity lost.

Short-term Summary: Most attributes continue supporting the Short-term Bull, but losing steam. Pressure never escaped convergence/inflection points and thus offers the bear some encouragement to make a move. However, some Force Vectors are configured for additional bullishness. If more Force Vectors fall into bearish domains and influence Pressure drops, the bear will most likely attempt an attack on the bull. This should be clarified in the next few days.

Contrarian Funds

ETF#03-Natural Resources is down 2.3% since the Near-term Indicant signaled buy on Mar 3, 2010. The Quick-term Indicant signaled buy on August 3, 2009. It is up 9.1% since that buy signal, annualizing at 13.9%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

Its Force Vector is lazy and Vector Pressure is increasingly penetrating bearish domains. This is a bit discerning. However, its price remains above NTI-bearish green curve and Pressure remains in bullish domains. Thus, there is no sell signal, yet.

ETF#11-Gold and Precious Metals is up 34.6% since the QTI signaled buy on December 11, 2008. Annualized growth is at 26.5%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $100.10 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is down 2.2% since that buy signal. Force favors bull, but Pressure still converging. This convergence is a bit threatening. Force Vectors is moving into bearish domains, which motivates the gold bear.

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

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will highlight that potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government is down 2.5% since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 2.8% since that sell signal.

Force Vector and Pressure remains in bearish domains, offering support to the TLT bear. Price is hovering around bearish yellow, which highlights bearish trend.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 10.6% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 62.9% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $23.60 and still falling.

Major ETF Events

Mar 26, 2010-Fri-Several Force Vectors are increasingly penetrating bearish domains with Pressure still in converging pattern (very close to falling into bearish domains). As long as Pressure remains positive (bullish domains), the bear cannot dominate.

Mar 25, 2010-Thu-No major events, but Force Vectors encouraging bear, but mildly so.

Mar 24, 2010-Wed-TLT Force Vector fell into bearish domains on strengthened U.S. dollar.

Mar 23, 2010-Tue-Several Force Vectors fell into bearish domains, which offers a minor threat to short-term stock market bull.

Mar 22, 2010-Mon- Several Force Vectors continue drifting to the south. They are not nose-diving. Even though this configuration is non-bullish, there is no serious bearish threat.

Current Strategy-Short-term Indicant- Mar 26, 2010-Fri-Same as last Tuesday. Mar 25, 2010-Thu-Same as yesterday. Mar 24, 2010-Wed-Same as yesterday. Mar 23, 2010-Tue-Force Vectors dip into bearish domains is a bit discerning; especially so with Pressure still converging. Mar 22, 2010-Mon-The lazy Force Vector movement to the south is not indicative of an immediate bearish threat. However, Pressure remains near convergence (neutrality), which makes the Short-term Bull a bit more vulnerable. If Force dips into bearish domains, it could influence Pressure to do the same. Attributes remain in a position of limited obviations of directional intensity. However, the prevailing bias remains bullish.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market again enjoyed bullish divergence last week, albeit mildly so. Four of the last seven weeks have enjoyed a combined bullish divergence and convergence. Bearish convergence was endured for four consecutive weeks ending seven weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence.

Indicant Conclusion

As stated the past twenty-four weeks, low interest rates offer narrowed alternative investment opportunities. The expiration of the Near-term Bull suggested this was increasingly an irrelevant observation, relative to more worldly dynamics, which appeared to have been leaning in favor of the bear until five weeks ago. Since then, the capital markets crushed the early February threat by the bear. One can argue political discourse in the U.S. has more bullish weight than China’s credit tightening.

There is a strategic view unfolding that China may tighten credit too much. Some logic suggests that large caps may leave China. That leads to a heightened concern regarding interest rates and/or deflation or inflation. This also could lead to reduced revenue volumes for larger cap companies and other business interest in China.

Trade tensions can mount. Such behavior will invoke a repeat of the 1930’s. Any legislation or behavior leading to restrictions on free trade will unleash a bear that will make the 1930’s bear look like a teddy bear. The economy is more intensely international than in the 1930’s. It is better for domestic unions to fall apart than international trade wars.

The stock market bull enjoyed additive magnitude with the additional number of capitalists in China since the early 1990’s. Chinese government leaders consist of the exact same psychological profile as any other politicians, where control freak, egotistical self-aggrandizement, and lying are common attributes. Forces far away from Washington D.C. can shake the world’s economy. The small country of Greece is a new threat, but for the time being is promoting austerity in their government. That is bullish.

Force Vectors are moving south. So far, this movement is non-threatening to the bull.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/28/2010

Mar 21, 2010 Indicant Weekly Stock Market Report

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

Separation of Power and Incongruent Ego Disease

The founding fathers of the U.S. Constitution must have known some crazy people during their day. That must be one of the reasons for their obsession with a separation of power. Just in case someone in leadership became crazy, the separation of powers would hold the crazy in check.

The U.S. Constitution authors created three entities of this power in government; legislative, executive, and judicial. Those three governmental entities were designed to have equal power. From the founding fathers’ writings, it appears they wanted to make sure that rational thinking and action could mitigate irrational thinking and action, assuming all three powers would not become crazy at the same time.

Most crazies are not born crazy. Most become crazy after birth and that can occur on any given day. Some are caused by injury, such as bump on the head, but many more are caused by distortion in brain flow. Some refer to this as one with psychological problems. The phrase, “going postal” describes the latter. For example, on Tuesday morning, one wakes up from a restful nights sleep with a brand new dysfunctional area in the brain. Those closest to the newly developing brain dysfunction may not detect it early enough to thwart catastrophe for that person and/or those around the newly devolving crazy person.

