November
25, 2007 Indicant Weekly Stock Market Report
Volume 11, Issue 04 ISSN 1526 6516 © The
Indicant Stock Market Report
This Week’s
Report
Special
Announcement
In
anticipation of the impending bear market, the daily stock market report
will track a purely contrarian exchange traded fund. Its charts can be
viewed by clicking the links in the first sentence of the following
paragraph.
The
Quick-term,
Short-term, and
Consolidated Quick-Short Indicant models are now tracking ETF #31. It
is QID, which moves bearishly during bull markets and bullishly during
bear markets. Although this ETF is relatively new, it has developed enough
history for the daily stock market report to track. Charts of QID can be
viewed by clicking the links in the previous sentence.
QID
configurations and attributes will not be included in the ETF performance
statistics and summaries. This fund is specifically deigned to be
completely contrarian to the overall stock market and specifically to the
QQQQ, ETF#01. The nature of its design, if included, would distort
convergent and divergent economic and stock market synergies. Therefore,
its performance summary will stand-alone.
ETF#31 is a
cousin to
Profunds Ultra Short, which is tracked by the Mid-term Indicant.
The Market
Finds Unfavorable Economic Conditions
Although the
market is sometimes wrong, it appears to have evaluated several changing
attributes as unfavorable. Rising oil prices continues to threaten
inflationary concerns. The plummeting strength of the U.S. Dollar adds to
inflationary concerns.
The market is
not impressed with rapidly declining interest rates. That will further
weaken the dollar. The fastest solution to rising energy costs is to
decrease demand. Reducing interest rates will prop up demand, which fuels
inflationary concerns.
As repeatedly
stated the market does not like inflation, deflation, economic recession,
or corporate incompetence. Deflation is not a concern at this time.
Inflation and economic recession both confront the stock market. Bigger
portions of consumer’s personal budgets are allocated to energy. This
depresses demand for other consumer products. The producer’s of those
other products are projected to endure reduced production volumes. That,
coupled with rising energy costs, will depress corporate profitability.
Six of the ten
major indices tracked by the Mid-term Indicant are now signaling bear.
The Mid-term
Indicant signaled bear this past weekend for another major index. The
S&P400, Mid-caps, fell victim to bearish behavior. This index fell below
the Mid-term Indicant Trip Line, the bullish red curve, and the lower
trading range limit. Click the below link to view its chart.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-09-SP400-Curr.htm
The Dow is
down 0.5% since its bear signal on November 9, 2007. It has yet to rebound
sufficiently, at the very least, to induce fluttering. It increased by 25%
in its previous bullish cycle from November 5, 2004 to its recent bear
signal. Click the below link to see it.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-01-DJIA-Curr.htm
The S&P500
Index increased 18.1% in its previous bull cycle from November 4, 2005
until its bear signal on November 9, 2007. It is now down 0.9% since that
recent bear signal.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-02-SP500-Curr.htm
Encouragingly, the NASDAQ has yet to endure a bear signal. It is up 33.7%
since its last Mid-term Indicant signal on October 1, 2004. As you can see
from the below link, that bull cycle is barely surviving.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-03-NASDAQ%20Curr.htm
The S&P100,
which represents the largest of the large caps, nearly fluttered back to
bull status two weeks ago, but also succumbed to bearish influences last
week. It is down 0.3% since its bear signal on November 9, 2007.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-04-SP100-Curr.htm
The
NASDAQ100, which relates directly to the QQQQ, has resisted falling to
bearish status, but also nearing that condition. It is up 39.6% since its
bull signal on October 1, 2004.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-05-NAS100-Curr.htm
Rising energy
cost took its toll on the Dow Jones Transports. It is down 5.3% since its
bear signal on November 9, 2007. It was up 57.0% from its previous bull
cycle from March 26, 2004 through its recent bear signal.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-06-DJT-Curr.htm
The Dow
Utilities, which has been the strongest index since October 2002, is up
25.9% since its last signal on June 26, 2006. As you can see from the
below link, it is resisting recent bearish ambition.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-07-DJU-Curr.htm
The Dow
Composites will receive a bear signal next week if the overall market is
bearish. It is the last index holding the original secular bull signal
date of October 25, 2002. It is up 83.4% since then; mostly on the
strength of the Dow Utilities.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-08-DJC-Curr.htm
The Small
Caps is the most volatile index. It has moved bearishly the most since its
previous peak. It is down 1.9% since its bear signal on November 9, 2007.
http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-10-S&P600-Curr.htm
Four of the
past five weeks have endured a combination of bearish convergence or
bearish divergence. Four consecutive weeks of bearish convergence not only
suggests bearish sustainability, it also is a leading indicator to
economic recession.
