May 2008 Indicant Weekly Stock Market Report

May 25, 2008 Indicant Weekly Stock Market Report

Volume 05, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Bullish Behavior Sustainable – Part 8

The Dow30 endured a major attribute shift, as pointed out in last Wednesday’s daily stock market report. Click the following link.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJ.htm

You will notice this tangential loss occurred with the “Greenspan Scare” in early March 2007. Most of you recall, the Quick-term Indicant did not generate ETF sell signals from the Greenspan scare. That bearish expression was phony.

The sub-prime lending crisis began to unfold in the summer of 2007. The Fed was dutifully raising interest rates to counter inflationary pressures from rising oil prices. That led to the sub-prime crisis, as variable mortgage rates paralleled the Fed’s policy. As stated in prior reports, one has to wonder how one is paid a significant salary by plotting interest rates paralleling commodity prices.

You will notice the Dow lost tangential protection against bearish ambition several times since January 2007. Each time, there was minor follow-on bearish behavior, followed by bullish spurts. Here is the tricky part.

When tangential protection is lost, will the follow-on bearish behavior be minor or will it be a devastating long-lasting bear market? Will the bullish expressions be a mere spurt or a long-lasting bull market? Most of the time, the bearish expressions are mere short-term bearish spurts. Every now and then, though, they are the beginning of major and long lasting bear markets. The trick is in identifying a spurt from the latter.

Fundamentally, rising oil prices and declining consumer spending in the U.S. is certainly a thorn to economic robustness. The bullish side of capital markets requires economic robustness. That robustness is absent. Consumer spending is heading south. Oil prices continue moving north and that is inflationary. On the surface, the news is not good. However, keep in mind, the market’s underlying directional intensity is not influenced by contemporary events. It looks into the future; sometimes accurately predicting it and sometimes missing the mark and thus the occasional violent volatile responses.

Governmental interference in the capital markets has worsened the inflationary spiral. Food prices are rising. The capital markets have never respected “intellectual and philosophical” interference. Capital markets reward only products of appeal. That does not come from any source other than hard-driving business minded people, who are not in government.

With the negative economic forces underway, why then has the stock market’s bearish behavior been relatively mild?

Technically, volume has not been supportive of recent bearish behavior. The great bear legs of 2001 and 2002 were preceded by a robust Indicant Volume Indicator. Click the following link to view this.

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

You will notice robust volume behavior paralleling the bearish cycle late last year. That indeed suggested more bearishness. However, since then such robustness has been absent. The bullish spurt, now expiring, was not supported by robust volume. That is a non-bullish attribute.

Fundamentally, the market senses profound wealth generation potential. Capitalism is in favor around the world. Russia, China, and India are provided a huge influx of capitalistic mind people. The long-term outlook for capital markets is indeed bullish. Sometimes, such thinking, influences the market’s directional intensity in spite of otherwise sour conditions. Governmental interference in those countries is always a threat to the potential of rapidly improving economies.

Sometimes the cause of capitalism establishes a solid baseline that overpowers governmental interference. Wealth begins to build from the efforts of the capitalists. Bullish spurts evolve into long lasting bull legs when that happens.

Unfortunately, the laws of supply and demand prevail. Capitalists need resources. The burgeoning population of capitalist are the reason for skyrocketing commodity prices. It takes time for the productivity factor to kick in and offset rising material costs. However, in the long-run, capitalists will provide solutions for any shortage or any environmental problem. Governments sometime get into the middle of these problems and worsen them. It slows the solution process down and consequently prices rise.

The supply and demand for stocks also influence bullish or bearish behavior. The bullish spurt, now expiring, was not accompanied with a rising Indicant Volume Indicator. This particular spurt was a little confusing first. It originated with a tremendous volume surge on March 11, 2008. That suggested it would have some sustainability. However, it was not followed by increasing volume. The Fed and Government got more involved, which is common during political election years. Those little checks being pumped back into the economy is like putting a band aid on a brain tumor. Incumbent politicians will do anything to retain power during election years. If this developed during a post election year, the politicians would have been more passive.

On Friday, two more major indices lost their tangential support; the Dow65 and the S&P100. The blue chips are leading the expiration of this bullish spurt. That adds fuel that is a bit more bearish.

Click the following link to view the other major indices tangential protection against bearish expressions.

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

Bullish expiration appears imminent, but it has not yet occurred. It should happen next week. The S&P400-Mid-Cap Index is the strongest. It could delay the process a little longer.

The long-term investor will tolerate this bearish behavior. The short-term oriented investor should behave in a manner consistent with bear market thinking.

The other remaining indices, such as the S&P400, are maintaining their tangential support and thus one reason for limited sell signals this weekend. However, configurations are unfolding that suggest increasing bearish influences. Do not be surprised with a new Quick-term bearish cycle. However, there should be increased volatility as this bullish spurt was healthy enough to have expected more longevity. In other words, its expiration will not be without battle.

Historical standards and normal seasonality suggest the following scenario. The summertime doldrums will influence bearish behavior on the immediate horizon, followed by the heart and soul of bullish seasonality during the autumn months. Post election year bearishness in 2009 will follow. Economic fundamentals suggest 2009 will be solidly bearish. The wild card is the two billion new capitalists eager to join the 20%-rich group. Just a few of them enjoying success will solve any problems. The other wild card is bearish; that is, watch for interfering governmental policies “to help.”

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

Weekly Buy/Sell Summary – Stocks and Funds – 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 two sell signals. There have been 90-buy signals since February 1, 2008. There have been 199-sell signals since October 26, 2007.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 213 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 143.5%. That annualizes to 59.4%. The Mid-term Indicant has been signaling hold for these 213-stocks and funds for an average of 125.7-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 130-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 18.5% since the Mid-term Indicant signaled sell an average of 31.5-weeks ago.

One year ago, on May 25, 2007, the Mid-term Indicant was holding 313-stocks and funds out of the 345 tracked for an average of 100.5-weeks. They were up by an average of 122.3% (annualized at 63.3%). There were 31-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 13.6% since their respective sell signals an average of 26.9-weeks earlier.

The Mid-term Indicant was signaling hold for 234-stocks and funds of the 345-tracked two years ago on May 26, 2006. They were up by an average of 142.5% (annualized at 70.6%) since their respective buy signals an average of 104.9-weeks earlier. The Mid-term Indicant was avoiding 100-stocks and funds at that time. They were down an average of 5.6% since their respective sell signals an average of 15.9-weeks earlier.

There were 208-stocks and funds with hold signals on May 27, 2005 since their buy signals an average of 88.4-weeks earlier. They were up by an average of 98.6% (annualized at 58.0%). There were 112-avoided stocks and funds at that time. They were down by an average of 25.8% from their respective sell signals an average of 56.8-weeks earlier.

On May 22, 2004, the Mid-term Indicant was signaling hold for 219-stocks and funds out of 296-tracked. They were up by an average of 74.7% (annualized at 67.5%) since their buy signals an average of 57.6-weeks earlier. The Mid-term Indicant was avoiding 65-stocks and funds at that time. They were down by an average of 10.9% since their sell signals an average of 12.3-weeks earlier.

Five years ago, on May 24, 2003, there were 286-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 35.9% (annualized at 108.1%) since their respective buy signals an average of 17.3-weeks earlier. There were nine avoided stocks and funds then. They were down an average of 25.1% since their respective sell signals an average of 26.5-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.

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

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

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

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

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

Enron trading surfaced again for a few days. As previously stated, this stock will be removed from the Indicant tracking later this year. The Mid-term Indicant had to signal buy last weekend and sell this weekend. If you do, make certain you understand its potential liquidity and if your stop loss would be honored. Lately, it has been manipulated, as opposed to real market pricing.

Buy signals since February will most likely not generate favorable returns. However, there are a few that will not succumb to bearish pressure. The sell signal volume since last October will contribute significantly to avoided losses.

Do not be surprised at significant selling increases in the next few months. Those stocks and funds with triple digit gains and strong technical support will most likely retain their hold positions. Most of the selling will be limited to those with weaker technical positions.

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 71.3% since its secular low on October 9, 2002. The NASDAQ is up 119.4% and the S&P500 is up 77.1% since then. The small cap index, S&P600, is up 124.3%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 11.9% since its last closing peak on Oct 9, 2007. The NASDAQ is down 14.5% since its last peak on Oct 31, 2007. The S&P600 is down 14.0% since its last closing peak value on Jul 19, 2007. The Small Caps Index was bearish last week with a 2.3%-loss, while the blue chips were more bearish with a 3.9%-loss. The NASDAQ100 was down solidly with a 3.3%-loss, wiping out the previous week’s gain of 3.4%.

The NASDAQ is down 51.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 9.9% since its similar secular peak on March 23, 2000. The Dow is up by a mere 6.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to bearish influence. The NASDAQ needs to climb 106.5% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 5.9% so far this year. The NASDAQ is down 7.8% this year. These conditions are incongruent with historical standards. This year, 2008, should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This always happen when such standards gain in popularity. The current bullish cycle is lending support to historical standards, but it will be challenged, during the dog days of summer. We saw the beginning of that last week.

The NASDAQ year-to-date performance was bearish by 9.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year was configuring with 2001 similarity, but the current bull cycle has disrupted that similarity. Now, it appears a resumption of standards is occurring. There will be additional bearish cycles in 2008. It appears a fresh one is unfolding now.

The NASDAQ was down by 13.0% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 13.1%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 4.6% in 2004. It was also down by 5.5% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was down by 2.6% and up by 6.7% at this time last year.

As previously stated, so far this year, the DOW30 is down 5.9% and the NASDAQ down 7.8%.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers, who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. However, rising commodity prices could dampen that potential bullish effect.

May 2, 2008 comment regarding the previous paragraph. The Fed’s mild interest rate adjustment to the south indeed strengthened the dollar. Keep in mind the U.S. is a net importer. This increases the supply of dollars abroad. As long as the U.S. is a net importer, there will be a continuing increase in supply of dollars, which will continuously keep a “real economic” lid on its value.

The bullish bias shift on August 15, 2006 expired on January 4, 2008. The heart and soul of bullish seasonality also expired on January 4, 2008. The Dow increased 14.0% since the bullish bias shift on August 15, 2006. The S&P500 was up 9.8% and the NASDAQ up by 18.4%.

A bearish bias shift was identified by the Quick-term Indicant on January 4, 2008. It lasted until March 11, 2008. The Dow was down 5.0% and the NASDAQ was down 9.9% during that time. On March 11, 2008, the Quick-term Indicant shifted away from bearish bias. Although the Quick-term Indicant endured fluttering since the March 11 bearish bias shift expiration, the NASDAQ is up by 8.4% since then. This has been an above average bullish rally. Until last week, there was no tangential support threatening. Now there is a major threat to the current bullish cycle.

As previously stated in the daily stock market reports, the Quick-term Indicant endured two violations since March 11 and encountered fluttering behavior until April 11. On April 29, 2008, the Quick-term Indicant conformed to its standards of Red Bull recognition with positive Vector Pressure and signaled bullish bias. Several buy signals for ETF’s were generated on that day. Since then, the Dow is down 2.7% and the NASDAQ is up 0.8%. The bullish cycle originating in early March is positioning its expiration. That does not mean a deep bearish cycle is about to unfold, with meandering behavior as a possible alternative.

As stated last week, the presidential pre-election year of 2007 was below average (+10.5%) with the Dow gaining 6.4%. This was the smallest gain since Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in October of that year. These seasonal standards appear to be losing their influence due to the phenomenon of commonality.

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

The fundamental requirements are limited inflation and economic stabilization. Fundamental influences will always be the primary force of directional intensity. Three of the big four are okay for the time being; inflationary threats have cooled but again threatening with a significant increase in the CPI, as oil continues setting new highs. Interest rates remain low, which is bullishly favorable. Deflation is not threatening. In addition to a resurging CPI, another unfavorable condition for stock market bullishness is the weak economy. The unknown is voodoo bookkeeping. The market reacts to corporate earnings. If those earnings are perceived as fiction, the market will move bearishly. Fictional financial representations will enhance stock market bearishness. The capital market system requires absolute honesty from the bookkeepers.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% due to current bullish cycle.

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

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

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

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

Stock and Fund Update

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

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

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As stated last week, emotion offers only a burst of energy. Falling commodity prices four weeks ago was emotionally-based, irrational market behavior. Commodity prices bounced back to the north since then wiping out that emotional elation. Unfortunately, major commodity indices continue hovering at near peak values.

As stated the past three weeks, interest rates are providing significant liquidity, but when budgets are strapped for fuel, expect little economic stimulus.

The U.S. Dollar continues in its embryonic cycle of strengthening. However, its weakening trend has not been disrupted. A reversal in trend will damper inflationary threats, but the extent remains unknown.