Authors of the U.S. Constitution designed significant checks and balances in government to prevent excessive controls by a single individual or small group of individuals since becoming crazy can happen in random fashion. After all, there is no guarantee that the one in political power will remain sane on an on-going basis. They can wake up crazy on any given morning or it may happen after their first cup of coffee or their first martini in the evening. Becoming crazy is purely random. Few announce they became crazy at the moment of their deterioration.

The founding fathers recognized that it is possible for the one with unmitigated power can point their armies and weapons at the populace with the announcement, “do as I say.” That was a common theme among the various royalty of their day. The founding fathers apparently found this sort of behavior disgusting and wrote some rules to prevent it from happening in the United States. In essence, their theme is that anyone at any point in time can become crazy and thus the balance of power concepts were documented as being important concepts.

Some become crazy when their egotistical needs expand to the point where they want power. Real power is easily detectable; Babe Ruth, Henry Aaron, Jim Brown, Barry Sanders, Jack Nicklaus, and people like them demonstrated real power with their obviously superior athleticism. The results of their efforts inarguably demonstrated superiority over their peers. Michael Dell, Henry Ford, Bill Gates, Soichira Honda, Steven Jobs, and others like them demonstrated real power by defeating their competition and providing products of value. Their success is inarguable. These people earned “real power.”

Real power is limited to just a few. Such people enjoy a superior vocational focus and/or innate chromosomal constructions that facilitate their greatness. The bell shaped curve in any subject suggests that most phenomena fall into the average category. In essence, by statistical default, most people are just average. There is nothing wrong with average for without it, there would be no detectable greatness. Observing greatness is a source of enjoyment for most. One never sees it in public or corporate politics.

The problem with politicians is they are average but think otherwise. Incongruent egos occur when average people think of themselves, as being more than average. All of you have encountered such people. Some, such as FDR and Hitler, endured this crazy disease.

An incongruent ego to individual capability results in the demise of those who follow such crazies. FDR and Hitler both had normal sized brains (around 3.5 pounds), just like you and me. However, they processed information in their 3.5-pound brains differently from you and me. Their every thought originates with the word, I. If it did not, then every thought concluded, “this must best for me.” After all, “I am great and need to be listened to.” They never demonstrated real power by providing a product or service of real value. Their services were provided through the coercion of their respective governments. That is a dynamic incongruent ego; average people with average talent, but in positions of political power. Great people tend to avoid politics.

Crazy means different things to different people. For example, two crazies looking at one another may not see crazy. Hundreds of thousands of screaming Germans worshiping every utterance from Adolph Hitler did not detect the craziness early enough. Their country was decimated and many died due to their inability to detect crazy when confronted with it. This is also true for those who kept voting for FDR. Just look at the consequences. Theories abound, but the conclusions of their efforts speak loudly and those conclusions are without any argument.

Every night on the radio, FDR duped American society with corny statements, such as “the only thing we have to fear is fear itself.” FDR never encountered fear. His table was populated every evening with good food in the comfort of the Whitehouse while the populace endured hunger and real fear during his tenure as president. His corny statement about fear did nothing to mitigate hunger pains. Many died anyway, while he never endured any plight. That is one reason why politicians become politicians. With one simple skill, the gift of oratory, they feel they can avoid the threat of reality.

Every U.S. politician giving a speech is just an average person, who for the most part, is inflicted with the incongruent ego disease. They are not seen as being crazy by his worshipers and followers. Their followers shout and clap at even the most irrational commentary; all abstracts with little to no substance. Politicians seek only two things; coerced control and applause. All they want is the same as any entertainer; “please clap and shout at my speech for my ego is hungry.” Therein lies the source of most problems; the average thinking they are more than average.

Scott Brown was elected on the belief that he provided the final vote against healthcare legislation. Politicians ignored the will of the people because their incongruent ego disease is blinding to what is real or correct.

The three distinct separations of power are being demonstrated as a failing concept. The founding fathers were unaware that such a large percentage of the populace would be as lazy as they are. Economic leeching is the fastest growing segment of the world’s population. Economic leeches are the ones who politicians represent. The rest of us do not have time to attend their rallies and offer applause. As previously stated, all democracies eventually fail due to tyranny by the majority.

Contemporarily, the executive branch of government is impregnating the legislative branch of government with corruption. Many in the legislative branch are being influenced by the executive branch of government on how to vote on healthcare. In essence, there is no separation of power between those two branches of government. Direct interaction and promises by one with incongruent ego disease to another with the same disease is a destructive path. Rest assured when irrationality becomes predominant, the stock market bear will be delighted. The stock market bull only follows the path of rationality, demonstrated greatness, and complete honesty. There is little difference between what is occurring in government to what occurred in Enron’s board room; both irrational and inclusive of corruption.

A really great person would start an insurance company that would insure for pre-existing conditions. They would offer to pay for abortion. They would create their own staff of doctors and take really good care of them, financially. A person understanding insurance and offering everything the coercion package is offering would gain tremendous market share. Such as insurance company would enjoy significant enough volumes they could get pharmaceuticals cheaper than the Canadian government. (There are only 30-million or so Canadians while the U.S. would offer over 50-million or so new customers for this new insurance business).

Now here’s the kicker. To create an insurance company, such as above, the absolute minimum requirement would be to at the very least break even. That would be very difficult. That is really hard work. And therein lies the problem. The average people (politicians and their constituents) are incapable of doing this. So, they resort to coercion, which is a common attribute among all forms of government. And the bigger the government, the more coercion. And those crazy souls who voted for these contemporary incumbents are laying the foundation for their children and grandchildren to live the same pitiful lives that their genetic cousins did in the U.S.S.R. for four generations. Jumping up and down with glee at the pontifications of any politicians is one of the grandest acts of stupidity there is.