The market
can be wrong. There may not be a recession. There may not be reduced
corporate earnings. There may not be inflation. However, right now, it
sees any one or a combination of all three.
Speculation
is not necessary. Keep your eye on the daily stock market report.
Weekly
Buy/Sell Summary – Stocks and Funds
Click this sentence for a graphical summary of what follows. Simply
scroll down the page to see detail content of this section.
The Mid-term
Indicant generated no buy signals and sixteen sell signals.
In addition
to the sell signals, the Mid-term
Indicant is avoiding 92-stocks and funds of the 345- tracked by the
Indicant. The avoided stocks and funds are down an average of 13.3% since
the Mid-term Indicant signaled sell an average of 16.9-weeks ago.
There were
only 31-stocks and funds avoided at this time last year. Those avoided
stocks and funds were down an average of 12.4% since their respective sell
signals an average of 19.2-weeks earlier.
Two years ago,
on Nov 25, 2005, the Mid-term Indicant was avoiding 51-stocks and funds
that were down an average of 16.5% since their respective sell signals an
average of 25.8-weeks earlier. Three years ago on Nov 26, 2004 there were
19-avoided stocks and funds. They were down by an average of 43.4% from
their respective sell signals an average of 54.8-weeks earlier. On Nov 22,
2003, the Mid-term Indicant was avoiding only 29-stocks and funds out of
296-tracked at that time. They were down by an average of 25.2% since
their sell signals an average of 33.8-weeks earlier. As you can see, there
were very few avoided stocks in the previous presidential election year of
2003. Five years ago on Nov 23, 2002, there were 11-avoided stocks and
funds. They were down an average of 30.5% since their respective sell
signals an average of 21.8-weeks earlier.
Although
there were no buy signals, the Mid-term Indicant is signaling hold for 237 of the 345-stocks and
funds tracked by the Indicant. The stocks and funds with hold signals are
up an average of 145.2%. That annualizes to 58.6%. The Mid-term Indicant
has been signaling hold for these 237-stocks and funds for an average of
128.9-weeks.
One year ago,
on Nov 24, 2006, the Mid-term Indicant was holding 311-stocks and funds
out of the 345 tracked for an average of 83.5-weeks. Those 311-stocks and
funds were up by an average of 107.6% (annualized at 67.0%). The Mid-term
Indicant was signaling hold for 269-stocks and funds of the 320-tracked
two years ago on Nov 25, 2005. They were up by an average of 97.3%
(annualized at 62.5%) since their respective buy signals an average of
80.9-weeks earlier. There were 301-stocks and funds with hold signals on
Nov 26, 2004 since their buy signals an average of 53.1-weeks earlier.
They were up by an average of 70.4% (annualized at 68.9%).
The Indicant
was only tracking 296-stocks and funds in 2002-2003, and early 2004. On
Nov 22, 2003, the Mid-term Indicant was signaling hold for 262-stocks and
funds out of 296-tracked. They were up by an average of 51.7% (annualized
at 79.9%) since their buy signals an average of 33.6-weeks earlier. Five
years ago, on Nov 23, 2002, there were 268-hold signals for stocks and
funds out of the 296 tracked by the Mid-term Indicant. They were up an
average of 20.9% (annualized at 115.0%) since their respective 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. These weekly reports are maintained on the website
for much longer periods. Beginning in March 2006, the daily stock market
report for the last trading day of each week is imbedded in this weekly
report. This allows web-based retention records of the daily report for
much longer than the last twelve months.
The Daily
Indicant Stock Market Report for the last trading day of the current week
is near the conclusion of this weekly stock market report. It is emailed
each weekend, separately, so you can read it, either as a separate
document, or in this document.
The
Indicant Stock Market Report’s Secular Market Blend
The Dow is up
78.2% since its secular low on October 9, 2002. The NASDAQ is up 133.1%
and the S&P500 is up 85.5%. The small cap index, S&P600, is up 129.7%. The
secular bull that originated on October 9, 2002 no longer remains solid,
but it remains a bull in spite of recent bearishness.
The NASDAQ is
down 48.6% since its last weekly secular peak on March 9, 2000. The S&P500
is down 5.7% since its similar secular peak on March 23, 2000. The S&P500
recently set a new peak, but the old peak will be tracked until the NASDAQ
sets a new one. The Dow is up 10.7% since January 13, 2000 when it peaked
from the 1990’s roaring bull. It has expressed no timidity in roaming
above the new peak area, until recently. The NASDAQ needs to climb 94.4%
to achieve a new record high. Do not be surprised if this occurs after the
year, 2025.