As stated the past three weeks, 2009 is setting up to be a solid recession and bear market. Historical standards support rising interest rates next year that will encourage the bear. Increased political mumbo-jumbo of protectionism enhances the probability of stock market calamity.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 432.1% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 59.9%. It moved to the north in 53 of the past 89-weeks. It has been bullish in 24 of the last 40-weeks. This fund has been bullish in nine weeks of the last 15-weeks. It was very bearish last week.

Fidelity Gold, Fund #28, is up 17.2% since its buy signal on September 7, 2007. It is annualized at 23.9% since that buy signal. This fund was solidly bullish in nine of the past 15-weeks. It has been bullish the past three weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 420.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 71.9%. This fund has been bullish in six of the last 13-weeks. It was also bearish last week.

Vanguard Energy #18, VGENX, is up 293.4% (annualized at 56.3%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 257.9% (annualized at 57.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 228.2% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 47.1%.

These energy related funds were bearish last week, following bullish behavior in the previous two weeks.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 109.6% since then. It is annualized at 38.5%. This fund has been bullish in 28 of the past 39-weeks. It has been solidly bullish in nine of the last 14-weeks. It has been bullish the past three weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 302.6% (annualized at 57.8%). This fund has been bearish in nine of the past 19-weeks. It was bearish last week, following two weeks of dynamic bullishness.

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 March 20, 2008. All ten major indices are up by an average of 6.5% since then. They are annualizing at 37.0%. The most bullish is the NASDAQ100 index. It is up 11.8%. The DOW30 is the weakest. It is up just 1.0%. Do not be surprised if these major indices receive bear signals in the next week or two.

The Mid-term Indicant Dow Jones Industrial Average performance is at $37,471,443

That beats buy and hold performance of $1,898,620 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $182,237. That beats buy and hold’s $134,776 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226.880. That beats buy and hold’s $84,767 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, respectively, for these indices as of this past week.

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

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Note from April 5, 2008: Enron will be removed from Indicant tracking later this year. It was removed from the Dow Utility Index several years ago. It is now a penny stock, but the Indicant kept tracking it at the request of members. Its low cost nature is not friendly to Mid-term Indicant assessment due to small price changes and corresponding large percentage impact. The Mid-term Indicant is not designed for penny stocks. Although recovery is always possible, this stock has become too busy to track. This position will be re-accessed based on member feedback as the year progresses.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009.

The Mid-term Indicant again signaled buy for this fund on April 12, 2008 and signaled sell on May 2, 2008. Unfortunately, it was sold at a loss of approximately 11.9%. It may offer more opportunities later this year or early next year.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 331.1% (annualized at 19.9%) since the Long-term Indicant signaled bull 864-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Seven of thirty; offering bullish support; no longer solid with significant population losses this week.

Quick-term Yellow Bears/Threats: Five of thirty. Non-bearish support, but dwindling.

Quick-term Non-Bearishness: QTI differential is bullish 3.0%. Weakening non-bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bullish by 3.6%. Solid, but weakening, bullish support.

Force Vectors: Somewhat of a bearish cycle is underway, but without robustness at this point.

Vector Pressure: Twenty-seven in bullish domains. They are holding steady but one was lost last Thursday. This bull leg will not expire as long as Force Vectors remain above Vector Pressure.

STI Tangential Support: Three major indices lost their support lines this past week. The other major indices still retain theirs. It is generally bearish when large caps lead bearish attributes, but important to not overreact.

Immediate Tactics: Buy signals for non-contrarian ETF’s will be limited with the bearish threat now underway.

Current Quick-term Bias: Bullish bias on April 29, 2008 no longer remains solid. This bull is panting now, but not yet dead.

Overall Market Status: Red bull population decline is discerning, but positive Vector Pressure remains, although its recent dominance is being challenged. The red bull population is declining, but Vector Pressure remains in solid support of the bull.

Profit Potential from Naked Options: Expect increased volatility with tangential support losses.

Volume: Lethargic, but consistent, with seasonal behavior.

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

To view the STI-Tangential Protection for ten major indices, click here. The Dow30 breeched tangential protection against bearish aggression last Wednesday, 2008-05-21. Since then, the bear has been encouraged to express its ambition. On Friday, May 23, 2008, the Dow65-Composites, and the S&P500 also breeched tangential protection against aggressive bearish behavior. The remaining major indices remain configured with that protection, but barely.

Force Vectors are moving south, favoring bearish ambition. However, Vector Pressure remains in bullish domains. This offers some resistance to absolute bearish dominance.

As stated most of last week, when major indices breech tangential protection, the underlying Quick-term Bull cycle is near extinction. That does not mean a bearish cycle is about to follow, but the symmetrical expression of the current cycle is disrupted. We are not complete in computing percentages, but early analysis suggests the market will endure fluttering behavior one the breech occurs. Volatility tends to be greater at the start and end of such cycles.

You should take a look at the S&P400, which was the most bullish index on this cycle. It still has some room before breeching. The magnitude of each indices bearish cycle are not the same. However, their directional bullish or bearish intensity are always in harmony with the smaller caps falling faster and deeper than the blue chips during bearish cycles and conversely during bull cycles.

In this case, the mid-caps was the leader of the current bullish cycle, which is obviously expiring. The small caps lagged. The blue chips are taking it on the nose first, which indicates an increased probability of a major bearish cycle in the not too distant future. Keep in mind, though, that volatile expressions should not be surprising.

As stated the past several days, the bull is tiring, but a Short-term Bull nonetheless. VIX bounced north off breakdown, suggesting no major cyclical shifts. This favors a resumption of a bearish stock market in the not too distant future.

The Short-term Indicant signaled bear on May 20, 2008 for the Dow Jones Industrial Average and yesterday, May 21, 2008, for the NASDAQ. The Short-term Indicant is influenced, in part, by historical seasonality.

Normal bearish seasonality is underway. It has gained in popularity over the past few years and as a result, its performance level in predictability has dropped due to the phenomenon of commonality. Normal seasonality has deteriorated significantly since 2003. This model will eventually be replaced by the STI Tangential Protection model which will remain esoteric to mitigate the influences of the phenomenon of commonality.

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

Both Indicant Volume Indicator’s remain lethargic. Today’s big board volume was relatively high on bearish aggression the past two days. However, it is nowhere near the March 11, 2008 bullish support volume. Overall, support is mixed at this point.

Keep in mind lethargic volume cycles are seasonal to daylight savings time, allowing the market to moved wildly in either direction without substantive cause.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 26-ETF’s. They are up by an average of 59.7% (annualized at 42.7%) since their respective buy signals an average of 71.9-weeks ago. Although there were no sell signals, the SQI is avoiding five-ETF’s at this time. They are down by an average of 7.2% since their sell signals an average of 13.5-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 26-ETF’s. They are up an average of 78.5% (annualized 49.0%) since the STI signaled, buy, an average of 82.5-weeks ago. Although there were no sell signals, there are five ETF’s with avoid signals. They are down by an average of 7.6% since their sell signals an average of 13.5-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 26-ETF’s. They are up by an average of 14.2% (annualized at 37.1%) since the QTI signaled buy an average of 19.7-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding five-ETF’s. They are down by an average of 5.8% since their sell signals an average of 8.2-weeks ago.

Current Strategy - The current bull leg is maturing relative to recent similar legs. Upon expiration of this Quick-term bull cycle, the Quick-term Indicant will most likely signal sell for ETF’s when their red bull status is lost. That is not the normal process, but since the QTI was late with the buy signals, it has to be earlier with the sell signals to make up for that error. Although this could encourage more fluttering, bearish risk are high enough to justify this approach. The original intent from the March 11, 2008 buy signals was to enjoy an approximate 8.0% gain with earlier than normal series of buy signals. In hindsight that original designed intention was perfect. Unfortunately, it was abandoned in early April, due in part, to the Bear Stearns voodoo bookkeeping.

Recent buy and sell signals have been stimulated to re-synchronize the normal model, which originally identified the current bullish cycle as a bullish spurt, but with wavering assessments of its sustainability. The current Quick-term Bullish cycle originated in mid-March or about six weeks ahead of bearish seasonality. Seasonal indices are one of several dimensions with vacillating weighting factors. For example, in the great bull leg of 2003, bearish seasonality was ignored, while they accurately identified the meandering bear markets of 2004, 2005, and early 2006. Based on normal seasonality, the current bull leg was to have expired in late April or early May leaving room for a six-week bullish spurt.

Recent analyses suggest seasonal trading patterns have become too popular. When one hears it on CNBC and other talk shows to the masses and or when one reads about it in the Wall Street Journal and other popular publications, rest assured the critical mass of the phenomenon of commonality has been breeched. When that happens such models become dysfunctional. Other than the heart and soul of bullish seasonality, which would require a larger critical mass before dysfunction, normal seasonal dimensional factors are being reduced and augmented by tangential support dimensions. The tangential support dimensions will be esoteric for a long time; one would have to gain access to computer files and have a thorough understanding of Karmarkar algorithms, in addition to differential equations. That limits the numbers of potential thieves to just a few and most of those types are extremely honest.

Fundamentals support a resumption of a bearish cycle before the heart and soul of bullish seasonality later this year. This will occur when most non-contrarian Red Bulls expire ahead of the next bear cycle. ETF#21 is non-contrarian, but its bullish strength may forbid it from receiving a sell signal. Tangential support will have to expire before this modified strategy is implemented.

As of May 21, 2008, the Dow30’s tangential support expired. Several other major indices expired on Friday, May 23, 2008. However, the other major indices remain in tact, but they will eventually expire. When they expire, coupled with a significant decrease in the number of non-contrarian non-Red-Bull ETF’s, that will substantiate the next bearish cycle.

Conflicts Between the Short-term and Quick-term Indicants

There are only two conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The combined Short/Quick Indicant models identify 78-hold signals and only 12-avoid signals, providing a bullish bias. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008, which has now expired. After some jittery behavior, a new bullish bias shift was born in mid-April 2008, but the measurement of performance will commence on April 29, 2008 when several ETF buy signals were generated.

The comment about being 97% confident the market will be lower than early April’s values at some future point; most likely in 2009, will be reinserted in this daily stock market report as soon as the current bullish bias expires. In the meantime, it is time to enjoy this bull leg until expiration, which is nearing.

Quick-term Indicant Bull/Bear Health Report

Five of the 30-ETF’s are below their respective bearish yellow curves. That is non-bearish, but the increase in yellow bears the past few days is discerning. The average relative position of all thirty ETF’s is above bearish yellow by 4.5%. This is the thirty-eighth consecutive trading day with non-bearish support.

Seven ETF’s are above their bullish red curves. All thirty ETF average positions are below bullish red by 1.5%. This is no longer a bullish attribute. The Red Bull population is down considerably since last Tuesday.

Six of the seven Red Bulls are non-contrarian, which is remains bullish. It only takes one non-contrarian red bull to stifle dynamic bearish aggression.

The QTI differential is bullish by 3.0%. This is the twenty-sixth consecutive trading day of bullish support.

Click the heading link in this section to view the charts. As earlier stated, there was no violent bullish response to Vector Pressure crossing into bullish domains from yellow bear status. That supported Quick-term bullishness.

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

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

None of the thirty ETF’s are contacting their breakout lines, which is no longer providing bullish support. After seven consecutive days of breakout contact, bearish aggression last Thursday and Friday took its toll on this former bullish attribute.

The average distance from breakout contact is 12.7%. Double digit variances from breakout contact for 97-consecutive trading-days has been non-bullish. After nearing a single digit expression earlier this past week, which is solidly bullish, the bear was obviously offended by this near excursion with near-complete bullish dominance.

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

The average distance between the price and breakdown is 16.2%. This configuration is providing non-bearish support, which has been the case since March 2003.

The breakout/breakdown differential is bullish by 3.6%, which is supportive of the bull, but as you notice this bullish support has been dwindling.

ETF Force Vector Configurations

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

Only five Force Vectors are in bullish domains. They had been relatively stable in bullish domains for several weeks but without conventional configurations. The question regarding sustainability has now subsided but after several weeks of sustainable bullishness, its beautiful symmetry is being challenged by the bear. This Quick-term bull leg was obviously sustainable, which was the interpretation on March 11, 2008, but regrettably, without adequate conviction. Bearish yellow is now inflecting, which suggests a tiring bull, but a bull nonetheless. Adding to the woes of the bull is the Dow30’s expiring bullish tangential support last Wednesday and other large cap expirations on Friday.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There was one put option and one call option buy signal after Friday’s close

Although it has not occurred much in the past few months, the market’s directional behavior was perfect for last Tuesday’s call option buy signal with Wednesday’s aggressive bearish behavior and a bullish bounce last Thursday. It was disappointing the bull’s bounce was not strong, but that should not be surprising for a “tiring bull.”

Twenty-seven of the thirty ETF Vector Pressures are in bullish domains, which for the thirty-sixth consecutive trading day is offering bullish support. Be cautious, as this is a decrease by one from yesterday. The population remains bullishly healthy, but not escaping some wounds from yesterday’s aggression by the bear.