One element of the incongruent ego disease is an unhealthy obsession toward one’s own legacy. Over the past few days, we have heard the speaker of the house of representatives state, “we are about to pass historic legislation.” She believes there is some sort of legacy connection to this historic passage. The “average” nature of such politicians is their inability to understand how their legacy will be viewed in future generations by a rational populace. A rational populace will view such legacies as evil, wrong, fraught with laziness, and an incongruent ego to their real capabilities. The average folks do not even understand how to leave a positive legacy.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 227 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 30.8%. That annualizes to 43.2%. The Mid-term Indicant has been signaling hold for these 227-stocks and funds for an average of 37.0-weeks.

The Mid-term Indicant is avoiding 89-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 34.9% since the Mid-term Indicant signaled sell an average of 80.3-weeks ago.

One year ago, on Mar 20, 2009, the Mid-term Indicant was holding 22-stocks and funds out of 344 tracked for an average of 93.4-weeks. They were up by an average of 103.9% (annualized at 57.9%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 38.3% since their respective sell signals an average of 41.7-weeks earlier.

The Mid-term Indicant was signaling hold for 158-stocks and funds of the 345-tracked two years ago on Mar 21, 2008. They were up by an average of 175.3% (annualized at 57.3%) since their respective buy signals an average of 159.2-weeks earlier. The Mid-term Indicant was avoiding 139-stocks and funds at that time. They were down an average of 21.6% since their respective sell signals an average of 23.0-weeks earlier.

There were 314-stocks and funds with hold signals on Mar 16, 2007 since their buy signals an average of 103.3-weeks earlier. They were up by an average of 118.9% (annualized at 59.9%). There were 44-avoided stocks and funds at that time. They were down by an average of 10.4% from their respective sell signals an average of 17.3-weeks earlier.

On Mar 17, 2006, the Mid-term Indicant was signaling hold for 286-stocks and funds out of 320-tracked. They were up by an average of 117.6% (annualized at 63.6%) since their 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 by an average of 8.8% since their sell signals an average of 23.2-weeks earlier.

Five years ago, on Mar 18, 2005, there were 235-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 88.6% (annualized at 62.0%) since their respective buy signals an average of 74.4-weeks earlier. There were 77-avoided stocks and funds then. They were down an average of 28.7% since their respective sell signals an average of 52.6-weeks earlier.

On Mar 19, 2004, there were 249-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 71.1%, annualizing at 77.4%, since their respective buy signals an average of 38.7-weeks earlier. There were 30-avoided stocks and funds then. They were down by an average of 25.4% since their sell signals an average of 38.7-weeks earlier.

There were 141-stocks and funds with hold signals on Mar 21, 2003. They were up by an average of 29.8%, annualizing at 74.8%, since their buy signals 20.7-weeks earlier. There were 119-buy signals this week just ahead of the grand bull leg of 2003. The 36-avoided stocks and funds were down an average of 28.3% since their respective sell signals an average of 26.6-weeks earlier.

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

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

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

Access all updated information from the following link. You will need your login ID and password.

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

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

The bull attacked the Near-term Indicant bearish attributes five weeks ago. This prevented additional sell signals by the Mid-term Indicant and has steadied the turbulence of the Near-term Indicant.

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

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

Stop Loss Management

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a bouncing point so a stop loss a percentage below its value could be considered.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 47.4% since its secular weekly low on October 9, 2002. The NASDAQ is up 113.1% and the S&P500 is up 49.3% since then. The small cap index, S&P600, is up 110.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 53.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 24.1% since its similar secular peak on March 23, 2000. The Dow is down by 8.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 21.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 3.6% 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 bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 4.6%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 3.1% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 7.7% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 4.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was down by 0.9% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 16.7% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was down 5.9% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 15.7% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post election bullishness.

The Dow is down 25.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 17.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 19.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the recently expired Near-term Bull cycle suggests these cyclical bottoms may not again be tested.

In other words, the next Near-term Bear cycle, which was attempted in early Feb 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

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

The Dow is up 64.1% since March 9, 2009. The NASDAQ is up 87.2% and the S&P500 is up 71.4% since then. The S&P600, Small Cap Index, is up a whopping 97.7% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Quick-term Indicant. Even the Near-term attributes are bullishly supportive, but remaining precariously close to supporting a bearish bias.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a bear stock market and high commodity prices, including gold.

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

As stated 77-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

In the face of defeat, the Democratic Politburo is changing the rules. If they are successful, the bear will roam again.

As stated the past 29-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

It will be interesting to observe stock market reaction to this weekend’s sneaky Congressional behavior.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 4.4% since then, annualizing at 10.3%. It has been bearish in four out of the last nine weeks, but solidly bullish the past three weeks. All commodities, including gold, are under pressure from a strengthening U.S. dollar.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 1.2% since then, annualizing at 2.3%. It was also solidly bullish last week. This particular fund marches to its own drumbeat.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 11.9%, annualizing at 18.5% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 2.5% since that buy signal, annualizing at 5.0%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is up 1.4% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was aggressively bearish last week.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 7.6% since its buy signal on Sep 11, 2009, annualizing at 14.4%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 11.4% since then, annualizing at 18.0%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is down 0.2% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 34.3% since that buy signal, annualizing at 26.6%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is down 2.5% since that buy signal.

Most commodities were bullish last week and were again not contrarian, which is bullish.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Unfortunately, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 4.7% since that bear signal. It was mildly bullish last week, while the other major indices were also mildly bullish.