The Dow is up
4.2% so far this year. The S&P500 is up 1.6% and the NASDAQ up 7.5%. At
this time last year, the Dow was up 15.0%, with the S&P500 up 12.6% and
the NASDAQ up 11.8%. With the exception of the NASDAQ, the major indices
remain behind last year’s year-to-date performance due to recent bearish
aggressions. The upper range trading limit has imposed an impenetrable lid
to bullish ambition.
The NASDAQ
YTD-2001 was down 23.0%. It was down 24.7% through this week of 2002. It
recovered with a gain of 41.8% by this weekend of 2003. After being down
most of the year due to the meandering bear market, the heart and soul of
bullish seasonality elevated it to being up by 4.0% on this weekend 2004.
At this time of year in 2005, it was up only by 3.9% due to the same
meandering bear from 2004. At this time last year, it was again up by
11.8%. This year, it is up 7.5%. As you can see, it is depressed this year
from the last presidential pre-election year of 2003.
As you can
see, the only years the NASDAQ has been up at this time of year has been
the presidential pre-election years (2003 and 2007) and last year’s
mid-term election year.
You will
notice the Dow endured less volatility than the NASDAQ this century. The
Dow was down 7.7% on this weekend in 2001. In 2002, it was down by 12.1%,
but with less severity than the NASDAQ’s 24.7% drop in 2002. In the last
presidential election year of 2003, the NASDAQ’s 41.8% rise delivered more
excitement than the Dow’s humble 15.4% increase.
Many of your
recall the meandering bear market in 2004 where the Dow was up a mere 0.4%
as the market concluded deep bearish seasonality. The meandering bear
continued through this week in 2005 with the Dow rising by a mere 1.2%. On
this weekend, the Dow was up 15.0% in 2006, which conflicted with
historical standards and seasonal normalcy. The Indicant stated the
bullish bias shift on August 15, 2006 obsoleted historical standards. More
than half that increased occurred from August 15, 2006. As previously
stated, so far this year, the Dow is up 4.2%, which is the third most
bullish year-to-date performance this century.
Since the
expiration of the heart and soul of bullish seasonality in late January
2007, the Dow is up 2.8%, while the NASDAQ is up 5.4% and the S&P500 is up
by 0.2%. Even with recent bearish behavior, all the major indices are up
since the expiration of the heart and soul of bullish seasonality in late
January of this year. This is a testament to the strength of the bull even
though it has undergone its third major bearish cycle of this year.
The Dow is up
15.6% since the Short-term and Quick-term Indicant signaled bias to bull
on August 16, 2006. The S&P500 and NASDAQ are up 12.1% and 22.8%,
respectively, since then.
Where is the
market headed for the remainder of this year? Keep your eye on the daily
stock market report.
Stop Loss
Management
The Mid-term
Indicant recommends a stop loss of 10% on recent buys due to the number of
Mid-term Indicant bear signals along with Quick-term Indicant limited
support for bullish bias.
Use a 10%
trailing stop loss or the yellow or green values you will find on the
tables for your longer-term hold positions. If your stock or fund is above
the bearish yellow curve and below the green curve, set your stop loss
equal to the greater of the yellow curve and the trailing stop loss. If
your stock or fund is above the green curve, set your stop loss at no less
the value of the green curve or 10% trailing, whichever is greater. If
your stock or fund is above the red curve and you bought at the Mid-term
Buy signal, you should use the 10% trailing stop loss.
If you are up
by triple digit amounts and enjoy your ownership of the stock or fund,
then use a 20% trailing stop loss or the slow moving blue curve price. If
you really enjoy holding the stock, keep a close eye on the management.
Dilettante managers have a way of worming into the business. Watch closely
for cronyism and lazy-hazy management dialog. Keep your eye on lavish
spending and excessive concerns about social issues. Those types are more
interested in burning your money for their pleasures, as opposed to making
you money. High performing companies remain focused on honoring the
investments made by their shareholders.
In a few
instances, you will see a hold signal for a stock or fund that is down
from its buy signal or below one of the above conditions for selling. If
you are more of a trader than an investor, feel free to buy stocks and
funds with those “bearish” attributes. They are configured for a possible
rebound, while at the same time, it is important to set the stop losses
mentioned in this report. Use the Quick-term Indicant as a guide in your
decision-making processes. If the stock price is falling in a Quick-term
Bear market, it is not advisable to buy.
