November 2006 Indicant Weekly Stock Market Report

Nov 26, 2006 Indicant Weekly Stock Market Report

Volume 11, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Bull Remains Strong

Since early 2004, the market has not enjoyed four consecutive weeks of bullish convergence. Bearish to mixed behavior has followed each period of three consecutive weeks of bullish convergence. This has depressed bullish exuberance the past three years.

The current Quick-term Indicant Bull is conservative. It recognizes the potential for economic fundamentals to transform to significant favorable conditions to support bullish gusto. The problem this bull is having is with the word, potential. These economic fundamentals appear poised to shift to favorable conditions. The stock market is anticipating this shift in the immediate future.

Some commodities continue to rise, while others have fallen in price. The stock market has responded bullishly to those commodities that have fallen. The lack of bullish exuberance is due, in part, from those commodity prices that continue to increase.

Rising commodities invoke inflationary threats. That depresses the Federal Reserve Board’s propensity to lower interest rates. This reduced propensity, thus depresses bullish behavior. However, the current quick-term bull anticipates economic conditions will move in support of relaxing the Fed’s policy of tightening money.

The bull is projecting reducing commodity prices, less inflationary threats, and declining interest rates into 2007. It just needs more evidence of its projections to accelerate the current quick-term bullish cycle.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 31-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 12.4% since the Mid-term Indicant signaled sell an average of 19.2-weeks ago.

There were 51-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 16.5% since their respective sell signals an average of 25.8-weeks earlier. Two years ago, on November 25, 2004, the Mid-term Indicant was avoiding 19-stocks and funds that were down an average of 43.4% since their respective sell signals an average of 54.8-weeks earlier. Three years ago on November 22, 2003, there were only 19-avoided stocks and funds. They were down 25.2% from their respective sell signals an average of 33.8-weeks earlier. On November 23, 2002, the Mid-term Indicant was avoiding 29-stocks and funds out of 296-tracked. They were down by an average of 30.5% since their sell signals an average of 21.8-weeks earlier.

In addition to the buy signals this weekend, the Mid-term Indicant is signaling hold for 311 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 107.6%. That annualizes to 67.0%. The Mid-term Indicant has been signaling hold for these 311-stocks and funds for an average of 83.5-weeks.

One year ago on November 25, 2005, the Mid-term Indicant was holding 269-stocks and funds out of the 320 tracked at that time for an average of 80.9-weeks. Those 269-stocks and funds were up by an average of 97.3% (annualized at 62.5%). The Mid-term Indicant was signaling hold for 301-stocks and funds of the 320-tracked two years ago on November 26, 2004. They were up by an average of 70.4% (annualized at 68.9%) since their respective buy signals an average of 53.1-weeks earlier. There were 262-stocks and funds with hold signals on November 22, 2003 since their buy signals an average of 33.6-weeks earlier. They were up 51.7% (annualized at 79.9%). The Indicant was only tracking 296 stocks and funds in 2002-2004. On November 23, 2002, the Mid-term Indicant was signaling hold for only 268-stocks and funds out of 296-tracked. They were up by an average of 20.9% (annualized at 115.0%) since their buy signals an average of 9.4-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

The Quick/Short-term Indicant Stock Market Report

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

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

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

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year. Deep bearish seasonality was not influential this year. Last August, a bullish bias was obviated just ahead of the historically significant deep bearish seasonality in this mid-term election year.

Currently, Indicant configurations suggest the market is in the process of honoring the historical normalcy of the heart and soul of bullish seasonality. It got off to an early start this year, showing little respect for the historical standards of deep bearish seasonality.

The market synchronized with near perfection to normal seasonality in the mid-term election year of 2002. The rolling half of May-October 2002 was typically bearish. The 2002 seasonal bear leg was dynamic and configured perfectly to historical standards, although the depth of that bearish cycle was deeper than normal.

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

As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. The Quick-term Indicant has been supporting this bullish bias since August 15, 2006.

Ignore recent news about economic lethargy. The stock market may recalibrate expectations six to nine months from now, but it does not care about the current economic situation. It addressed that in the first quarter of this year and pretty much had it figured out. That is why the market was a mild bearish meanderer from February through mid-August of this year. Since August, the market has been consistently, but not dynamically bullish.

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

The last period of the heart and soul of bullish seasonality, ending January 31, 2006 produced gains of 2.8%, 4.2%, and 7.2% for the Dow, S&P500, and NASDAQ, respectively. Expect greater gains than that in the current heart and soul of bullish seasonality.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 68.4% from the last mid-term presidential election year bottom. The NASDAQ is up 120.8% since October 9, 2002. The S&P600, small caps, is up even more by 135.8% since October 9, 2002.

The NASDAQ is down 51.3% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 4.8% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years for the DJIA to establish a new high a few weeks ago. The S&P500 is down 8.3% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 105.2% and S&P500 by 9.0% to establish new weekly closing highs.

Historical standards suggest the NASDAQ will not return to historical high until 2025 or so. A 2000 buyer and holder will not be back to break-even until then, assuming zero inflation. Including inflation, a thirty-year-old investor will be in his or her eighties before the NASDAQ profits from early 2000 investment dollars.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness. The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed follow-on bullish behavior due to this lack of demand with the exception of normal bullish expressions during the heart and soul of bullish seasonality in 2004 and 2005.

Until the past few weeks, most major market indices have been slightly bullish since late 2003 with pronounced meandering behavior. The only significant bullish expressions, not followed by bearish expressions, occurred in the heart and soul of bullish seasonality (Nov-Jan) in 2003, 2004, and 2005. Other than those “heart and soul” bullish cycles, the market was relatively flat from early 2004 through August 2006.

