November 30, 2008 Indicant Weekly Stock Market Report

Volume 11, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

Enjoy a Bullish Cycle before Next Bearish Cycle

The stock market can be analogized to ocean waves. There are peaks and valleys repeatedly following one another. The problem for the stock market is the lack of a repeatable pattern. The time between peak and valley of ocean waves is predictable, while those of the stock market are not.

Ocean waves for the most part do not follow along a trend, as their bashing against any coastline is linear. The stock market is always following a trend that is not flat like ocean waves. In addition to flat trend, there are only two others; up or down.

The problem with trends is defining the starting point. If we start the stock market trend in 1933, we can conclude the trend is up if we stop the trend line as of last Friday. If we originate the NASDAQ trend in March 2000, we can easily conclude the trend is down.

The Indicant defines trend in a couple of ways. When both the bullish red curve and the bearish yellow curve are moving south, the trend is down. When the bearish green curve and bullish blue curve are on top of one another the trend is south. The latter trend is determined from a faster cycle than the former.

Click the following link for a look at the DJIA and Dow Composite Indices.

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

As you can see, both the bullish red curve and the bearish yellow curve are moving south. That is a bearish trend. You will notice a blue and green curve on the chart as well. The blue curve is a sharp cycle. Every now and then it collapses. A bear cycle usually follows that collapse.

The green curve never collapses, but quickly shifts direction at the slightest hint of a bias shift. When its last cyclical peak is below the prior cyclical peak, the short-term trend is down. The green cycle gives us a short-term view of trends and cycles.

Click the following link to the Dow Transports and Dow Utilities.

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

You may have to scroll down a bit to view the Dow Utilities. Many of you recall the Dow Utilities was the most bullish index from 2003 through most of 2007 with triple digit gains. Some of you recall, this index was the most obstinate resisting bearish ambition earlier this year. The stock market crumbled after it capitulated to the bear last July. Bear signal number four on the chart illustrates this. We should finish the tour later next week for more elucidation on this subject.

You should notice that bear cycles always follow bullish cycles. Bear Signal Number Eight on the Dow Utilities occurred just three weeks ago when its blue curve collapsed. Although a bit difficult to see, you should notice the blue curve is now rising. It is just above Bull Signal Number Nine. The blue and green curves are much quicker cycles than the Quick-term Indicant cycles most of you are familiar with.

You will notice the green cycle peaked in the summer of 2007. Another peak occurred in early 2008. At that point, the short trend would be bullish. However, the bullish spurt in the summer of 2008 resulted in a green peak lower than the prior one. The short-term trend became south at that point. You will also notice Utilities never found comfort above the Bullish Red Curve during that bullish spurt last summer. Bullish blue collapsed at Bear Signal Number Four last summer just after the Green cycle pinnacled.

Notice Bull Signal Number Nine on the Utilities Chart. This suggests another bullish spurt is about to begin.

We have been disappointed with false start twice since the bear started at Bear Signal Number 4. Bull Signal Number Five was triggered during Yellow Bear conditions and quickly evaporated. The same thing occurred at Bull Signal Number Seven. Many of you recall two series of buy signals for ETF’s during the stock market collapse during September and October. These quick cycles were influential. The Indicant has determined it is worth the risk since most such starts manifest into a sustainable bull cycle of at least eight weeks. This is what you traders tend to enjoy.

The longer-term investor would focus more on the bearish yellow curve. The rule has been to avoid all yellow bear instruments. As you can see, both the Dow Transports and Dow Utilities are Yellow Bears, which is the case with all ten of the major indices. Bull cycles tend to be tame under the influence of Yellow Bears.

It has been said, “do not fight the trend.” The trend is south (bearish). However, for those of you interested in trading, the near-term model is configuring in support of a bullish cycle.  Consequently, the Quick-term Indicant signaled buy for several ETF’s after last Friday’s close based on this near-term model. About half of the other ETF’s tracked by the Quick-term Indicant are following the old rules, which avoid yellow bears.

Click the following link to the small cap index, S&P600.

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

Notice its Force Vector remains below Yellow-N and Red-X. The N means minimum and the X means maximum. Force Vectors below the minimum means bearish domains. The Near-term Indicant will not signal bull until the Force Vectors crosses above Red-X when it climbs into bullish domains.

The S&P600 and the NYSE are the only two of the ten major indices with Force Vectors remaining in bearish domains. In other words, there is a majority consensus of a bullish cycle starting, but not yet unanimous. Once unanimity is achieved, you can be more aggressive in buying for the impending bullish spurt. Until then, preserve enough cash in your accounts to lower the average purchase price in the event this is another false start.

Within a week or two, we should have Pro Shares Ultra moving ETF’s for you to trade and invest in. You may want to do that off of the current Quick-term Indicant. Instead of buying QQQQ, you may want to consider QLD. It moves fast both ways and not for the feint of heart.

The problem with bullish spurts is that sometimes that cascade into major bullish cycles. Sometimes they are not sustainable and quickly perish. The Near-term Indicant will differentiate the two possibilities on a daily basis. Right now, a bullish spurt could very well be forming.

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

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

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

The Mid-term Indicant generated four buy signals and no sell signals. There have been 518-sell signals since October 26, 2007.

We will mention the heart and soul of bullish seasonality again. Its cycle time would be much shorter in the event one is enjoyed. There is time for a Santa Clause rally, but it would expire in January or early February.

In addition to the four buy signals, the Mid-term Indicant is signaling hold for only 23 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 84.5%. That annualizes to 84.3%. The Mid-term Indicant has been signaling hold for these 30-stocks and funds for an average of 52.2-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 317-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 33.6% since the Mid-term Indicant signaled sell an average of 27.3-weeks ago.

The Mid-term Indicant is avoiding all Mutual Funds. All one-hundred funds are down an average of 33.1% since their sell signals an average of 24.2-weeks ago. Even though a bullish spurt is possible, the Mid-term Indicant will be much more conservative before signaling buy for these funds. Bearish yellow must be toppled first.

One year ago, on Nov 29, 2007, the Mid-term Indicant was holding 235-stocks and funds out of the 345 tracked for an average of 130.4-weeks. They were up by an average of 152.6% (annualized at 60.6%). There were 107-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 4.7% since their respective sell signals an average of 14.9-weeks earlier.

The Mid-term Indicant was signaling hold for 311-stocks and funds of the 345-tracked two years ago on Nov 30, 2006. They were up by an average of 113.1% (annualized at 69.7%) since their respective buy signals an average of 84.3-weeks earlier. The Mid-term Indicant was avoiding 31-stocks and funds at that time. They were down an average of 12.0% since their respective sell signals an average of 19.8-weeks earlier.

There were 268-stocks and funds with hold signals on Dec 2, 2005 since their buy signals an average of 81.7-weeks earlier. They were up by an average of 97.6% (annualized at 62.1%). There were 47-avoided stocks and funds at that time. They were down by an average of 17.1% from their respective sell signals an average of 27.5-weeks earlier.

On Nov 26, 2004, the Mid-term Indicant was signaling hold for 301-stocks and funds out of 320-tracked. They were up by an average of 70.4 (annualized at 62.1%) since their buy signals an average of 53.1-weeks earlier. The Mid-term Indicant was avoiding 19-stocks and funds at that time. They were down by an average of 43.4% since their sell signals an average of 53.1-weeks earlier.

Five years ago, on Nov 29, 2003, there were 261-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 59.0% (annualized at 88.5%) since their respective buy signals an average of 34.6-weeks earlier. There were 19-avoided stocks and funds then. They were down an average of 27.1% since their respective sell signals an average of 35.0-weeks earlier.

On Nov 30, 2002, there were 280-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 22.2%, annualizing at 120.0%. There were seven avoided stocks and funds then. They were down by an average of 29.8% since their sell signals an average of 9.6-weeks earlier.

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

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

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

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

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

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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 21.2% since its secular low on October 9, 2002. The NASDAQ is up 37.8% and the S&P500 is up 15.4% since then. The small cap index, S&P600, is up 48.6%.

All ten major stock indices received Mid-term Bull signals this weekend, as expected.

The Dow is down 37.7% since its last closing peak on Oct 9, 2007. The NASDAQ is down 46.3% since its last peak on Oct 31, 2007. The S&P600 is down 43.0% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 69.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 41.3% since its similar secular peak on March 23, 2000. The Dow is down by 24.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 33.4% so far this year. The NASDAQ is down 42.1% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The heart and soul of bullish seasonality did not manifest. It still can, but its breadth will be much shorter in the event it configures.

The NASDAQ year-to-date performance was bearish by 23.6% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.  This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 23.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 46.8%. It finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 4.9%.  It was up by 2.9% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 9.4% on this weekend and finished that year with a 9.5%-gain. It was up by 10.3% at this time last year and finished 2007 up by 9.8%.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to increasing bullish influences for the longer-term holdings. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

After falling briskly, commodities stabilized a bit last week. Gold moved into neutral domains. Other commodities found some resistance to nose-diving, but from deep inside their respective bearish domains.

As stated the past two weeks, the concern around the corner will be deflation. Depending on magnitude, the next Great Depression is feasible. Socialism caused the problem. It will be conveyed as the solution to the problem. Poverty levels will accelerate. The quality of life will deteriorate if weak philosophical under-pinning’s continue.

As stated three weeks ago, the U.S. Dollar continues to strengthen. There is no real good reason for this, except fewer dollars by consumers are available, depressing demand. Other countries are apparently more vulnerable due to the “screw-up by politicians” and money manager dilettantes.

As stated five weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with some gusto. This is not technical. This is fundamental.

As stated three weeks ago, probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009.

As stated three weeks ago, if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.

As stated last week, this bear has teeth, is hungry, and is nowhere near expiration. Cyclical spurts of a bullish configuration will occur from time to time, but the trend should remain bearish.

Unfortunately, the heart and soul of bullish seasonality did not provide relief. Configurations supporting a bullish spurt expired last week. Currently, there is no technical floor to prevent the bear’s dominance.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 36.1% since that sell signal.

Fidelity Gold, Fund #28 is down 33.6% since the Midterm Indicant signaled sell on August 1, 2008.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 16.7% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 35.1% since that sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 26.8% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 20.5% since that sell signal.

Energy related funds were bullish last week. They have endured significant bearishness in 12 of the last 16-weeks, but enjoyed a bullish bounce last week for the first time in several weeks.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 27.4% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 26 of the past 44-weeks and in 18 of the past 24-weeks. This ETF remains configured for bearishness on a Short-term basis, but it was bullish last week.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on November 28, 2008 (last Friday). It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund is no longer a yellow bear and the primary reason for the buy signal.

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

There were ten new bull signals and no bear signals, as expected.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,340,231

That beats buy and hold performance of $1,343,228 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $146,704. That beats buy and hold’s $87,789 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $186,857. That beats buy and hold’s $53,244 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,233.2%, 67.1%, and 250.9%, 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 approximately 2,000% covering the past 100+ years.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was up 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009. However, as you can see, the next buying opportunity occurred earlier than historical standards suggested.

The Mid-term Indicant signaled buy for this fund on September 12, 2008 and it signaled sell on October 31, 2008. It was up over 30% since that September buy signal. It remains too risky to hold for the time being. Once the heart and soul of bullish seasonality expires, this fund will receive a buy signal; most likely in January 2009. It is up 14.7% since the October 31, 2008 sell signal. This fund is volatile and too risky to buy at this time. Last week it was up 54.5% since that sell signal. As you can see, it plummeted last week and expected to continue to do so.

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 205.0% (annualized at 12.0%) since the Long-term Indicant signaled bull 991-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty, but it is contrarian. No bullish support at this time.

Quick-term Yellow Bears/Threats: Twenty-eight of thirty. Still supporting bearish behavior.

Quick-term Non-Bearishness: QTI differential is bearish 45.0%; strong bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 21.6%; this remains solidly in support of the bear, but weakened in that support the past several trading days.

Short-term Indicant: Breakdown contact density occurred in five of the last ten days, but in none of the last five days. The bear is obviously relaxing.

Short-term Indicant: Bearish position.

Force Vectors: Twenty-eight are now in bullish domains. Now with majority support for the bull.

Vector Pressure: Potential for a bullish slope is building, but still reside in bearish domains. Strong bullish cycles seldom originate from such configurations. However, there is increasing bullish potential.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. Such a response would not be surprising before year end. (This has been changed in timing from presidential inauguration, but may shift this expectation back to late January). Either way, this bear is nowhere near extinction. It will be long lasting and deep! But for traders, there is some excitement in the attempt to participate in bullish spurts from time to time. For longer-term investors, cash is king.

Reverse Tangential Support: Being constructed, fostering a very high probability of bearish sustainability. However, there is again some potential for a bullish spurt.

Immediate Tactics: Cash is king except for two extremely conservative buy signals on Friday, November 21, 2008 and several more “conservative” Quick-term and Short-term buy signals on Friday, November 28, 2008.

Current Short-term/Quick-term Bias: Bullish bias born on Friday, November 28, 2008.

Overall Market Status: Configurations support bullish bias.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Holiday volume distorting directional intensity.

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

To view the STI-Tangential Protection for ten major indices, click here.  

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality,  has been thoroughly tested and validated. Documentation is a different matter and it will be completed before the end of the year.

DJIA

11/21/08-Fri-Today’s bullish response is a mere upward blip on a bearish cycle and trend. It had no impact on any of the bullish attributes required for sustainability. Force Vectors must cross above Vector Pressure before any additional considerations for bullish behavior. 11/24/08-Mon-No report. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Bullish cycle potential again configuring. Force Vectors remain below Red-X. Although assumptive bullish risk remains high, it could weaken quickly with a rise in Vector Pressure. So, wait for that. More obviating bullish attributes are required for short-term buying. 11/27/08-Fri-Configurations shifted to bull today. It is a yellow bull, which should not manifest into a thoroughbred, but it should facilitate bullish spurt behavior.

DJ Composites

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as DJIA. 11/27/08-Fri-Same as DJIA.

DJ Transports

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as DJIA. 11/27/08-Fri-Same as DJIA.

DJ Utilities

11/21/08-Fri-The Utilities Force Vector and Vector Pressure have the highest bullish potential. It may be the first to receive a bull signal, but more broad support must be demonstrated from the other indices. 11/25/08-Tue-Force Vector and Vector Pressure are not configuring with bullish support at this time; they are somewhat listless. 11/26/08-Wed-This index is configuring with the greatest degree of bearish resistance. It again triggered a near-term bull. Vector Pressure very near supportive of bullish behavior. Force Vector supports same, but lacks aggression; but supportive nonetheless. 11/27/08-Fri-Last Wednesday’s bull is holding up.

NASDAQ

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as DJIA except Force Vector still below bearish Yellow-N. 11/27/08-Fri-Same as DJIA.