Do not short
on stocks if they are up from an avoid signal. Stocks go up more often
than they go down. Stocks have a tendency to march to their own drumbeat
when rising. Some stocks rise and continue to rise in the most severe of
bear markets. Short selling opens up an opportunity for the snakes on Wall
Street to take everything you own. They can cause a stock to rise at their
whim and without any regard to fundamental reason. It usually does not
make sense to bet against the sweat and toil of hard-working people.
Stock and
Fund Update
Click the
following link to see sorted performance of stocks and funds with
hold/avoid signals. In the past, they were included in this email message
but now display them on the website. This is available to the public,
while the specific buy and sell transactions are limited to members only.
The below table is public information and not updated on a frequent basis.
http://www.indicant.net/Non-Members/Performance/Top-Bot.htm
Economic Conditions – Inflation, Currency, Interest Rates
Click the
above heading for a summary of hard economic indicators.
Interest rate
declines accelerated last week after flattening slightly in the prior
week. Their bearish cycle/trend continues to be undeniable.
As stated the
past two weeks, falling interest rates typically accompany stock market
bullish behavior. The primary exception to stock market bullishness with
declining interest rates is inflation or deflation. Inflation is the
primary threat. If the CPI begins to rise, falling interest rates will not
stimulate bullish behavior.
Also, as
stated the past two weeks, the U.S. Dollar generally weakens with
declining interest rates. A weak dollar increases the cost of imports,
which is inflationary. On the other hand, U.S. exports become more
competitive, but that is becoming less meaningful with the international
economy. At any rate, the bias is increasingly inflationary.
This statement
will remain until it becomes irrelevant. Commodity prices continue to
increase. Their rise in prices could also be labeled as dramatic. This
does not bode well with respect to inflation.
This statement
will remain until it becomes irrelevant. With the exception of the
favorable trend in interest rates, other economic trends suggest a
troubling future to this bull market.
Fear
Metrics: Economics and Terrorism
Vanguard Gold and Precious Metals (VGPMX) - #19 is up 389.8% since the
April 13, 2001 buy signal. Its annualized growth since that buy signal is
58.1%. It moved to the north in 39 of the past 63-weeks. It has been
solidly bullish in ten of the last fourteen weeks, but bearish the past
three weeks.
Fidelity Gold, Fund #28, is up 22.1% since its buy signal on September
7, 2007. It is annualized at 103.3% since that buy signal. This fund was
mildly bullish last week after aggressive bearishness in the prior week.
State Street Research Global #9, SSGRX, which is isolated in the
energy sector, is up 331.8% since the Mid-term Indicant signaled buy on
August 16, 2002. It is annualizing at 62.1%.
Vanguard Energy #18, VGENX, is up 244.4% (annualized at 51.7%) since
the Mid-term Indicant signaled buy on April 5, 2003.
Fidelity Energy Services #40, FSESX, is up 188.2% (annualized at
43.4%) since the Mid-term Indicant signaled buy on December 6, 2003.
Fidelity Energy #39, FSENX, is up 188.2% since the Mid-term Indicant
signaled buy on August 16, 2003. It is annualized at 43.4%.
These energy
related funds were mildly bearish last week.
Investors in
these funds are supporting a 1970’s type of market with high inflation and
high oil prices. As long as capitalism remains in vogue around the globe
and alternative sources of energy continue to lag exponentially increasing
demand, a long-term perspective on holding strategy is appropriate.
The SQI
(Consolidated Short-term and Quick-term Indicant) model signaled buy for
the
GLD-ETF#11 on August 3, 2005. It is up 86.7% since then. It is
annualized at 37.0%. This fund has been bullish in eleven of the past
thirteen weeks. It was solidly bullish last week.
The SQI
signaled buy for
ETF#03 – Energy and Natural Resources on March 26, 2003. It is up
244.4% (annualized at 51.7%). This fund was also solidly bullish last
week.
Mid-term
Indicant Positions – Ten U.S. Indices
There were no new bull signals and one
new bear signal. As stated, the past several weeks expect an
increased number of bull/bear signals with fluttering behavior due to
nearing the conclusion of the election cycle phenomenon.
There are four
bulls. They are up by an average of 45.7% since the Mid-term Indicant
signaled bull an average of 168-weeks ago. That annualizes to 14.2%.
In addition to
the new bear signal, there are four bears. They are down by an average of
1.2% since the Mid-term Indicant signaled sell two weeks ago.
The Mid-term Indicant Dow Jones Industrial Average performance is now
at $39,322,197
That beats buy
and hold performance of $1,984,879 on a $10,000 investment in the Dow
stocks in 1900. The
MTI S&P500 is at $186,015. That beats buy and hold’s $141,121 on a
December 31, 1971 $10,000 investment. The
MTI-NASDAQ is at $217,260. That beats buy and hold’s $90,035 on an
October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy
and hold by 1,881.1%, 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 Mid-term Indicant 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.