For example, the Dow fell 4.4% from January 31, 2004 through October 31, 2004. The NASDAQ fell by the same amount. The Dow fell 0.5% from January 31, 2005 through October 31, 2005, while the NASDAQ was up only 2.8%. The Quick-term Indicant shifted to bullish bias on August 15, 2006. The NASDAQ was down 10.3% from January 31, 2006 through August 14, 2006. The S&P500 was down 0.9% while the Dow was up 2.1%. The market was not bullishly expressive after the heart and soul of bullish seasonality in 2004, 2005, and 2006.

The Dow is up 9.3% since the Quick-term bias shifted to bullish bias on August 15, 2006. The S&P500 and NASDAQ are up 9.0% and 16.3%, respectively since that bias shift.

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

Since August 18, 2006, the Mid-term Indicant generated 142-buy signals and only five sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

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

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

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

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

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

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

The Quick-term Indicant’s bearish bias most of this year was replaced with a bullish bias in mid-August. Several buy signals ensued shortly after that bias shift. Do not be surprised at dynamic bullish behavior in the next few weeks/months that should carry on through next year. The various Indicant models, economic fundamentals, and historical standards suggest significant bullishness in the coming months and the next two years.

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

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

Stop Loss Management

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

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

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

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

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

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, they were included in this email message but now display them on the website. This is available to the public, while the specific buy and sell transactions are limited to members only.

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated last week, interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher.

The U.S. dollar continues to weaken. Regardless of what the media says, a weakened dollar is bullish for the stock market. A weakening dollar facilitates reducing interest rates, which induces bullish stock market behavior.

Commodity prices are mixed with some at record highs and others in bearish positions. Oil is most noticeably in a bearish position, as well as the CRB Bridge Futures. This mixed behavior can have a freezing effect on the Federal Reserve Board.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-five weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 315.2%. The current annualized growth rate since the April 13, 2001 buy signal is 55.3%. This fund has moved to the north in six of the past seven weeks.

Fidelity Gold, Fund #28, is up 42.7% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 37.3%. This fund moved north last week after falling sharply in the previous week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 258.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 59.7%. This fund moved north last week after meandering in the previous two weeks.

Vanguard Energy #18, VGENX, is up 177.4% (annualized at 48.1%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 130.8% (annualized at 43.5%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 128.1% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 38.5%.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. Energy and gold always do well during such times. Fundamentals appear to be shifting in favor of selling the above funds (09/10/06). Do not sell until the Mid-term Indicant signals sell.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 45.9% since then. It is annualized at 34.6%. Its bullish position is being threatened on a Quick-term Indicant basis.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 167.3% (annualized at 45.0%).

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

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

All ten major indices are bulls. They are up by an average of 27.8% since the Mid-term Indicant signaled bull an average of 84-weeks ago. That annualizes to 17.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,199,578. That beats buy and hold performance of $1,878,275 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,882. That beats buy and hold’s $137,227 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $205,852 that beats buy and hold’s $85,307 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.5%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

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

Divergence versus Convergence

Bearish divergence occurred last week. It was mild. That divergent behavior disrupted the three consecutive weeks of bullish convergence. This bull leg is simply not dynamic and is having difficulty producing four consecutive weeks of bullish convergence. When that occurs, if it does, the market will express dynamic and sustainable bullish behavior for a long period.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 16.9% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 324.2% (annualized at 21.5%) since the Long-term Indicant signaled bull 786-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine; increasingly solid bullish support.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

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

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

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

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

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

The NASDAQ’s Indicant Volume Indicator is reflecting typical holiday behavior with a lethargic drop. It could also be tiring from significant volume and smooth bullishness the past several weeks.

The Dow is up 6.8% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 11.0% since the Short-term Indicant signaled bull on the same day. They are annualizing at 34.0% and 55.2%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 58.1% (annualized at 33.4%) since their respective buy signals an average of 89.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 59.7% (annualized 35.6%) since the STI signaled, buy, an average of 86.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.7% (annualized at 28.6%) since the QTI signaled buy an average of 22.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

Unanimous bullish consensus between the Short-term Indicant and the Quick-term Indicant remains absent. However, a bullish majority prevails, albeit weak. There are no conflicts, where the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. The bias shift on August 15, 2006 remains in favor of the bull.

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

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 11.4%. This is increasing the market’s non-bearish posture.

Twenty-nine ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 4.2% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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.

Two of the non-contrarian-ETF’s are contacting their breakout lines. As stated the past several days, a high concentration of contact the past few weeks is solidly bullish. Contact the past eight trading days is bullishly biased with gusto.

The average distance from breakout contact is at a miniscule 1.9%, which is not a great distance to take to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 19.7%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

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.

Seven of the ETF Force Vectors are in bullish domains. Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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 for the fourth consecutive trading day.

Although the market has been bullish, it is not dynamically so. It is just a simple steady bull with less magnitudes of follow-on bearishness , which is not favorable to naked options plays. The absence of volatility is not friendly to option plays.

Twenty-nine ETF Vector Pressures are in bullish domains, which supports a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

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

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias since early February 2006. The Quick-term and Short-term Indicant models are suggesting bullish bias.

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

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

The market was mixed last week with a slight bearish bias. Some indices were up; some were down. Commodity prices continue to be mixed but troublesome enough to hang the threat of an inflationary cloud over this young quick-term bull leg. Even with that cloud of doubt, the market bullish direction continues in a steady state.