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

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

Quick-term and Short-term Indicant Summary

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008. However, a new bullish bias was born on March 11, 2008. It is not a thoroughbred, though. It is tainted with Enron-like misguidance from Bear Stearns. The March 11 bullish bias shift expired on April 11, 2008. It was expected to be just another short bullish spurt. The Quick-term Indicant is incapable of ignoring red bulls even though the trend is south. Consequently, a new bullish bias shift was started on April 29, 2008. It is now being threatened by expiring tangential support.

Continue avoid writing covered options due to expected volatility as the bull and bear are nearing battle stages. Although red bull population has waned the past two days, they usually do not collapse all at once. It is a battle.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Mid-term Indicant is avoiding this fund for the time being. The next growth opportunity will most likely be in 2009.

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

The Indicant signaled sell for QID on April 29, 2008. It is down by 3.0% since that sell signal. You can see its Force Vector is moving north, but from deep inside bearish domains. Vector Pressure remains within bearish domains and with yellow bear configurations. It will take a lot of Force Vector energy to shift this back into a bullish configuration, but the attempt to do so could invigorate the bear. So far, though, this is simply a solid yellow bear with increasing interest to shift out of bearish influences. The interest will not be linear.

Other Contrarian Funds

ETF#03-Natural Resources - is up 52.5% (annualized at 32.8%) since the Quick-term Indicant signaled buy on Oct 25, 2006. It is a solid red bull although a little too hot right now. Its Force Vector shifted south encouraging a cooling off period.

ETF#11-Gold and Precious Metals is up 109.6% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 38.5%. Its Force Vector has moved north, reducing the chances of it falling to yellow. However, this fund could fall to bearish yellow before the end of this year, which could be an excellent buy point for those who are getting in late. Unfortunately for those not already in hold position, it has expressed significant bullish behavior most of this past week. Rest assured if the CPI continues to rise, this fund will be holding and leading the way.

ETF#14-Long Government is up 0.1% since the May 5, 2008 sell signal. Its Force Vector and Vector Pressure remain inside bearish domains, but attempting to make a move to the north. The configuration is weak, but it could be a good buy for the more conservative investor in the event the market turns bearish.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Combined bullish convergence and divergence in eight of the past eleven weeks was powerfully bullish. Unfortunately, the market endured bearish divergence last week. The bull is increasingly vulnerable to bearish attacks. However, the bullish convergence during this bull cycle suggests 2008 still has a significant chance to finish the year on a bullish note. The Quick-term Indicant and Short-term Indicant suggest some potential bearishness on the near-term horizon.

Indicant Conclusion

As stated the past six weeks, it is unlikely the stock market’s recent bullish cycle will enjoy significant sustainability. Until this past week, the Quick-term bullish cycle was strong. It has been severely weakened by virtue of the loss of tangential protection against the bear. The bull is wounded and the bear has more opportunity to become carnivorous.

As stated the past several weeks, severe bearishness is expected in 2009, as the stock market is expected to conform to historical standards. New political leadership will then be in office and rest assured their focus for economic well-being will not be until 2010. Social policies and more regulatory constraints will be enhanced in 2009 and early 2010. That depresses capitalistic enjoyment, which is a bearish stimulant.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

05/25/08

May 18, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Bullish Behavior Sustainable – Part 7?

The tricky part is differentiating trend shifts from quick-term cyclical shifts for most long-term oriented investors. All long-term and most mid-term investors are okay with tolerating bearish cycles of a short and shallow nature. The trick is in knowing when a cyclical shift will prompt a trend shift.

Some quick cyclical shifts can trigger a trend shift. Economic fundamentals and corporate earnings, relative to expectation, generate stock market trends. Cyclical shifts are more emotionally based and thus the reason for their short-term influence on stock market’s long-term directional intensity.

Stock market products, such as contrarian investments, are adding some equilibrium. For many decades, the only way to enjoy portfolio growth during bear markets was through short-selling. That is an extremely high-risk method of enjoying bear markets. Potential losses approach infinity, while potential gains are finite. We now have bearish instruments, such as QID, so that bear market can be enjoyed without the risk of short-selling.

Short-selling volume use to be a metric to gauge the stock market’s directional intensity. The bigger it got, the greater the potential demand for stocks. That increased demand potential would eventually trigger a bullish rally; sometimes for a sustainable period; sometimes just long enough to wipe out personal fortunes for many.

Cyclical stock market behavior is more influenced by investor emotion, as opposed to economic or corporate fundamentals. This is especially dominant during contrarian cycles. Every bear market enjoys sucker-play bullish spurt rallies. Some of these spurts become headlines. Most spurts are easy to spot. Those headlines invite the passive uninformed investors into the fray.

Spurt behavior without volume is usually a manipulative play and phony. Those little spurt rallies in 2002 were humorous to watch, but many were victimized by them, as Wall Street folks more or less were in robbery mode. Sometimes, though, spurt behavior is for the benefit of those who are at work, while the others are asleep or on vacation. Capital markets are insensitive to those who take breaks and have a penchant for relaxation.

Cyclical bullish spurts are required to invite more stock market participation so that those with detailed knowledge about the stock market’s directional intensity can take money from those with limited knowledge. Capitalistic methods require winners and losers, but it also allows for greater rebounding opportunities for the losers.

The stock market has detected the flaws of democracy, where the majority elects governmental leaders. Politicians have learned that appealing commentary is what gets the votes. Since the 80-20 rule applies to just about everything, 20% of the populace possess about 80% of the wealth. That means the other 80% of the populace only possess 20% of the wealth. It is this poorer group of folks who the politicians appeal to and that makes sense for those who want to be successful politicians. Democracies are sometimes referred to as, “tyranny by the majority.” The have-nots are incapable of wealth accumulation and employ politicians to “take” from that 20%-rich group.

Interestingly, most politicians are members of the 20%-rich group. Most did not earn their money through the only real wealth building economic sectors; agriculture, manufacturing, or extraction. Most are of the legal profession, who has been in the business of taking from the 20%-rich group. They eventually parlay that experience into their political careers. Some of that is justifiable since not all those in the 20%-rich group are good folks. Some of them accumulated wealth with devious or criminal methods. However, most of the 20%-rich group accumulated wealth with honor since the quality of life continues to improve. The critical point of excessive taking from the highly productive of a large subset of the 20%-rich group will be detectable when the quality of life begins a cycle of deterioration. Some are forecasting that now as a by-product of the sub-prime lending crisis.

At any rate, the current bullish cycle may reverse the current bearish trend or it could be a mere bullish spurt, albeit many weeks old. This particular cycle is interesting. It originated in mid-March with tremendous volume. However, this cycle is different from most that are sustainable enough to drive a trend shift. Follow-on volume has been absent in this cycle. This is not saying the market will be bearish for 2008. However, a bearish trend should not be surprising due to historical standards. The presidential post election year is the only consistent money loser on the four-year presidential election cycle. The post election year is 2009 and should be bearish based on historical standards and projected economic fundamentals.

Political mumbo-jumbo of Robin Hood politics eventually takes it toll on the capital markets. That is why a $10,000 investment made only in presidential post-election years since 1832 has lost money. Some of the stupid ideas by politicians actually get implemented into law. Most of that law drains productivity and profits. During the 1990’s, Congressional and Executive branches of government were from different political parties resulting in a do-nothing government, which was favorable to the ideals of capitalism. Regulatory law was minimized during that time and the bull dominated.

The 80% poor group works hard; most focus on their jobs; some focus on joining the 20% rich group.

Some of those in the 80% poor group that are focused on joining the 20%-rich group are substance wealth builders. Folks such as Bill Gates, Henry Ford, Michael Dell, etc. create tremendous wealth by introducing major shifts in the nature of industrial behavior. Those who cross the paths of such individuals in the early stages of these industrial shifts also enjoy joining that 20% rich group although their daily habits are no different if they had remained in the 80% poor group. For example, an IBM programmer is not nearly as rich as an early days Microsoft programmer even though most worked from 8 to 5 for a salary. So, there are some who have been lucky in joining the 20% rich group.

Others, such as politicians, focus on joining the 20% rich group, in a different sort of way. They usually are born with abnormal egos and like the perception of power that is afforded those in the political spectrum. They learned the 80-20 rule in their liberal arts training and have a penchant for talking. The combination of their ego, overly developed speaking skills, and being deviously smart puts them in the 20% rich group because they know the 80% poor group cannot see through the façade of their fake methods. Those with a political penchant enjoy the coercive ability for forced results offered through the “political industry” as opposed to producing a product of appeal, which is much harder to do.

Many that join that 20%-rich group return to the 80%-poor-group since it was all luck anyway. Luck tends to evolve around a 49% to 51% swing. In other words, it balances out in one’s life-time, although there are some exceptions. Many investors in the capital markets are victims of bad luck, but periodically enjoy good luck. It is those moments of good luck that brings them back into the market. Those short cycle bullish spurts do that and work hard to shift as many people as it can from the 20%-rich group to the 80%-poor-group. It is as if the 80-20 rule is not an accidental phenomenon, but a universal requirement. Social policies tend to drive to make everyone equal when, in fact, they are not. When the social causes manifest, the 20%-rich group become like the 80%-poor-group. When that happens no one has wealth as the 20% deteriorate, as opposed to the 80% elevating to higher abilities. Communism proved this and therefore no longer a theory, but a fact.

This year is a political election year. Most of you have witnessed the political machine at work to ensure the populace has money in their wallets and purses by Election Day. Incumbent politicians know they lose their jobs when their constituents have empty wallets and purses. If the subprime crisis had originated in 2009, the recession would be deep, as the political machine would have not seen any reason to hurry with solutions to the crisis. However in mid-term and election years, they do hurry. The four-year cycle may be too long. A two-year cycle would enhance the probability of a 100,000 Dow and possibly destroy the old 80-20 rule of wealth accumulation.

Each bearish yellow cycle since mid last year has been lower than its predecessor cycle, which suggests the bearish trend. The year, 2008, is the presidential election year, which is traditionally bullish. Expect a bearish cycle between now and the heart and soul of bullish seasonality later this year. Historical standards suggest this year will finish bullishly even if only by one percentage point. The market has behaved nicely to this historical standard so far this year, even though the major indices are down so far this year. However, do not be surprised at dynamic bearishness next year when the new political leaders take office and spend the first two years celebrating and learning where the bathroom is located. If a single political party represents the legislative and executive branches, expect severe stock market bearishness.

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

Weekly Buy/Sell Summary – Stocks and Funds – 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 five buy signals and no sell signals. This brings the total buy signals to 90 since February 1, 2008. There have been 197-sell signals since October 26, 2007.

The most depressed stocks and funds are not participating in the current bull cycle. This limited breadth suggests bullish sustainability will most likely not last through the summer.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 210 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 151.7%. That annualizes to 62.6%. The Mid-term Indicant has been signaling hold for these 210-stocks and funds for an average of 126.0-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 130-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 14.9% since the Mid-term Indicant signaled sell an average of 30.5-weeks ago.

One year ago, on May 18, 2007, the Mid-term Indicant was holding 314-stocks and funds out of the 345 tracked for an average of 99.5-weeks. They were up by an average of 123.6% (annualized at 64.6%). There were 31-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 13.9% since their respective sell signals an average of 26.1-weeks earlier.

The Mid-term Indicant was signaling hold for 244-stocks and funds of the 345-tracked two years ago on May 19, 2006. They were up by an average of 126.7% (annualized at 66.7%) since their respective buy signals an average of 98.8-weeks earlier. The Mid-term Indicant was avoiding 92-stocks and funds at that time. They were down an average of 6.8% since their respective sell signals an average of 16.1-weeks earlier.

There were 201-stocks and funds with hold signals on May 20, 2005 since their buy signals an average of 90.6-weeks earlier. They were up by an average of 99.4% (annualized at 57.0%). There were 112-avoided stocks and funds at that time. They were down by an average of 26.6% from their respective sell signals an average of 55.8-weeks earlier.

On May 15, 2004, the Mid-term Indicant was signaling hold for 218-stocks and funds out of 296-tracked. They were up by an average of 75.4% (annualized at 68.5%) since their buy signals an average of 57.2-weeks earlier. The Mid-term Indicant was avoiding only 73-stocks and funds. They were down by an average of 10.0% since their sell signals an average of 11.3-weeks earlier.

Five years ago, on May 17, 2003, there were 275-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 36.3% (annualized at 111.9%) since their respective buy signals an average of 16.8-weeks earlier. There were eight avoided stocks and funds then. They were down an average of 26.0% since their respective sell signals an average of 26.4-weeks earlier.