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 continues avoiding
ProFunds Ultra Short. It is down 34.9% 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. However, the recent bear signal for several major
indices suggest an increasing probability of this funds profit production
before 2009.
Do no buy it
just yet. Wait for the Quick-term Indicant to offer support.
Click here for
Mid-term Indicant Table of Mutual Funds
Always
remember never to keep more than 20% of your investment resources into a
single mutual fund. Sector investing in mutual funds is an extremely good
way to mix your investments.
Long Term
Indicant Positions - Dow Jones Industrial Average
The blue-chip
Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991.
Keep in mind the Long-term Indicant generated only five bull/bear cycles
since 1920.
The Dow is up
348.4% (annualized at 21.6%) since the Long-term Indicant signaled bull
838-weeks ago. Economic data is the primary influence on the Long-term
Indicant. Recessions, deflation, and inflation have not been strong enough
to signal bear since that bull signal. A link to the Long-term Indicant is
below:
http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.htm
Quick/Short-term Indicant Stock Market Report - Summary
Quick-term
Red Bulls: Only five of thirty;
bullish bias holding, under near-term bearish pressure.
Quick-term
Yellow Bears/Threats: Twelve of
thirty. Attribute remains configured with non-bearish support, but
weakening.
Quick-term
Non-Bearishness: Weak;
inflationary fears threaten the bull, but the slightest inflationary
weakness will invite vigorous bullish responses. (You saw that with
reports of declining oil prices and the 300+ Dow gain on Nov 13, 2007).
Since then, oil prices have increased and thus inviting the inflationary
threats the bear tends to enjoy.
Short-term
Non-Bearishness: Weak. The
July-August bearish threat expired on Monday, September 17, 2007. The
Heart and Soul of bullish seasonality began on that day. On October 17 and
October 19, the market reacted bearishly to the upper trading range
limits. This again occurred on November 7, 2007. Although resistance to
bullish desires are obvious, consider this phenomenon as a bearish spurt
in the face of the underlying bullish trend, but barely a spurt. The major
indices are now approaching the lower trading range limit. Falling below
that limit with shift bias to bearish.
Force
Vectors: Configurations
continue supporting bullish bias, but very weak.
Vector
Pressure: Six in bullish
domains with minority support for bullish bias. This is not as strong as
unanimous support and it no longer is configured with majority support.
However, it is not yet supporting the bear.
Long-term
Hold Positions: Bear
threatening to hold positions.
Immediate
Tactics: Hold until sell
signals. Preserve cash.
Current
Quick-term Bias: Bullish, but
significantly weakened.
Overall
(Long-term) Market Status:
Bullish bias prevailing, but weakened.
Profit
Potential from Naked Options:
Volatility is high, enhancing option opportunities. However, do not write
any covered options in this environment.
Volume:
Configurations are supporting
bullish bias.
Comment
from September 17, 2007
Configurations are shifting away from bearish support………….
Observation
on September 18, 2007. The Dow’s 335-point gain today (9/18/07) is not
jittery behavior. It is not a bullish spurt. It reflects the beginning of
the heart and soul of bullish seasonality. Enjoy!
October 19,
2007 Addendum. Recent bearish aggression is configured as a spurt in the
face of the underlying bull at this time. Several attributes will advise
if this bearish aggression is sustainable. Current configurations suggest
it is not sustainable. Keep in mind these attributes can shift quickly.
November 7,
2007 Addendum: The major indices again reacted bearishly after contacting
the upper trading range limit. This phenomenon does not detract from the
underlying bullish trend.
November 9,
2007 Addendum. Economic fundamentals are threatening the bull, but the
bullish trend has not been reversed.
Quick-term/Short-term Indicant Stock Market Report Details
The Dow is
down 0.5% and the NASDAQ is down 1.2% since the
Short-term Indicant signaled bear on November 9, 2007. Although
disappointing to those desiring on-going bullish behavior, the Short-term
Indicant attributes remain insufficient for a bull signal. A Short-term
Indicant bear signal suggests the bull is not positioning itself for
dominance.
Please read
on. Click here to see the
Short-term Indicant’s history.
Both
Indicant Volume Indicator’s fell sharply with holiday lethargy. This
disrupted the robust cycle that favored the bear with the current
near-term cycle.
As stated the
past several weeks, robust volume on aggressive bearishness invigorated
the bear. This configuration has been increasingly supporting bearish
behavior.
Nov 12, 2007.
The major indices are moving briskly toward the lower trading range limit.