All bulls encounter bouts with bearish ambition. Sometimes the bear inflicts disruptive behavior to bullish demands. That occurred last week, but it was very mild with some indexes moving to the north and others moving mildly to the south. That has been typical of this quick-term bull leg. Do not be surprised at a continuation of this sort of behavior through January 2007. However, keep your eye on the Quick-term and Short-term Indicant where the market’s bias is monitored daily.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/26/06

Nov 19, 2006 Indicant Weekly Stock Market Report

Volume 11, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Lazy Bull Continues

As stated last week, the stock market has a higher propensity to express bullish behavior when different political parties represent the executive and legislative branches of the Federal Government. This explains, somewhat, why the stock market is bullish during presidential pre-election years. The market is excited about the possibility of changing political power.

Commodity prices are the problem for this bull. They continue to be obstinate, remaining at near or new record highs. This configuration discourages the Federal Reserve Board from aggressively relaxing interest rates. The Fed biases policy to minimize inflation. This bias has been consistently demonstrated regardless of economic impact. The Federal Reserve’s performance and legacy is based on how well inflation/deflation is managed. They understand that high unemployment is blamed on the executive and legislative branches of government.

Commodities are finite to what is contained on this planet. The growing population of capitalist increase the consumption of raw materials. That increased demand for commodities against the finite supply is a classic demonstration of pricing elasticity from the law of supply and demand.

Interestingly, inflation has been contained, even with these dynamic price increases for commodities. Although capitalist consume more than socialists, the capitalists tend to improve their efficiencies in their consumption of finite resources. This increased efficiency helps control the delivery prices. That is why inflation has been contained in the face of record high commodity prices.

Interest rates have been stable for several weeks. Although not a reversal from their up-trend the past few years, at least the northerly moving cycle has been disrupted. The stock market has shown its support of this disruption with its bullish behavior.

A stable economy with minor up and down fluctuations will foster a continuation of this tame bull. The rising productivity and technological capabilities from rising numbers of capitalists on this planet will contribute to tame pricing. The cost of raw materials will continue to rise, but the rising productivity will offset the rising cost of raw materials.

This economic fundamental, coupled with technical stock market phenomena, fosters bullish expectations in 2007. The technical influences on a bullish stock market for 2007 are indeed promising. The pre-election year is the most bullish on the four-year cycle.

The last bearish pre-election year was in 1939. The market fell by a scant 2.9% then. Of the sixteen presidential pre-election years since then, only four delivered less than double-digit gains. The last four pre-election years delivered gains of 20.3%, 33.5%, 25.2%, and 25.3%. Expect gains in the presidential pre-election year in 2007.

However, do not assume this bullishness as automatic. The pre-election year of 1933 endured a 52.7% bearish cycle. Blind believers of the presidential pre-election year phenomenon endured significant and life-changing financial grief. The stock market never provides a consistently predictable pattern. Every now and then it will twist off pre-defined patterns.

The idea here is to take a bullish view for 2007. However, do not do this blindly. None of you wants to endure a 50% decline in your portfolio. The odds support this bullish view. A $10,000 investment in 1832 in the stock market only in the presidential pre-election year was worth $283,810 at the end of 2003; the last presidential pre-election year. A similar $10,000 investment made only in the post election years was worth $8,758 at the end of 2005. In other words over the past 150+ years, a $10,000 investment is worth less when invested only in presidential post-election years.

The Quick-term Indicant will keep you posted on the market’s conformance to expectations and help you avoid any unfavorable surprises.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 33-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 11.9% since the Mid-term Indicant signaled sell an average of 18.7-weeks ago.

There were 50-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 17.7% since their respective sell signals an average of 24.8-weeks earlier. Two years ago, on November 19, 2004, the Mid-term Indicant was avoiding 16-stocks and funds that were down an average of 45.4% since their respective sell signals an average of 55.5-weeks earlier. Three years ago on November 15, 2003, there were only 22-avoided stocks and funds. They were down 24.3% from their respective sell signals an average of 33.3-weeks earlier. On November 16, 2002, the Mid-term Indicant was avoiding 23-stocks and funds out of 296-tracked. They were down by an average of 22.4% since their sell signals an average of 14.1-weeks earlier.

In addition to the buy signal this weekend, the Mid-term Indicant is signaling hold for 310 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 109.7%. That annualizes to 68.9%. The Mid-term Indicant has been signaling hold for these 310-stocks and funds for an average of 82.8-weeks.

One year ago on November 18, 2005, the Mid-term Indicant was holding 265-stocks and funds out of the 320 tracked at that time for an average of 80.7-weeks. Those 265-stocks and funds were up by an average of 94.6% (annualized at 60.9%). The Mid-term Indicant was signaling hold for 299-stocks and funds of the 320-tracked two years ago on November 19, 2004. They were up by an average of 67.6% (annualized at 67.1%) since their respective buy signals an average of 55.5-weeks earlier. There were 264-stocks and funds with hold signals on November 15, 2003 since their buy signals an average of 31.9-weeks earlier. They were up 54.9% (annualized at 89.6%). The Indicant was only tracking 296 stocks and funds in 2002-2004. On November 16, 2002, the Mid-term Indicant was signaling hold for only 268-stocks and funds out of 296-tracked. They were up by an average of 14.4% (annualized at 88.5%) since their buy signals an average of 8.4-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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.

The Indicant Stock Market Report’s Secular Market Blend

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 69.4% from the last mid-term presidential election year bottom. The NASDAQ is up 119.5% since October 9, 2002. The S&P600, small caps, is up even more by 134.2% since October 9, 2002.

The NASDAQ is down 51.6% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 5.3% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years to establish a new high a few weeks ago. The S&P500 is down 8.3% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 106.4% and S&P500 by 9.0% to establish new weekly closing highs.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 has depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness. The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed follow-on bullish behavior due to this lack of demand with the exception of normal bullish expressions during the heart and soul of bullish seasonality in 2004 and 2005.