NASDAQ100

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as NASDAQ. 11/27/08-Fri-Same as DJIA.

S&P500

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as DJIA. 11/27/08-Fri-Same as DJIA.

S&P100

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as DJIA. 11/27/08-Fri-Same as DJIA.

S&P400

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as NASDAQ. 11/27/08-Fri-Same as DJIA.

S&P600

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as NASDAQ, except Force Vector very weak as it still lags below Vector Pressure. 11/27/08-Fri-Force Vector bearish position prevented bull signal, but moving in the proper direction to do so by early next week.

NYSE

11/21/08-Fri-Same as DJIA. 11/25/08-Tue-Same as last Fri. 11/26/08-Wed-Same as S&P600.  11/27/08-Fri-Same as S&P600.

VIX

11/21/08-Fri-Configurations suggest this is overheated, but until Vector Pressure drops below Red-X, volatile expressions will continue favoring the bearish stock market. 11/25/08-Tue-Same as last Friday. 11/26/08-Wed-This index remains with significant potential for bearishness, which is bullish for the stock market. 11/27/08-Fri-Positions remain in strong bullish support, but weakening, which should bode well for a stock market with bullish desires.

Overall Comment Regarding Major Indices:  11/21/08-Fri-Bullish behavior was refreshing, but did nothing to suggests any bullish sustainability is immediate. 11/25/08-Tue-Too many attributes remain supportive of the bear, but not as threatening as a week ago. Some are attempting a shift to bullish support. The salient point is “attempting” and this is the fourth such attempt since early September.  11/26/08-Wed-Most of the major indices remain with non-bullish configuration. Again, the Dow Utilities is fostering defiant configurations to bearish ambition. The Small Caps and Big Board, which are two broad-based extremes, are complicit in their support of the bear. 11/27/08-Fri-The major indices are yellow bears, but received near-term bull signals. All buying should be made with the idea of a bullish spurt, as opposed to a sustainable bull.

The Short-term Indicant signaled bull today for both the NYSE and NASDAQ as Force Vectors and other configurations shifted into bullish support.

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

The NYSE and NASDAQ Indicant Volume Indicators  are somewhat mixed with near-term bullish support but overall bearish support. Holiday volume is light as usual. Support of directional intensity is difficult on a near-term basis with such volume at this time. However, recent volume suggests little interest in continued support of bearish ambition.

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

There were 13-buy signals and no sell signals. There are three ETF’s with hold signals. They are up 7.1% since their buy signals 1.1-weeks ago. The SQI is avoiding 15-ETF’s. They are down by an average of 31.3% since their sell signals an average of 16.1-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were 13-buy signals and no sell signals. Only three ETF’s enjoy a hold signal. They are up 7.1% since their buy signals 1.1-weeks ago. There are 15-ETF’s with avoid signals. They are down by an average of 31.3% since their sell signals an average of 16.1-weeks ago.

Quick-term Report Card, Status, and Charts

There were 13-buy signals and three sell signals. ETF’s with hold signals are up 7.1% since their buy signals 1.1-weeks ago. The Quick-term Indicant is avoiding 15-ETF’s. They are down by an average of 32.3% since their sell signals an average of 13.7-weeks ago.

Current Strategy-Quick-term Indicant - Nov 21, 2008-Fri-The late Friday bullish surge is justification for signaling buy for two non-contrarian ETF’s. They were reluctantly sold last Thursday. The remaining avoided ETF’s will most likely not receive a buy signal as long as they are in yellow bear condition with negative Vector Pressure, which is conventional for the Quick-term and Short-term Indicant. Nov 25, 2008-Tue-Nearly all of the ETF’s are deep inside bearish domains. Bearish yellow is in rapid decline. Once the price of ETF’s and bearish yellow interact, volatile expressions will become less severe. The trend remains bearish and better to not fight the trend. The political environment suggests a period of capitalistic decline, which does not bode well for the bull in capital markets. Deflationary threats support the idea of cash retention. Nov 26, 2008-Same as yesterday. Nov 28, 2008-Fri-Most of the non-contrarian ETF’s and major indices are yellow bears. However, their configurations are supporting a bullish spurt. Those ETF’s with recent buy/sell signals are again receiving a buy signal to participate in a bullish spurt.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-eight of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 21.8%. This remains bearish, but weakening in bearish support.

One of the 30-ETF’s is above its bullish red curve. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 23.2%. which is also non-bullish.

The QTI differential is bearish by 45.0%. This is the one-hundred and eleventh consecutive trading day of a bearish reading.

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 are contacting their breakout lines. This remains non-bullish, as it is contrarian ETF#14, TLT.

The average distance from breakout contact is 41.5%. Double digit variances from breakout contact for 227-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. This is the fifth consecutive day without bearish contact, which supports the idea of a tiring bear. However, the bear is nowhere near expiring on a trend basis.

The average distance between the price and breakdown is 19.9%, which is significantly better the 0.8% differential on Nov 20, 2008. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 64 of the last 107-trading days. Single digit reading facilitates the bear’s roaming at will. Non-single digit values the past few days should provide the new bull encouragement.

The breakout/breakdown differential is bearish by 21.6%. This attribute continues supporting bearish ambition.

ETF Force Vector Configurations

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

Twenty-eight Force Vectors are in bullish domains. This again is in majority support for bullish ambition.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

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

One of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Configurations continue suggesting decreasing bearish support.

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

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

Quick-term and Short-term Indicant Summary

The bearish bias originating on September 5, 2008 expired on November 4 and replaced with a new bullish bias. That bullish bias has expired as the bullish spurt perished shortly after its origination. However, on November 28, 2008, a new bullish bias configured. 

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID  on November 21, 2008. It is down 18.1% since then.

Other Contrarian Funds

ETF#03-Natural Resources   - This ETF is down 31.7% since the Quick-term Indicant sell signal on July 24, 2008. The Quick-term Indicant will not signal bull until Vector Pressure is positive and Yellow Bear expires.

ETF#11-Gold and Precious Metals   received a buy signal on Nov 28, 2008. It crossed above bearish yellow earlier this week. Although Vector Pressure remains in bearish domains, its movement into bullish domains is inevitable. That will most likely occur next week.

ETF#14-Long Government  is up 6.5% since its buy signal on Nov 19, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Bullish convergence was enjoyed last week, preventing another major assault by the bear. This should facilitate a bullish spurt of some healthy magnitude in the coming weeks.

Indicant Conclusion

There were no buy signals for Mutual Funds. All 100-mutual funds are with avoid signals. Although the Quick-term and Short-term Indicant models are suggesting buy again for about one-half of the ETF’s tracked, the Mid-term Indicant will not signal buy for most of the Mutual Funds until they remove themselves from bearish domains.

As stated the past four weeks, interest rates are falling, which is bullish. Oil prices are declining. Those two elements, alone, are typically enough to stimulate bullish activity. Trader behavior should ignite a bullish cycle, even in the face of sour economic outlooks.

Deflation is an increasing concern. If it manifests, a 2500 Dow by 2010/11 may be optimistic. Even with that threat, a bullish spurt appears ready.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/30/08

November 23, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

A 2500 Dow by 2010 – Part 2

The Dow Utilities demonstrated obstinate resistance to bearish aggression for several days, but succumbed last Thursday. That was disappointing to those desiring bullish behavior. Let’s review the chart.

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

You may have to scroll down a bit to see the Utilities. The Dow Transports is the chart on top of the page.

As you can see, Utilities collapsed to bearish yellow on Thursday. It was encouraging to those desiring bullish behavior that bearish yellow was a bouncing point for Utilities. The Dow Utilities was the biggest gainer on last Friday’s bullish surge. It gained a significant 9.12% on Friday’s bullish aggression. For a comparative observation, the NASDAQ100 only gained 4.73%. Although the NASDAQ100’s gain would normally be considered a nice gain, it was only half that of the Utilities.

This suggests dividend hunting by investors. Also, utility operating income should expand with the falling costs of energy. This suggests a reducing probability of dividend disappointments.

Take another look at the Utilities chart. You should notice a couple of attributes. Friday’s bounce occurred at a higher point than the lowest point endured a few weeks ago. Look slightly to the left where you will see a point lower on the chart than the deep drop point last Thursday night.

Look at the bottom of the chart. You should notice the Force Vector curve. It is the gray line that zigzags up and down all the time. Last Thursday’s deep bearish expression did not influence Force Vector. The green line in the general vicinity of the Force Vector is Vector Pressure. As you can see, it is struggling to cross above Yellow-N, which is where bearish domains begins and ends. Notice how Vector Pressure runs nice and long sinusoidal cycles. Notice how Utilities is mostly non-bearish when Vector Pressure is not in bearish domains (less than Yellow-N).

If Vector Pressure crosses above Yellow-N, the probability of non-bearish influences on the stock market will double. That does not necessarily mean robust bullishness, but it suggests the bear is tiring.

Scroll up a bit and look at the Dow Transports. You can see bearish yellow was not a bouncing point. Force Vectors are deep inside bearish domains (well below Yellow-N). Vector Pressure mounted an attempt a few weeks ago to move northward, but as you can see, it never approached Yellow-N and has since turned back to the south. Most of the other indices are configured similarly to the Dow Transports. Click the following link to view them.

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

Just click the links at the top of the table.

Additional bearishness will follow any bullish cycle that may form. If deflation manifests, the Dow will plummet. The deflationary threat is real. The U.S. Government caused this problem and exacerbating it with increasing production of phony dollars. The U.S. Government is trying to solve the problem. Government never solves problem. All decisions by any government are impossible to be good because the decision makers have no personal financial risks in the consequences of their decisions. That means all possibilities are not considered and the bias is toward vote getting. If GM, Ford, and Chrysler were requesting money from the government ahead of the recent election, rest assured politicians would give it to them in return for the votes they would gain from the U.A.W. and some of the management.

You saw an example of dilettante management from the Big-3 U.S. Automotive companies. They flew to Washington D.C. with their hands out, begging for money, on corporate jets. That contrasts with Bill Gates, who flew commercial and in coach. Dilettantes are ineffective as managers because one of their sorry attributes is an inability to lead by example. A horse draw wagon from Detroit to Washington D.C. would have done the trick. The meeting in Washington D.C. was by leeches among the ultimate den of leeches.

When greenback turns into play money, stock prices will reflect the true value of play money. That would be a Dow at around 2500 by 2010 or 2011 and that could be optimistic.

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

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

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

The Mid-term Indicant generated no buy signals and seven sell signals. There have been 518-sell signals since October 26, 2007.

We will mention the heart and soul of bullish seasonality again. Its cycle time would be much shorter in the event one is enjoyed. There is time for a Santa Clause rally, but it would expire in January or early February.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 23 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 74.2%. That annualizes to 75.1%. The Mid-term Indicant has been signaling hold for these 30-stocks and funds for an average of 51.4-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 314-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 39.6% since the Mid-term Indicant signaled sell an average of 26.6-weeks ago.

One year ago, on Nov 23, 2007, the Mid-term Indicant was holding 237-stocks and funds out of the 345 tracked for an average of 128.9-weeks. They were up by an average of 145.2% (annualized at 58.6%). There were 92-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 13.3% since their respective sell signals an average of 16.9-weeks earlier.

The Mid-term Indicant was signaling hold for 311-stocks and funds of the 345-tracked two years ago on Nov 24, 2006. They were up by an average of 107.6% (annualized at 67.0%) since their respective buy signals an average of 83.5-weeks earlier. The Mid-term Indicant was avoiding 31-stocks and funds at that time. They were down an average of 12.4% since their respective sell signals an average of 19.2-weeks earlier.

There were 269-stocks and funds with hold signals on Nov 25, 2005 since their buy signals an average of 80.9-weeks earlier. They were up by an average of 97.3% (annualized at 62.5%). There were 51-avoided stocks and funds at that time. They were down by an average of 16.5% from their respective sell signals an average of 25.8-weeks earlier.

On Nov 19, 2004, the Mid-term Indicant was signaling hold for 299-stocks and funds out of 320-tracked. They were up by an average of 67.7% (annualized at 67.1%) since their buy signals an average of 52.4-weeks earlier. The Mid-term Indicant was avoiding 16-stocks and funds at that time. They were down by an average of 45.4% since their sell signals an average of 52.4-weeks earlier.

Five years ago, on Nov 22, 2003, there were 262-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 51.7% (annualized at 79.9%) since their respective buy signals an average of 33.6-weeks earlier. There were 29-avoided stocks and funds then. They were down an average of 25.2% since their respective sell signals an average of 33.8-weeks earlier.

On Nov 23, 2002, there were 268-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 20.9%, annualizing at 115.0%. There were 11-avoided stocks and funds then. They were down by an average of 30.5% since their sell 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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 10.4% since its secular low on October 9, 2002. The NASDAQ is up 24.3% and the S&P500 is up 3.0% since then. The small cap index, S&P600, is up 28.9%.

All ten major stock indices received Mid-term Bull signals this weekend. The bull signals did not hold up as expected. However, do not be surprised at a new bull signal next weekend.

The Dow is down 43.2% since its last closing peak on Oct 9, 2007. The NASDAQ is down 51.6% since its last peak on Oct 31, 2007. The S&P600 is down 50.6% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 72.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 47.6% since its similar secular peak on March 23, 2000. The Dow is down by 31.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 39.3% so far this year. The NASDAQ is down 47.8% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The heart and soul of bullish seasonality did not manifest. It still can, but its breadth will be much shorter in the event it configures.

The NASDAQ year-to-date performance was bearish by 24.1% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.  This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 24.8% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 41.8%. It finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 3.4%.  It was up by 3.0% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 11.3% on this weekend and finished that year up by 9.5%. It was up by 6.1% at this time last year and finished 2007 up by 9.8%.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated last week, interest rates and commodity prices continue collapsing and fast. Extraction of one of the three wealth creation industries. Reducing demand is reducing prices, which will reduce activity, which will reduce wealth. With all that, politicians and government employees will not experience pay cuts or be laid off.

As stated last week, the concern around the corner will be deflation. Depending on magnitude, the next Great Depression feasible. Socialism, which caused the problem, will be conveyed as the solution to the problem. Poverty levels will accelerate.

As stated two weeks ago, the U.S. Dollar continues to strengthen. There is no real good reason for this, except fewer dollars by consumers are available, depressing supply. The banks are apparently hoarding the $700-billion. Other countries are apparently more vulnerable due to the “screw-up by politicians” and money manager dilettantes.

As stated four weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with some gusto. This is not technical. This is fundamental.

As stated two weeks ago, probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009.

As stated two weeks ago, if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.

As stated last week, this bear has teeth, is hungry, and is nowhere near expiration.