It is common for bull/bear battles to occur at the lower trading range
limit. Watch this attribute. If the major indices fall below the lower
trading range limit without a bullish response, the likelihood of
sustainable bearish behavior will increase. Use the Quick-term Indicant
exclusively for your recent buys/sells. Use the Consolidated model for
your longer-term hold positions. NYSE down
Nov 13, 2007.
Aggressive bullish expression could be viewed as a bullish spurt in the
face of near-term bearishness. With respect to underlying bullish trend,
recent bearishness is a spurt. However, near-term spurt behavior is always
the first step toward sustainable bearish behavior. The near-term behavior
is under study, but still remains classified as a bearish spurt. (Dow down
Nov 14, 2007.
The NYSE is within a couple of percentage points of the lower trading
range limit. The NASDAQ has a little more room to fall before contact is
made. Contact with the lower trading range limit should induce abnormal
volatility. Keep your eyes on this particular attribute. If the market
falls below the lower trading range limit, the Indicant will be more
liberal is generating sell signals, depending on other attributes. Please
read on.
Nov 16, 2007.
The major indices responded bullishly as they approached the lower trading
range limit. That suggests an increased probability of two possible
behavior patterns; 1) fluttering can occur or 2) the market will not
collapse into a deep and protracted bear. Two of the four behavioral
patterns are non-bearish. The other two are robust bullishness and robust
bearishness. Configurations at this time do not support either of the
latter two behavioral patterns.
Nov 23, 2007.
The bullish trend remains in tact. Near-term bearishness has inflicted
enough of its influence, the major indices are now situated near their
lower trading range limits. Falling below the lower trading range limit
will increase the probability of sustaining the bear to greater depths
and/or bearishness for an extended period.
Nov 24, 2007.
The NYSE and NASDAQ are down 7.1% and 9.2% since their last daily closing
peak prices on 10/31/07. A 20% decline is technically classified at a bear
market. The NASDAQ is “technically nearly half-way there. The last time
the NASDAQ declined from it former peak was an 89% drop.
SQI Report Card (Consolidated Short/Quick), Status, and Charts
There were no
buy signals and no sell signals. Although there were no buy signals, the
SQI is signaling hold for 23-ETF’s. They are up by an average of 69.1%
(annualized at 26.2%) since their respective buy signals an average of
135.5-weeks ago. Although there were no sell signals, the SQI is avoiding
seven ETF’s at this time. They are down an average of 3.7% since their
sell signals an average of 3.0-weeks ago.
The SQI model is the one that most of you will prefer for your trading
decisions. It generates fewer signals than the other two models and
represents consistencies in the Quick-term and Short-term outlooks for the
specific ETF’s. It also beats buy and hold on a regular basis, although
there is only eight years of proof. The quality of that proof is high
since this period includes a powerful bull and bear. The model sours a
little during meandering markets with an excessive number of signals from
time to time. Research toward perfecting continues.
Short-term Indicant Report Card, Status, and Charts
There were no
buy signals and no sell signals. Although there were no buy signals, the
Short-term Indicant is signaling hold for 23-ETF’s. They are up an average
of 92.7% (annualized 36.4%) since the STI signaled, buy, an average of
131.1-weeks ago. Although there were no sell signals, there are seven
ETF’s with avoid signals. They are down an average of 3.9% since their
sell signals an average of 3.0-weeks ago.
The
Short-term Indicant is more active in buying/selling than the Consolidated
model. The Quick-term Indicant, which follows, is even more active.
Quick-term Report Card, Status, and Charts
There were no
buy signals and no sell signals. Although there were no buy signals, the
Quick-term Indicant is signaling hold for 16-ETF’s. They are up by an
average of 29.5% (annualized at 27.6%) since the QTI signaled buy an
average of 54.9-weeks ago. Although there were no sell signals, the
Quick-term Indicant is avoiding fourteen ETF’s. They are down an average
of 2.4% since their sell signals an average of 2.3-weeks ago.
The
Quick-term Indicant is yet more active with buy and sell signals.
Conflicts
Between the Short-term and Quick-term Indicants
There are
seven conflicts, whereby the Short-term Indicant and the Quick-term
Indicant are in disagreement between hold and avoid status. This
harmonious relationship, although weakened with recent bearish
expressions, remains in support of the Quick-term bullish bias shift since
August 15, 2006.
Quick-term Indicant Bull/Bear Health Report
Twelve of the
30-ETF’s are below their respective bearish yellow curves. The average
relative position of all thirty ETF’s is above bearish yellow by a mere
3.4%. Although this attribute is providing non-bearish support, it is
being threatened by the bear. When the ETF’s average value is below
bearish yellow, there will be no non-bearish support.