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

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

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

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

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

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

Last week’s stock market contained some weird behavior. Enron trading surfaced again for a few days. As previously stated, this stock will be removed from the Indicant tracking, later this year. The Mid-term Indicant had to signal buy. If you do, make certain you understand its potential liquidity and if your stop loss would be honored. Lately, it has been manipulated, as opposed to real market pricing.

The Mid-term Indicant signaled buy for I-Stock #38, Energy Conversion, on April 4, 2008. Since that buy signal, this stock has zoomed up by 71%. This behavior reluctantly prompted a few more buy signals for stocks in the same sector. As you can see, such stocks are extremely volatile. Click the following link and scroll to view I-Stock #38.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S07.htm#38

The Mid-term Indicant signaled buy for I-Stock #85 because it was a red bull, which by default is never avoided. However, the current bull cycle is maturing and this stock has a bearish trend. If you elect to buy, set a tight stop loss, such as 5%.

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 78.2% since its secular low on October 9, 2002. The NASDAQ is up 127.0% and the S&P500 is up 83.5% since then. The small cap index, S&P600, is up 129.7%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 8.3% since its last closing peak on Oct 9, 2007. The NASDAQ is down 11.6% since its last peak on Oct 31, 2007. The S&P600 is down 11.9% since its last closing peak value on Jul 19, 2007. The Small Caps Index was bullish last week with a 3.4%-gain, while the blue chips were less bullish with a 1.9%-loss. The NASDAQ100 was up solidly with a 3.4%-gain.

The NASDAQ is down 49.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 6.7% since its similar secular peak on March 23, 2000. The Dow is up by a mere 10.8% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to bearish influence. The NASDAQ needs to climb 99.6% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 2.1% so far this year. The NASDAQ is down 4.7% this year. These conditions are incongruent with historical standards. This year, 2008, should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This will always happen when such standards gain in popularity. The current bullish cycle is lending support to historical standards, but it will be challenged during the dog days of summer.

The NASDAQ year-to-date performance was bearish by 12.3% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year was configuring with 2001 similarity, but the current bull cycle has disrupted that similarity. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles.

The NASDAQ was down by 11.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 15.2%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 4.9% in 2004. It was also down by 8.3% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 1.1% and up by 5.5% at this time last year.

As previously stated, so far this year, the DOW30 is down 2.1% and the NASDAQ down 4.7%.

May 2, 2008 comment regarding the previous paragraph. Last week’s Fed mild interest rate adjustment to the south indeed strengthened the dollar. Keep in mind the U.S. is a net importer. This increases the supply of dollars abroad. As long as the U.S. is a net importer, there will be a continuing increase in supply of dollars, which will continuously keep a “real economic” lid on its value.

A bearish bias shift was identified by the Quick-term Indicant on January 4, 2008. It lasted until March 11, 2008. The Dow was down 5.0% and the NASDAQ was down 9.9% during that time. On March 11, 2008, the Quick-term Indicant shifted away from bearish bias. Although the Quick-term Indicant endured fluttering since the March 11 bearish bias shift expiration, the NASDAQ is up by 12.1% since then. This has been an above average bullish rally. There is no tangential support threatening at this time. There is no tangential support loss threatening the current bullish cycle at this time.

As previously stated in the daily stock market reports, the Quick-term Indicant endured two violations since March 11 and encountered fluttering behavior until April 11. On April 29, 2008, the Quick-term Indicant conformed to its standards of Red Bull recognition with positive Vector Pressure and signaled bullish bias. Several buy signals for ETF’s were generated on that day. Since then, the Dow is up 1.2% and the NASDAQ is up 4.2%. The lesson learned is to never argue with Red Bulls with positive Vector Pressure even if the trend is bearish.

Three of the big four are okay for the time being; inflationary threats have cooled but again threatening with a significant increase in the CPI, as oil continues setting new highs. Interest rates remain low, which is bullishly favorable. Deflation is not threatening. In addition to a resurging CPI, another unfavorable condition for stock market bullishness is the weak economy. The unknown is voodoo bookkeeping. The market reacts to corporate earnings. If those earnings are perceived as fiction, the market will move bearishly. Fictional financial representations will enhance stock market bearishness.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% due to current bullish cycle.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As stated last week, emotion offers only a burst of energy. Falling commodity prices the three weeks ago was emotionally-based, irrational market behavior. Commodity prices bounced back to the north since then wiping out that emotional elation. However, Reuter U.K. commodity index has nestled against its bullish red curve, suggesting increased potential for price declines. Unfortunately, other major commodity indices continue hovering at near peak values.

As stated the past two weeks, interest rates are providing significant liquidity, but when budgets are strapped for fuel, expect little economic stimulus.

The U.S. Dollar was mixed last week, following strengthening in the prior two weeks. Its underlying bearish cycle and weakening trend have not been disrupted.

As stated the past two weeks, 2009 is setting up to be a solid recession and bear market. Historical standards support rising interest rates next year that will encourage the bear. Increased political mumbo-jumbo of protectionism enhances the probability of stock market calamity.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 444.7% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 61.8%. It moved to the north in 53 of the past 88-weeks. It has been bullish in 24 of the last 39-weeks. This fund has been bullish in nine weeks of the last 14-weeks. It was bullish the past two weeks following bearish behavior in the prior two weeks.

Fidelity Gold, Fund #28, is up 15.2% since its buy signal on September 7, 2007. It is annualized at 21.7% since that buy signal. This fund was solidly bullish in eight of the past 14-weeks. It was bullish the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 426.1% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 73.0%. This fund has been bullish in six of the last 12-weeks.

Vanguard Energy #18, VGENX, is up 297.5% (annualized at 57.3%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 267.2% (annualized at 59.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 233.4% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 48.4%.

These energy related funds were bullish the past two weeks, following two weeks of bearish behavior.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 104.7% since then. It is annualized at 37.1%. This fund has been bullish in 27 of the past 38-weeks. It has been solidly bullish in eight of the last 13-weeks. It was bullish the past two weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 313.7% (annualized at 60.1%). This fund has been bearish in eight of the past 18-weeks. It was dynamically bullish the past two weeks.

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 March 20, 2008. All ten major indices are up by an average of 9.9% since then. They are annualizing at 63.1%. The most bullish is the NASDAQ100 index. It is up 15.9%. The DOW30 and S&P100 are the weakest. They are up 5.1%. Disappointedly, the most bullish during bull markets is the S&P600, which is up 8.2% since the March 20, 2008 bull signal. Nearly half of that gain was enjoyed last week. This suggests the bull cycle may be short-lived, but so far has been demonstrating sustainability. All indices were up last week.

The Mid-term Indicant Dow Jones Industrial Average performance is at $38,994,275

That beats buy and hold performance of $1,975,780 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $188,782. That beats buy and hold’s $139,617 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $234,693. That beats buy and hold’s $87,686 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 348.6% (annualized at 21.0%) since the Long-term Indicant signaled bull 863-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-two of thirty; offering bullish support; very solid.

Quick-term Yellow Bears/Threats: Two of thirty. Solid non-bearish support.

Quick-term Non-Bearishness: QTI differential is bullish 9.7%. Solid non-bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bullish by 9.8%. Solid bullish support.

Force Vectors: Increased today, supporting bullish bias.

Vector Pressure: Twenty-eight in bullish domains. They are holding steady and should not be argued with. This bull leg will not expire as long as Force Vectors remain above Vector Pressure.

STI Tangential Support: Support lines are offering resistance to dynamic bearish expressions.

Immediate Tactics: Buy on signals as probability of deep bearish behavior is minimal.

Current Quick-term Bias: Bullish bias on April 29, 2008 was solid until late last week with a few bullish attributes illustrating early signs of bullish exhaustion. The bull, although tiring, is demonstrating tenacity.

Overall Market Status: Red bulls and positive Vector Pressure are dominant. They should never be challenged. Safe to hold until those two attributes wane.

Profit Potential from Naked Options: Volatility will decrease as long as this bull remains in tact, minimizing profit opportunities from options.

Volume: Lethargic but consistent with seasonal behavior.

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

To view the STI for the ten major indices, click here. All major indices are enjoying tangential protection against dynamic bearish expressions. Keep in mind the bull is tiring, but a Short-term Bull nonetheless. The VIX is approaching its breakdown line. The interaction will be interesting. As of Friday, May 16, 2008, the VIX is interacting with its breakdown line, but has yet to breech it. Breeching will add bullish energy.

Tangential lines were elevated last Monday by virtue of inflection points shifting more northerly. This elevation will induce a sooner, rather than later, intersections between Bullish Red Curve and Tangential Lines. Until that intersection occurs, the Short-term Bull remains in tact.

The Short-term Indicant signaled bull on May 1, 2008. The DJIA is down 0.2% and the NASDAQ is up 1.9% since that bull signal. It is rare for the Short-term Indicant to maintain a bullish signal during bearish seasonality. This particular bull leg is inclining along a slope exceeding 60-degrees. Such an incline overweighs other variables, such as seasonal influences. It should be noted that such rapid risers tend to exhaust more quickly than a bull leg along a shallower inclining slope. However, the “right now” is endowed with too many bullish attributes.

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

Both Indicant Volume Indicator’s remain lethargic. However, there was a brief period of NASDAQ robustness concurrent to the bullish cycle now underway. As stated the past several days, that was a powerful bullish configuration.

Keep in mind lethargic volume cycles are seasonal to daylight savings time.

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

There were two buy signals and no sell signals. In addition to the buy signals, the SQI is signaling hold for 24-ETF’s. They are up by an average of 68.1% (annualized at 45.6%) since their respective buy signals an average of 76.8-weeks ago. Although there were no sell signals, the SQI is avoiding five-ETF’s at this time. They are down by an average of 5.5% since their sell signals an average of 12.5-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were two buy signals and no sell signals. In addition to the buy signals, the Short-term Indicant is signaling hold for 24-ETF’s. They are up an average of 90.1% (annualized 52.5%) since the STI signaled, buy, an average of 88.2-weeks ago. Although there were no sell signals, there are five ETF’s with avoid signals. They are down by an average of 5.9% since their sell signals an average of 12.5-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were two buy signals and no sell signals. In addition to the buy signals, the Quick-term Indicant is signaling hold for 24-ETF’s. They are up by an average of 18.8% (annualized at 48.0%) since the QTI signaled buy an average of 20.2-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding five-ETF’s. They are down by an average of 5.0% since their sell signals an average of 7.2-weeks ago.

Conflicts Between the Short-term and Quick-term Indicants

There are only two conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The combined Short/Quick Indicant models identify 72-hold signals and only 18-avoid signals, providing a bullish bias, but not quite as strong as last week. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008, which has now expired. After some jittery behavior, a new bullish bias shift was born in mid-April 2008, but the measurement of performance will commence on April 29, 2008 when several ETF buy signals were generated.

Quick-term Indicant Bull/Bear Health Report

Only two of the 30-ETF’s are below their respective bearish yellow curves. That is non-bearish. The average relative position of all thirty ETF’s is above bearish yellow by 7.9%. This is the thirty-third consecutive trading day with non-bearish support, which is increasingly suggesting non-bearish sustainability.

Twenty-two ETF’s are above their bullish red curves. All thirty ETF average positions are above bullish red by 1.8%. This is a bullish attribute.

Twenty-one of the twenty-two Red Bulls are non-contrarian, which is increasingly bullish.

The QTI differential is bullish by 9.7%. This is the twenty-first consecutive trading day of bullish support.

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

Three of the thirty ETF’s are contacting their breakout lines, which is bullish. This is the fifth consecutive day of breakout contact, supporting bullish enthusiasm.

The average distance from breakout contact is 10.0%. Double digit variances from breakout contact for 92-consecutive trading-days has been non-bullish. As you can see, it is nearing a single digit expression, which is solidly bullish. Only 0.1% more to support significant bullish bias.

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

The average distance between the price and breakdown is 19.8%. This configuration is providing non-bearish support, which has been the case since March 2003.

The breakout/breakdown differential is bullish by 9.8%, which is supportive of the bull.

ETF Force Vector Configurations

Twenty-seven Force Vectors are in bullish domains. That is up by fifteen from last Tuesday, supporting bullish bias. The question regarding sustainability has now subsided. This Quick-term bull leg is obviously sustainable, which was the interpretation on March 11, 2008, but regrettably, without adequate conviction. Bearish yellow is now inflecting, which suggests a tiring bull, but a bull nonetheless.

The bear did not gain momentum from declining Force Vectors a few days, which supports bullish bias on a Quick-term basis.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There was one call option buy signal after Friday’s close. That brings the total call option buy signals to fifteen since last Wednesday.

Twenty-eight of the thirty ETF Vector Pressures are in bullish domains, which for the thirty-first consecutive day is offering bullish support.

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

Quick-term and Short-term Indicant Summary

Continue avoid writing covered options due to obstinate bullishly Vector Pressure and an increasing number of red bulls.