Unfortunately, the heart and soul of bullish seasonality did not provide relief. Configurations supporting a bullish spurt expired last week. Currently, there is no technical floor to prevent the bear’s dominance.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 46.7% since that sell signal.

Fidelity Gold, Fund #28 is down 41.2% since the Midterm Indicant signaled sell on August 1, 2008.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 28.1% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 45.7% since that sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 45.7% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 33.5% since that sell signal.

Energy related funds were again bearish last week. They have endured significant bearishness in 12 of the last 15-weeks.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 35.9% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 26 of the past 43-weeks and in 18 of the past 23-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 again on October 20, 2008. It is up 0.3% since then. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund’s bearish influence may not yet be over, but should not fall in price as much as other commodities.

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

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

If the Dow Utilities holds its non-bearish configuration, new bull signals could be generated next week.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,340,231

That beats buy and hold performance of $1,224,162 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $146,704. That beats buy and hold’s $78,365 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $186,857. That beats buy and hold’s $48,001 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,460.1%, 87.2%, and 289.3%, 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 approximately 2,000% covering the past 100+ years.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was up 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009. However, as you can see, the next buying opportunity occurred earlier than historical standards suggested.

The Mid-term Indicant signaled buy for this fund on September 12, 2008 and it signaled sell on October 31, 2008. It was up over 30% since that September buy signal. It remains too risky to hold for the time being. Once the heart and soul of bullish seasonality expires, this fund will receive a buy signal; most likely in January 2009. It is up 54.5% since the October 31, 2008 sell signal. This fund is volatile and too risky to buy at this time.

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 178.5% (annualized at 10.4%) since the Long-term Indicant signaled bull 990-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty, but it is contrarian. No bullish support at this time.

Quick-term Yellow Bears/Threats: Twenty-eight of thirty. Still supporting bearish behavior.

Quick-term Non-Bearishness: QTI differential is bearish 62.3%; strong bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 40.2%; this remains solidly in support of the bear.

Short-term Indicant: Breakdown contact density occurred in five of the last six days with broadening bearish support. Friday’s bullish bounce mitigated this increasing bearish support.

Short-term Indicant: Bearish position.

Force Vectors: Zero bullish support and solid bearish support.

Vector Pressure: Shifting back into bearish direction and from deep inside bearish domains.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. Such a response would not be surprising before year end. (This has been changed in timing from presidential inauguration, but may shift this expectation back to late January). Either way, this bear is nowhere near extinction. It will be long lasting and deep! But for traders, there is some excitement in the attempt to participate in bullish spurts from time to time. For longer-term investors, cash is king.

Reverse Tangential Support: Being constructed, fostering a very high probability of bearish sustainability. The recent, but very small bullish spurt, should be sufficient for reverse tangential construction. Once a cycle bottom is achieved, we will get a idea of the next cyclical bottom.

Immediate Tactics: Cash is king except for two extremely conservative buy signals on Friday, November 21, 2008.

Current Short-term/Quick-term Bias: Bearish bias of September 5, 2008 expired November 4, 2008 in favor of a new bullish bias. The November 4 bullish bias did not gain traction and expired November 19, 2008. Friday’s bullish expression did nothing to shift attributes favoring bullish spurt with the possible potential of Dow Utilities.

Overall Market Status: The expiration of Dow Utilities potential for bullish spurt on Thursday, November 20, 2008 leaves market in complete bearish dominance, but again offering bullish potential with Friday’s configuration.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness supported bear while configuring lethargy will not be as supportive of any bullish spurt that may form in the immediate future. Recent bearish behavior had not been supported by volume until Wednesday and Thursday, November 19/20. Those two days highlighted significant volume support for the bear. This could, indeed, be a “capital gains” or lack thereof market. Prices are below where they were when the 2003 bull began. Many are selling to preserve what few gains they have remaining and will continue to do so with the political threat of an increase to capital gains tax. The market is moving inversely to gun sells. Bullish spurts will be technical.

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

To view the STI-Tangential Protection for ten major indices, click here.  

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality,  has been thoroughly tested and validated. Documentation is a different matter and it will be completed before the end of the year.

DJIA

Nov 14, 2008-Fri-In spite of today’s bearish aggression, this index remains above bearish yellow. The attempt at cyclical shift from bearish dominance continues to be difficult, but still doable with the current configuration. Nov 17, 2008-Mon-Force Vector is waffling with obvious technically based desires to support bullishness while fundamentals offer no reason for it. Short-term bear remains intact. Nov 18, 2008-Tue-Same as yesterday. Near-term bearish yellow cycling sideways. Nov 19, 2008-Wed-Although dynamic bearish behavior occurred today, Force Vectors did not support. However, there is no floor to future bearish behavior. 11/20/08-Thu-There is absolutely no floor to stifle bearish ambition. Cash is king even for those interested in short-term trading. 11/21/08-Fri-Today’s bullish response is a mere upward blip on a bearish cycle and trend. It had no impact on any of the bullish attributes required for sustainability. Force Vectors must cross above Vector Pressure before any additional considerations for bullish behavior.

DJ Composites

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Tue-Same as DJIA.  Nov 19, 2008-Wed-This index is displaying increasing bearish support. None of the attributes are suggesting bullish potential. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

DJ Transports

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Tue-Index is contacting breakdown, bearish yellow, and other attributes favoring the bear. Nov 19, 2008-Wed-This is the primary culprit drawing down the DJ Composites. Its Force Vector is pointing sharply to the south along with declining Vector Pressure. That is extremely bearish. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

DJ Utilities

Nov 14, 2008-Although Utilities did not escape the bear’s wrath today, it was the least bearish of the major indices. Its Force Vector continues marching north and doing its part to pull Vector Pressure from deep bearish domains. Bearish yellow curve continues to flatten offering some potential resistance to near-term dynamic bearishness. Nov 17, 2008-Bearish yellow continues flattening offering limited inspiration to the bull.  Nov 18, 2008-Tue-This index continues holding neutral and supporting an increase in bearish yellow, which should support bullishness. Nov 19, 2008-Wed-Although Utilities took it on the chin with today’s bearish onslaught, it is holding with configurations supporting a bullish spurt. Its Force Vector continued moving north even in the face of dynamic bearish expressions. 11/20/08-Thu-This index succumbed to bearish ambition. The last ray of bullish hope expired today. 11/21/08-Fri-The Utilities Force Vector and Vector Pressure have the highest bullish potential. It may be the first to receive a bull signal, but more broad support must be demonstrated from the other indices.

NASDAQ

Nov 14, 2008-The NASDAQ is a pathetic expression of forward moving, profit making enterprises. There are no attributes positioned in support of the bull. Nov 17, 2008-There is no difference from last Friday. Nov 18, 2008-Tue-Same as yesterday. Nov 19, 2008-Wed- The NASDAQ Force Vector cycle is attempting to reverse from bearish support to bullish. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

NASDAQ100

Nov 14, 2008-Same as NASDAQ. Nov 17, 2008-Same as NASDAQ. Nov 18, 2008-Tue-Same as NASDAQ. Nov 19, 2008-Wed-Same as NASDAQ. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

S&P500

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Same as DJIA. Nov 19, 2008-Wed-Force Vector shifted north, which should help stifle bearish expressions, but the deep bearish position of Vector Pressure is reason enough to anticipate bearish dominance. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

S&P100

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Same as DJIA. Nov 19, 2008-Wed-Force Vector continued moving south, but at a relaxed rate of decline. Expect the bear to rest in the near future, but not proclaiming strong bullish behavior; just a relaxing bear. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

S&P400

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Same as DJIA. Nov 19, 2008-Wed-There is no floor to stop continuing bearish dominance. Wait for a floor to develop. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

S&P600

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Same as DJIA. Nov 19, 2008-Wed-Force Vectors support bearish behavior. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

NYSE

Nov 14, 2008-Same as DJIA. Nov 17, 2008-Same as DJIA. Nov 18, 2008-Same as DJIA. Nov 19, 2008-Wed-Same as S&P600. 11/20/08-Thu-Same as DJIA. 11/21/08-Fri-Same as DJIA.

VIX

Nov 14, 2008-Fri-Same as yesterday. Today’s market behavior did not disrupt potential for this indices succumbing to bearish behavior. Nov 17, 2008-Mon-Remains bullish, but with increasing threats from bear. Remember, this index generally configures inversely to the stock market and related major indices. Nov 18, 2008-Tue-Same as yesterday. Nov 19, 2008-Wed-Same as last Monday. 11/20/08-Thu-The VIX continues hovering deep inside bullish domains, which is bearish for the stock market. 11/21/08-Fri-Configurations suggest this is overheated, but until Vector Pressure drops below Red-X, volatile expressions will continue favoring the bearish stock market.

Overall Comment Regarding Major Indices:  11/14/08-Fri-….. QTI held loss positions are undesirable, but on average less than 10%. The risk/reward for continued holding remains justified for those with a penchant for high trading frequency. Nov 17, 2008-Holding will continue for another day or two. If Utilities moves south, another deep bearish cycle will not be surprising. Nov 18, 2008-Same as yesterday. Nov 19, 2008-Wed-Utilities continue to show promise of bullish potential, but the Quick-term Indicant will signal sell today for several of the held ETF’s. Too many attributes support bear and thus risks do not justify holding at this time for most of those ETF’s on a quick-term basis. 11/20/08-Thu-All major indices are configured with bearish support. The Dow Utilities collapsed today. 11/21/08-Fri-Today’s bullish behavior was refreshing, but did nothing to suggests any bullish sustainability is immediate.

The Short-term Indicant will not signal bull until Force Vectors cross above Red-X and evolve to Red Bull status. The DJIA is down 2.9% and the NASDAQ is down 7.7% since the bear signal of November 12, 2008.

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

The NYSE and NASDAQ Indicant Volume Indicators  are shifting robustly during bearish aggressions. Thursday’s volume was significantly high on bearish aggression and Friday’s volume was significantly high on bullish aggression. Such a combination typically leads bullish cycles. Recently, over 10-billion big-board shares traded on October 10 on 1.8% NYSE decline. The following Monday enjoyed a 12.2% gain in the big board. Big money new something on Friday and big gains were indeed enjoyed the following Monday, October 13. Those who held after that Monday lost another 20% or more than that particular bullish blip. Ignore the pundits and their heightened squeaky voices. Let’s wait for solid bullish support from the Quick-term and Short-term attributes.

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

There were two buy signals and one sell signal. There is one ETF with a hold signal. It is up 3.4% since its buy signal 0.3 weeks ago. The SQI is avoiding 27-ETF’s. They are down by an average of 20.9% since their sell signals an average of 8.7-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were two buy signals and one sell signal. Only one ETF enjoys a hold signal. It is up 3.4% since its buy signal 0.3-weeks ago. There are 27-ETF’s with avoid signals. They are down by an average of 20.9% since their sell signals an average of 8.7-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were two buy signals and one sell signal. The lone ETF with a hold signal is up 3.4% since its buy signal 0.3-weeks ago. The Quick-term Indicant is avoiding 27-ETF’s. They are down by an average of 21.4% since their sell signals an average of 7.4-weeks ago.

Current Strategy-Quick-term Indicant - Nov 14, 2008-Fri-Dynamic bullishness followed with lesser dynamic bearishness suggests a desire for the markets to stabilize. Several quick-term attributes are supporting at best a mild bullish spurt through XMAS and at worse an extended period of non-bearishness. Nov 17, 2008 –Mon The Dow Utilities continues configuring with support for a bullish spurt. A resumption of bearish behavior would be a stimulant for more bearish aggression. Nov 18, 2008-Tue-Same as yesterday, which was inadvertently dated Nov 15, 2008 yesterday. Nov 19, 2008-Wed-Risks are high for continuing bearishness. That, coupled with a very high probability of dynamic bearishness in 2009, suggests selling those ETF’s that were recently bought. Some attributes suggest the heart and soul of bullish seasonality remains possible. The slightest shift in favor of bullish spurt potential will prompt a reversal to buy for most of those funds that have been traded well below bearish yellow. Nov 20, 2008-Fri-Cash is king for even the most ardent short-term trader. Utilities acquiesced to bearish assertions today. With that, the last potential bullish configuration expired. Volume appears supportive for yet more bearish behavior. Bearish yellow will inflect and allow the construction of a reverse tangential expression which means the next cyclical bottom will be followed by yet another cyclical bottom that is further south than the next cyclical bottom. In other words, this bear is no where near expiration and it is no where near its ultimate depth. Nov 21, 2008-Fri-The late Friday bullish surge is justification for signaling buy for two non-contrarian ETF’s. They were reluctantly sold last Thursday. The remaining avoided ETF’s will most likely not receive a buy signal as long as they are in yellow bear condition with negative Vector Pressure, which is conventional for the Quick-term and Short-term Indicant.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-eight of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 30.6%. This remains bearish, but weakening in bearish support.

One of the 30-ETF’s is above its bullish red curve. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 31.7%. which is also non-bullish. The heart and soul of bullish seasonality potential has expired. Last Thursday Utilities were configured in support of deep bearishness, but Friday’s bullish spike reconfigured it with a very slight probability to lead a bullish spurt.

The QTI differential is bearish by 62.3%. This is the one-hundred and eighth consecutive trading day of a bearish reading. This bearishness is below those of any period between 1929 and 1934.

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

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

None of the thirty ETF’s is contacting its breakout line. Contrarian ETF#14-TLT contacted it on Thursday, November 20, 2008, but quickly retreated the next day. This remains non-bullish. At least there is confidence in treasuries at this time, but that could be challenged in the not too distant future.

The average distance from breakout contact is 47.2%. Double digit variances from breakout contact for 224-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. This is providing bearish support. Contact density is increasing, which is solidly bearish. However, there was no such contact on Friday, following last Thursday’s record high contact of 27-ETF’s.

The average distance between the price and breakdown is 7.0%, which is significantly better last Thursday’s 0.8% differential. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 63 of the last 104-trading days. This single digit reading facilitates the bear’s roaming at will.

The breakout/breakdown differential is bearish by 40.2%. This attribute continues supporting bearish ambition.

ETF Force Vector Configurations

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

Only two Force Vectors are in bullish domains. This low bullish support had been a reason the Short-term Indicant did not signal bull earlier this week when configurations suggested a slight probability of a bullish spurt.  Bullish spurt potential is approached near zero probability last Thursday, but elevated somewhat on Friday’s bullish expression.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

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

One of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Configurations continue suggesting decreasing bearish support.

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

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

Quick-term and Short-term Indicant Summary

The bearish bias originating on September 5, 2008 expired on November 4 and replaced with a new bullish bias. That bullish bias has expired as the bullish spurt perished shortly after its origination.  The Dow Utilities configured potential for bullish support expired last Thursday, but reconfigured on Friday, but no bull signal accompanied it.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID  today. It is simply too hot to hold right now.