The nine remaining major indices retaining bull signals are up by an average of 19.4% since there respective bull signals an average of 33.0-weeks ago. That annualizes at 30.5%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle and attempting to join the ranks of bulls.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,852,044. That beats buy and hold performance of $1,634,258 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $150,886. That beats buy and hold’s $113,615 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,377. That beats buy and hold’s $82,330 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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 ProFunds Ultra Short on April 3, 2009. It is down 59.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 271.1% (annualized at 14.7%) since the Long-term Indicant signaled bull 959-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Several Force Vectors continue dipping to the south. As stated one week ago, do not be surprised at meandering behavior or mild bearishness the next few days. However, too many attributes are positioned to prevent dynamic bearishness. Also, it should be noted that Force is wavering inside bullish domains and not with southerly crispness. In other words, their southerly movement is not bearish. It is more non-bullish. (Note: A few shifted a bit more aggressively to the south this Friday, but the jury is still out on stock market reaction. Current configurations suggests on-going bullishness, though).

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

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

The Near-term Indicant is signaling bull for 10-major indices. They are up 3.9% since their bull signals on Mar 3, 2010. There are two indices enduring bear signals. They are down by an average of 4.4% since their respective bear signals an average of 4.6-weeks ago.

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

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 27.8%, annualizing at 35.9%, since their bull signals an average of 40.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are down by an average of 2.7% since their respective bear signals an average of 3.9-weeks ago.

This is a low volume bull cycle, which suggests the next bearish cycle will have more breadth and magnitude. Until then, the Near-term Indicant must participate with bullish bias, albeit weak at this point. The NASDAQ Index, however, is enjoying increased volume, but not yet configuring in robust support for the bullish cycle now underway. NYSE volume was relatively aggressive early last week, but without correlation to directional intensity.

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

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

QTI-Red Bull Count; Ten non-contrarian; solid bullish support.

QTI-Bullish Red Curve Trend; Ten non-contrarians; solid bullish support.

QTI-Bearish Yellow Curve Trend; Non-bearish majority with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

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

NTI-Blue Bull Count; All eleven non-contrarians and arguing with them is not profitable.

NTI-Bullish Blue Curve Trend; Eleven non-contrarian; bullish support.

NTI-Bearish Green Curve Trend; Eleven non-contrarian moving north; non-bearish. Ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; Eleven non-contrarians in bullish domain; supporting bull.

STI-Force Vector Position Relative to Vector Pressure; Eleven non-contrarians above Pressure and without any bearish threats.

STI-Force Vector Direction; Only seven moving north; those with a southerly cycle will be interesting when they fall below Vector Pressure, since bullish Pressure remains low.

STI-Vector Pressure Trend; All non-contrarians are moving bullishly.

STI-Vector Pressure Position; All non-contrarians, except DJU, are with positive (bullish) pressure. Indices remain near convergence and new bull signal may not be long lasting.

Short-term Market Summary

-Political Climate – Political disharmony continues and really bullish. There is increasing intra-party bickering, which is even more bullish. Rumors of successful passage of healthcare can dampen the bull’s spirit. Healthcare passage will inspire the bear over the longer-term.

A new political influence is burgeoning in China, though, where one party remains dominant, which is generally bearish. Also, the fundamental gap between wealth creation and socialistic causes should prompt the bear to display its glory before this year completes.

On the other hand, Greece is making claims of significant governmental spending cuts. If that transpires, the bull could roar. Talking about doing something takes little effort; actually doing it is quite different. We’ll see. The markets will advise.

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

Indicant Volume Indicators

The NYSE remains with a lethargic cycle, while NASDAQ is gaining minor volume support for bullish bias. Overall, these configurations are supportive of bullish bias, but mildly so. (Recent chronological observations are expressed below in reverse order).

Mar 19. 2010-Fri-Volume was mildly “aggressive” on mild stock market bearishness. Although a bit discerning, there remains an absence of evidence to shift bias from bullish to bearish.

Mar 18, 2010-Thu-Same as yesterday; mild bullishness with average volume continues suggestion of status quo; bullish bias.

Mar 17, 2010-Wed-Steady volume suggests little nervousness in the stock market. That supports status quo, which is bullish.

Mar 16, 2010-Tue-No volume surge on today’s mild bullishness, suggesting a continuation of bullish bias.

Mar 15, 2010-Mon-Volume again non-descriptive. This suggests a continuation of bullish bias.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 5.3%, annualizing at 50.0%, since their buy signals an average of 5.5-weeks ago.

The NTI is avoiding three-ETF’s. They are down by an average of 1.8% since their sell signals an average of 3.9-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 32.5% since their buy signals an average of 41.4-weeks ago. Those with hold signals are annualizing at 40.8%.

The Quick-term Indicant is avoiding two ETF’s. They are down by an average of 31.1% since their sell signals an average of 26.6-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; 26-solid bullish support.

NTI Blue Curve Trend; 30-non-contrarians sloping north; bullish support.

NTI Green Curve Trend; majority of 30-sloping north; strong non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 23-non-contrarian; bullish support.

QTI Bullish Red Curve Trend; majority of 27-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend; 29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction; Only two moving north (bullish). Twenty-five shifted south in the last 12-days, but the movement is not crisp. This suggests minimal bearish threat. As stated one week ago, do not be surprised at stock market cooling the next few days.

STI Force Vector Position; 29-populating bullish domains, supporting bullish bias.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; solid bullish support.

Vector Pressure Trend; 29-moving north; solid bullish support.

Short-term Summary: Most attributes continue supporting the Short-term Bull. Some ETF’s are setting new cyclical highs, which is also bullish.

Contrarian Funds

ETF#03-Natural Resources is down 0.2% since the Near-term Indicant signaled buy on Mar 3, 2010. The Quick-term Indicant signaled buy on August 3, 2009. It is up 11.4% since that buy signal, annualizing at 18.0%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

Its Force Vector is lazy and Vector Pressure is barely inside bearish domains. This is a bit discerning.