For example, the Dow fell 4.4% from January 31, 2004 through October 31, 2004. The NASDAQ fell by the same amount. The Dow fell 0.5% from January 31, 2005 through October 31, 2005, while the NASDAQ was up only 2.8%. Since January 31, 2006, the Dow is up 13.6%. The NASDAQ is up 6.1% and the S&P500 is up 9.5%. The market was not bullishly expressive after the heart and soul of bullish seasonality in 2004 and 2005. Recent bullish expressions have demonstrated little respect for historical normalcy. The Quick-term Indicant is currently suggesting the mid-term election year bottom is behind us.

Since August 18, 2006, the Mid-term Indicant generated 140-buy signals and only five sell signals. That is an unusually high number of buy signals when considering historical seasonal market influences. However, all Indicant models supported this recent buying surge just as they did in October 2002 and March 2003.

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

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

Stop Loss Management

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

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue to flatten, but not yet moving in a dynamic and bullishly favorable direction to the south. A strong southerly movement in next year’s pre-election year would be consistent with historical standards. That would propel the stock market much higher.

The U.S. dollar continues to weaken. Even though that is unfavorable to foreign economies, it remains a favorable consideration for U.S. markets.

Commodity prices continue to be a major concern. Their prices are not falling, which depresses interest rate reduction activities. They continue to support inflationary threats. International productivity is helping hold costs in line as the rising number of capitalists are more efficiently consuming natural resources. The problem with commodities is their finiteness. The ultimate supply of commodities is constant while the demand continues to increase. Thus the rising prices.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-four weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 299.0%. The current annualized growth rate since the April 13, 2001 buy signal is 52.7%. After moving to the north the past five weeks, this fund fell sharply last week.

Fidelity Gold, Fund #28, is up 39.0% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 31.3%. This fund moved sharply to the south after moving solidly to the north in the previous three weeks.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 252.4% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 58.5%. This fund has been a meanderer the past two weeks with falling oil prices.

Vanguard Energy #18, VGENX, is up 174.4% (annualized at 47.5%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 125.1% (annualized at 41.8%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 124.4% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 37.7%. These energy related funds are also being threatened with declining oil prices.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 41.9% since then. It is annualized at 32.0%. Its bullish position is being threatened on a Quick-term Indicant basis.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 165.6% (annualized at 44.8%). This fund is also being threatened by declining oil prices.

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

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

All ten major indices are bulls. They are up by an average of 27.6% since the Mid-term Indicant signaled bull an average of 84-weeks ago. That annualizes to 17.0%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $37,388,572. That beats buy and hold performance of $1,887,767 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $180,915. That beats buy and hold’s $137,251 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $204,647 that beats buy and hold’s $84,808 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,880.6%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

The market has delivered bullish convergence in three of the past five weeks. Although this is not the desired four consecutive weeks, this is a solidly bullish attribute. The divergent behavior is due to the bearish energy sector. This attribute does not detract from the bull’s potential yield. The energy sector is up significantly since the summer of 2002. Strong bearish behavior in the energy sector would be bullish for the other sectors assuming stable economic conditions.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 326.4% (annualized at 21.6%) since the Long-term Indicant signaled bull 785-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-eight; increasingly solid bullish support.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

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

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

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

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

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

Nothing has changed the past few days/weeks. Both Indicant Volume Indicator’s continue supporting sustainable bullishness.

The Dow is up 7.3% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 10.4% since the Short-term Indicant signaled bull on the same day. They are annualizing at 40.6% and 57.4%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 56.6% (annualized at 32.9%) since their respective buy signals an average of 88.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 58.2% (annualized 35.1%) since the STI signaled, buy, an average of 85.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 11.8% (annualized at 27.7%) since the QTI signaled buy an average of 21.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

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

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 10.8%. This is increasing the market’s non-bearish posture.

Twenty-eight ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 3.9% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

Six of the non-contrarian-ETF’s are contacting their breakout lines. As stated the past several days, a high concentration of contact the past few weeks is solidly bullish. Contact the past four days is bullishly biased with gusto.

The average distance from breakout contact is at a miniscule 2.4%, which is not a great distance to take to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 19.4%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Twenty of the ETF Force Vectors are in bullish domains. Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market. However, this is a steady bull to be enjoyed.

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 buy signal for ETF#11-GOLD. It is not strongly configured for dynamic bearishness. This is a contrarian ETF and can endure significant bearish cycles during a bullish stock market.

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 pocket book. Do not despair if your order does not take. There are plenty of opportunities throughout the course of the year. Remember, stalking is the key to success here. Although not necessary for stock market success, those of you who have a gambling instinct will enjoy this. For those of you with a longer-term perspective, it does not hurt to see what the short-term folks are thinking. The Indicant indicates both perspectives.

Quick-term and Short-term Indicant Summary

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

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

As stated last week, the commodities market continues to act somewhat as a depressant to the stock market bull. That, along with a non-bearish mid-term election year configuration, has stabilized the overall stock market. The lack of bearish magnitude prevented the bull from catapulting off of a typical mid-term election year market bottom. However, a tame bull should be appreciated. They tend to live a longer life although not as exciting as a volatile or dynamic bull.

The market is conforming perfectly to the heart and soul of bullish seasonality. A bull is a bull, regardless of magnitude. This particular one is simply not as exciting as others, but a bull nonetheless.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/19/06

Nov 12, 2006 Indicant Weekly Stock Market Report

Volume 11, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

The Lazy Bull Was Just Resting

Contrary to what you read this last week in the press, the market had no reaction to the mid-term election. The press needs to fill white space, sensationalize, etc.

Here are the facts. The stock market has a higher propensity for bullishness with a gridlocked government. Historical data supports this. The market does not care which party is in power, as neither political party contributes to the economy. Politicians act as a depressant to the economy.