Other Contrarian Funds

ETF#03-Natural Resources   - This ETF is down 39.7% since the Quick-term Indicant sell signal on July 24, 2008. The Quick-term Indicant will not signal bull until Vector Pressure is positive and Yellow Bear expires.

ETF#11-Gold and Precious Metals   received a sell signal on October 20, 2008. It is up 0.4% since then. This ETF will also not receive a buy signal until Vector Pressure is positive and its price crosses above yellow in classical Quick-term Indicant fashion.

ETF#14-Long Government  is up 3.4% since its buy signal on Nov 19, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

The market again succumbed to bearish convergence last week. That is three consecutive weeks of significant bearishness. One more week like the past three will foster more encouragement to the bear.

Indicant Conclusion

There were no buy signals for Mutual Funds. All 100-mutual funds are with avoid signals. A bullish spurt remains possible, but cash is king right now.

As stated the past three weeks, interest rates are falling, which is bullish. Oil prices are declining. Those two elements, alone, are typically enough to stimulate bullish activity. The problem is the economy, but the stock market will focus on economic conditions in 2009 and 2010. And that appears to be bearish.

Deflation is an increasing concern. If it manifests, a 2500 Dow by 2010/11 may be optimistic.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/23/08

November 16, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

A 2500 Dow by 2010?

A 30-year old buyer in 1980 would enjoy an approximate 250% increase by 2010 at the age of sixty if the Dow were to fall to 2500 by then. However, such investors would have some difficulty digesting the fact that their 15-fold increase by late 2007 will be down by 90%.

That is why cash is king. A 1980 holder of cash, however, would have less than sixty cents on the dollar due to inflation, which has been relatively mild since 1980. The problem with capital markets is the absence of guarantees. However that problem is the sole source of the benefits one gains in investing in capital markets.

Right now the Dow is battling around 8,000, which is down by 40% since it October 2007 peak. Pundits continue to suggest the average bear market is a 30% decline and some proclaimed this bear market was near its conclusion about 3,000 points ago last August. Others made those sort of comments earlier this year. It is a waste of time to listen to that sort of dialog.

Historically, the most bearish year along the presidential election cycle is the post election year. Politicians are not a focused on the economy in the post election year. Although they contribute nothing positive to the economy, they can undo some of their prior damage to stimulate economic activity.

In 1994, a Republican Congress and a Democratic president counter-balanced each other’s agenda, That created more or less a do-nothing government and the bull reacted with some significant gusto. It always does when government does little to nothing.

A much larger percentage of Americans hold stocks and/or mutual funds than in the 1980’s. That is creating somewhat of a new problem for politicians. Politicians have always campaigned with placating commentary to the middle class and lower classes. That is because that is where the most votes are. Politicians never do anything significantly to help them but the middle and lower classes keep on believing them.

The incoming U.S. president will not want to lose Congressional seats in 2010. Once the American public learns in detail how political interference in the capital market system is the sole source of the current bear market, incumbent politicians should be voted out of office in 2010. That biases in favor of the minority Republican party in 2010. Unfortunately, that is two years from now. Before then do not be surprised at politically induced stock market bearishness in addition to the politically induced bearishness already underway.

To make matters worse, China is unleashing over $500-billion to stimulate their economy. That may mean less investment in the U.S., which has limited capability to export goods to China. Also China’s economy is young and certainly more vibrant than that of the U.S. and Europe. There is little doubt that China will become decreasingly dependent on European and American consumption, since their own economy health may be self sustainable. That leads to the thought the U.S. may not have a customer to sell treasury bills to finance the crazy agenda of U.S. politicians. Since the U.S. caused the problem, there will be increased animosities from abroad furthering additional difficulties in financing political mumbo-jumbo.

As politicians increase socialistic agenda, which is about the only thing they can do, the question is, who will pay for it. U.S. taxpayers are obviously incapable since the U.S. consistently engages in deficit spending. The Japanese, who use to be the financiers of U.S. ineptness, have their own problems.

Bias your behavior in favor of deep bearish behavior until the 2010 elections and talk to everyone you know that is important that the executive and legislative branches of government not be from the same party. It does not matter which is which. Just different.

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

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

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

The Mid-term Indicant generated no buy signals and one sell signal. There have been 511-sell signals since October 26, 2007.

As stated the past five weeks, there is an increasing likelihood the heart and soul of bullish seasonality may take effect immediately. Technically, it will most likely be bullish spurt but this one could enjoy some sustainability through Christmas.

Although the major indices and ETF’s are settling just above their breakdown lines, the heart and soul of bullish seasonality is lacking the required motivation to get moving. Although the probability remains high of this seasonal phenomenon, bullish magnitude will most likely be muted due to the shorten lead-time remaining before the presidential inauguration.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 30 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 60.7%. That annualizes to 76.5%. The Mid-term Indicant has been signaling hold for these 30-stocks and funds for an average of 41.2-weeks.

In addition to the sell signal, the Mid-term Indicant is avoiding 313-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 35.3% since the Mid-term Indicant signaled sell an average of 25.7-weeks ago.

One year ago, on Nov 16, 2007, the Mid-term Indicant was holding 253-stocks and funds out of the 345 tracked for an average of 123.2-weeks. They were up by an average of 141.8% (annualized at 59.6%). There were 84-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 10.9% since their respective sell signals an average of 17.0-weeks earlier.

The Mid-term Indicant was signaling hold for 310-stocks and funds of the 345-tracked two years ago on Nov 17, 2006. They were up by an average of 109.7% (annualized at 68.9%) since their respective buy signals an average of 82.8-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down an average of 11.9% since their respective sell signals an average of 18.7-weeks earlier.

There were 265-stocks and funds with hold signals on Nov 18, 2005 since their buy signals an average of 80.7-weeks earlier. They were up by an average of 94.6% (annualized at 60.9%). There were 50-avoided stocks and funds at that time. They were down by an average of 17.7% from their respective sell signals an average of 24.8-weeks earlier.

On Nov 12, 2004, the Mid-term Indicant was signaling hold for 297-stocks and funds out of 320-tracked. They were up by an average of 68.7% (annualized at 69.1%) since their buy signals an average of 51.7-weeks earlier. The Mid-term Indicant was avoiding 17-stocks and funds at that time. They were down by an average of 45.6% since their sell signals an average of 54.6-weeks earlier.

Five years ago, on Nov 15, 2003, there were 264-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 54.9% (annualized at 89.6%) since their respective buy signals an average of 33.3-weeks earlier. There were 22-avoided stocks and funds then. They were down an average of 24.3% since their respective sell signals an average of 33.3-weeks earlier.

On Nov 9, 2002, there were 268-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 14.4%, annualizing at 88.5%. There were 23-avoided stocks and funds then. They were down by an average of 22.4% since their sell signals an average of 14.1-weeks earlier.

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

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

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

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

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

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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 16.4% since its secular low on October 9, 2002. The NASDAQ is up 36.1% and the S&P500 is up 12.4% since then. The small cap index, S&P600, is up 43.7%.

All ten major stock indices received Mid-term Bull signals last weekend and should hold up through December or January.

The Dow is down 40.0% since its last closing peak on Oct 9, 2007. The NASDAQ is down 46.9% since its last peak on Oct 31, 2007. The S&P600 is down 44.9% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 70.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 42.8% since its similar secular peak on March 23, 2000. The Dow is down by 27.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 35.9% so far this year. The NASDAQ is down 42.8% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

As stated the past few weeks, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality. Deep bearish seasonality for 2008 technically expired as of Friday, October 17. The heart and soul of bullish seasonality is available to exert its influence on the stock market. However, it varies off of the standards from year to year. For example in 2006 started in mid-August. In 2007, it was much later and did not last as long. This year, the start was three weeks ago. It should hold up and last at least a few weeks; most likely through Christmas.

All major indices contacted their breakdown lines seven Friday’s ago. Unfortunately, that continued into the following weeks with record setting bearish expressions. However, as stated the past six weeks, that is a common condition for bullish cycles to originate. The bear was obviously offended by this but the major indices are still hovering above their breakdown lines in spite of bearish aggression the past few days.

The NASDAQ year-to-date performance was bearish by 23.0% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.  This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 27.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 44.5%. It finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 4.1%.  It was up by 1.2% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 10.2% on this weekend and finished that year up by 9.5%. It was up by 9.5% at this time last year and finished 2007 up by 9.8%.

As stated the past two weeks, do not be surprised at a Quick-term and Short-term bullish cycle in the next few days. Unfortunately, the bull is having difficulty finding traction.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to decreasing bearish influences for the longer-term holdings. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates and commodity prices continue collapsing and fast. Extraction of one of the three wealth creation industries. Reducing demand is reducing prices, which will reduce activity, which will reduce wealth. And without all that politicians and government employees will not experience pay cuts or get laid off.

As stated last week, the concern around the corner will be deflation. Depending on magnitude, the next Great Depression feasible. Socialism, which caused the problem, will be conveyed as the solution to the problem. Poverty levels will accelerate.

As stated last week, the U.S. Dollar continues to strengthen. There is no real good reason for this, except fewer dollars by consumers are available, depressing supply. The banks are apparently hoarding the $700-billion. Other countries are apparently more vulnerable due to the “screw-up by politicians” and money manager dilettantes.

As stated three weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will return and with some gusto. This is not technical. This is fundamental.

As stated last week, probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009.

As stated last week, if taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.

This bear has teeth, is hungry, and is nowhere near expiration. However, the heart and soul of bullish seasonality should provide some relief. It apparently got off to a rough start this past week, but configurations remain in support of that bullish phenomenon.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 40.0% since that sell signal.

Fidelity Gold, Fund #28 is down 46.9% since the Midterm Indicant signaled sell on August 1, 2008.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 21.4% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 26.4% since that sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 28.4% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 23.0% since that sell signal.

Energy related funds were again bearish last week. They have endured significant bearishness in eleven of the last 14-weeks.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 20.2% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 25 of the past 42-weeks and in 17 of the past 22-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 again on October 20, 2008. It is down 4.1% since then. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund’s bearish influence may not yet be over, but should not fall in price as much as other commodities.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They were down an average of 29.0% at the time some of them received bull signals on Oct 31, 2008. The Mid-term Indicant signaled bull for the remaining four major indices last weekend. All ten of the major indices are now bulls.

Unfortunately, all ten major indices are down by an average of 8.1% since the Mid-term Indicant signaled bull an average of 1.6 weeks ago. Last week’s bearishness caused this but should correct in the next week or two.

Keep in mind there is no expectation of bullish sustainability. Although technical factors are stimulating these bull signals, economic fundamentals are not supportive. These new bulls should extend through Christmas.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $33,096,415

That beats buy and hold performance of $1,292,760 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $160,138. That beats buy and hold’s $85,541 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $204,742. That beats buy and hold’s $52,595 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,460.1%, 87.2%, and 289.3%, 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 approximately 2,000% covering the past 100+ years.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled buy for this fund on September 12, 2008 and it signaled sell on October 31, 2008. It was up over 30% since that September buy signal. It remains too risky to hold for the time being. Once the heart and soul of bullish seasonality expires, this fund will receive a buy signal; most likely in January 2009. It is up 21.5% since the October 31, 2008 sell signal.

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 193.5% (annualized at 11.3%) since the Long-term Indicant signaled bull 889-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: None of thirty. No bullish support at this time.

Quick-term Yellow Bears/Threats: Twenty-nine of thirty. Still supporting bearish behavior.

Quick-term Non-Bearishness: QTI differential is bearish 54.9%; strong bearish support but weakened in that support the past two days.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 37.7%; this remains solidly in support of the bear, but weakened the past two days.

Short-term Indicant: Breakdown contact density again occurred today, but very narrowly sectored.

Short-term Indicant: Bearish position.

Force Vectors: Bullish support arrived last Thursday. Its arrival was strategic, critical, and significant on a quick-term, short-term, mid-term and long-term basis. Friday’s profit taking bearish session did not disrupt Thursday’s significance.

Vector Pressure: A minority of one in bullish domains and thus without bullish support. Directional intensity is bullish, but from deep inside bearish domains. The bullish direction is sufficient for partial participation of hold signals.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. Such a response would not be surprising before year end. (This has been changed in timing from presidential inauguration, but may shift this expectation back to late January). Either way, this bear is nowhere near extinction. It will be long lasting and deep! But for traders, there is some excitement in the attempt to participate in bullish spurts from time to time. For longer-term investors, cash is king.

Reverse Tangential Support: Being constructed, fostering a very high probability of bearish sustainability, but a bullish spurt is required to complete the valuations of where the next bearish cycle will occur; most likely next January-February.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation. The current bullish cycle is attempting traction and it had better hurry before the major indices and ETF’s resume sliding down that slippery bearish slope. That desired traction remains developmental in spite of recent bearishness.

Current Short-term/Quick-term Bias: Bearish bias of September 5, 2008 expired November 4, 2008 in favor of a new bullish bias. Rising Vector Pressure is tantamount to this bias and still holding in spite of bearish aggressions this past week.

Overall Market Status: A bullish spurt of eight to 12-weeks would not be surprising starting as of October 31, 2008. Now supported by bullish bias. The bearish yellow curve is inflection off of bearish direction. Thursday, November 13, 2008 bullish aggression still supports this prognosis, but the breadth of sustainability is being challenged.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness supported bear while configuring lethargy will not be as supportive of any bullish spurt that may form in the immediate future. Recent bearish behavior has not been supported by volume. However, configurations are threatening to any desired bullishness before year-end. This could, indeed, be a “capital gains” or lack thereof market.

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

To view the STI-Tangential Protection for ten major indices, click here.  

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality,  has been thoroughly tested and validated. Documentation is a different matter and it will be completed before the end of the year.