ETF#11-Gold and Precious Metals is up 34.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 26.6%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $99.75 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is down 2.5% since that buy signal. Force favors bull, but Pressure still converging.

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

ETF#14-TLT-Long Government is flat since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 0.2% since that sell signal.

Force Vector is again moving north, but Pressure remains in bearish domains, offering support to the TLT bear. Price is hovering around bearish yellow, which highlights bearish trend.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 8.5% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 62.0% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $23.95 and still falling.

Major ETF Events

Mar 19, 2010-Fri-Again no major events; rumors of healthcare passage potential inspired the bear a little, but too many attributes are positioned to resist immediate bearish dominance. Some Force Vectors are nearing bearish domains, but that is not justification for believing in the bear.

Mar 18, 2010-Thu-No major events; all very steady and remaining bullishly biased.

Mar 17, 2010-Wed-No major events; volume steady and bullishness continues is measured fashion.

Mar 16, 2010-Tue-Healthcare reform is gaining momentum for passage. It will be interesting if there is an immediate bearish reaction in the event of its passage. The market is behaving, though, as it does not believe passage is imminent.

Mar 15, 2010-Mon-Several Force Vectors shifted south, suggesting a few days of non-bullishness would not be surprising. They are drifting to the southeast and not nose-diving. Even though the configuration is non-bullish, there is no serious bearish threat.

Current Strategy-Short-term Indicant- Mar 19, 2010-Fri-Vector Pressure remains near neutrality, Force Vectors are moving south, and an overheated stock market suggests bearish behavior on the immediate horizon. However, as long as Pressure remains in bullish domains and NTI Green continues rising, dynamic bearishness would meet resistance. Also, there are some tangential protections available to minimize bearish damage. If Force Vectors bounce north in the next few days, the bull will strengthen. Mar 18, 2010-Thu-Laterally to slightly declining Force with rising Pressure suggests no bearish threat and supportive of bullish bias. Mar 17, 2010-Wed-Same. Mar 16, 2010-Tue-Same as yesterday. Mar 15, 2010-Mon-As stated last Friday, NTI Green can act as a buffer to bearish behavior and it would not be surprising to see prices drop this week due to pinnacled Force Vectors and threats of healthcare passage.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market endured bullish divergence last week, albeit mildly so. Four of the last six weeks have enjoyed bullish convergence. Bearish convergence was endured for four consecutive weeks ending six weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence.

Indicant Conclusion

As stated the past twenty-three weeks, low interest rates offer narrowed alternative investment opportunities. The expiration of the Near-term Bull in February 2010 suggested this was an increasingly irrelevant observation, relative to more worldly dynamics, which appeared to have been leaning in favor of the bear until four weeks ago. Since then, the capital markets crushed the early February threat by the bear. One can argue political discourse in the U.S. has more bullish weight than China’s credit tightening.

Force Vectors are moving south. So far, this movement is non-threatening to the bull.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

03/21/2010

Mar 14, 2010 Indicant Weekly Stock Market Report

The Bear Has another Chance

Massachusetts elected republican senator, Scott Brown, a few months ago to fill the senate seat vacated by the late Edward Kennedy. The perception at the time of Mr. Brown’s election represented the 41^st vote against healthcare. It is unknown how many people in the traditional democratic state of Massachusetts voted for Mr. Brown because of this perception of the forty-first vote’s influence. One could argue there were votes in favor of Mr. Brown on this basis and on this basis alone.

Senate reconciliation was developed in 1974 to streamline the passage of legislation and eliminate the threat of filibustering. This was a stupid idea that oozed from minds tainted with OPM disease. When using other people’s money, OPM, efficiency and effectiveness are tossed to the wind. The results will land wherever they land. There is little to no immediate punishment for erring when practicing the art of OPM.

Many of you have read and heard about the waste from the 2009 economic stimulus plan. It is classical OPM distribution. Those who messed that up never missed a meal, never missed a flight to fancy places on earth, never missed a night’s sleep, etc. The absence of negative feedback to any biological unit perpetuates a process that can only conclude in collapsing the system facilitating the art of OPM.

Without the potential of negative or painful feedback, an open looped system manifests and such systems are not ever lasting. The OPM disease in government has a finite stopping point. It may not be predictable where that finite point is, but rest assured there is a stopping point. That stopping point is a systemic collapse.

At some future point, human society should evolve to displaying zero respect for those who practice the OPM art. It is an effortless activity, with little to no risks to the decision-maker. OPM is also a disease. Those who are attracted to the art of OPM are, for the most part, gutless wanderers, taking very little personal risks. Taking action or invoking coercion from the façade of the OPM art is a display of zero talent by the practitioner.

OPM has provided little in the way of products of value. F22’s are paid for with OPM, but the engineers and work force producing F22’s is where the talent and effort reside. OPM produced the first nuclear bomb, but the scientists who created it was the talent source; not the OPM practitioners. Applying OPM practice requires zero talent, little thought, and usually void of consequences.

The founding fathers of the United States were great people. They rebelled at the tyranny of an undeserving king and with great personal risk. Knowing in complete vivid detail how political power can corrupt, they wrote the U.S. Constitution. Its primary purpose is to keep one person and even a small group of people from gaining absolute power. They worked hard to ensure that power by a small group of people would be a difficult achievement.

Because of their fine workmanship, just one Senator could filibuster any legislative proposal of their choosing and prevent its passage. That and that alone minimized the growth rate of the federal government. Over time, this constraint to centralized bill passage has been watered-down by subsequent generations of legislators with each generation being less talented than predecessor generations.

This process degenerated to 60-votes as the requirement to overcome filibuster. As recently as 1974, about twelve generations after the “real men” wrote the U.S. Constitution, a bunch of soft-handed intellectual elites with the gall to think they know better than the founding fathers, invented reconciliation. Legislation can now be passed with mere 51-votes. That defies the intentions of the Massachusetts voters.