Bullish behavior is more pronounced when different political parties represent the executive and the legislative branches of government. This was exceedingly pronounced in the 1990’s with a democratic president and a republican congress. However, this relationship between a bullish stock market and a gridlocked government has over 100-years of statistical support.

The market is still enjoying the heart and soul of bullish seasonality. That typically lasts through January. Next year is the presidential pre-election year, which is historically the most bullish on the four-year cycle. Commodity prices appear to be stabilizing. Interest rates appear to be at a peak. Economic conditions support a relaxed posture on future interest rates. These attributes, along with a gridlocked government, support bullish behavior in 2007.

Weekly Buy/Sell Summary – Stocks and Funds

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

Although there were no sell signals, the Mid-term Indicant is avoiding only 33-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 11.8% since the Mid-term Indicant signaled sell an average of 24.1-weeks ago.

There were 60-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 16.1% since their respective sell signals an average of 25.5-weeks earlier. Two years ago, on November 11, 2004, the Mid-term Indicant was avoiding 17-stocks and funds that were down an average of 45.6% since their respective sell signals an average of 54.6-weeks earlier. Three years ago on November 8, 2003, there were only 23-avoided stocks and funds. They were down 24.5% from their respective sell signals an average of 32.6-weeks earlier. On November 9, 2002, the Mid-term Indicant was avoiding 21-stocks and funds out of 295-tracked. They were down by an average of 25.4% since their sell signals an average of 13.9-weeks earlier.

Although there were no buy signals this weekend, the Mid-term Indicant is signaling hold for 310 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 103.5%. That annualizes to 65.8%. The Mid-term Indicant has been signaling hold for these 310-stocks and funds for an average of 81.8-weeks.

One year ago on November 11, 2005, the Mid-term Indicant was holding 253-stocks and funds out of the 320 tracked at that time for an average of 82.9-weeks. Those 253-stocks and funds were up by an average of 93.4% (annualized at 58.6%). The Mid-term Indicant was signaling hold for 297-stocks and funds of the 320 tracked two years ago on November 12, 2004. They were up by an average of 68.7% (annualized at 69.1%) since their respective buy signals an average of 51.7-weeks earlier. There were 267-stocks and funds with hold signals on November 8, 2003 since their buy signals an average of 32.6-weeks earlier. They were up 55.3% (annualized at 93.6%). The Indicant was only tracking 296 stocks and funds in 2002-2004. On November 9, 2002, the Mid-term Indicant was signaling hold for only 249-stocks and funds out of 296-tracked. They were up by an average of 12.7% (annualized at 74.8%) since their buy signals an average of 8.9-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year. Deep bearish seasonality was not influential this year. Bullish bias was obviated just ahead of the historically significant deep bearish seasonality in this mid-term election year.

The market synchronized with near perfection to normal seasonality in the mid-term election year of 2002. The rolling half of May-October 2002 is typically bearish. The 2002 seasonal bear leg was dynamic and configured perfectly to historical standards, although the depth of that bearish cycle was deeper than normal.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 66.2% from the last mid-term presidential election year bottom. The NASDAQ is up 114.5% since October 9, 2002. The S&P600, small caps, is up even more by 129.4% since October 9, 2002.

The NASDAQ is down 52.7% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 3.3% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years to establish a new high a few weeks ago. The S&P500 is down 9.6% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 111.3% and S&P500 by 10.5% to establish new weekly closing highs.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 has depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness. The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed follow-on bullish behavior due to this lack of demand with the exception of normal bullish expressions during the heart and soul of bullish seasonality in 2004 and 2005.

For example, the Dow fell 4.4% from January 31, 2004 through October 31, 2004. The NASDAQ fell by the same amount. The Dow fell 0.5% from January 31, 2005 through October 31, 2005, while the NASDAQ was up only 2.8%. Since January 31, 2006, the Dow is up 11.4% and the NASDAQ is up 3.6% and the S&P500 is up 7.9%. The market was not bullishly expressive after the heart and soul of bullish seasonality in 2004 and 2005. Recent bullish expressions have demonstrated little respect for historical normalcy. The Quick-term Indicant is currently suggesting the mid-term election year bottom is behind us.

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

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

Stop Loss Management

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

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Commodities discontinued their unsettling rise but nowhere near cycling in favor of stocks desiring bullish behavior. Interest rates continue to waiver, but not galloping to the south. Inflationary pressures continue to threaten. Regardless of a lack of bullishly supporting fundamentals, the market continues to reveal its tradition of bullishness during the heart and soul of bullish seasonality.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-three weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 321.5%. The current annualized growth rate since the April 13, 2001 buy signal is 56.8%. After moving south in three of the past eight weeks, it moved solidly to the north the past five weeks.

Fidelity Gold, Fund #28, is up 44.5% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 36.3%. This fund moved solidly to the north the past three weeks with a general rise in commodity prices.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 254.7% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 59.3%. This fund moved mildly north last week.

Vanguard Energy #18, VGENX, is up 177.5% (annualized at 48.5%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 125.7% (annualized at 42.3%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 124.0% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 37.8%. These energy related funds moved solidly to the north in the four of the last five weeks.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 43.6% since then. It is annualized at 33.8%.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 167.2% (annualized at 45.4%).

