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
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
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 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
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%.
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. 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.
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 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.
As stated last
week, the presidential pre-election year of 2007 was below average
(+10.5%) with the Dow gaining 6.4%. This was the smallest gain since
Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in
October of that year.
Where is the
market headed in 2008, the presidential election year, which is the second
most bullish year on the four-year presidential election cycle? If
historical standards prevail, which is bullish, the market is setting up
nicely for a tremendous profit this year. All that is needed is a bottom
to this bear, as 2008 should finish up on the year, based on historical
standards and falling interest rates. The fundamental requirements are
limited inflation and economic stabilization.
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.
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-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.
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 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.
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
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.
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
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.
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.
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.
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.
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
You can scan
the
Quick-term Indicant for Exchange Traded Funds table and click on the
charts to observe Force Vector configurations. Scroll down each of the
charts, where a quick link has been added to take you to the next series
of Quick-term ETF charts. Use you back arrow on your browser to return to
the previous page.
Twenty-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.
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.
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 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 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.
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
05/18/08
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
As repeatedly
stated, do not hold more than 10% of your investment resources in a single
stock and do not hold more than 20% of your investment resources into a
single mutual fund. Also, never fall in love with a stock or fund. Only
love the value of your portfolio. Never love its contents. Management
stupidity can wreak havoc on any stock or fund at any time.
All updated
information can be found from a single page at Indicant.Net. Click the
below link to that page. You will need your login ID and password.
http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm
The
Quick/Short-term Indicant Stock Market Report
The Indicant website maintains the last twelve months of daily reports on
an annual basis. These weekly reports are maintained on the website
for much longer periods. Beginning in March 2006, the daily stock market
report for the last trading day of each week is imbedded in this weekly
report. This allows web-based retention records of the daily report for
much longer than the last twelve months.
The Daily
Indicant Stock Market Report for the last trading day of the current week
is near the conclusion of this weekly stock market report. It is emailed
each weekend, separately, so you can read it, either as a separate
document, or in this document.
The
Indicant Stock Market Report’s Secular Market Blend
The Dow is up
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.
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. 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.
As stated last
week, the presidential pre-election year of 2007 was below average
(+10.5%) with the Dow gaining 6.4%. This was the smallest gain since
Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in
October of that year.
Where is the
market headed in 2008, the presidential election year, which is the second
most bullish year on the four-year presidential election cycle? If
historical standards prevail, which is bullish, the market is setting up
nicely for a tremendous profit this year. All that is needed is a bottom
to this bear, as 2008 should finish up on the year, based on historical
standards and falling interest rates. The fundamental requirements are
limited inflation and economic stabilization.
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.
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-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.
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 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.
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 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.
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 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.
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.
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
The above
heading is linked to the Short-term Indicant table. This paragraph is
repeated daily as a reminder of accurately interpreting the charts. By
clicking the charts on the table you can review potential contact with the
breakdown lines (bearish) and potential contact with breakout lines
(bullish). It is extremely bearish when several ETF’s are contacting their
respective breakdown lines. The breakdown lines are the yellow lines
(bearish). The breakout lines are the red ones (bullish). Close proximity
to breakout implies an increased probability of an actual breakout
occurring. It is certainly bullish and you will want to be in a hold
position for those few days a year when the breakout occurs. Conversely,
significant contact with yellow (breakdown) suggests “avoid” positions are
best.
None of the
thirty ETF’s are contacting their breakout lines, which is non-bullish.
The average
distance from breakout contact is 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
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.
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.
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.
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.
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. 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.
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
05/11/08
May 4, 2008
Indicant Weekly Stock Market Report
Volume 05, Issue 01 ISSN 1526 6516 © The
Indicant 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
As repeatedly
stated, do not hold more than 10% of your investment resources in a single
stock and do not hold more than 20% of your investment resources into a
single mutual fund. Also, never fall in love with a stock or fund. Only
love the value of your portfolio. Never love its contents. Management
stupidity can wreak havoc on any stock or fund at any time.
All updated
information can be found from a single page at Indicant.Net. Click the
below link to that page. You will need your login ID and password.
http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm
The
Quick/Short-term Indicant Stock Market Report
The Indicant website maintains the last twelve months of daily reports on
an annual basis. These weekly reports are maintained on the website
for much longer periods. Beginning in March 2006, the daily stock market
report for the last trading day of each week is imbedded in this weekly
report. This allows web-based retention records of the daily report for
much longer than the last twelve months.
The Daily
Indicant Stock Market Report for the last trading day of the current week
is near the conclusion of this weekly stock market report. It is emailed
each weekend, separately, so you can read it, either as a separate
document, or in this document.
The
Indicant Stock Market Report’s Secular Market Blend
The Dow is up
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.
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 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.
As stated last
week, the presidential pre-election year of 2007 was below average
(+10.5%) with the Dow gaining 6.4%. This was the smallest gain since
Reagan’s 2.3% gain in 1987, when the market endured sharp sell off in
October of that year.
Where is the
market headed in 2008, the presidential election year, which is the second
most bullish year on the four-year presidential election cycle? If
historical standards prevail, which is bullish, the market is setting up
nicely for a tremendous profit this year. All that is needed is a bottom
to this bear, as 2008 should finish up on the year, based on historical
standards and falling interest rates. The fundamental requirements are
limited inflation and economic stabilization.
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.
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-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.
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 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.
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 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.
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 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.
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 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
The above
heading is linked to the Short-term Indicant table. This paragraph is
repeated daily as a reminder of accurately interpreting the charts. By
clicking the charts on the table you can review potential contact with the
breakdown lines (bearish) and potential contact with breakout lines
(bullish). It is extremely bearish when several ETF’s are contacting their
respective breakdown lines. The breakdown lines are the yellow lines
(bearish). The breakout lines are the red ones (bullish). Close proximity
to breakout implies an increased probability of an actual breakout
occurring. It is certainly bullish and you will want to be in a hold
position for those few days a year when the breakout occurs. Conversely,
significant contact with yellow (breakdown) suggests “avoid” positions are
best.
One of the
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
You can scan
the
Quick-term Indicant for Exchange Traded Funds table and click on the
charts to observe Force Vector configurations. Scroll down each of the
charts, where a quick link has been added to take you to the next series
of Quick-term ETF charts. Use you back arrow on your browser to return to
the previous page.
Twenty-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.
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 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
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 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