Now, a very small group of people has power. That goes against the spirit and moral fiber of the U.S. Constitution. That tampering of the U.S. Constitution by soft-handed, intellectual elitist politicians will eventually destroy the systems it created. The system is now even more open looped. This enhances probabilities of a bearish stock market. Resources are finite and plowing an increasing volume of them through the most inefficient organization in the United States, the federal government, is bearish for the stock market.

Each generation following greatness is weaker than the predecessor generation. Most in contemporary U.S. society has never known tyranny from their government. This lack of consciousness on how bad it could be is one reason for the threat confronting this dumb society, where a huge number of lazy and incompetent people obtain possessions without earning them. Those scumbags are approaching near majority. That is bearish for the stock market and your quality of life.

Those who promote healthcare ignore the arithmetic impact. Adding 30,000,000, plus, to free health care will simply result in longer waiting periods for all. Those who like their healthcare coverage will find it irrelevant when they are waiting in line for healthcare. Only the intellectual elite will not have to wait in line. If they think people are mad now, wait a few years. The intellectual elite are setting themselves up for failure they cannot fathom at this time. The problem with intellectual elites is simple. They are not as smart as they think they are. They believe fancy jargon or recalling what they just read is the substance of life.

Your contemporary politicians, with only a miniscule understanding of the spirit of the U.S. Constitution, are going to attempt application of their swirling three and a half brains by getting only 51-senators to vote on passing healthcare reform. The capital markets know that whatever efficiencies could be gained in the healthcare industry in the private sector will follow the path of typical governmental effort; that is maximize inefficiency with a continuation of demonstrated ineffectiveness.

The bullish spurt the past few weeks occurred, in part, on the belief that the healthcare plan would not pass. It will be interesting to observe stock market behavior with its passage, if it indeed passes. The bear may not respond immediately. The bull may be encouraged by the possibility of repeal. However, if passage does occur and never repealed, the longer-term prognosis for capital markets will be bearish. That is because the dilettantes who get into politics will not stop with healthcare. Who knows what stupid idea they will promote next? The stock market bull’s most threatening enemy is elitists and politicians.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 227 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 33.2%. That annualizes to 44.1%. The Mid-term Indicant has been signaling hold for these 227-stocks and funds for an average of 36.0-weeks.

The Mid-term Indicant is avoiding 89-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 33.2% since the Mid-term Indicant signaled sell an average of 79.3-weeks ago.

One year ago, on Mar 13, 2009, the Mid-term Indicant was holding 22-stocks and funds out of 344 tracked for an average of 92.6-weeks. They were up by an average of 102.8% (annualized at 57.7%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 38.6% since their respective sell signals an average of 40.7-weeks earlier.

The Mid-term Indicant was signaling hold for 155-stocks and funds of the 345-tracked two years ago on Mar 14, 2008. They were up by an average of 182.8% (annualized at 59.5%) since their respective buy signals an average of 159.8-weeks earlier. The Mid-term Indicant was avoiding 186-stocks and funds at that time. They were down an average of 17.2% since their respective sell signals an average of 18.4-weeks earlier.

There were 314-stocks and funds with hold signals on Mar 9, 2007 since their buy signals an average of 98.6-weeks earlier. They were up by an average of 111.2% (annualized at 58.6%). There were 42-avoided stocks and funds at that time. They were down by an average of 9.9% from their respective sell signals an average of 17.0-weeks earlier.

On Mar 10, 2006, the Mid-term Indicant was signaling hold for 290-stocks and funds out of 320-tracked. They were up by an average of 111.0% (annualized at 61.0%) since their 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 by an average of 9.6% since their sell signals an average of 23.0-weeks earlier.

Five years ago, on Mar 11, 2005, there were 241-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 86.2% (annualized at 61.9%) since their respective buy signals an average of 72.4-weeks earlier. There were 68-avoided stocks and funds then. They were down an average of 28.9% since their respective sell signals an average of 52.4-weeks earlier.

On Mar 12, 2004, there were 263-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 68.4%, annualizing at 77.2%, since their respective buy signals an average of 46.1-weeks earlier. There were 15-avoided stocks and funds then. They were down by an average of 27.4% since their sell signals an average of 39.2-weeks earlier.

There were 135-stocks and funds with hold signals on Mar 14, 2003. They were up by an average of 25.3%, annualizing at 56.7%, since their buy signals 23.3-weeks earlier. The 124-avoided stocks and funds 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.

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

Access all updated information from the following link. You will need your login ID and password.

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

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

The bull attacked the Near-term Indicant bearish attributes four weeks ago. This prevented additional sell signals by the Mid-term Indicant and has steadied the turbulence of the Near-term Indicant.

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

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

Stop Loss Management

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If Green is rising, set stop loss just below it. Green is a bouncing point so a stop loss a percentage below its value could be considered.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 45.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 112.5% and the S&P500 is up 48.0% since then. The small cap index, S&P600, is up 110.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 53.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 24.7% since its similar secular peak on March 23, 2000. The Dow is down by 9.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 22.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 2.7% 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%. There was a solid expression on this weekend in 2002, but it turned out to be fake. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was down by 4.2%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 0.9% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 6.2% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005’s post election year finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 2.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was down by 0.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 15.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was down 9.6% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. That extraordinary bullishness will be viewed by historians as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 18.3% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post election bullishness.