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

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

All ten major indices are bulls. They are up by an average of 25.3% since the Mid-term Indicant signaled bull an average of 83-weeks ago. That annualizes to 15.8%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $36,679,337. That beats buy and hold performance of $1,852,147 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $178,294. That beats buy and hold’s $135,263 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $199,950 that beats buy and hold’s $82,861 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,879.0%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

The market has delivered bullish convergence in three of the past four weeks. Although this is not the desired four consecutive weeks, this is a solidly bullish attribute. Enjoy.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant is now avoiding ProFunds Ultra Short. It is down 7.5% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 318.3% (annualized at 21.1%) since the Long-term Indicant signaled bull 784-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine; increasingly solid bullish support.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

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

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

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

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

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

Both Indicant Volume Indicator’s continue supporting sustainable bullishness. This configuration is displaying increased robustness in support of bullish sustainability. As stated yesterday, ignore the news about the election’s influence on the market. Politicians never add to corporate income. They can subtract from it, but the market knows that is not going to occur in the next six to ten months. Therefore, enjoy this bullish seasonal period.

The Dow is up 5.3% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 7.8% since the Short-term Indicant signaled bull on the same day. They are annualizing at 32.8% and 48.6%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 54.6% (annualized at 32.2%) since their respective buy signals an average of 87.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 56.4% (annualized 34.4%) since the STI signaled, buy, an average of 84.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 10.4% (annualized at 25.5%) since the QTI signaled buy an average of 20.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

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

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 9.8%. This is increasing the market’s non-bearish posture.

Twenty-nine ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 3.0% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

Two of the non-contrarian-ETF’s are contacting their breakout lines. As stated the past several days, a high concentration of contact the past few weeks is solidly bullish.

The average distance from breakout contact is at a miniscule 3.0%, which is not a great distance to take to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 18.7%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Twenty-five of the ETF Force Vectors are in bullish domains. That is a tremendous increase since yesterday, highlighting increasing bullish bias. Force Vector behavior has not offered any robust cycles in the past several months. That is one reason for this somewhat tame Quick-term Bull market.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals today for the second consecutive day.

All thirty ETF Vector Pressures are in bullish domains, which supports a bullish bias. Positive Vector Pressure guards against bearish dominance. Positive Vector Pressure continues to hold and increasing its support of bullish bias. This number has been holding at this level with minimal shifts since mid-August, highlighting its continued support of the underlying Quick-term bullish bias.

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

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 pocket book. Do not despair if your order does not take. There are plenty of opportunities throughout the course of the year. Remember, stalking is the key to success here. Although not necessary for stock market success, those of you who have a gambling instinct will enjoy this. For those of you with a longer-term perspective, it does not hurt to see what the short-term folks are thinking. The Indicant indicates both perspectives.

Quick-term and Short-term Indicant Summary

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

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

The commodities market continues to act somewhat as a depressant to the stock market bull. That, along with a non-bearish mid-term election year configuration has stabilized the overall stock market. The lack of bearish magnitude prevented the bull from catapulting off of a market bottom.

The market, however, is conforming perfectly to the heart and soul of bullish seasonality. A bull is a bull, regardless of magnitude. This particular one is simply not as exciting as others.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/12/06

Nov 05, 2006 Indicant Weekly Stock Market Report

Dear Indicant Members:

This Week’s Report

Lazy Bull Continues

Several weeks ago, economic fundamentals appeared shifting in favor of supporting a sustainable bullish stock market. Such sustainable behavior would be consistent with historical standards. The heart and soul of bullish seasonality generally performs as expected without regard to any fundamental reason. It even performed to expectations in 2001 when it had plenty of reasons to disappoint. We are now in the midst of the heart and soul of bullish seasonality. However, economic fundamentals are threatening that sustainability.

As you can see, by clicking the following link, Gold, Oil, and the CRB Bridge Futures rebounded to the north the past two weeks. Oil and the CRB Bridge Futures both remain in bearish domains. Their movement to the north has unsettled a bullish stock market. This movement is not the lone causative factor of last week’s stock market bearishness. The stock market seldom parallels unfavorable factors. However, the stock market is concerned about the mid-term cycle and trend. It is disappointed there is not a more pronounced favorable movement in these factors.

http://www.indicant.net/Members/Updates/Economic/E03.htm

You will notice the Reuter U.K. commodities futures remains in bullish domains to the extent it is nowhere near reversing its unfavorable cycle. A sustainable bull into the normally bullish pre-election year requires at least a pause in commodity prices. That pause is expected. Without such a pause, the market knows the Federal Reserve Board will continue to tighten money or inflationary threats will ensue. The stock market does not like either of those two phenomena.

This lazy bull has created some havoc on some recent buy signals. This can be a little frustrating, as the most dangerous time to own a stock is just after buying it. Several recent buy signals are down by seven to nine percent. However, configurations suggest this is temporary and those stocks should catapult to the north in the next few weeks. Let’s review one as an example.

NAS#05, Check Free, moved south just after receiving a Mid-term Indicant buy signal. Configurations suggest this stock should turn north, even though it has fallen below its long-term trend line. Seasonality is favorable to stocks, such as this one, to rebound. Click the following link to view its chart.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS01.htm#5

Keep in mind, the heart and soul of bullish seasonality is a very powerful and a consistent stock market timing phenomena. Even with last week’s mild bearishness, the Quick-term Indicant’s attributes indicated a strengthening bull. Until, the Quick-term Indicant suggests otherwise, assume sustainable bullish bias in the stock market.

Weekly Buy/Sell Summary – Stocks and Funds

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

In addition to the sell signal, the Mid-term Indicant is avoiding only 33-stocks and funds of the 345 tracked by the Indicant. The avoided stocks and funds are down an average of 13.7% since the Mid-term Indicant signaled sell an average of 23.9-weeks ago.