The Indicant signaled sell for QID on April 29, 2008. It is down by 10% since that sell signal. Southerly moving Force Vectors exacerbate its bearish inclinations. Vector Pressure remains within bearish domains and with yellow bear configurations. It will take a lot of Force Vector energy to shift this back into a bullish configuration, but the attempt to do so could invigorate the bear. So far, though, this is simply a solid yellow bear with little inspiration to move north.

Other Contrarian Funds

ETF#03-Natural Resources - is up 56.7% (annualized at 35.9%) since the Quick-term Indicant signaled buy on Oct 25, 2006. It is a solid red bull. Vector Pressure is well within bullish domains. It moved sharply to the north on Friday, in spite of southerly moving Force Vectors. Red bulls should never be argued with.

ETF#11-Gold and Precious Metals is up 104.7% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 37.1%. Its Force Vector is pointed south. That, coupled with Vector Pressure well within bearish domains, is a bearish configuration. This fund could fall to bearish yellow, which could be an excellent buy point for those who are getting in late. Rest assured if the CPI continues to rise, this fund will be holding and leading the way. Although it is has succumbed to negative Vector Pressure, its rising bearish yellow curve is preventing sell signal.

ETF#14-Long Government is up 0.1% from the May 5, 2008 sell signal. Its Force Vector and Vector Pressure remain deep inside bearish domains, offering little likelihood of any significant bullish behavior.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Line Analysis

Divergence versus Convergence

The market enjoyed bullish convergence last week. Combined bullish convergence and divergence in eight of the past ten weeks is powerfully bullish. Commodities and the energy sector were also bullish last week.

Indicant Conclusion

As stated the past five weeks, it is unlikely the stock market’s recent bullish cycle will enjoy significant sustainability. However, the Quick-term bullish cycle is strong.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

05/18/08

May 11, 2008 Indicant Weekly Stock Market Report

Volume 05, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Bullish Behavior Sustainable – Part 6?

The Dow fell below bullish red last week on the Tangential support model. This movement is meaningless in this particular case. As you can see by looking at the chart, such occurrences are seldom predecessor to undesirable behavior or dynamic changes. Click the following link to view the chart.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08a-DJ.htm

As previously stated, a tour is being written for you to see how the market, over a long period, identifies the expiration of a bullish cycle when red intersects tangential support lines.

The intersection of bullish red and tangential support lines does not always mean a deep bearish cycle is about to start. It merely indentifies the expulsion of the beautiful symmetry of a Quick-term bullish cycle. No one would want to invest “new money” at a time when bullish red is intersecting the underlying tangential support lines.

Scroll down to view the Dow’s Composite Index. You will find similar characteristics, except for one small difference. You will notice its bearish yellow curve inflecting again above the tangential line. That means the current tangential line will become obsolete and superseded by another more northerly tangential line. When bullish red eventually intersects with that tangential line, it will occur before it would if the current tangential line was not eliminated. The new tangential support line cannot be constructed until such time its bearish yellow curve begins to inflect bearishly from its current northerly slope. Keep in mind, bearish yellow can inflect without the market shifting bearishly.

Click the following link to view the NASDAQ and NASDAQ100 indices.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08b-NS.htm

As you can see, both of those indices remain above bullish red. Their respect yellow curves are inflecting for the second time on this bullish cycle, much like the Dow Composites. As long as bearish yellow continues moving north, the bullish cycle will remain in tact. The same is true for bullish red. When you see bullish red suddenly drop, the undesired intersection with tangential support will occur. When that happens, the current Quick-term bullish cycle will expire. That does not mean a bearish cycle is about to become dominant. It just means the directional market intensity lacks definition. Right now, there is zero doubt about directional intensity; it is bullish with respect to Short-term Indicant perspectives.

You will notice the NASDAQ and NASDAQ100 Force Vectors well inside bullish domains. Vector Pressure is also hovering at those lofty levels. That is a solid bullish attribute.

However, you will also notice Force Vectors moving south, but not in a robust fashion. Even if they did move south in a robust manner, it would require a tremendous amount of bearish energy to overcome the bullish synergy now imbedded in the stock market’s cycle. This is how we know there is little threat of dynamic bearish behavior on the immediate horizon.

Southerly moving Force Vectors favor near-term bearishness. Such bearishness are mere micro-bearish spurts until such time Vector Pressure fell to bearish domains. When that happens, it is easier for the bear to garnish momentum and become the dominant influence of stock market cyclical behavior.

Click the following link to view where the more incompetence pervades the capital markets.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08c-SPL.htm

More dilettante management resides in the S&P500 and S&P100 companies. Dilettante management are centered toward political gain and personal “dishonest” greed than shareholder value creation. When the markets weaken under the pressures of bearish ambition, these so-called blue chip companies are the first to succumb to bearish influences.

You will notice the S&P500 and S&P100 are both below bullish red. Again, this is meaningless in the particular model. However, you will notice its Force Vector movement to the south is more aggressive than that of the NASDAQ and NASDAQ100. That Force Vector movement, if not directionally changed, will reduce Vector Pressure. Although still in healthy bullish domains, it could fall into bearish domains within a week or two. Once bullish red intersects with tangential support, rest assured this bullish cycle is over. Again, this does not mean bearish behavior will become dominant. The Quick-term Indicant will advise of that in the daily stock market report.

The smaller companies, comprised the of the S&P400-Mid-caps and S&P600-Small caps, is a bit more perplexing. Its attributes have been a thorn in the side since the underlying Quick-term Bullish cycle started last March and early April.

Click the following link to view their charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08d-SPS.htm

You will notice the S&P400 remains in a solid bullish red configuration. Its Force Vectors have been meandering, as opposed to directionally charged. You will notice this meandering behavior is abnormal. However, since it has been meandering deep inside bullish domains, this particular attribute has been exceedingly bullish.

Scrolling down to the S&P600, you will notice a much weaker bullish configuration. This index is the highest performing index during solid bull markets. Corporate politics tend to be less severe in small caps than in the larger caps. Employees are more centered on shareholder wealth since most actually own the stock and without huge bonuses and remuneration packages that are common in the larger caps.

The weakness of the S&P600 arouses suspicion as to the legitimacy and sustainability of the current bullish cycle underway. If it is true the smaller caps are the stronger performers during solid bull markets, then what can be said about it being weaker in the current bullish cycle? The answer is this. The current bull cycle is not a solid bull market as long as the S&P600 lags. Furthermore, the current bullish cycle will fade and be followed by an aggressive bearish cycle.

The Quick-term Indicant is not focused on trend, while all of the above charts viewed today are sensitive to trend. Each yellow cycle has a minimum and maximum point. As long as those minimum and maximums are lower than the previous ones, the trend is south. Other mathematical constructions can argue that point, but most lose in their arguments. So, for those of you who like “going with the trend” will be very aggressive when the Quick-term model signals sell.

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

Weekly Buy/Sell Summary – Stocks and Funds – 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 three sell signals. This brings the total buy signals to 85 since February 1, 2008. There have been 197-sell signals since October 26, 2007.

The most depressed stocks and funds are not participating in the current bull cycle. This limited breadth suggests bullish sustainability will most likely not last through the summer.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 210 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 145.1%. That annualizes to 60.3%. The Mid-term Indicant has been signaling hold for these 210-stocks and funds for an average of 125.0-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 132-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 16.6% since the Mid-term Indicant signaled sell an average of 28.6-weeks ago.

One year ago, on May 11, 2007, the Mid-term Indicant was holding 312-stocks and funds out of the 345 tracked for an average of 98.8-weeks. They were up by an average of 121.6% (annualized at 64.0%). There were 31-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 13.7% since their respective sell signals an average of 25.3-weeks earlier.

The Mid-term Indicant was signaling hold for 253-stocks and funds of the 345-tracked two years ago on May 12, 2006. They were up by an average of 131.2% (annualized at 71.0%) since their respective buy signals an average of 96.0-weeks earlier. The Mid-term Indicant was avoiding 71-stocks and funds at that time. They were down an average of 7.9% since their respective sell signals an average of 18.5-weeks earlier.

There were 201-stocks and funds with hold signals on May 13, 2005 since their buy signals an average of 89.6-weeks earlier. They were up by an average of 93.9% (annualized at 54.5%). There were 117-avoided stocks and funds at that time. They were down by an average of 28.0% from their respective sell signals an average of 54.7-weeks earlier.

On May 8, 2004, the Mid-term Indicant was signaling hold for 219-stocks and funds out of 296-tracked. They were up by an average of 76.9% (annualized at 70.8%) since their buy signals an average of 56.5-weeks earlier. The Mid-term Indicant was avoiding only 57-stocks and funds. They were down by an average of 12.8% since their sell signals an average of 15.8-weeks earlier.

Five years ago, on May 10, 2003, there were 266-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 32.0% (annualized at 101.5%) since their respective buy signals an average of 16.4-weeks earlier. There were 17-avoided stocks and funds then. They were down an average of 31.9% since their respective sell signals an average of 30.7-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 74.9% since its secular low on October 9, 2002. The NASDAQ is up 119.5% and the S&P500 is up 78.7% since then. The small cap index, S&P600, is up 122.2%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 10.0% since its last closing peak on Oct 9, 2007. The NASDAQ is down 14.5% since its last peak on Oct 31, 2007. The S&P600 is down 14.8% since its last closing peak value on Jul 19, 2007. The Small Caps Index was bearish last week with a 1.2% loss, while the blue chips were more bearish with a 2.4%-loss. The NASDAQ100 was down 1.3%.

The NASDAQ is down 51.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 9.4% since its similar secular peak on March 23, 2000. The Dow is up by a mere 8.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to bearish influence. The NASDAQ needs to climb 106.4% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 3.9% so far this year. The NASDAQ is down 7.8% this year. These conditions are incongruent with historical standards. 2008 should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This will always happen when such standards gain in popularity. The current bullish cycle is lending support to historical standards, but it will be challenged during the dog days of summer.

The NASDAQ year-to-date performance was bearish by 12.7% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. So far, this year looks similar to that of 2001. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles. This is now being challenged.

The NASDAQ was down by 15.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 13.8%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 4.3% in 2004. It was also down by 9.0% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 6.0% and up by 6.7% at this time last year.

As previously stated, so far this year, the DOW30 is down 3.9% and the NASDAQ down 7.8%. The Dow30 is down more this year than any year this century, 2000-inclusive.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. If the Fed strengthens the dollar next week by stabilizing interest rates, this bullish option may wane.

May 2, 2008 comment regarding the previous paragraph. Last week’s Fed mild interest rate adjustment to the south indeed strengthened the dollar. Keep in mind the U.S. is a net importer. This increases the supply of dollars abroad. As long as the U.S. is a net importer there will be a continuing increase in supply of dollars, which will continuously keep a “real economic” lid on its value.

A bearish bias shift was identified by the Quick-term Indicant on January 4, 2008. It lasted until March 11, 2008. The Dow was down 5.0% and the NASDAQ was down 9.9% during that time. On March 11, 2008, the Quick-term Indicant shifted away from bearish bias. Although the Quick-term Indicant endured fluttering since the March 11 bearish bias shift expiration, the NASDAQ is up by 8.4% since then. In other words, the NASDAQ is basically flat since January 4, 2008.

As previously stated in the daily stock market reports, the Quick-term Indicant endured two violations since March 11 and encountered fluttering behavior until April 11. On April 29, 2008, the Quick-term Indicant conformed to its standards of Red Bull recognition with positive Vector Pressure and signaled bullish bias. Several buy signals for ETF’s were generated on that day. Since then, the Dow is down 0.7% and the NASDAQ is up 0.8%. The lesson learned is to never argue with Red Bulls with positive Vector Pressure.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% due to current bullish cycle.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As stated last week, emotion offers only a burst of energy. Falling commodity prices the week before last was emotionally based irrational market behavior. Commodity prices bounced back to the north wiping out that emotional elation.

Commodity prices bounced north last week with some gusto after falling in the previous two weeks. They have been bearish in four of the past six weeks. Until last week, the theory was held that demand was softening; a common recessionary attribute. As stated the past two weeks, though, demand must fall in other countries. In other words, there needs to be a worldwide recession for that to happen.

As stated last week, interest rates are providing significant liquidity, but when budgets are strapped for fuel, expect little economic stimulus.

The U.S. Dollar has strengthened the past two weeks by virtue of the mild interest rate reduction. That has briefly contributed to the reduction in commodity prices. As stated last week, that reduction is an algebraic exercise as opposed to a physical reality. Those really close to the stock market believe in paper matters.

As stated last week, 2009 is setting up to be a solid recession and bear market. Historical standards support rising interest rates next year that will encourage the bear. Increased political mumbo-jumbo of protectionism enhances the probability of stock market calamity.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 422.2% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 58.1%. It moved to the north in 52 of the past 87-weeks. It has been bullish in 23 of the last 38-weeks. This fund has been bullish in eight weeks of the last 13-weeks. It was bullish last week following bearish behavior in the prior two weeks.