Five of the
ETF’s are above their respective bullish red curves, which is supportive
of the bullish bias. All thirty ETF average positions are 5.2% below their
bullish red curves. As long as one non-contrarian ETF remains above
bullish red, the bear cannot gain complete dominance. Unfortunately, the
average relative position is now without the full support of red bulls.
This is encouraging the bear.
Short-term Indicant Bull/Bear Health Report for ETF’s
The above
heading is linked to the Short-term Indicant table. This paragraph is
repeated daily as a reminder of accurately interpreting the charts. By
clicking the charts on the table you can review potential contact with the
breakdown lines (bearish) and potential contact with breakout lines
(bullish). It is extremely bearish when several ETF’s are contacting their
respective breakdown lines. The breakdown lines are the yellow lines
(bearish). The breakout lines are the red ones (bullish). Close proximity
to breakout implies an increased probability of an actual breakout
occurring. It is certainly bullish and you will want to be in a hold
position for those few days a year when the breakout occurs. Conversely,
significant contact with yellow (breakdown) suggests “avoid” positions are
best.
One of the
thirty ETF’s is contacting its breakout line. It is semi-contrarian
ETF#14-Long Government. This is the third time in the past five trading
days this ETF has contacted its breakout line. Fundamentally, this
suggests money is flowing into this security.
As stated the
past several months, the high concentration of breakout-contact since
August 2006 was solidly bullish. Contact in forty-nine of the last
fifty-seven trading days supports bullish bias. Non contact in seven of
the last twenty-five trading days suggested the upper trading range limit
successfully resisted bullish desires several weeks ago and again the past
few weeks. At this point, it is doubtful the bull will overpower the upper
trading range limit on the near-term horizon.
The average
distance from breakout contact is 10.1%. This remains in support of the
quick-term bullish bias, but the energy required for additional bullish
breakout is increasing to the point of potential bullish lethargy.
None of the
ETF’s are contacting their breakdown lines. Recent contact encourages the
bear.
The average
distance from the price and breakdown is 14.6%. Although significant
energy is required for bearish dominance, its potential is increasing.
Although this non-bearish attribute is weakening, this configuration
provides non-bearish support, which has been the case since March 2003.
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.
Two Force
Vectors are moving bullishly. That is a decrease from last Wednesday,
which supports near-term bearishness. Although some Force Vectors are
increasing, they remain deep inside bearish domains. Significant energy
must be expended to move to neutrality, which suggests an increased
probability of bearish momentum. However, do not be surprised at bullish
expressions in the next few days. That should elevate Force Vectors.
Behavior around neutral position will obviate the market’s intermediate to
short-term intentions.
Force
Vector’s were shifting north late last week. They have since shifted to
the south, but many have stabilized. This recent bullish cycle never
matured into a robust configuration, suggesting weak bullish resistance to
bearish assertions. That resistance proved to be minimal, as the bear
gained momentum. Now, it is time to observe behavior the next few days. If
they turn crisply and robustly to the north, the heart and soul of bullish
seasonality will gain influence. If they turn harshly to the south, the
bear will gain momentum. That is a significant threat to the underlying
bullish trend.
Consider
bearish expressions as mere spurts in the face of underlying bullish bias,
which will offer more buying and call-option opportunities. Recent bearish
aggression remains configured as a spurt, but barely..
To understand
potential financial opportunities,
click here to learn to identify Robust Force Vectors. They are visible
on the
Quick-term Indicant charts.
ETF Force
Vectors/Vector Pressure Crossings/Option Signals
Remember, the
links contained herein are more visible when reading this on the website.
Click this sentence for Vector Pressure Option Signals. There was one
call option buy signal after Friday’s close. This was Gold’s ETF and does
not need contrarian market behavior to be profitable. However, you still
should have already stalked some options and if interested offer deeply
discounted buy prices and hope for intraday contrarian behavior. Do not
despair the contrarian movement does not occur.
Wednesday’s
bearish aggression supported buying yesterday’s call option. As stated
last Wednesday, a bullish response on Friday will support profit. There
was a bullish bounce on Friday, but not very aggressive. Nevertheless, a
profit should have been enjoyed. Selling on Monday morning at the market
will not be out of line.
Six
ETF Vector Pressures remain in bullish
domains. This is no longer providing near-unanimous or majority bullish
support. This is threatening to the underlying bullish theme.
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 from early February 2006 until August 15,
2006.
Message from
Monday, September 17, 2007. The market is configuring nicely in support of
the impending heart and soul of bullish seasonality.