There were 60-stocks and funds avoided at this time last year. The avoided stocks and funds one year ago were down an average of 17.2% since their respective sell signals an average of 28.7-weeks earlier. Two years ago, on November 5, 2004, the Mid-term Indicant was avoiding 21-stocks and funds that were down an average of 41.0% since their respective sell signals an average of 53.7-weeks earlier. Three years ago on November 1, 2003, there were only 25-avoided stocks and funds. They were down 23.9% from their respective sell signals an average of 31.6-weeks earlier. On November 2, 2002, the Mid-term Indicant was avoiding 38-stocks and funds out of 295-tracked. They were down by an average of 29.6% since their sell signals an average of 19.1-weeks earlier.

Although there were no buy signals this weekend, the Mid-term Indicant is signaling hold for 310 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 102.8%. That annualizes to 66.1%. The Mid-term Indicant has been signaling hold for these 310-stocks and funds for an average of 80.8-weeks.

One year ago on November 4, 2005, the Mid-term Indicant was holding 209-stocks and funds out of the 320 tracked at that time for an average of 103.6-weeks. Those 209-stocks and funds were up by an average of 113.6% (annualized at 57.0%). The Mid-term Indicant was signaling hold for 277-stocks and funds of the 296 tracked two years ago on November 4, 2004. They were up by an average of 69.8% (annualized at 67.7%) since their respective buy signals an average of 53.6-weeks earlier. There were 261-stocks and funds with hold signals on November 1, 2003 since their buy signals an average of 30.4-weeks earlier. They were up 54.5% (annualized at 93.4%). The Indicant was only tracking 296 stocks and funds in 2002-2004. On November 2, 2002, the Mid-term Indicant was signaling hold for only 211-stocks and funds out of 295-tracked. They were up by an average of 16.9% (annualized at 88.4%) since their buy signals an average of 10.0-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report.

The Indicant Stock Market Report’s Secular Market Blend

The current Mid-term Bull market and buying barrage started in late 2002. The mid-term election year of 2002 conformed perfectly to historical standards with deep bearish expressions. The stock market was a meandering bear from February through mid-August on this mid-term election year. Deep bearish seasonality was not influential this year. Bullish bias was obviated just ahead of the historically significant deep bearish seasonality in this mid-term election year.

The market synchronized with near perfection to normal seasonality in 2002. The rolling half of May-October is typically bearish. The 2002 seasonal bear leg was dynamic and configured perfectly to historical standards, although the depth of that bearish cycle was deeper than normal.

The current mid-term election year of 2006, fundamentally, supported historical standards for the first two thirds of this year. As of mid-August 2006, hard economic fundamentals shifted in support of a bullish onslaught for the heart and soul of bullish seasonality and the normally bullish presidential pre-election year of 2007. The Quick-term Indicant has been supporting this bullish bias since August 15, 2006.

The Dow30 found bottom in the last presidential mid-term election year on October 9, 2002 at 7,286.27. The NASDAQ found bottom on the same day at 1114.11. Finding cyclical bottoms in mid-term election years is common. Fortunately, the bottom of 2006, so far, was minimal and not sharp when compared to that of 2002. The Dow is up 64.5% from the last mid-term presidential election year bottom. The NASDAQ is up 109.2% since October 9, 2002. The S&P600, small caps, is up even more by 124.8% since October 9, 2002.

The NASDAQ is down 53.8% from its historical high of 5048.62 on March 9, 2000. The Dow is up by 2.2% from its previous week-ending historical high of 11723 on January 13, 2000. It took over five-and-a-half years to establish a new high a few weeks ago. The S&P500 is down 10.7% since its all time high of March 23, 2000. So far, the new century, 2000 inclusive, has not been kind to long-term investors. The NASDAQ needs to climb 116.6% and S&P500 by 12.0% to establish new weekly closing highs.

Economic or corporate earnings fundamentals did not support the stock market’s meteoric rise in the 1990’s in many sectors. Unprecedented demand for stocks skewed the supply-demand ratio and thus the powerful bull leg of the 1990’s enjoyed sustainability. The simple law of supply and demand propelled stock prices dynamically to the north in the 1990’s. The great bear leg of 2001 and 2002 has depressed those prior sources of demand for at least one generation of investors. The market now has to wait for a new generation of investors to enjoy dynamic secular bullishness. The great bull leg of 2003 was a relatively short bull cycle that has not enjoyed follow-on bullish behavior due to this lack of demand with the exception of normal bullish expressions during the heart and soul of bullish seasonality in 2004 and 2005.

For example, the Dow fell 4.4% from January 31, 2004 through October 31, 2004. The NASDAQ fell by the same amount. The Dow fell 0.5% from January 31, 2005 through October 31, 2005, while the NASDAQ was up only 2.8%. Since January 31, 2006, the Dow is up 10.3% and the NASDAQ is up 1.1% and the S&P500 is up 6.6%. The market was not bullishly expressive after the heart and soul of bullish seasonality in 2004 and 2005. Recent bullish expressions have demonstrated little respect for historical normalcy. The Quick-term Indicant is currently suggesting the mid-term election year bottom is behind us.

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

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

Stop Loss Management

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

Stock and Fund Update

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Some of the commodity prices rose for the third consecutive week, unfavorably to a bullish stock market. This is one reason for a lackluster bull, but the bull remains in tact.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% two-hundred and twenty-three weeks ago since the MTI buy signal on April 13, 2001. Last week it closed up 311.0%. The current annualized growth rate since the April 13, 2001 buy signal is 55.1%. After moving south in three of the past seven weeks, it moved solidly to the north the past four weeks.

Fidelity Gold, Fund #28, is up 40.4% since the Mid-term Indicant signaled buy on August 26, 2005. That annualizes to 33.5%. This fund moved solidly to the north the past two weeks with a general rise in commodity prices.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 253.8% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 59.3%. This fund also moved south last week after moving solidly to the north in the previous three weeks.