Fidelity Gold, Fund #28, is up 11.3% since its buy signal on September 7, 2007. It is annualized at 16.6% since that buy signal. This fund was solidly bullish in seven of the past 13-weeks. It was bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 407.1% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 70.0%. This fund has been bullish in five of the last ten weeks. It was bullish last week, following two weeks of bearish behavior.

Vanguard Energy #18, VGENX, is up 278.7% (annualized at 53.9%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 255.7% (annualized at 57.0%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 219.9% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 45.8%.

These energy related funds were bullish last week, following two weeks of bearish behavior.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 100.6% since then. It is annualized at 35.8%. This fund has been bullish in 26 of the past 37-weeks. It has been solidly bullish in seven of the last 12-weeks. It was bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 294.0% (annualized at 56.6%). This fund has been bearish in seven of the past 17-weeks. It was dynamically bullish last week.

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

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

The Mid-term Indicant signaled bull on March 20, 2008. All ten major indices are up by an average of 6.9% since then. They are annualizing at 50.4%. The most bullish is the NASDAQ100 index. It is up 11.9%. The DOW30 is the weakest. It is up 3.1%. Disappointedly, the most bullish during bull markets is the S&P600, which is up only 4.7% since the March 20, 2008 bull signal. This suggests the bull cycle may be short-lived, but so far has been demonstrating some sustainability. All indices were down last week.

The Mid-term Indicant Dow Jones Industrial Average performance is at $38,270,887

That beats buy and hold performance of $1,939,127 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $183,872. That beats buy and hold’s $135,986 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226,959. That beats buy and hold’s $84,796 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant again signaled buy for this fund on April 12, 2008 and signaled sell last weekend. Unfortunately, it was sold at a loss of approximately 11.9%. It may offer more opportunities later this year or early next year.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 340.3% (annualized at 20.5%) since the Long-term Indicant signaled bull 862-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Six of thirty; offering bullish support; fairly solid, but weakening.

Quick-term Yellow Bears/Threats: Four of thirty. Solid non-bearish support.

Quick-term Non-Bearishness: QTI differential is bullish 3.4%. Solid non-bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bullish by 4.6%. Solid bullish support.

Force Vectors: Force Vectors remain with bullish support. Bearish sloping the past few days had been lazy, offering combined bullish and non-bearish support. However, they shifted south on Friday with a bit more rigidity and potential robustness, suggesting increasing bearish activity.

Vector Pressure: Twenty-eight in bullish domains. They are holding steady and should not be argued with. This bull leg will not expire as long as Force Vectors remain above Vector Pressure.

STI Tangential Support: Support lines now exist offering resistance to dynamic bearish expressions.

Immediate Tactics: Buy on signals as probability of deep bearish behavior is minimal.

Current Quick-term Bias: Bullish bias on April 29, 2008 was solid until late last week with a few bullish attributes illustrating early signs of bullish exhaustion.

Overall Market Status: Red bulls and positive Vector Pressure are dominant. They should never be challenged. Safe to hold until those two attributes wane. Some specific ETF’s waned on Friday and received sell signals.

Profit Potential from Naked Options: Volatility will decrease as long as this bull remains in tact, minimizing profit opportunities from options.

Volume: Lethargic but consistent with seasonal behavior.

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

To view the STI for the ten major indices, click here. Currently, all major indices are enjoying tangential protection against dynamic bearish expressions. However, you will notice Force Vectors moving feverishly to the south, favoring bearish on the immediate horizon. Last Wednesday’s bearish behavior did nothing to cause any disturbances with tangential protection. Keep in mind the bull is tiring, but a Short-term Bull nonetheless.

The Short-term Indicant signaled bull on May 1, 2008. The NYSE and NASDAQ are down 2.0% and 1.4% since that bull signal. It is rare for the Short-term Indicant to maintain a bullish signal during bearish seasonality. This particular bull leg is inclining along a slope exceeding 60-degrees. Such an incline overweighs other variables, such as seasonal influences. It should be noted that such rapid risers tend to exhaust more quickly than a bull leg along a shallower inclining slope. However, the “right now” is endowed with too many bullish attributes. They are on the verge of weakening, though. The next question will be to what extent.

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

Both Indicant Volume Indicator’s are in a lethargic configuration. However, there was a brief period of NASDAQ robustness concurrent to the bullish cycle now underway. As stated the past several days, this is a powerful bullish configuration. Unfortunately, yesterday’s bearish behavior was accompanied with above average volume; not dynamic, though.

Keep in mind lethargic volume cycles are seasonal to daylight savings time.

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

There were no buy signals and four sell signals. Although there were no buy signals, the SQI is signaling hold for 24-ETF’s. They are up by an average of 66.1% (annualized at 44.9%) since their respective buy signals an average of 75.8-weeks ago. In addition to the sell signals, the SQI is avoiding three-ETF’s at this time. They are down by an average of 9.9% since their sell signals an average of 19.1-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and four sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 24-ETF’s. They are up an average of 82.0% (annualized 48.4%) since the STI signaled, buy, an average of 87.2-weeks ago. In addition to the sell signals, there are three ETF’s with avoid signals. They are down by an average of 10.5% since their sell signals an average of 19.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and four sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 24-ETF’s. They are up by an average of 14.7% (annualized at 39.3%) since the QTI signaled buy an average of 19.2-weeks ago. In addition to the sell signals, the Quick-term Indicant is avoiding 3-ETF’s. They are down by an average of 7.6% since their sell signals an average of 10.3-weeks ago.

The sell signals were generated due to weaker ETF’s with southerly moving Force Vectors.

Conflicts Between the Short-term and Quick-term Indicants

There are only two conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The combined Short/Quick Indicant models identify 72-hold signals and only 6-avoid signals, providing a bullish bias. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008, which has now expired. After some jittery behavior, a new bullish bias shift was born in mid-April 2008, but the measurement of performance will commence on April 29, 2008 when several ETF buy signals were generated.

Quick-term Indicant Bull/Bear Health Report

Only four of the 30-ETF’s are below their respective bearish yellow curves. That is non-bearish. The average relative position of all thirty ETF’s is above bearish yellow by 4.6%. This is the twenty-eighth consecutive trading day with non-bearish support, which is increasingly suggesting non-bearish sustainability.

Six ETF’s are above their bullish red curves. All thirty ETF average positions are below bullish red by 1.2%. This is no longer solid bullish attribute.

Five of the six Red Bulls are non-contrarian, which is bullish, but weakened from earlier this past week.

The QTI differential is bullish by 3.4%. This is the seventeenth consecutive trading day of bullish support.

Click the heading link in this section to view the charts. As earlier stated, there was no violent bullish response to Vector Pressure crossing into bullish domains from yellow bear status.

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

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

The average distance from breakout contact is 12.4%. Double digit variances from breakout contact for 87-consecutive trading-days has been non-bullish.

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

The average distance between the price and breakdown is 16.0%. This configuration is providing non-bearish support, which has been the case since March 2003.

The breakout/breakdown differential is bullish by 3.6%, which is supportive of the bull.

ETF Force Vector Configurations

Fourteen Force Vectors are in bullish domains. That is down by thirteen from April 25. Overall bullish support is configured. The question regarding sustainability has now subsided. This Quick-term bull leg is obviously sustainable, which was the interpretation on March 11, 2008, but regrettably, without adequate conviction. Bearish yellow is now inflecting, which suggests a tiring bull, but a bull nonetheless.

Several Force Vectors shifted south. It will interesting to see how the market reacts to this. If there is minimal bearish reaction to this, the current bull cycle could last several more weeks. If the bear gathers momentum, then do not be surprised at extensive bearish expressions.

Although yesterday’s bearish behavior disrupted several Quick-term attributes with bullish support, there was no resurrection of bearish attribute support. Today’s mild bullishness supports continuation of underlying bullish bias.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close.

Twenty-eight of the thirty ETF Vector Pressures are in bullish domains, which for the twenty-sixth consecutive day is offering bullish support.

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

Quick-term and Short-term Indicant Summary

Continue avoid writing covered options due to obstinate bullishly Vector Pressure and an increasing number of red bulls even though many were lost with today’s bearish behavior.

The Indicant signaled sell for QID on April 29, 2008. It is down by 3.0% since that sell signal. Its Force Vector shifted bullishly on Friday. Vector Pressure has fallen deeply into bearish domains and with yellow bear configurations. It will take a lot of Force Vector energy to shift this back into a bullish configuration, but the attempt to do so could invigorate the bear.

Other Contrarian Funds

ETF#03-Natural Resources - is up 49.2% (annualized at 31.5%) since the Quick-term Indicant signaled buy on Oct 25, 2006. Vector Pressure is well inside bullish domains. Force Vector is moving bullishly. Drilling and exploration will continue to be a growth industry regardless of the strengthening dollar’s impact on the price of oil. Rest assured this is a powerfully bullish ETF. If it falls to yellow, it may be a good time to buy for late arrivals. It moved favorably last Wednesday (down) and Thursday’s (up) to Tuesday’s call option buy signal.

ETF#11-Gold and Precious Metals is up 100.6% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 35.8%. Its Force Vector has shifted back to the north, but still retains “pitiful” configurations. This fund could fall to bearish yellow, which could be an excellent buy point for those who are getting in late. Rest assured if the CPI continues to rise, this fund will be holding and leading the way. Although it is bordering with negative Vector Pressure, its rising bearish yellow curve is preventing sell signal.

LETF#14-Long Government is up 0.8% from the May 5, 2008 sell signal. Its Force Vector and Vector Pressure remain deep inside bearish domains, offering little likelihood of any significant bullish behavior.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Line Analysis

Divergence versus Convergence

After enjoying a combination of bullish convergence and divergence in seven of the past nine weeks, the market endure bearish divergence last week. Commodities and the energy sector were bullish last week, following two weeks of bearish behavior.

Indicant Conclusion

As stated the past four weeks, it is unlikely the stock market’s recent bullish cycle will enjoy significant sustainability. However, the Quick-term bullish cycle is strong.

As predicted last week, the stock market was bearish last week. That bearish behavior was indeed mild and did not disrupt bullish attributes.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

05/11/08

May 4, 2008 Indicant Weekly Stock Market Report

This Week’s Report

Is Recent Bullish Behavior Sustainable – Part 5?

The average sustainable Quick-term bull legs last from seven to 12-weeks with some extending to over a year. Any bullish cycle less than seven weeks is a bullish spurt. On March 11, 2008, the major indices enjoyed a tremendous bullish surge. It was accompanied by very high volume, which is a significant bullish attribute. Without that volume support, it would have been identified as a bullish spurt.

Although of the ETF’s were deep Yellow Bears on March 11, the Quick-term Indicant uncharacteristically signaled buy for several of them based on the volume-bull relationship. No other Quick-term attributes supported those “premature buy signals.”

The idea at that time was the cumulative variance from a disappointing heart and soul of bullish seasonality in late 2007 and early 2008. Normal bearish seasonality starts on May 1 of each year. That coupled with cumulative variance expectations suggested strong bullish behavior should manifest ahead of bearish seasonality. That, in fact, has happened.

Unfortunately, deep Yellow Bears seldom move to bullish positions in a straight line. They encountered significant volatility while in their Yellow Bear configurations. The reward/risk ratio was solid on March 11, but quickly shifted to a high risk/reward ratio shortly thereafter. There were a couple of cycles of these changing expressions since March 11. The general rule of thumb is to never buy a Yellow Bear.

The recent stock market bullish cycle has not elevated many Mid-term Indicant Yellow Bears. This implies this bullish cycle is merely a technical one, but it can still be sustainable, but possibly not enough to shift out of the bearish trend that is currently underway.

Regardless of what fundamental rationalizations for this bullish cycle one may convey, non-participating Yellow Bears suggests the bounce is merely technical. Without fundamental support, all technical bullish cycles revert to the bearish trend. In other words, technical bullish rallies are based more on emotion than corporate profits or economic fundamentals. Again, a technical rally can enjoy sustainability, but it will be closer to spurt durations than a nice long-running bull leg.

There is one economic fundamental that may have some merit, but the jury is still out in spite of the hype surrounding the theory. That bullish fundamental is he strengthening dollar. Although this has no impact on the real cost of a barrel of oil, the import price will fall. Students of numbers will say the price of oil is falling. That should lead to a reduction in the price of gas at the pump. That is believed to lead to more consumer purchasing power. That should spread corporate profits from the narrowed few Exxon type of companies to the many others, such as Home Depot. That is the bullish interpretation of the underlying fundamentals influencing this bullish leg. It has the tinge of a technical bull, as opposed to a solid bullish trend.