DJIA

11/07/08-Fri-Today’s bullish aggression did not approach prior two days of bearish aggression. The bull did respond, though, suggesting an attempt to gain traction. Bearish behavior last Wednesday and Thursday are typical at this point of the current configuration where yellow curve is attempting a cyclical shift from bearish support to bullish support. That bearish behavior, albeit significant to the point of being extreme, did not disrupt the bull’s configured attempt to flourish. 11/10/08-Mon-You can see bearish yellow flattening. Vector Pressure is attempting to climb into neutrality. Force Vector is threatening with bearish support, but its cycle is mature. Those desiring bullish behavior do not want to see it fall below Yellow-N. 11/11/08-Tue-Force Vectors fell below Vector Pressure and Yellow-N. The Short-term Indicant is near signaling bear. It did not do that today since the Index is higher than Bearish Yellow curve. It is unusual that a robust Force Vector that accompanied the bullish movement above Bullish Red curve lacked any follow-on bullishness. If Index falls below Bearish Yellow Curve in the next few days, we can forget about the heart and soul of bullish seasonality this year, which is similar to 2001 bear market behavior. Its Bullish Red curve has not yet collapsed, which is one of the few remaining attributes providing bullish bounce hope. 11/12/08-Wed-Unfortunately, all potential bullish attributes succumbed to the bear and thus this index is again a bear. Positively moving Vector Pressure is the last ray of bullish hope. Do not be surprised at bullish behavior in the next few days, but this model will not signal bull until such time all criteria are met; the prime two is the index crosses above bullish red and Force Vectors crossing above Red-X. The question now is will Vector Pressure pull Force Vectors north or will Force Vectors pull Vector Pressure south. If it is the latter, this index could very well indeed go below 5,000 in 2009 and approach 2500 in 2010. Reverse tangential constructions will shed more light on that after the next bullish cycle forms and completes. Nov 13, 2008-Thu-Vector Pressure pulled Force Vectors north. This is encouraging to those desiring bullish behavior. Force Vectors, though, remain deep inside bearish domains. Before signaling bull, they must cross Red-X. As you can see they are below Yellow-N on the bottom of the charts. Nov 14, 2008-Fri-In spite of today’s bearish aggression, this index remains above bearish yellow. The attempt at cyclical shift from bearish dominance continues to be difficult, but still doable with the current configuration.

DJ Composites

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as DJIA, but Vector Pressure remains a bit more depressed, but heading slightly northeast favoring non-bearish behavior for the time being. 11/11/08-Tue-Same as DJIA. 11/12/08-Wed-Same as DJIA except this index could fall to 2000 next year. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

DJ Transports

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as DJ-Composites. 11/11/08-Tue-Same as DJIA. 11/12/08-Wed-Same as DJIA except this index could fall to 2,000 by next year. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

DJ Utilities

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as DJIA, except its Vector Pressure is very close to penetrating neutrality, which should depress bearish ambition. It is also hugging around bullish Red Curve, which suggests some added bullish potential. 11/11/08-Tue-This index provides a glimmer of bullish hope. Although a weak observation with some emotional attachment, this index remains positioned closer to Bullish Red than Bearish Yellow. Other than that, this is configured similarly to the DJIA. 11/12/08-Wed-This is the only ray of bullish hope remaining and it is thinner than a human hair. As you can see, Force Vectors fell into bearish domains, but the Utility Index continues hovering above bearish yellow. You will also notice bearish yellow is flattening. It did not receive a bear signal today, while the remaining indices are now with bear signals. Nov 13, 2008-Thu-As you can see, this Index returned to Red Bull today, which is very bullish. Vector Pressure is struggling to cross into neutrality. Many of you recall, this index was most resistive to bearish influences earlier this year. This index was the only one that did not display bearish attributes yesterday. Keep your eye on this particular index. If the oscillations occur around Bullish Red curve, a sustainable rally lasting through late December, remains possible. Nov 14, 2008-Although Utilities did not escape the bear’s wrath today, it was the least bearish of the major indices. Its Force Vector continues marching north and doing its part to pull Vector Pressure from deep bearish domains. Bearish yellow curve continues to flatten offering some potential resistance to near-term dynamic bearishness.

NASDAQ

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as DJIA. It along with the other major indices continues resisting yellow bear status. Force Vector is threatening, though, with some added bullish support. However, its cycle is mature. 11/11/08-Tue-This index is more bearish than the DJIA. It is now riding its breakdown line. This is exceedingly bearish. The last ray of bullish hope is for a violent bullish reaction to Force Vector crossing below Vector Pressure today. A bullish bounce is needed and within the next day or two. 11/12/08-Wed-There was no bullish bounce. This index is pathetic and completely under control by the bear. All associated ETF’s, etc. will receive sell signals. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-The NASDAQ is a pathetic expression of forward moving, profit making enterprises. There are no attributes positioned in support of the bull.

NASDAQ100

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as NASDAQ. 11/11/08-Tue-Same as NASDAQ. 11/12/08-Wed-Same as NASDAQ. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as NASDAQ.

S&P500

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as Dow Composites. 11/11/08-Tue-Same as DJIA. 11/12/08-Wed-Same as DJIA. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

S&P100

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as Dow Composites. 11/11/08-Tue-Same as DJIA. 11/12/08-Wed-Same as DJIA. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

S&P400

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as Dow Composites. 11/11/08-Tue-Same as DJIA. 11/12/08-Wed-Same as NASDAQ and DJIA. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

S&P600

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as Dow Composites. 11/11/08-Tue-The small caps Force Vector is hovering above Vector Pressure and Yellow-N. That remains non-bearish. 11/12/08-Wed-Same as NASDAQ and DJIA. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

NYSE

11/07/08-Fri-Same as DJIA. 11/10/08-Mon-Same as DJIA. 11/11/08-Tue-The Big Board’s Force Vector remains elevated above Bullish Red-X, which is exceedingly non-bearish. 11/12/08-Wed-Same as NASDAQ and DJIA. Nov 13, 2008-Thu-Same as DJIA. Nov 14, 2008-Same as DJIA.

VIX

11/07/08-Fri-Force Vectors are configuring to support non-bearishness by the VIX (non-bullish for the stock market). However, it is deep in bearish domains and it should not be destructive at the bull’s attempt to become dominant. 11/10/08-Mon-Bearish yellow is flattening. Vector Pressure moving south, but still remaining deep inside bullish domains. The positional aspects of VIX do not support continuing stock market bearishness, but they equally do not support dynamic stock market bullishness. 11/11/08-Tue-Force Vector is rising from deep inside bearish domains, but its bearish yellow curve is flattening, which offers some potential to bring this index down. 11/12/08-Wed-The trend remains bullish (bearish for stock market) even though the VIX’s bull is tiring. It should expire soon. Nov 13, 2008-Thu-As you can see, the Force Vector has nestled right up next to Vector Pressure. This bodes well for a bullish stock market, provided the Force Vector shifts back south and supporting a continuation of a bearishly moving Vector Pressure. Nov 14, 2008-Fri-Same as yesterday. Today’s market behavior did not disrupt potential for this indices succumbing to bearish behavior.

Overall Comment Regarding Major Indices:  11/07/08-Fri-As you can see, all of the major indices are behaving the same. They are in harmony in supporting each other’s attempt to form a bullish configuration. The bull/buy signals last Tuesday were mechanical and technical and configurations have not shifted to repel them. So, continue holding those short-term buys, albeit somewhat discerning at this point. 11/10/08-Mon-The major indices are resisting bearish dominance by remaining above bearish yellow, which are attempting to flatten out. That will minimize any bearish damage that could ensue. The risk remain high, but the reward potential is worth it for a few of the ETF’s that are signaling hold. 11/11/08-Tue-Vector Pressure continues increasing from inside deep bearish domains. Force Vector behavior is threatening the increasing bullish pressure. If Vector Pressure shifts back into a southerly direction, the bear will assume dominance. This threat is immediate and corrective bullish action is required in the next day or two. 11/12/08-Wed-The bear obliterated the few remaining attributes arguing for bullish behavior. The lone survivor is the Dow Utilities. If the market opens up tomorrow, hold off on selling the recent buys, even though the Quick-term Indicant will signal a few sells today. It may hold onto some of the less weakened ETF’s on the basis of rising Vector Pressure. 11/13/08-Thu-The Quick-term Indicant continued holding several ETF’s of the group receiving recent buy signals. Although still in a small losing position, the Dow Utilities and rising Vector Pressure are reason for continued holding of those ETF’s. Those receiving sell signals in early September will not receive buy signals until they contact bearish yellow and Vector Pressure is positive. 11/14/08-Fri-Same as yesterday, but the held loss positions are undesirable, but on average less than 10%. The risk/reward for continued holding remains justified for those with a penchant for high trading frequency.

The Short-term Indicant will not signal bull until Force Vectors cross above Red-X and evolve to Red Bull status. The DJIA is up 2.6% and the NASDAQ is up 1.2% since the bear signal of November 12, 2008.

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

The NYSE and NASDAQ Indicant Volume Indicators  continue with a lethargic configuration with less bullish support than recent bearish support. Although a bullish cycle is anticipated on a near-term basis, it will be without volume support. 

Volume was significantly lower on today’s bearish aggression than yesterday’s aggressive bullish aggression. This attribute supports the idea of a bullish cycle on the immediate horizon; at worse a period of non-bearishness. The NASDAQ rose 6.5% on high volume last Thursday, which is slightly better than its 5.5% increase last October 16. Until the Indicant Volume Indicator shifts into a robust cycle, do not read too much into these volume relationships of bullish/bearish behavior.

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

There were no buy signals and no-sell signals. There are 15-ETF’s with hold signals. The are down by an average of 8.0% since their buy signals an average of 1.8-weeks ago. The SQI is avoiding 16-ETF’s. They are down by an average of 30.1% since their sell signals an average of 14.2-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. There are 15-ETF’s with hold signals. They are down by an average of 7.7% since their buy signals an average of 1.8-weeks ago. There are 16-ETF’s with avoid signals. They are down by an average of 30.2% since their sell signals an average of 14.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no-sell signals. There are 15-ETF’s with hold signals. They are down by an average of 7.7% since their buy signals an average of 1.8-weeks ago. The Quick-term Indicant is avoiding 16-ETF’s. They are down by an average of 31.5% since their sell signals an average of 12.0-weeks ago.

Current Strategy-Quick-term Indicant -Nov 7, 2008-Fri-Today’s bullish response to nasty bearish aggressions the past two days is justification into holding the recent buys. There will be no additional buy signals until the individual ETF’s that are currently being avoided contact their bearish yellow curves. Those being held will continue to hold unless major indices reconfigure to bearish support and the ETF Force Vector fall into bearish domains. Nov 10, 2008-Mon-Continue holding the ETF’s with hold signals as long as Force Vectors remain above Vector Pressure and major indices avoid becoming yellow bears. Do not buy more, though, and do not set stop losses. Nov 12, 2008-Vector Pressure continues to rise. Force Vectors continue to fall. The question is which will become more influential. The Quick-term Indicant signaled sell for a few ETF’s but held onto some of the recent buys on the basis of rising Force Vectors. Do not buy more as the major indices are falling prey to additional bearishness. Although the heart and soul may still configure, its bullish potential is at a minimum. For those buy signals in late October, the idea here is to minimize losses. The Dow Utilities and rising Force Vectors are the only remaining attributes offering some Quick-term bullish potential.  Nov 13, 2008-Rising Vector Pressure and a bullish Utility Index proved to be strong enough to mitigate bearish ambition on a short-term basis. For those with a penchant to trade, continue holding those recently purchased ETF’s. The longer-term investor should remain in cash. This bear is not over. The other ETF’s with negative Vector Pressure and Yellow Bear status will not receive a buy signal, regardless of market behavior, until those two attributes shift from bearish configurations to bullish configurations. That may not happen until 2010. Nov 14, 2008-Fri-Dynamic bullishness followed with lesser dynamic bearishness suggests a desire for the markets to stabilize. Several quick-term attributes are supporting at best a mild bullish spurt through XMAS and at worse an extended period of non-bearishness.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-nine of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 26.6%. This remains bearish, but weakening in bearish support.

None of the 30-ETF’s are above their bullish red curves. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 28.3%. which is also non-bullish. The heart and soul of bullish seasonality is justification for some participation in the market and assuming associated risks for the traders. Buy signals week before last were technically supported by Quick-term Indicant attributes. Most of those “bullish” attributes succumbed to bearish influences on November 12, 2008, but rebounded on November 13, 2008. Dynamic bearish expressions on Friday, November 14, 2008 did not upset these “fragile” configurations of mild bullish support. Their short-term extinction, coupled with positively sloping Vector Pressure, is the reason for retaining some hold signals on some of the less punished ETF’s.

The QTI differential is bearish by 54.9%. This is the one-hundredth and thrid consecutive trading day of a bearish reading. Thursday’s bullish response was much needed to prevent the bear from resuming dynamic dominance. It most likely will in 2009 and 2010, but there will be a few bullish spurts for those of you who enjoy trading.

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

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

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

The average distance from breakout contact is 43.3%. Double digit variances from breakout contact for 219-consecutive trading-days has been non-bullish.

One of the thirty ETF’s is contacting its breakdown line. It is ETF#17, Real Estate. Not too surprising as that industry sector, coupled with the idle and dysfunctional brains in politics is what caused all of this bearishness.

The average distance between the price and breakdown is 5.6%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 58 of the last 99-trading days. The shift from Wednesday’s single digit reading to Thursday’s double digit expression and back to Friday’s single digit expression suggests both bull and bear are convinced they are on the correct side of accurately foretelling future economic conditions.

The breakout/breakdown differential is bearish by 37.7%. This attribute is supporting bearish ambition.

ETF Force Vector Configurations

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

Only one Force Vector is in bullish domains. This is a primary reason the Short-term Indicant did not signal bull the past two days.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

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

One of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Configurations continue suggesting decreasing bearish support.

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

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

Quick-term and Short-term Indicant Summary

The bearish bias originating on September 5, 2008 expired on November 4 and replaced with a new bullish bias. The bull finally responded by virtue of rising Vector Pressure on Thursday, November 13, 2008. The November 4 bullish bias remains in tact but exceedingly fragile and intended only for those with short-term interest in the stock market.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID  on October 16, 2008. It is up 10.6% since then. It should move south in the next few days.

Other Contrarian Funds

ETF#03-Natural Resources   - This ETF is down 35.2% since the Quick-term Indicant sell signal on July 24, 2008. The Quick-term Indicant will not signal bull until Vector Pressure is positive and Yellow Bear expires.

ETF#11-Gold and Precious Metals   received a sell signal on October 20, 2008. It is down 6.6% since then. This ETF will also not receive a buy signal until Vector Pressure is positive and its price crosses above yellow in classical Quick-term Indicant fashion.

ETF#14-Long Government  is up 0.4% since the sell signal on September 30, 2008. Vector Pressure is declining.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

The market succumbed to bearish convergence last week. That is two consecutive weeks of significant bearishness. Two more weeks like the past two will foster more encouragement to the bear.

Indicant Conclusion

As stated the past three weekends, some buy signals were induced by a shift in some bullish configurations. However, you notice the Mid-term Indicant did not generate any buy signals this past weekend. The idea at this point is for a bullish spurt to move mutual funds and some stocks up to their bearish yellow curves. Once contact is made there, the bear will be stimulated to exert its influence on the stock market.

There were no buy signals for Mutual Funds. All 100-mutual funds are with avoid signals.