Vanguard Energy #18, VGENX, is up 171.5% (annualized at 47.2%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 123.5% (annualized at 41.8%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 121.2% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 37.1%. These energy related funds were mixed last week after moving solidly to the north in the previous three weeks.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 43.1% since then. It is annualized at 34.0%.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 162.8% (annualized at 44.5%).

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

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

All ten major indices are bulls. They are up by an average of 23.0% since the Mid-term Indicant signaled bull an average of 82-weeks ago. That annualizes to 14.6%, which is down significantly from the past three years. This is due to the bear signals for the S&P400 and S&P600 Indexes on July 21, 2006, which had been receiving a bull signal since October 25, 2002. Those two indices endured some fluttering after the expiration of the tremendous bull leg that lasted nearly four years. A new bull leg is underway and may proceed just as vigorously for these two indices as the bull leg from October 2002 through July 2006.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $36,308,588. That beats buy and hold performance of $1,833,527 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $176,150. That beats buy and hold’s $133,637 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $195,019 that beats buy and hold’s $80,818 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,879.0%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

Divergence versus Convergence

After enjoying bullish convergence the past three weeks, the market demonstrated bearish divergence last week. That does not mean the market is about to become bearish, but it does demonstrate a lazy bull. Bullish convergence for four or more weeks provides greater breadth to bullish sustainability. The market has not enjoyed four or more weeks of bullish convergence since early 2003.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 314.1% (annualized at 20.9%) since the Long-term Indicant signaled bull 783-weeks ago. Economic data is the primary influence on the Long-term Indicant. The recession, deflation, and inflation have not been strong enough to signal bear. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Twenty-nine; increasingly solid bullish support.

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

Force Vectors: Solid support for sustainable bullish behavior.

Vector Pressure: Showing significant resistance to bearish influence.

Long-term Hold Positions: Solidly safe.

Current Quick-term Bias: Bullish.

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

Profit Potential from Naked Options: Minimal due to the absence of volatility.

Volume: Configurations support bullish bias.

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

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

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

Both Indicant Volume Indicator’s continue supporting sustainable bullishness. Light volume on mild bearishness the past three days is insignificant.

The Dow is up 4.2% since the Short-term Indicant signaled bull on September 12, 2006 for both the Dow and NASDAQ. The NASDAQ is up 5.2% since the Short-term Indicant signaled bull on the same day. They are annualizing at 29.8% and 36.4%, respectively, on the current short-term bullish cycle. Click here to see the Short-term Indicant’s history.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up 52.7% (annualized at 31.4%) since their respective buy signals an average of 86.3-weeks ago. The SQI is not avoiding any of the 30-ETF’s.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 54.3% (annualized 33.6%) since the STI signaled, buy, an average of 83.3-weeks ago. The STI is not avoiding any of the 30-ETF’s.

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

Quick-term Report Card, Status, and Charts

There were no buy signal and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 8.8% (annualized at 22.7%) since the QTI signaled buy an average of 19.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time, including the contrarians.

Conflicts Between the Short-term and Quick-term Indicants

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

Quick-term Indicant Bull/Bear Health Report

None of the 30-ETF’s are below their bearish yellow curves. The average position of all thirty ETF’s is above bearish yellow by 8.6%. This is increasing the market’s non-bearish posture.

Twenty-nine ETF’s are above their respective bullish red curves, which is an exceedingly healthy bullish attribute.

All thirty ETF average positions are 1.9% above their bullish red curves. This attribute is solidly bullish on a Quick-term Indicant basis.

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

One non-contrarian-ETF is contacting its breakout line. Recent contact has been prevalent and continuing to support bullish bias.

The average distance from breakout contact is at a miniscule 4.2%, which is not a great distance to take to find an area friendly for bullish exuberance.

The average distance from the price and breakdown is 17.4%. This configuration provides tremendous non-bearish support, which has been the case since March 2003. The probability of immediate contact remains low and thus a non-bearish bias is maintained on a short-term basis.

This attribute remains solidly non-bearish.

ETF Force Vector Configurations

Three of the ETF Force Vectors are in bullish domains. Although down significantly the past few days, configurations support bullish bias. Recent bearish expressions are merely a microscopic reflection of selling overbought conditions.

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 for the twenty-second consecutive trading day. Although the market has been bullish, it is not dynamically so. It is just a simple steady bull with less magnitudes of follow-on bearishness , which is not favorable to naked options plays. Time premiums require volatility, which has been absent most of this year.

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 pocket book. Do not despair if your order does not take. There are plenty of opportunities throughout the course of the year. Remember, stalking is the key to success here. Although not necessary for stock market success, those of you who have a gambling instinct will enjoy this. For those of you with a longer-term perspective, it does not hurt to see what the short-term folks are thinking. The Indicant indicates both perspectives.

Quick-term and Short-term Indicant Summary

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

The Quick-term Bull remains in tact with an increasing probability of strengthening.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Indicant Conclusion

As stated last week, the reason for the passive nature of this Quick-term Bull Market is due to a lack of bearish commitment in the commodities market. After appearing to have pinnacled, some commodities zoomed to new heights the past two weeks. The stock market does not care about that, but there is little doubt the stock market is recalibrating its six to nine-month outlook.

Interestingly, this sort of behavior by the commodities would normally perpetuate a bearish bias; especially if the stock market projected sustainable bullishness by the commodities. However, the stock market has been holding its bullish bias in the face of this surge in commodity prices. The heart and soul of bullish seasonality is helping shore up the underlying bullish bias. If commodity prices continue to misbehave, do not be surprised at pronounced bearishness at the conclusion of the current bullish cycle.

The Quick-term Indicant remains solidly in support of the bullish stock market.

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/05/06