Fundamentals, such as economic well being, are not officially known until well after the fact. It will be a couple of years before we understand the economic impact of the sub-prime lending crisis. Some professors will most likely bad-mouth the Federal Reserve for jacking up interest rates in 2004-07. The Federal Reserve should have a good defense as the cost of energy was moving north and they were simply doing their job to keep inflation under control. It is amazing they are paid to plot the price of oil a graph paper and then plot their interest policies along the same pattern until economic havoc is observed. The ability to anticipate and prevent catastrophe is usually the reason for fame and/or good salaries. Apparently, the Federal Reserve Board’s anticipatory skills are minimal.

The idiots who sold mortgages to people with, say a $1500 monthly payment, that would skyrocket to, say $4500 or so, with those crazy adjustable clauses, are also culprits. Who in their right mind can expect to sell something to an ordinary person and expect that ordinary person to be able to respond to a tripling of their biggest budget account? That had to be considered a high risk revenue stream, but when “things are going good, what the problem?” That is corporate America’s biggest problem; now worrying when they should. Chrysler is again an example of that; big gas guzzler’s in product offering and a shriveling market, which is no different than their stupidity in the late 1970’s only to be saved by evil politicians. What are they teaching in MBA programs these days? Apparently, commonsense is not in the curriculum.

Do not forget Bear Stearns lies. A group of people providing “okay profit guidance” two days before the reality of downright ugly losses will not escape the stock market that quickly. The news reports, for the most part, quote Bear Stearns as being responsible for that misguidance. Bear Stearns is a legal entity; it was people lying. Apparently, Clintonian lying continues to pervade some corporate leaders. Providing misguidance can occur from time to time due to operational “surprises.” Although being surprised is an act of incompetence, a two-day misguidance includes dishonesty. The bull distains that and will have difficulty being a participant too long. Fictional fundamentals are always punished and severely.

Adding to the dishonesty factor is the upcoming presidential election. All politicians are dishonest. They could never have successful political careers being otherwise. The bull views political influence as a negative, while the bear delights in their mumbo-jumbo and interference with corporate profits. That is why the market has been bearish over the past 180-years in the presidential post election years. The year, 2009, is setting up to be solidly bearish.

However, in the meantime, we have Quick-term Indicant Red Bulls with positive Vector Pressure. That is cyclically bullish even though the trend is bearish.

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

Weekly Buy/Sell Summary – Stocks and Funds – 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 twelve buy signals and two sell signals. This brings the total buy signals to 85 since February 1, 2008. There have been 194-sell signals since October 26, 2007.

The most depressed stocks and funds are not participating in the current bull cycle. This limited breadth suggests bullish sustainability will most likely not last through the summer.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 201 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 147.9%. That annualizes to 60.5%. The Mid-term Indicant has been signaling hold for these 201-stocks and funds for an average of 127.0-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 130-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 15.4% since the Mid-term Indicant signaled sell an average of 28.0-weeks ago.

One year ago, on May 4, 2007, the Mid-term Indicant was holding 308-stocks and funds out of the 345 tracked for an average of 98.5-weeks. They were up by an average of 122.4% (annualized at 64.6%). There were 33-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 12.0% since their respective sell signals an average of 23.2-weeks earlier.

The Mid-term Indicant was signaling hold for 270-stocks and funds of the 345-tracked two years ago on May 5, 2006. They were up by an average of 144.8% (annualized at 75.5%) since their respective buy signals an average of 99.7-weeks earlier. The Mid-term Indicant was avoiding 67-stocks and funds at that time. They were down an average of 5.8% since their respective sell signals an average of 18.6-weeks earlier.

There were 201-stocks and funds with hold signals on May 6, 2005 since their buy signals an average of 88.7-weeks earlier. They were up by an average of 98.0% (annualized at 57.5%). There were 117-avoided stocks and funds at that time. They were down by an average of 27.8% from their respective sell signals an average of 53.7-weeks earlier.

On May 1, 2004, the Mid-term Indicant was signaling hold for 237-stocks and funds out of 296-tracked. They were up by an average of 72.1% (annualized at 70.9%) since their buy signals an average of 52.9-weeks earlier. The Mid-term Indicant was avoiding only 28-stocks and funds. They were down by an average of 27.5% since their sell signals an average of 39.5-weeks earlier.

Five years ago, on May 3, 2003, there were 255-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 31.4% (annualized at 102.2%) since their respective buy signals an average of 16.0-weeks earlier. There were 27-avoided stocks and funds then. They were down an average of 26.4% since their respective sell signals an average of 29.6-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 79.2% since its secular low on October 9, 2002. The NASDAQ is up 122.3% and the S&P500 is up 82.0% since then. The small cap index, S&P600, is up 123.9%. Even with the S&P600’s dynamic bearish behavior the last several months, it still leads the major indices in bullish performance since the birth of the secular bull on October 9, 2002. As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding.

The Dow is down 7.8% since its last closing peak on Oct 9, 2007. The NASDAQ is down 13.4% since its last peak on Oct 31, 2007. The S&P600 is down 13.8% since its last closing peak value on Jul 19, 2007. The Small Caps Index was bullish last week with a meager 0.7% gain, while the blue chips were slightly bullish with a 1.3%-gain. The NASDAQ100 was the most bullish index of the majors with a whopping 3.3% gain.

The NASDAQ is down 50.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 7.4% since its similar secular peak on March 23, 2000. The Dow is up by a mere 11.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming above the new peak area, while the S&P500 set a new record in early 2007 and then immediately succumbed to bearish influence. The NASDAQ needs to climb 103.8% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is down 1.6% so far this year. The NASDAQ is down 6.6% this year. These conditions are incongruent with historical standards. 2008 should be a bullish year, based on those standards. The stock market occasionally delights in violating historical standards. This will always happen when such standards gain in popularity. The current bullish cycle is lending support to historical standards, but it will be challenged during the dog days of summer.

The NASDAQ year-to-date performance was bearish by 10.1% through this week in 2001. This particular week in 2001 was bullish by nearly 6%. Keep in mind the NASDAQ finished 2001 down by 21.1%. So far, this year looks similar to that of 2001. There will be some more bearish cycles in 2008 and one of the reasons for expectations of a solid bullish cycle ahead of those impending bearish cycles. This is now being challenged.

The NASDAQ was down by 15.7% 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%. The NASDAQ YTD 2003 performance was up by 12.5%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend by 4.2% in 2004. It was also down by 11.3% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up by 4.7% and up by 5.9% at this time last year.

As previously stated, so far this year, the DOW30 is down 1.6% and the NASDAQ down 6.6%. Until the past two weeks, the NASDAQ and Dow were down at this time of year more than any other year this century. However, 2008 has risen to the middle of the pack with the current bullish cycle.

This paragraph, originating in the March 30, 2008 Weekly Stock Market Report, will remain unchanged until it becomes irrelevant. Bearish behavior this year contradicts historical standards whereby the presidential election year is typically bullish. The political establishment and their appointees are doing their part to support bullish behavior with interest rate cuts and tax rebates. On the other hand, the stock market appears to be short of buyers who at one time refinanced their homes to buy stocks. Their replacement buyers are expected to be foreign investors, where the weak dollar is an added bonus for those who desire bullish market behavior. If the Fed strengthens the dollar next week by stabilizing interest rates, this bullish option may wane.

May 2, 2008 comment regarding the previous paragraph. Last week’s Fed mild interest rate adjustment to the south indeed strengthened the dollar. Keep in mind the U.S. is a net importer. This increases the supply of dollars abroad. As long as the U.S. is a net importer there will be a continuing increase in supply of dollars, which will continuously keep a “real economic” lid on its value.

A bearish bias shift was identified by the Quick-term Indicant on January 4, 2008. It lasted until March 11, 2008. The Dow was down 5.0% and the NASDAQ was down 9.9% during that time. On March 11, 2008, the Quick-term Indicant shifted away from bearish bias. Although the Quick-term Indicant endured fluttering since the March 11 bearish bias shift expiration, the NASDAQ is up by 9.8% since then. In other words the NASDAQ is basically flat since January 4, 2008.

As previously stated in the daily stock market reports, the Quick-term Indicant endured two violations since March 11 and encountered fluttering behavior until April 11. On April 29, 2008, the Quick-term Indicant conformed to its standards of Red Bull recognition with positive Vector Pressure and signaled bullish bias. Several buy signals for ETF’s were generated on that day. Since then, the Dow is up 1.8% and the NASDAQ is up 2.1%. The lesson learned is to never argue with Red Bulls with positive Vector Pressure.

Three of the big four are okay for the time being; inflationary threats have cooled but again threatening with a significant increase in the CPI. Interest rates remain low, which is bullishly favorable. Deflation is not threatening. In addition to a resurging CPI, another unfavorable condition for stock market bullishness is the weak economy. The unknown is voodoo bookkeeping. The market reacts to corporate earnings. If those earnings are perceived as fiction, the market will move bearishly. Fictional financial representations will enhance stock market bearishness.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% due to current bullish cycle.

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

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

The stock market was aroused with declining commodity prices last week. Their fall was indeed impressive. There is one major problem with this elation. The bullish trend in commodity prices has not been disrupted. Even their bullish cycle has not been disrupted. The emotional elements are driving the stock market’s bullishness right now. Emotion only provides a burst of energy.

Commodity prices tumbled the past two weeks. They have been bearish in four of the past five weeks. That suggests demand is softening; a common recessionary attribute. As stated last week, though, demand must fall in other countries. In other words, there needs to be a world wide recession for that to happen.

Interest rates are providing significant liquidity, but when budgets are strapped for fuel, expect little economic stimulus. The Federal Reserve relaxed interest rates last week.

The U.S. Dollar strengthened last week by virtue of the mild interest rate reduction. That has briefly contributed to the reduction in commodity prices. In other words, that reduction is an algebraic exercise as opposed to a physical reality. Those really close to the stock market believe in paper matters.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 398.6% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 55.7%. It moved to the north in 51 of the past 86-weeks. It has been bullish in 22 of the last 37-weeks. This fund has been bullish in seven weeks of the last 12-weeks. It has been bearish the past two weeks.

Fidelity Gold, Fund #28, is up 4.9% since its buy signal on September 7, 2007. It is annualized at 7.5% since that buy signal. This fund was solidly bullish in six of the past 12-weeks. It has also been bearish the past two weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 371.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 64.1%. This fund has been bullish in four of the last nine weeks. It has been bearish the past two weeks.

Vanguard Energy #18, VGENX, is up 262.7% (annualized at 51.0%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 233.1% (annualized at 52.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 207.2% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 43.3%.

These energy related funds have been bearish the past two weeks.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 92.6% since then. It is annualized at 33.2%. This fund has been bullish in 25 of the past 36-weeks. It has been solidly bullish in six of the last 11-weeks. It has been bearish the last three weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 272.7% (annualized at 52.7%). This fund has been bearish in seven of the past 16-weeks. It has been bearish the last two weeks, following bullishness in the previous four weeks.

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 March 20, 2008. All ten major indices are up by an average of 8.8% since then. They are annualizing at 74.1%. The most bullish is the NASDAQ100 index. It is up 13.1%. The DOW30 is the weakest. It is up 3.9%. Disappointedly, the most bullish during bull markets is the S&P600, which is up only 6.0% since the March 20, 2008 bull signal. This suggests the bull cycle may be short-lived, but so far has been demonstrating some sustainability.

The Mid-term Indicant Dow Jones Industrial Average performance is at $39,208,662

That beats buy and hold performance of $1,986,642 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $187,266. That beats buy and hold’s $138,495 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $229,880. That beats buy and hold’s $85,887 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,873.6%, 35.2%, and 167.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant again signaled buy for this fund on April 12, 2008 and signaled sell this past weekend. Unfortunately, it was sold at a loss of approximately 11.9%. It may offer more opportunities later this year or early next year.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 351.1% (annualized at 21.2%) since the Long-term Indicant signaled bull 861-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. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Eighteen of thirty; offering significant bullish support.

Quick-term Yellow Bears/Threats: Two of thirty. Solid non-bearish support.

Quick-term Non-Bearishness: QTI differential is bullish 6.4%. Solid non-bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bullish by 6.3%. Solid bullish support.

Force Vectors: Force Vectors remain with bullish support. Bearish sloping the past few days has been lazy, offering combined bullish and non-bearish support.

Vector Pressure: Twenty-eight are in bullish domains. They are holding steady and should not be argued with. If they continue holding steady for a few more days, then this bullish cycle, may in fact, not be a short-cycle bullish spurt. Major inflection points are now forming which will enhance obviation of the stock market’s directional intensity.

Immediate Tactics: Buy with little sensation of bearish risks.

Current Quick-term Bias: Bullish bias on April 29, 2008 is solid. Bearish behavior on the immediate horizon will be mere profit-taking micro-spurts and until advised offer opportunities for additional buying.

Overall Market Status: Red bulls and positive Vector Pressure are dominant. They should never be challenged. Safe to hold until those two attributes wane.