As stated the past two weeks, interest rates are falling, which is bullish. Oil prices are declining. Those two elements, alone, are typically enough to stimulate bullish activity. The problem is the economy, but the stock market will focus on economic conditions in 2009 and 2010. And that appears to be bearish.

As stated last weekend, the expected bullish cycle has begun, albeit late from prior expectations. It will most likely be a bullish spurt, lasting through Christmas. There is little doubt about a deeper bearish cycle into 2009 and 2010 by virtue of a reverse tangential line that is over 90% accurate in predicting such phenomenon.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/16/08

November 09, 2008 Indicant Weekly Stock Market Report

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

This Week’s Report

Technical Overview

All major indices achieved non-bearish attributes the past few days for the first time since early September. The Short-term Indicant shifted into bullish bias a few days ago due to the synergies developed to support a bullish cycle on the immediate horizon.

Extreme bearishness last Wednesday and Thursday were not unusual after these non-bearish attributes configured. However, the magnitude was unusual with over a 10% drop in the NASDAQ index on those two days. That was the stock market making a statement to the politicians. The message was, “do not raise capital gains taxes.” The current rate is abusive and immoral and raising it only worsens the capacity of capitalism.

However, in spite of politician’s unrelenting depressant to the quality of life, good greed should stimulate some bullishness over the next few weeks for those of you interested in short-term trading.

A quick look at the charts will illustrate this prognosis of short-term bullishness.

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

As many of you noticed just ahead of the presidential election, Force Vectors for the major indices shot to the north with significant exuberance. The magnitude of this Force Vector behavior approached the bearish magnitude that drove the indices to record setting bearishness during September and October.

Clicking the below link will take you to the remaining charts representing the behavior of the major market indices.

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

Even the dynamic bearish aggression on the two days following the election did not disrupt the newly non-bearish configuration. This is significant in that the market is finding some comfort at current levels. Also, the heart and soul of bullish seasonality should offer some influence in the next few days.

Investors are comparing stock prices today with that of the past; some over a year ago and some just a few weeks ago. The gap between recent historical prices and contemporary prices should incite good greed. That is, the perception of bargain basement prices enhances the probability of a bullish cycle.

Keep in mind once the bullish cycle starts and completes, a new reverse tangential expression will be configured. This offers a longer-term perspective with respect to the stock market outlook. Unfortunately, that outlook is bearish. The impending bullish cycle will not be sustainable. Sour economic fundamentals are backed with solid technical support for long-term bearishness.

Believing government will solve the economic problem by the masses offers the bear significant incentive to slap that sort of stupidity. Government created the problem, but the masses do not understand that. And government will use their massive access to the press claiming they readying the rescue and with each move only worsening it. If the masses are as gullible as their ancestors from the 1930’s, the bear market could last twenty years, driving the Dow down below 2,000.

Regardless though, there will be periods of good greed bullishness. The Short-term Indicant is sniffing such a cycle right now. Vector Pressure remains deep inside bearish domains, which suggests such bullishness will not last too long.

Finally, if Force Vectors drop below N, which is the yellow line on the bottom of the charts, then the impending bullish cycle will evaporate and the bear will resume dominance.

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

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

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

The Mid-term Indicant generated seven buy signals and no sell signals. There have been 510-sell signals since October 26, 2007.

As stated the past four weeks, there is an increasing likelihood the heart and soul of bullish seasonality may take effect immediately. Technically, it will most likely be bullish spurt but this one could enjoy some sustainability through Christmas.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 24 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 83.0%. That annualizes to 87.9%. The Mid-term Indicant has been signaling hold for these 24-stocks and funds for an average of 49.1-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 313-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 30.9% since the Mid-term Indicant signaled sell an average of 24.7-weeks ago.

One year ago, on Nov 9, 2007, the Mid-term Indicant was holding 261-stocks and funds out of the 345 tracked for an average of 119.5-weeks. They were up by an average of 138.8% (annualized at 60.4%). There were 59-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 19.6% since their respective sell signals an average of 26.7-weeks earlier.

The Mid-term Indicant was signaling hold for 310-stocks and funds of the 345-tracked two years ago on Nov 10, 2006. They were up by an average of 103.5% (annualized at 65.8%) since their respective buy signals an average of 81.8-weeks earlier. The Mid-term Indicant was avoiding 34-stocks and funds at that time. They were down an average of 11.8% since their respective sell signals an average of 24.1-weeks earlier.

There were 253-stocks and funds with hold signals on Nov 11, 2005 since their buy signals an average of 82.9-weeks earlier. They were up by an average of 93.4% (annualized at 58.6%). There were 54-avoided stocks and funds at that time. They were down by an average of 16.1% from their respective sell signals an average of 25.5-weeks earlier.

On Nov 5, 2004, the Mid-term Indicant was signaling hold for 277-stocks and funds out of 296-tracked. They were up by an average of 69.8% (annualized at 67.7%) since their buy signals an average of 53.6-weeks earlier. The Mid-term Indicant was avoiding 21-stocks and funds at that time. They were down by an average of 41.0% since their sell signals an average of 53.6-weeks earlier.

Five years ago, on Nov 8, 2003, there were 267-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 55.3% (annualized at 93.6%) since their respective buy signals an average of 30.7-weeks earlier. There were 23-avoided stocks and funds then. They were down an average of 24.5% since their respective sell signals an average of 32.6-weeks earlier.

On Nov 9, 2002, there were 249-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 12.7%, annualizing at 74.8%. There were 21-avoided stocks and funds then. They were down by an average of 25.4% since their sell signals an average of 13.9-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

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

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

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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 22.7% since its secular low on October 9, 2002. The NASDAQ is up 47.9% and the S&P500 is up 19.9% since then. The small cap index, S&P600, is up 58.1%.

All ten major stock indices received Mid-term Bull signals this weekend and should hold up through December or January.

The Dow is down 36.9% since its last closing peak on Oct 9, 2007. The NASDAQ is down 42.4% since its last peak on Oct 31, 2007. The S&P600 is down 39.4% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 67.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 39.0% since its similar secular peak on March 23, 2000. The Dow is down by 23.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 32.6% so far this year. The NASDAQ is down 37.9% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

As stated the past few weeks, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality. Deep bearish seasonality technically expired as of Friday, October 17, 2008. The heart and soul of bullish seasonality is available to exert its influence on the stock market. However, it varies off of the standards from year to year. For example in 2006 started in mid-August. In 2007, it was much later and did not last as long. This year, the start was two weeks ago. It should hold up and last at least a few weeks; most likely through Christmas.

All major indices contacted their breakdown lines six Friday’s ago. Unfortunately, that continued into the following weeks with record setting bearish expressions. However, as stated the past five weeks, that is a common condition for bullish cycles to originate.

The NASDAQ year-to-date performance was bearish by 25.6% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.  This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 29.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 47.6%. It finished up in that solidly bullish year by 50.0%. It was up on this weekend in 2004 by 1.8%.  It was up by 0.1% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 7.7% on this weekend and finished that year up by 9.5%. It was up by 13.8% at this time last year and finished 2007 up by 9.8%.

As stated last week, do not be surprised at a Quick-term and Short-term bullish cycle in the next few days. This past week indeed enjoyed significant bullish expressions.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to decreasing bearish influences for the longer-term holdings. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates and commodity prices are collapsing and fast. The concern around the corner will be deflation. Depending on magnitude, the next Great Depression will be feasible.

The U.S. Dollar continues to strengthen. There is no real good reason for this, except fewer dollars by consumers are available, depressing supply. The banks are apparently hoarding the $700-billion. Other countries are apparently more vulnerable due to the “screw-up by politicians” and money manager dilettantes.

As stated two weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will return and with some gusto. This is not technical. This is fundamental.

Probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009.

If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.

This bear has teeth, is hungry, and is nowhere near expiration. However, the heart and soul of bullish seasonality will provide some relief. It apparently got off to a rough start this past week, but configurations remain in support of that bullish phenomenon.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 32.4% since that sell signal.

Fidelity Gold, Fund #28 is down 43.1% since the Midterm Indicant signaled sell on August 1, 2008.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 14.6% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 29.7% since that sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 20.8% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 18.0% since that sell signal.

Energy related funds were bearish last week, following a bullish spurt in the prior week. They have endured significant bearishness in ten of the last 13-weeks and were bearish last week.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 32.9% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 24 of the past 41-weeks and in 16 of the past 21-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 again on October 20, 2008. It is down 8.0% since then. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund’s bearish influence may not yet be over, but should not fall in price as much as other commodities.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They were down an average of 29.0% at the time some of them received bull signals on Oct 31, 2008. The Mid-term Indicant signaled bull for the remaining four major indices this weekend. All ten of the major indices are now bulls.

Keep in mind there is no expectation of bullish sustainability. Although technical factors are stimulating these bull signals, economic fundamentals are not supportive. These new bulls should extend through Christmas.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $34,835,500

That beats buy and hold performance of $1,360,689 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $170,719. That beats buy and hold’s $91,193 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $57,122 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,460.1%, 87.2%, and 289.3%, 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 approximately 2,000% covering the past 100+ years.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled buy for this fund on September 12, 2008 and it signaled sell on October 31, 2008. It was up over 30% since that September buy signal. It remains too risky to hold for the time being. Once the heart and soul of bullish seasonality expires, this fund will receive a buy signal; most likely in January 2009. It is up 7.7% since the October 31, 2008 sell signal. That was due to the market screaming at the new president elect to not disrupt the capital gains tax.

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 209.1% (annualized at 12.2%) since the Long-term Indicant signaled bull 888-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

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

Quick-term Red Bulls: None of thirty. No bullish support at this time.

Quick-term Yellow Bears/Threats: Twenty-nine of thirty. Still supporting bearish behavior.

Quick-term Non-Bearishness: QTI differential is bearish 46.8%; although bearish, it is weakening in its bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 25.7% with continued but weakening bearish support on a cyclical basis in spite of bearishness last Wed and Thu.

Short-term Indicant: Breakdown contact density continues relaxing, supporting non-bearishness.

Short-term Indicant: Still bearish in position, but direction is again being challenged by the bull.

Force Vectors: Solidly supporting bull with a majority of 23 in bullish domains. They are falling now from bullish domains.

Vector Pressure: A minority of one in bullish domains and thus without bullish support. Directional intensity is bullish, but from deep inside bearish domains. The bullish direction is sufficient for partial participation of hold signals.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. Such a response would not be surprising before year end. (This has been changed in timing from presidential inauguration).

Reverse Tangential Support: Being constructed, fostering a very high probability of bearish sustainability, but a bullish spurt is required to complete the valuations of where the next bearish cycle will occur; most likely next January-February. Unfortunately, the current bear cycle continues without the desired interruption, but nearing with the desired disruption.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation. The current bullish cycle is attempting traction in spite of bearish aggressions last Wed and Thu.

Current Short-term/Quick-term Bias: Bearish bias of September 5, 2008 expired November 4, 2008 in favor of a new bullish bias.

Overall Market Status: A bullish spurt of eight to 12-weeks would not be surprising starting as of October 31, 2008. Now supported by bullish bias.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness supported bear while configuring lethargy will not be as supportive of any bullish spurt that may form in the immediate future.

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

To view the STI-Tangential Protection for ten major indices, click here.  

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality,  has been thoroughly tested and validated. Documentation is a different matter and it will be completed before the end of the year.

DJIA

10/31/08-Fri-Force Vector and Index are greater than red and therefore a baby bull has been born. It is young and vulnerable. 11/03/08-Mon-Force Vector dynamic and resonating bullish bias. 11/04/08-Tue-Same as yesterday. 11/05/08-Wed-Force Vector was too hot and today’s bearish expression is it cooling, regardless of fundamental reasons. 11/06/08-Thu-Today’s aggression by the bear again did not disrupt bullish configurations. Once the Force Vectors cool off, bullish expressions should completely offset recent bearishness. Vector Pressure rising in favor of the bull. Hold signals and recent bullish bias does not want to see Force Vectors fall below yellow or Vector Pressure.11/07/08-Fri-Today’s bullish aggression did not approach prior two days of bearish aggression. The bull did respond, though, suggesting an attempt to gain traction. Bearish behavior last Wednesday and Thursday are typical at this point of the current configuration where yellow curve is attempting a cyclical shift from bearish support to bullish support. That bearish behavior, albeit significant to the point of being extreme, did not disrupt the bull’s configured attempt to flourish.

DJ Composites

10/31/08-Fri-Same as Dow. 11/03/08-Mon-Same as DJIA. 11/04/08-Tue-Same as yesterday. 11/05/08-Wed-Same as Dow. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

DJ Transports

10/31/08-Fri-Same as Dow. 11/03/08-Mon-Same as DJIA. 11/04/08-Tue-Same as yesterday. 11/05/08-Wed-Same as Dow. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

DJ Utilities

10/31/08-Fri-This index received a bull signal yesterday and was the only index to endure a bearish expression today; albeit a mild one. The baby bull survived this mild attack. 11/03/08-Mon-Maintaining its bullish bias from last week. Still embryonic but increasing its potential for growth. 11/04/08-Tue-Same as yesterday. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

NASDAQ

10/31/08-Fri-Unfortunately, this index remains a yellow bear even though Force Vectors support the bull. 11/03/08-Mon-Index remains below bullish red curve, which is the only attribute preventing bull signal. 11/04/08-Tue-Received bull signal today. 11/05/08-Wed-Same as Dow. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

NASDAQ100

10/31/08-Fri-Although Force Vector complied with bullish support, this is again a yellow bear. 11/03/08-Mon-Same as NASDAQ. 11/04/08-Tue-Received bull signal today. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

S&P500

10/31/08-Fri-Same as Dow. 11/03/08-Mon-Index fell below bullish red today, but retains bull status since Force Vector remains in dynamic support of bull. 11/04/08-Tue-Resumed red bull status. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

S&P100

10/30/08-Thu-Same as S&P500. 10/31/08-Fri-Same as S&P500. 11/03/08-Mon-Same as S&P500. 11/04/08-Tue-Same as S&P500. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

S&P400

10/31/08-Fri-This index is no longer a yellow bear, but needs to cross above red curve to get bull status signal. 11/03/08-Mon-Index has yet to cross above bullish red curve. This is the only reason for no bull signal. 11/04/08-Tue-Received bull signal today. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

S&P600

10/31/08-Fri-This Force Vector remains too weak for bullish configuration standards. 11/03/08-Mon-This is now a bull with Force Vector and Index above their respective bullish red curves. 11/04/08-Tue-Red bull solid. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

NYSE

10/31/08-Fri-Same as S&P600. 11/03/08-Mon-Same as NASDAQ. 11/04/08-Tue-Even this weakling received a bull signal today. 11/05/08-Wed-Same as DJIA. 11/06/08-Thu-Same as DJIA. 11/07/08-Fri-Same as DJIA.