In other words, the next Near-term Bear cycle, which began in early Feb 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% accuracy, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is up 62.3% since March 9, 2009. The NASDAQ is up 86.6% and the S&P500 is up 70.0% since then. The S&P600, Small Cap Index, is up a whopping 97.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, while the Near-term Indicant remains committed to some bearish influences.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Most of the hard economic data, interest rates, commodities, and exchange rate are holding relatively constant. The discount rate is inching up and even crossed above yellow bear status. However, its depth suggests a non-threatening configuration.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of its boring repeatability. However, with the change in the Fed’s discount rate in early Feb 2010 there are a few changes.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a bear stock market and high commodity prices, including gold.

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

More recently, China is now expressing concerns regarding inflation. That will pressure rates more to the north. That will be non-bullish.

As stated 76-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg.

In the face of defeat, the Democratic Politburo is changing the rules. If they are successful, the bear will roam again.

As stated the past 28-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 3.8% since then, annualizing at 9.3%. It has been bearish in four out of the last eight weeks, but solidly bullish the past two weeks. All commodities, including gold, are under pressure from a strengthening U.S. dollar.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 1.1% since then, annualizing at 2.1%. It was also solidly bullish last week. This particular fund marches to its own drumbeat.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 14.2%, annualizing at 22.9% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 7.0% since that buy signal, annualizing at 14.4%.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant had to signal sell for this fund on Feb 12, 2010. It is up 7.4% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats, coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. However, it was bullish the past two weeks and may receive another buy signal in a week or two.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 12.4% since its buy signal on Sep 11, 2009, annualizing at 24.5%.

The Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 13.8% since then, annualizing at 22.5%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term Indicant signaled buy for this ETF on Mar 3, 2010. It is up 2.0% since then, annualizing at 78.1%.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 33.8% since that buy signal, annualizing at 26.7%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is down 2.8% since that buy signal.

Most commodities were bullish last week and were again not contrarian, which is bullish.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Unfortunately, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 3.4% since that bear signal. It was mildly bearish last week, while the other major indices were bullish.

The nine remaining major indices retaining bull signals are up by an average of 18.6% since there respective bull signals an average of 32.0-weeks ago. That annualizes at 30.3%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal. That contrast with it being the strongest bull from 2003 through the peaking in 2007.

Other than the Dow Utilities, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle and attempting to join the ranks of bulls.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,515,175. That beats buy and hold performance of $1,616,414 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $149,597. That beats buy and hold’s $112,645 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $215,762. That beats buy and hold’s $82,096 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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 ProFunds Ultra Short on April 3, 2009. It is down 59.2% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 267.0% (annualized at 14.5%) since the Long-term Indicant signaled bull 958-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

The Short-term Indicant continues strengthening in support of bullish bias. Focal points will be NTI Green curve and Vector Pressure. As long as the former increases on the charts and the latter remains in bullish domains, the bear cannot find success.

Several Force Vectors dipped to the south today. Do not be surprised at meandering behavior or bearishness the next few days. However, too many attributes are positioned to prevent dynamic bearishness.

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

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

The Near-term Indicant is signaling bull for 10-major indices. They are up 3.2% since their bull signals on Mar 3, 2010. There are two indices enduring bear signals. They are down by an average of 3.5% since their respective bear signals an average of 3.6-weeks ago.

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

The Quick-term Indicant is signaling bull for 10-major indices. They are up by an average of 27.0%, annualizing at 35.7%, since their bull signals an average of 39.3-weeks ago. The Quick-term Indicant will signal bear if and when the indices fall below their respective bearish yellow curves.

The Quick-term Indicant is signaling bear for two major indices (the Dow Jones Utilities and contrarian VIX). They are down by an average of 1.8% since their respective bear signals an average of 2.9-weeks ago.

This is a low volume bull cycle, which suggests the next bearish cycle will have more breadth and magnitude. Until then, the Near-term Indicant must participate with bullish bias, albeit weak at this point. The NASDAQ Index, however, is enjoying increased volume, but not yet configuring in robust support for the bullish cycle now underway. NYSE volume was relatively aggressive the past Tuesday and Wednesday, but without correlation to directional intensity.

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

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

QTI-Red Bull Count; Ten non-contrarian; solid bullish support.

QTI-Bullish Red Curve Trend; Ten non-contrarians; solid bullish support.

QTI-Bearish Yellow Curve Trend; Non-bearish majority with 10 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle.

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

NTI-Blue Bull Count; All eleven non-contrarians and arguing with them is not profitable.

NTI-Bullish Blue Curve Trend; Eleven non-contrarian; increasing bullish support.

NTI-Bearish Green Curve Trend; Ten non-contrarian; positive bearish support; definitely non-bullish. All ten shifted bullishly on Mar 4, 2010.

The Near-term attributes remain in favor of the bull.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; Ten non-contrarians in bullish domain; supporting bull.

STI-Force Vector Position Relative to Vector Pressure; Eleven non-contrarians above Pressure and without any bearish threats.

STI-Force Vector Direction; Only five moving north; this impending southerly cycle will be interesting.

STI-Vector Pressure Trend; All non-contrarians are moving bullishly.

STI-Vector Pressure Position; All non-contrarians, except DJU, are with positive (bullish) pressure. Indices remain near convergence and new bull signal may not be long lasting.

Short-term Market Summary

-Tangential Protection – There are none at this time. Since NTI Green is again increasing, there is a chance more can be formed, but that will take several weeks to manifest. Tangential protection, once formed, helps avoid the pitfalls of fluttering behavior.

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness on this cycle will be high. The Dow Utilities moved toward supporting this phenomenon a few days ago. Recent bullish bounces did nothing to challenge this theme.

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

Indicant Volume Indicators

The NYSE remains with a lethargic cycle, while NASDAQ is gaining volume support for bullish bias. Overall, these configurations are supportive of bullish bias, but mildly so. (Recent chronological observations are expressed below in reverse order).

Mar 12, 2010-Fri-Same as yesterday. The stock market is looking for a reason…….