Profit Potential from Naked Options: Volatility will decrease as long as this bull remains in tact, enhancing option opportunities.

Volume: The NASDAQ lost robustness earlier this week, which was configuring an increased probability of a bullish bias shift. However, that brief period of robustness remains pertinent and thus in support of bullish bias. Keep in mind that lethargy is commonplace during daylight savings time.

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

Click this sentence to view the VIX chart. As stated since last Tuesday, this index continues configuring in favor of a bullish stock market. The bearish yellow curve continues movement favorable to the bull. It is nearing its breakdown line. It will be interesting to see if bullish VIX resistance occurs at contact.

Click this sentence to view the S&P600 chart. As stated the past several days, the configuration mentioned on Thursday, April 10, 2008 remains the most discerning at this point. This index remains well above the bullish red curve. You will notice a light blue line draw across the yellow curve. At some future point, the red curve will intersect with that tangential line. When that happens the current bullish cycle will expire. Yellow’s inflection is the first indicator of bullish tiring. That does not mean the bull is about nap, but the rate of increase should slow down. There is plenty of room before red contact with tangential. Therefore, fear of bear should be minimal at this point.

It is obvious this S&P600 will not fall below April 10 or April 11 values in a few days. However, the probability remains high that that will happen at some future point. That probability will adjust depending on when red interacts with tangential. If it does not occur this year, a deep 2009 bear would not be out of line.

As pointed out the past few days, the yellow curve inflecting back to the north without the index falling below yellow will offer bullish sustainability for several more weeks. There are early indications this is occurring.

As stated since last Tuesday, although there is currently a 97% probability the S&P600 will be lower at some future point than it was on April 11, 2008, the normal Quick-term Indicant has developed too many bullish attributes to continue avoidance tactics. Prices last Tuesday were back to approximately where most were sold after the 20-months of holding from August 2006 through January 2008. Consequently, there were several ETF buy signals on Tuesday, April 29. Solid bullish behavior occurred the next day, April 30. The Quick-term Indicant will not be slow in generating sell signals until the heart and soul of bullish seasonality starts in late August through early October of this year. There should be at least one, if not two bearish cycles before then.

This paragraph remains unchanged from Tuesday, April 29, 2006. QQQQ-Vector Pressure-Some of you recall the concerns about negative Vector Pressure on April 6, 2008. Click this sentence to review that concern. As you can see by clicking the next sentence, QQQQ Vector Pressure appears comfortably residing in bullish domains. Click this sentence to review the current configurations.

As you can see, the bullish ambition did not meet bearish resistance. The risk/reward ratio on continued avoidance has shriveled. Several Quick-term Indicant attributes continue to shift into bullish support; very subtly. The current price is fairly close to that when it was sold at earlier this year from the August 2006 buy signal. It is a red bull, which can stimulate sell signals, but we have learned time and again to not argue with red bulls. The Quick-term Indicant will signal sell pretty quickly in the event Vector Pressure sours or Red Bull positions are lost. The most dangerous time in holding a security is shortly after buying it.

To view STI for the ten major indices, click here. Keep in mind, some of the charts are being used for research, but the actual market data is pure. You can see that most of the indices remain above their bullish red curves, which is a bullish configuration. You will also notice most of the indices are enduring yellow inflection points. Scanning to the left on each of the charts reveals how the market behaves after Red intersects those blue tangential lines; always bearish.

The Short-term Indicant signaled bull on May 1, 2008. Although this is a period of bearish seasonality, this model was plummeted with too many bullish attributes to ignore. It even got its required four points, which was hard to do during bearish seasonality.

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

The NASDAQ Indicant Volume Indicator has cooled off since late last week when it was configuring with robustness. The robust cycle, although brief, was concurrent to bullish behavior. As stated the past few days, this is a powerful bullish configuration. Volume the past two days has been relatively high and concurrent with bullish behavior, which is supportive of the current bullish bias.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 28-ETF’s. They are up by an average of 57.5% (annualized at 46.0%) since their respective buy signals an average of 64.4-weeks ago. Although there were no sell signals, the SQI is avoiding three-ETF’s at this time. They are down by an average of 7.9% since their sell signals an average of 18.1-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 28-ETF’s. They are up an average of 71.3% (annualized 49.4%) since the STI signaled, buy, an average of 74.2-weeks ago. Although there were no sell signals, there are three ETF’s with avoid signals. They are down by an average of 8.6% since their sell signals an average of 18.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 12.9% (annualized at 43.2%) since the QTI signaled buy an average of 15.4-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding 2-ETF’s. They are down by an average of 10.3% since their sell signals an average of 14.2-weeks ago.

You will notice the April 29 and April 30 buying and selling among the models was in tandem. This is common during inflection periods and conflicts in the directional intensity of trend and cycle. In this case, the cycle is up while the trend is south.

Conflicts Between the Short-term and Quick-term Indicants

There is only one conflict, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The combined Short/Quick Indicant models identify 85-hold signals and only 5-avoid signals, providing a bullish bias. The bullish bias shift on August 15, 2006 expired on January 4, 2008, but a potential bullish bias shift was born on March 11, 2008, which has now expired. After some jittery behavior, a new bullish bias shift was born a few days ago, but the measurement of performance will commence on April 29, 2008.

The following paragraph has a 97% probability of being accurate. Configurations suggest the market and most of the ETF’s will be lower than they were in early April at some future point. Timing will be more predictable when bearish yellow curve inflects and tangential intersects with red. Some are now configuring with inflection points. This price depression should occur in 2009, but it could occur sooner.

Although the above may manifest with 100% accuracy by direct observation, the major indices and most of the ETF’s did not bounce south off bullish red the past few days. The Quick-term Indicant is designed to participate in bullish spurts with some degree of sustainability. As long as Vector Pressure is positive with bullish red configurations, the Quick-term Indicant cannot avoid participation in a potential sustainable bullish spurt, regardless of duration. That is the reason for the high number of buy signals this past Tuesday.

If bullish red configurations evaporate and Vector Pressure shifts to bearish domains, the Quick-term Indicant will signal sell.

The Quick-term Indicant’s March 11 and March 18 buy signals were unusual. Most of the ETF’s at that time were deep yellow bears with negative Vector Pressure. There were procedural and algorithmic violations with those buy signals. The March 18 buy signal was more classical, but the errors made on March 11 induced sell signals on April 11. Once violations occur, it takes a few cycles to return to normalcy. Last Tuesday’s buy signals will not reverse unless red bull and Vector Pressure discontinue supporting the bull cycle now underway. That will not happen very quickly since the number of non-contrarian red bulls continues to increase. Some have healthy margins with respect to magnitude above red. They can become too hot and cool down, but as long as they are red bulls, the Quick-term Indicant will continue to hold.

The yellow bear buys were tricky. Holding red bulls is a no brainer. Holding positive Vector Pressure is also a no-brainer. Vector Pressure has been obstinate the past several weeks, which is a bullish attribute. Force Vectors have dipped south three times since March 11 and had zero impact on positive Vector Pressure. That is also bullish. All of this could be obsoleted by the bear within a few days, and if so, the sell signals will be quick.

This is a bear market due to trend, but bullish spurts can rise as much as 15 to 30% before capsizing back into bearish mode. The market is more diverse with about three billion people contributing to the cause of capitalism as opposed to just a few million in the last century. Behavioral patterns will be different to extent there will be more of a bullish influence as long as the capitalistic movement flourishes. Even with that, the current market is a bear, but with the potential for a nice bullish spurt of some duration. That was observed several weeks ago, but the Quick-term Indicant lacked the proper number of supporting attributes to maintain that conviction.

Quick-term Indicant Bull/Bear Health Report

Only two of the 30-ETF’s are below their respective bearish yellow curves. That is non-bearish. The average relative position of all thirty ETF’s is above bearish yellow by 6.1%. This is the twenty-fourth consecutive trading day with non-bearish support, which is increasingly suggesting non-bearish sustainability.

A whopping eighteen of the ETF’s are above their bullish red curves. All thirty ETF average positions are flat with respect to their bullish red curves. This is a solid bullish attribute. This is the first time in several months the average relative position has not been negative.

The QTI differential is bullish by 5.4%. This is the twelfth consecutive trading day of bullish support.

Click the heading link in this section to view the charts. As earlier stated, there was no violent bullish response to Vector Pressure crossing into bullish domains from yellow bear status.

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

One of the thirty ETF’s is contacting its breakout line, which is bullish. This is the third consecutive trading day with breakout contact, which is bullish. It is non-contrarian ETF#21-Latin American Stocks.

The average distance from breakout contact is 11.2%. Double digit variances from breakout contact for 82-consecutive trading-days is not supportive of the bull. As you can see, it is nearing single-digit values.

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

The average distance between the price and breakdown is 17.6%. This configuration is providing non-bearish support, which has been the case since March 2003.

The breakout/breakdown differential is bullish by 6.3%, which is supportive of the bull.

ETF Force Vector Configurations

Twenty-five Force Vectors are in bullish domains. That is up by sixteen from April 16. Overall bullish support is configured. The question regarding sustainability has now subsided. This Quick-term bull leg will be sustainable, which was the interpretation on March 11, 2008, but regrettably, without adequate conviction. Bearish yellow is now inflecting, which suggests a tiring bull, but a bull nonetheless.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close. Today’s flat market was not helpful to yesterday’s 3-call option buy signals.

Twenty-eight of the thirty ETF Vector Pressures are in bullish domains, which for the twenty-first consecutive day since several months ago is no longer configuring in support of the bear.

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

Quick-term and Short-term Indicant Summary

The bullish bias shift that began on August 15, 2006 expired on January 4, 2008. However, a new bullish bias was born on March 11, 2008. It is not a thoroughbred, though. It is tainted with Enron-like misguidance from Bear Stearns. The March 11 bullish bias shift expired on April 11, 2008. It was expected to be just another short bullish spurt. The Quick-term Indicant is incapable of ignoring red bulls and a new bullish bias shift was started on April 29, 2008.

Continue avoid writing covered options due to obstinate bullishly Vector Pressure and an increasing number of red bulls.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Mid-term Indicant signaled sell for ProFunds Ultra Short this weekend.

The Indicant signaled sell for QID on April 29, 2008. It is down by 5.3% since that sell signal. Although its Force Vector is attempting to rise, its Vector Pressure has fallen deeply into bearish domains and with yellow bear configurations.

Other Contrarian Funds

ETF#03-Natural Resources - is up 43.6% (annualized at 28.3%) since the Quick-term Indicant signaled buy on Oct 25, 2006. Vector Pressure is well inside bullish domains, but Force Vectors are declining. This fund remains a red bull and is configured consistently with one that is just too hot and merely cooling down. Drilling and exploration will continue to be a growth industry regardless of the strengthening dollar’s impact on the price of oil. Rest assured this is a powerfully bullish ETF. If it falls to yellow, it may be a good time to buy for those late arrivals.

ETF#11-Gold and Precious Metals is up 94.3% since the Quick-term Indicant signaled buy on August 3, 2005. It is annualizing at 33.8%. Its Force Vector continues wandering with a pitiful configuration. This fund could fall to bearish yellow, which could be an excellent buy point for those who are getting in late. Rest assured if the CPI continues to rise, this fund will be holding and leading the way. Although it is bordering with negative Vector Pressure its rising bearish yellow curve is preventing sell signal.

LETF#14-Long Government - This fund is down 3.3% since the Quick-term Indicant signaled buy on April 7, 2008. This fund has little volatility. It is mildly contrarian to the stock market. If the market turns bearish this fund should perform okay. If the market turns bullish, this fund will continue underperforming. The Quick-term Indicant will be slow to signal sell since the market’s trend is bearish, even in the face of a bullish spurt. Keep in mind this fund has little movement in price, while it also is stable and safe in bear markets.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Divergence versus Convergence

The market has enjoyed a combination of bullish convergence and divergence in seven of the past eight weeks. Bullish divergence has been enjoyed the past two weeks. For the second consecutive week, nearly all sectors were bullish with the exception of precious metals and a few other commodities.

The energy sector was again bearish and thus one reason for divergent performance. Much of that bearishness was due to the expectation of dollar strengthening. The dollar is now strengthening in the face of interest rate stabilization by the Federal Reserve Board.

Indicant Conclusion

As stated the past three weeks, it is unlikely the stock market’s recent bullish cycle will enjoy sustainability. However, the Quick-term bullish cycle is strong. If the impending bearish response is merely a profit-taking one, which would not be surprising this coming week, the current bullish cycle could last several more weeks.

As stated last week, severe bearishness is expected in 2009, as the stock market is expected to conform to historical standards. New political leadership will then be in office and rest assured their focus for economic well-being will not be until 2010, the mid-term election year. Social policies and more regulatory constraints will be enhanced in 2009 and early 2010. That depresses capitalistic enjoyment, which is a bearish stimulant.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

05/04/08