VIX

10/31/08-Fri-Has plenty of room for additional cooling, which is non-bearish for the stock market. 11/03/08-Mon-This index continues cooling off, which is favorable for stock market bullishness. 11/04/08-Tue-This index remains bullishly configured. This conflicts with a bullish stock market, but the VIX bull is weakening. However, until it expires bearish threats will remain. 11/05/08-Wed-Index bounced off bearish yellow today, supporting bearish stock market. That is a common technicality. 11/06/08-Thu-Conviction remains that VIX will shift in favor of a bullish stock market. Force Vector needs to elevate, but not to the extent of more bearish aggression. 11/07/08-Fri-Force Vectors are configuring to support non-bearishness by the VIX (non-bullish for the stock market). However, it is deep in bearish domains and it should not be destructive at the bull’s attempt to become dominant.

Overall Comment Regarding Major Indices:  10/31/08-Fri-A few more indices shifted into bullish support today, offering pressure to shift bearish bias to bullish. 11/03/08-Mon-Configurations are finally lending some early solid support for stock market bullishness. The process is not quite complete, but nearing a complete bullish bias. 11/04/08-Tue-All major indices are expressing unanimity in favor of the bull. The Short-term Indicant is formally shifting from bearish bias to bullish bias today. 11/05/08-Wed-Yesterday’s shift to bullish bias stands. Today’s bearish behavior may continue for a few days, but without those deep bearish expressions in September and October. Bullish configured attributes were not damaged with today’s bearish aggression. 11/06/08-Thu-Quick-term attributes were simply too hot and needed to cool. The baby bull has not expired. Configurations remain in support of a bullish cycle. 11/07/08-Fri-As you can see, all of the major indices are behaving the same. They are in harmony in supporting each other’s attempt to form a bullish configuration. The bull/buy signals last Tuesday were mechanical and technical and configurations have not shifted to repel them. So, continue holding those short-term buys, albeit somewhat discerning at this point.

The Short-term Indicant signaled bull on October 31, 2008 for the Dow30. The Dow is down 4.1% since that bull signal. The NASDAQ received a bull signal on November 4, 2008. It is down 7.5% since that bear signal. The NASDAQ was down 21.2% between the bear signal on September 4, 2008 and the bull signal on November 5, 2008. As stated last Thursday, “it has nearly halved the last down cycle in only two days. A bullish bounce should wipe out that in the day few days.” As you can see, today’s bullish bounce made up about 30% of the Wed-Thu losses and that sort of behavior should continue to the point where profit results.

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

The NYSE and NASDAQ Indicant Volume Indicators  continue with a lethargic configuration with less bullish support than recent bearish support.

Although lacking with robust volume, the baby bull under development should be enjoyed through Christmas. The daily report will advise of potential enjoyment or a short-life for the bull. Current configurations do not suggest bearish expressions last Wed and Thu are the beginning of a major bear cycle. Although the baby bull remains vulnerable, configurations still support it.

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

There were no buy signals and no-sell signals. There are 15-ETF’s with hold signals. The are down by an average of 2.5% since their buy signals an average of 1.2-weeks ago. The SQI is avoiding 16-ETF’s. They are down by an average of 28.0% since their sell signals an average of 13.9-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. There are 15-ETF’s with hold signals. They are down by an average of 2.2% since their buy signals 1.3-weeks ago. There are 16-ETF’s with avoid signals. They are down by an average of 26.5% since their sell signals an average of 13.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no-sell signals. There are 15-ETF’s with hold signals. They are down by an average of 2.2% since their buy signals 1.3-weeks ago. The Quick-term Indicant is avoiding 16-ETF’s. They are down by an average of 27.4% since their sell signals an average of 11.0-weeks ago.

Current Strategy-Quick-term Indicant – Nov 3, 2008-Mon- The baby bull remains vulnerable, but support for its growth is solidifying. Do not be surprised at some additional volatility. It should be harmless as long as Force Vectors remain in bullish domains and the index remains above bearish yellow. Nov 4, 2008-Tue-Bull gaining momentum. Okay to be more aggressive in buying. Keep in mind, the high probability of a significant bear cycle following this bullish cycle, which should extend to Christmas. Nov 5, 2008-Wed-Today’s aggression by the bear did not disrupt bullish configurations. All major indices and ETF’s retained bullish Force Vectors and did not succumb to yellow bear status. Nov 6, 2008-Thu-Today,s aggressive bearishness, like yesterday’s, did not disrupt bullish configurations. Although somewhat unsettling, significant variability occurs when indices attempt their inflection into a shift to a new directional intensity. Nov 7, 2008-Fri-Today’s bullish response to nasty bearish aggressions the past two days is justification into holding the recent buys. There will be no additional buy signals until the individual ETF’s that are currently being avoided contact their bearish yellow curves. Those being held will continue to hold unless major indices reconfigure to bearish support and the ETF Force Vector fall into bearish domains.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-nine of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 22.2%. This remains bearish, but weakening in bearish support.

None of the 30-ETF’s are above their bullish red curves. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 24.6%. which is also non-bullish. The heart and soul of bullish seasonality is justification for some participation in the market and assuming associated risks for the traders. Buy signals week before last were technically supported by Quick-term Indicant attributes and they continue to hold with “technical” commitment.

The QTI differential is bearish by 46.8%. This is the ninety-eighth consecutive trading day of a bearish reading. It continues weakening in its bearish support.

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

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

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

The average distance from breakout contact is 39.2%. Double digit variances from breakout contact for 214-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. There has been no contact in ten of the last 21-trading days, lending support to decreasing bearishness. This is the ninth consecutive day without bearish contact, supporting bullish ambition on a quick-term basis, in spite of significant bearishness last Wed and Thu.

The average distance between the price and breakdown is 13.5%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 55 of the last 94-trading days. This is weakening in its support of the bear. Today’s (Friday’s) double digit reading is a reassuring bullish response that it will argue against single digit readings, such as yesterdays.

The breakout/breakdown differential is bearish by 27.5%. This attribute is supporting bearish ambition but weakening in that support.

ETF Force Vector Configurations

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

Twenty-three Force Vectors are in bullish domains. This bullish majority is supportive of the bull, although slightly from last Thursday. They are shifting south from deep bullish domains. Recent buy signals do not want see Force Vectors fall below Vector Pressure and other parameters of tolerance.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

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

One of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Configurations continue suggesting decreasing bearish support.

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

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

Quick-term and Short-term Indicant Summary

The bearish bias originating on September 5, 2008 expired on November 4 and replaced with a new bullish bias.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID  last on October 16, 2008. It is down 3.1% since then.

Other Contrarian Funds

ETF#03-Natural Resources   - This ETF is down 32.3% since the Quick-term Indicant sell signal on July 24, 2008. This is a leading indicator to economic health. As long as it is moving south, the outlook for energy consumption is bearish and that means most other economic elements are bearish. Vector Pressure is deep inside bearish domains.

ETF#11-Gold and Precious Metals   received a sell signal on October 20, 2008. It is down 7.6% since then. Although this particular commodity may hold well, configurations are suggesting excessive risk in holding.

ETF#14-Long Government  is down 0.5% since the sell signal on September 30, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Last week endured bearish convergence, following the prior week’s solid bullish convergence.

Indicant Conclusion

As stated the past two weekends, some buy signals were induced by a shift in some bullish configurations.

There were no buy signals for Mutual Funds, other than the ETF’s tracked by the Quick-term Indicant.

As stated last week, interest rates are falling, which is bullish. Oil prices are declining. Those two elements, alone, are typically enough to stimulate bullish activity. The problem is the economy, but the stock market will focus on economic conditions in 2009 and 2010. And that appears to be bearish.

As stated last weekend, the expected bullish cycle has begun, albeit late from prior expectations. It will most likely be a bullish spurt, lasting through Christmas. There is little doubt about a deeper bearish cycle into 2009 and 2010 by virtue of a reverse tangential line that is over 90% accurate in predicting such phenomenon.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/09/08

November 02, 2008 Indicant Weekly Stock Market Report

Volume 11, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Phases of Buy/Sell, Guilt and Innocent

If you are a trader, now is a good time to buy. The Mid-term Indicant signaled bull for the blue chips and large cap stocks. The Quick-term and Short-term Indicant signaled bull for the various Dow indices. The Quick-term Indicant signaled buy for several ETF’s earlier this week.

If you are a long-term investor, this bear market is not over. The damage done to the economy by the phony creation of fake wealth will take quite awhile to undo. If you sold on Mid-term Indicant sell signals for mutual funds earlier this year and have remained out of the market, please continue doing so. Cash is king when considering a longer-term view of the stock market.

Who is to blame for the mess? Finger pointing is always rampant during these type of episodes that occur from time to time. The problem with the finger pointers is that the guilty point their fingers at the guilty and vice versus. That sounds nonsensical, but fake wealth creation is a nonsensical undertaking. The capital markets always eventually detect it and punish accordingly.

Unfortunately, those being punished are not the ones who created the stench. Very few of those who are guilty of the economic mess have been punished. The innocent are being punished. Who are the guilty? Who are the innocent? Why is the punishment phase upside down?

Broadly speaking there are only two kinds of people; those who create wealth and those who do not. Those who create wealth work in only three sectors: manufacturing, agriculture, and extraction. Those are the innocents. They are not pointing fingers for the most part. Many of them do not even know what caused the problem. That is because they do not watch too much TV, read newspapers, etc. That is because they are hard at work. For the most part, the innocent folks are not that informed. That allows the guilty to run circles around them and the cause of the eventuality of failed democracies. This particular election year is invoking many more “uninformed” to vote to their demise. This is just another step toward the faults in democracies.

The innocent folks are increasingly becoming the minority. Their efforts are heavily burdened by those who do not create economic wealth. The only reason the quality of life has continued to increase for several generations is because those innocents elevated their productivity. That is the sole source for enhancements in the quality of life. The “guilty” have no idea of what productivity is about. If the species of the guilty became extinct, all people on earth would enjoy a much higher quality of life than what is endured today.

The guilty are the group of people, who do not create economic wealth. There are many in the non-economic wealth creation, who are not guilty, such as medical doctors, nurses, etc. The guilty are represented by a small subset of non-wealth creators. 99.999% of all politicians comprise the guilty. That is not hard to prove. They are in power. The express leadership. When the environment is screwed up, those in power are 100% responsible.

The ideal of a democracy is to remove those from power who screwed things up. Unfortunately, that is a slow process. Even more unfortunately, the guilty’s replacement is made up of the same genetic profile as the incumbent booted from office. It will be difficult to impose a constitutional amendment to reduce political effort to a part-time job. That is what is needed!

Recent political mumbo-jumbo suggests more regulations. Who regulates the regulators? They for the most part yawn throughout their daily low effort lives of non-wealth creation. The regulators are encumbered with 3.5-pound brains with the same basic human flaws and needs of those who they are perceived to regulate. In essence, the mumbo-jumbo regarding regulation is a joke with no laughter. The concept is nonsensical. Just as over 2,000-guns laws have not been effective toward anything meaningful, more paper and fake expense by the dishonest toward the dishonest will do nothing. The problem is that innocent people hear some of this mumbo-jumbo and actually believe it from time to time. That slows the ideal of democracy.

Since the guilty (non-wealth creators) are, for the most part. idle, their diseased brains try to do “something” to make their souls feel better. After spending forty to sixty years leeching their way through life, they feel bad. That is unconscious and in conflict with their ego. That is human nature. It is their own fault for avoiding the hard working efforts required in wealth creation. It does not matter what that “something” is. There is only one truth for all the “somethings” those poor souls create. It is a screw-up. For example, if one wants to elevate minimum wages, all they have to do is start a company, hire employees, and pay them top wages. The easy way is to talk it up to poorer folks, get elected by the poorer folks, and then use coercion to force the innocents to pay more. The innocent seldom do that. They usually have to reduce headcount to offset the idiotic methods of the guilty.

A second subset of the guilty are the dilettante management in financial institutions. They had no loyalty to the shareholders. Their only loyalty was to themselves. The hardest thing they ever accomplished was writing a resume and interviewing for a job. In essence, they are hirelings. Not one hireling is worth more than $450,000 per year and that is a stretch. When one owns shares in a company paying their officers and directors more than $450,000 per year for a hireling, rest assured it is only a matter of time before you regret that. That is why small caps and mid-caps are more attractive. Not too many in that group are encumbered by the fake contributions of hirelings. Most do not even know how to write a resume. They just know their jobs and work hard to improve their personal performance and those within their organizations. Unfortunately, socialistic causes are not friendly to small caps and smaller capital organizations.

So, when investing, understand if the person in charge is a hireling or a real wealth creator. Keep in mind there are some good hirelings on the payroll. Not all are bad. Also, make certain none of them are making over $450,000 per year. It is okay for them to participate in stock ownership programs, but no more than the lowest paid employee. If the officers and directors are not big investors in their place of employment, do not buy the stock. That is a dilettante infested organization.

To support the ideals of a bullish stock market, never re-elect any incumbent. The first day in office, their corruption index elevated, much like a learning curve in any new job. The second day, the corruption index elevates more than what it was on the first day. The terms for U.S. Senators, at six years, is way too long. It should be no more than two years, as long as they do not work as a Senator more than, say, 10-days in that two-year period.

Also, to further the cause of bull markets, never allow the executive and legislative branches of government be from the same party. The stock market performed pretty darn good in the 1990’s when they were from different parties. That relationship in effect parlays into a near do-nothing government. Guilty offsetting other guilty is the key point here. The market remained depressed from 1932 through the early 1950’s when the executive and legislative branches of were from the same party; democrats. If the U.S. public allows this again, expect bearish pressure on the stock market.

This bear market is nowhere nearing its conclusion. The depth is probably another 50% down from where it is right now. Do not be surprised at a 4,000 to 5,000 Dow by 2010. If the executive and legislative branches of government are the same, it could go as low as 2,000. That is because the politicians will have well-meaning plans, but since most have no idea of real wealth creation, they will “screw it up.” They always have and always will. They think the answer is on paper and have no idea of the effort required to produce a threaded lock mandrel. Just one threaded lock mandrel in production produces more economic wealth than all the presidents and congresses since their beginning. The same is true for one piece of corn on a cob.

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

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

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

The Mid-term Indicant generated 12-buy signals and one sell signal. There have been 510-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired eight weeks ago and the bear continues enjoying “open season.”

However, as stated the past three weeks, there is an increasing likelihood the heart and soul of bullish seasonality may take effect immediately. Technically, it will most likely be bullish spurt but this one could enjoy some sustainability through Christmas.