Mar 11, 2010-Thu-Mild volume suggests little interest in dramatic behavior. Bias remains bullish.

Mar 10, 2010-Wed-Big Board volume was again aggressive on mild bullishness. It has not yet influenced the Indicant Volume Indicator for the NYSE, but the NASDAQ Indicator continues to rise. Overall, this suggests continuation of bullish bias.

Mar 09, 2010-Tue-Volume was aggressive on today’s flat market behavior. This combination restricts obviations of directional intensity. Therefore, the last bias prevails, which remains in support of the bull.

Mar 08, 2010-Mon-The NASDAQ continues gaining volume support of bullish bias, while the NYSE continues enduring lethargic support. Remaining absent are strong obviations of any shift in directional intensity and thus continuing with Short-term bullish bias.

Mar 05, 2010-Fri-The NASDAQ is gaining volume support for the current bullish cycle. If it manifests into a robust configuration, this bullish spurt may indeed mature into a longer lasting bull cycle than what those of a mere bullish spurt.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 26-ETF’s. They are up by an average of 5.5%, annualizing at 58.6%, since their buy signals an average of 4.9-weeks ago.

The NTI is avoiding five-ETF’s. They are up by an average of 1.0% since their sell signals an average of 3.8-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 32.2% since their buy signals an average of 40.4-weeks ago. Those with hold signals are annualizing at 41.5%.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; 28-solid bullish support.

NTI Blue Curve Trend; 30-non-contrarians sloping north; bullish support.

NTI Green Curve Trend; majority of 28-sloping north; strong non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 26-non-contrarian, solid bullish support.

QTI Bullish Red Curve Trend; majority of 26-sloping north in support of Quick-term Bull.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority, supporting Quick-term non-bearishness. (This is a potential source of resistance to any potential bearish aggression).

QTI Bearish Yellow Curve Trend; 29-sloping north, highlighting non-bearishness along a slower moving plane.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction; 12-moving north (bullish). Six shifted south today, as many are at recent maximums. Do not be surprised at stock market cooling the next few days.

STI Force Vector Position; 29-in bullish domains, supporting bullish bias.

Vector Pressure Position; a majority of 29-non-contrarians in bullish domains; solid bullish support.

Vector Pressure Trend; 28-moving north; solid bullish support.

Short-term Summary: Most attributes continue supporting the Short-term Bull. Some ETF’s are setting new cyclical highs, which is also bullish.

Contrarian Funds

ETF#03-Natural Resources is up 2.0% since the Near-term Indicant signaled buy on Mar 3, 2010. The Quick-term Indicant signaled buy on August 3, 2009. It is up 13.8% since that buy signal, annualizing at 22.5%.

The Quick-term Indicant will signal sell only after the price drops below QTI Yellow Curve with assistance from other attributes.

Its Force Vector is lazy and Vector Pressure is barely inside bearish domains. This is a bit discerning at this point.

ETF#11-Gold and Precious Metals is up 33.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 26.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $99.34 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is down 2.8% since that buy signal. Force Vector bounced north off of Vector Pressure, suggesting near-term bullishness and, at worse, non-bearishness. Convergence is still underway and appears favoring the gold bull. Of minor concern is the lazy Force Vector pointing toward bearish domains.

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

The Near-term strategy is to hold, even in the face of bearishness. The NTI Green curve has been a source of bearish resistance for well over a year now.

ETF#14-TLT-Long Government is down 0.8% since the Near-term Indicant signaled sell on Mar 2, 2010.

The Quick-term Indicant signaled sell on Mar 4, 2010. TLT is down 1.1% since that sell signal.

Force Vector did not bounce north. It pierced Pressure, suggesting TLT bearish bias. Force Vector fell into bearish domains last Thursday. They fell even further on Friday, even though TLT was bullish at the week closed out. It will be interesting to see how deep Force goes. Deep Force should invoke dynamic bearishness on this ETF, while shallow depths should inspire the TLT bull; or at least be discouraging to the TLT bear. Odds favor the latter.

The Near-term Indicant signaled sell for ETF#31-QID on Mar 2, 2010. It is down 7.7% since then.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 61.7% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $24.30 and still falling.

Major ETF Events

Mar 12, 2010-Fri-The lazy stock market is afraid to move more bullishly as long as rumors suggest healthcare passage is imminent. Some Force Vectors dipped south in anticipation of this “fear” by the capital markets. Decision-making and money funneling through the most inefficient organization in the world (The United States Government) is a growing threat to the bull.

Mar 11, 2010-Thu-TLT’s Force Vector fell into bearish domains, suggesting continued non-bullishness for this ETF.

Mar 10, 2010-Wed-Big board volume was again aggressive today, albeit without correlative evidence of obviating directional intensity.

Mar 9, 2010-Tue-Big board volume was aggressive on today’s mild bullish behavior.

Mar 8, 2010-Mon-There were no major events today.

Mar 5, 2010-Fri-NASDAQ Indicant Volume Indicator nudge up a bit the past two days, suggesting this bull cycle may lose the taint of a low volume bull. The NYSE remains lethargic, though. Fundamentals are not supportive, but political bickering correlates well with this bullish cycle. The more they bicker and the less Washington D.C. accomplishes, the more the stock market will be bullish.

Current Strategy-Short-term Indicant- Mar 12, 2010-Fri-NTI Green can act as a buffer to bearish behavior and it would not be surprising to see prices drop next week due to pinnacled Force Vectors and threats of healthcare passage. Mar 11, 2010-Thu-Same. Mar 10, 2010-Wed-Same. Mar 9, 2010-Tue-Same as yesterday. Mar 8, 2010-Mon-Any bearish behavior occurring above the NTI Green curve should be viewed as an opportunity to add to long positions.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.