Message from
September 17, 2007. It is recommended to avoid writing covered call
options due to increased probability of quick-term and short-term
bullishness. Modified on September 24, 2007. Vector Pressure is again
positive (bullish) and not configured favorably for writing covered call
options. (Note: NYSE was up 7.3% from 09/17/07 through 10/31/07. The
NASDAQ was up 10.7% from 09/17/07 through 10/31/07).
October 16,
2007 addendum: The market is nervous about inflationary pressures. This is
a valid fundamental concern that can invite long-term bearishness. The
stock market will not tolerate high rates of inflation; nor high interest
rates. (Note: The NYSE and NASDAQ are down 5.4% and 6.1% since this
comment).
October 17,
2007 addendum: You will notice the major indices are near their upper
limit of the trading range. That does not mean bearish dominance is about
to occur. If it does occur, your longer-term hold positions should be
maintained until the major indices approach the lower limit of the trading
range. Do not overreact to bearish threats; consider them as mere spurts
in the face of the underlying bull.
November 7,
2007 addendum. The major indices again reacted bearishly with their recent
interaction with the upper trading range limit. As long as this phenomenon
occurs with the upper trading range limit, as opposed to the lower trading
range limit, the trend remains bullish regardless of the displeasure one
endures with these bearish spurts.
November 9,
2007 addendum. The underlying bullish bias is again being threatened by
bearish aggression. Economic fundamentals are overpowering historical
standards.
November 12,
2007 addendum. Increased market volatility is not favorable to writing
options.
The
Quick-term Bull remains in tact.
ProFunds Ultra Short mutual fund moves inversely to the QQQQ by
exponential amounts. The Consolidated Indicant model is not avoiding QQQQ,
which does not support holding contrarian fund, ProFunds Ultra Short.
The
Quick-term and Short-term Indicant began tracking ETF#31, QID, which is
the ETF cousin to ProFunds Ultra Short. This ETF is relatively new and has
not yet developed enough data to formally track its outlook. It will not
be included on overall ETF statistics because it is purely contrarian. It
is designed to move bullishly during bear markets and bearishly during
bull markets.
QID inclusion
in overall ETF analysis will distort observations of market divergence and
convergence due to the nature of its design. For example, precious metals
and energy are contrarian but can parallel market direction with
synergistic relationships.
QID will
receive Quick-term and Short-term sell signals, but must mature more for
independent near-term observations. This comment will be removed once that
maturity is developed.
QID is down
43.5% since all three models signaled bear upon the initial offering of
this ETF 71.1-weeks ago.
To
familiarize yourself with viewing the market from an ETF perspective,
click the following update links.
Quick-term ETF Options
Quick-term Indicant for ETF’s
Short-term Indicant for ETF’s
Consolidated Quick-term/Short-term Indicant for ETF’s
Click here to the report card, which is updated weekly, to link to related
tours.
Links to the
Short-term Indicant and Indicant Volume Indicator are below:
Short-term Indicant for DJIA and NASDAQ
Short-term Indicant Tables for the Dow Jones Industrial Average Index
Short-term Indicant Table for the NASDAQ Composite Index
Indicant Volume Indicator
Divergence
versus Convergence
After enduring
bearish convergence in three of the last five weeks, interrupted by
bullish divergence two weeks, endure bearish divergence last week. The
energy sector was up, while most of the other sectors were down.
Unfortunately, this bodes well for those desiring bearish behavior.
Indicant
Conclusion
Bullish
convergence two weeks ago is configured as a bullish spurt in the face of
bearish dominance.
The upper
trading range limit stopped bullish ambition on the last two micro-cycles
to the north. The question now, as asked last week, will the lower trading
limit act similarly as a depressant to bearish ambition? We are about to
find out. Keep your eye on the Short-term Indicant.
As stated last
week, substantive economic fears continue to threaten the bull. The heart
and soul of bullish seasonality, so far this season, is not capable of
establishing barriers to excessive bearish ambitions. Strong economic
fundamentals influence the market regardless of technical indicators.
Bearish
expressions on a Quick-term Indicant basis should continue to be
considered as mere spurts in the face of the underlying bullish bias.
Although this remains technically correct, this message may change in the
next few days/weeks.
Keep up with
the daily stock market report as the Quick-term attributes can shift
quickly.
Do not get
lazy and set those stop losses for those stocks and funds that continue to
enjoy hold signals.
The daily
updates are on the following link.
http://www.indicant.net/Non-Members/Back%20Issues/QT.htm
Hyperlinks
To access all
major markets, stocks, funds, economic data, charts, statuses, etc, click
the following hyperlink:
http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm
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.
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