In addition to the buy signals, the Mid-term Indicant is signaling hold for only 12 of the 344-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 163.6%. That annualizes to 92.8%. The Mid-term Indicant has been signaling hold for these 12-stocks and funds for an average of 91.7-weeks.

In addition to the sell signal, the Mid-term Indicant is avoiding 319-stocks and funds of the 344- tracked by the Indicant. The avoided stocks and funds are down an average of 27.8% since the Mid-term Indicant signaled sell an average of 23.3-weeks ago.

The sell signal was for the ProFunds Short of the NASDAQ. That is discussed later in this report. The buy signals were generated in anticipation of the heart and soul of bullish seasonality and favorable configurations.

One year ago, on Nov 2, 2007, the Mid-term Indicant was holding 286-stocks and funds out of the 345 tracked for an average of 113.8-weeks. They were up by an average of 143.2% (annualized at 65.4%). There were 58-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 17.2% since their respective sell signals an average of 26.2-weeks earlier.

The Mid-term Indicant was signaling hold for 310-stocks and funds of the 345-tracked two years ago on Nov 3, 2006. They were up by an average of 102.8% (annualized at 66.1%) since their respective buy signals an average of 80.8-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down an average of 13.7% since their respective sell signals an average of 23.9-weeks earlier.

There were 209-stocks and funds with hold signals on Nov 4, 2005 since their buy signals an average of 103.6-weeks earlier. They were up by an average of 113.6% (annualized at 57.0%). There were 60-avoided stocks and funds at that time. They were down by an average of 17.2% from their respective sell signals an average of 28.7-weeks earlier.

On Oct 29, 2004, the Mid-term Indicant was signaling hold for 243-stocks and funds out of 296-tracked. They were up by an average of 67.1% (annualized at 64.8%) since their buy signals an average of 53.8-weeks earlier. The Mid-term Indicant was avoiding 43-stocks and funds at that time. They were down by an average of 33.3% since their sell signals an average of 53.8-weeks earlier.

Five years ago, on Nov 1, 2003, there were 261-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 54.5% (annualized at 93.4%) since their respective buy signals an average of 30.4-weeks earlier. There were 25-avoided stocks and funds then. They were down an average of 23.9% since their respective sell signals an average of 31.6-weeks earlier.

On Nov 2, 2002, there were 211-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 16.9%, annualizing at 88.4%. There were 38-avoided stocks and funds then. They were down by an average of 29.6% since their sell signals an average of 19.1-weeks earlier.

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

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

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

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

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

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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 28.0% since its secular low on October 9, 2002. The NASDAQ is up 54.5% and the S&P500 is up 24.7% since then. The small cap index, S&P600, is up 68.5%. The large caps (all Dow Indices and S&P500 and S&P100 received Mid-term Bull signals this weekend).

The Dow is down 34.2% since its last closing peak on Oct 9, 2007. The NASDAQ is down 39.8% since its last peak on Oct 31, 2007. The S&P600 is down 45.4% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 65.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 36.6% since its similar secular peak on March 23, 2000. The Dow is down by 20.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 29.7% so far this year. The NASDAQ is down 35.1% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

As stated the past few weeks, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality. Deep bearish seasonality technically expired as of Friday, October 17, 2008. The heart and soul of bullish seasonality is available to exert its influence on the stock market. However, it varies off of the standards from year to year. For example in 2006 started in mid-August. In 2007, it was much later and did not last as long. This year, the start was early this past week. It should hold up and last at least a few weeks; most likely through Christmas.

All major indices contacted their breakdown lines five Friday’s ago. Unfortunately, that continued into the following weeks with record setting bearish expressions. However, as stated the past four weeks, that is a common condition for bullish cycles to originate.

The NASDAQ year-to-date performance was bearish by 31.6% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%.  This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 31.8% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 44.7%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 1.4%.  It was down by 2.5% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 7.3% on this weekend and finished that year up by 9.5%. It was up by 18.4% at this time last year and finished 2007 up by 9.8%.

As stated last week, do not be surprised at a Quick-term and Short-term bullish cycle in the next few days. This past week indeed enjoyed significant bullish expressions.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to decreasing bearish influences for the longer-term holdings. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

Most interest rates are stabilizing contrasting with unusual volatility a few weeks ago. Most are in support of bullish behavior. The Freddie Mac-30 and Fannie Mae-60 are above bullish red, which is somewhat of a conflict with prevailing position and direction. Under normal circumstances interest rate are positioned to support a bullish stock market.

Commodities stabilized the past few days, which relieves deflationary concerns and one reason for the stock market’s bullishness. Under normal circumstances commodities are configured to support a bullish stock market.

The U.S. dollar continues to strengthen. Recent strengthening cycles have paralleled bullish stock market. The weaker countries are able to export into the huge U.S. consumer market, which is bullish. It spreads the wealth the way capitalist would prefer. That way, no one is getting something for nothing.

The strengthening of the U.S. dollar is not a testament of its strength, but pure evidence of weakness around the world. Socialism is broader in most other countries. So, if bad in the U.S. it is worse elsewhere.

There is one exception to currency. The Japanese yen is not following a path of weakness. The Japanese are in the second generation of manufacturing management, much like Alfred P. Sloan. In essence, Japanese management remains superior to that of the U.S., which is infested by dilettantes in the larger companies. If it takes a world war to correct sour economic conditions, one should hope the Japanese are allies.

As stated last week, once the euphoria of the socialistic methods are complete, rest assured the bear market will return and with some gusto. This is not technical. This is fundamental. Also, keep in mind, a bullish cycle before the end of the year is seasonal. Probabilities are high that any bullish cycle will be followed by a deep bear market in 2009.

If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow.

This bear has teeth, is hungry, and is nowhere near expiration. However, the heart and soul of bullish seasonality will provide some relief.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 29.3% since that sell signal.

Fidelity Gold, Fund #28 is down 44.0% since the Midterm Indicant signaled sell on August 1, 2008.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 13.6% since that sell signal.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 13.6% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 25.6% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 15.0% since that sell signal.

Energy related funds were bearish last week, following a bullish spurt in the prior week. They have endured significant bearishness in nine of the last twelve weeks. They enjoyed bullishness last week.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 27.5% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 23 of the past 40-weeks and in 15 of the past 20-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 again on October 20, 2008. It is down 9.1% since then. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund’s bearish influence may not yet be over, but should not fall in price as much as other commodities.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They were down an average of 29.0% as of last weekend. The Mid-term Indicant signaled bull for the blue chips this weekend. This is significant.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,320,247

That beats buy and hold performance of $1,418,684 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $94,892 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $59,672 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,460.1%, 87.2%, and 272.6%, 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 approximately 2,000% covering the past 100+ years.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled buy for this fund on September 12, 2008 and it signaled sell this weekend. It was up over 30% since that September buy signal. It is too risky to hold for the time being. Once the heart and soul of bullish seasonality expires, this fund will receive a buy signal; most likely in January 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 222.1% (annualized at 13.0%) since the Long-term Indicant signaled bull 887-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: None of thirty. No bullish support at this time.

Quick-term Yellow Bears/Threats: Twenty-nine of thirty. Still supporting bearish behavior.

Quick-term Non-Bearishness: QTI differential is bearish 45.4%; although bearish, it is weakening in its bearish support.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 21.1% with continued but weakening bearish support.

Short-term Indicant: Breakdown contact density has relaxed in eight of the last 15-days. There is increasing probability of further relaxation of this bearish attribute.

Short-term Indicant: Still bearish in position, but direction is again being challenged by the bull.

Force Vectors: There was a tremendous jump into bullish domains to the point where there is majority support for the bull as of October 31, 2008.

Vector Pressure: A minority of two in bullish domains and thus without bullish support.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. Such a response would not be surprising at the time of the presidential inauguration.

Reverse Tangential Support: Being constructed, fostering a very high probability of bearish sustainability, but a bullish spurt is required to complete the valuations of where the next bearish cycle will occur; most likely next January-February. Unfortunately, the current bear cycle continues without the desired interruption, but nearing with the desired disruption.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation. Unfortunately, such enjoyment is not a daily affair. Volatile expressions can be unnerving.

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. Force Vector interaction with Vector Pressure did not behave friendly to the bull. The bear still reigns even with recent aggressive bullish behavior. However, the Dow Utilities configured with a new baby bull on October 30, 2008 and the Short-term Indicant signaled bull on October 31, 2008 for the Dow30.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market. This remains true, but participation is for gamblers. However, a bullish spurt of eight to 12-weeks would not be surprising starting right now.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness supported bear while configuring lethargy will not be as supportive of any bullish spurt that may form in the immediate future.

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

To view the STI-Tangential Protection for ten major indices, click here.  

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality,  has been thoroughly tested and validated. Documentation is a different matter and it will be completed before the end of the year.

DJIA

10/24/08-Fri-Force Vectors turned south by not dynamically. Unfortunately, the anticipated bullish spurt will initiate from a lower position than desired. 10/27/08-Mon-Force Vectors continue southerly direction. This is threatening to any seasonal standards. 10/28/08-Tue-Finally, some hope for the heart and soul of bullish seasonality. The next step is to develop traction. This index moved above bearish yellow with the nearly 900-point gain. Wait for traction. 10-29/08-Wed-Force Vector moving toward support for bullish traction potential; not there yet. Index needs to be above Red and Force Vector needs to be above red. Do not think bull until you see both of those attributes. Also, the extremely depressed Vector Pressure remains a threatening attribute to bullish desires. 10/30/08-Thu-Index is above bearish yellow for first since late September. The index and its Force Vector must climb above Red. This would trigger a bull signal. The depressed condition of Vector Pressure would be threatening to a baby bull, though. 10/31/08-Fri-Force Vector and Index are greater than red and therefore a baby bull has been born. It is young and vulnerable.

DJ Composites

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-This index is still a yellow bear and remains with pitiful configurations with respect to bullish inspiration. 10-29/08-Wed-Same as Dow and same as yesterday for this index. 10/30/08-Thu-Same as DJIA. 10/31/08-Fri-Same as Dow.

DJ Transports

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites and the primary reason for the Composites pitiful configurations. 10-29/08-Wed-Same as DJ Composites; strong yellow bear remains in tact. 10/30/08-Thu-Index still a yellow bear. 10/31/08-Fri-Same as Dow.

DJ Utilities

10/27/08-Mon-This index offers the greatest potential for any type of bullish expression. Force Vectors are above Vector Pressure, which suggests some significant underlying desire to discontinue with bearish dominance. Also, this is the only index that has enjoyed some interaction with bearish yellow, while the others continue deep bearish expressions. 10/28/08-Tue-This index is developing traction by virtue of Force Vector hovering above Vector Pressure and has the potential to gain red bull status. Waiting for traction. 10-29/08-Wed-This index is in the verge of receiving a bull signal since its Force Vector is about to cross above Red, while the Index is finally above Red. 10/30/08-Thu-This index received a bull signal today due to both attributes crossing above bullish red values. 10/31/08-Fri-This index received a bull signal yesterday and was the only index to endure a bearish expression today; albeit a mild one. The baby bull survived this mild attack.

NASDAQ

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites. 10-29/08-Wed-Strong yellow bear remains in tact. 10/30/08-Thu-This index remains a yellow bear. 10/31/08-Fri-Unfortunately, this index remains a yellow bear even though Force Vectors support the bull.

NASDAQ100

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites. 10-29/08-Wed-Same as NASDAQ. 10/30/08-Thu-No longer a yellow bear. The only requirement for bull signal is for Force Vector to cross above Red. 10/31/08-Fri-Although Force Vector complied with bullish support, this is again a yellow bear.

S&P500

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites. 10-29/08-Wed-Same as NASDAQ. 10/30/08-Thu-Even this dilettante infested index moved above bearish yellow but still lacks attribute credentials to attain bull status.  10/31/08-Fri-Same as Dow.

S&P100

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites. 10-29/08-Wed-This index is no longer a yellow bear, but Force Vector is struggling in bearish domains. Waiting for Force Vector to cross above Red. Until then, think bear. 10/30/08-Thu-Same as S&P500. 10/31/08-Fri-Same as S&P500.

S&P400

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as Dow Composites, plus Force Vectors continue moving bearishly. 10-29/08-Wed-Strong yellow bear remains in tact. 10/30/08-Thu-Still a yellow bear most likely due to the impending tax increases on small businesses. 10/31/08-Fri-This index is no longer a yellow bear, but needs to cross above red curve to get bull status signal.

S&P600

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as S&P400. 10-29/08-Wed-Strong yellow bear remains in tact. This bear is strong. 10/30/08-Thu-Solid yellow bear remains in tact. 10/31/08-Fri-This Force Vector remains too weak for bullish configuration standards.

NYSE

10/27/08-Mon-Same as DJIA. 10/28/08-Tue-Same as S&P400. 10-29/08-Wed-Same as S&P600. 10/30/08-Thu-Solid yellow bear remains in tact. 10/31/08-Fri-Same as S&P600.

VIX

10/27/08-Mon-The VIX continues moving upward and setting new cyclical highs. However, this movement is suggesting excessiveness. 10/28/08-Tue-The mild retreat from overheated conditions needs more follow-on similarity for traction to develop. 10-29/08-Wed-Still needs to cool more from its bearish support of the overall stock market. 10/30/08-Thu-Still cooling off, but its bullish position is in solid support of a bearish stock market. 10/31/08-Fri-Has plenty of room for additional cooling, which is non-bearish for the stock market.

Overall Comment Regarding Major Indices:  10/27/08-Mon-Last week’s bullish spurt was shot down by continued bearishness. Even if there is a bullish spurt, do not expect much magnitude. The bull is bordering extinction. It will not become extinct, but certainly placed on the endangered species list. The major indices must solidify above yellow. 10/28/08-Tue-Today’s bullish aggression, although impressive, needs a few more bullish days to lose yellow bear status and develop some traction for a sustainable bullish cycle. 10-29/08-Wed-Many of the major indices, with the exception of Utilities, remains bearishly biased. The DJIA is showing some interest in biasing to bull, but the Utilities are more advanced in this development. All remain bears. 10/30/08-Thu-The Dow Utilities qualified for bull status today. This is the first bullish configuration since September 5. More than one index requires this before bias shifts from bearish to bullish.  10/31/08-Fri-A few more indices shifted into bullish support today, offering pressure to shift bearish bias to bullish.

The Short-term Indicant signaled bear on September 4, 2008. The Dow is down 16.7% and the NASDAQ is down 23.8% since then. 

The Short-term Indicant signaled bull today, October 31, 2008 for the Dow30. It did not do so for the NASDAQ, but will probably do that early next week.

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

The NYSE and NASDAQ Indicant Volume Indicators  continue with a lethargic configuration with less bullish support than recent bearish support.

Although volume is not as supportive for the impending bullish cycle, a baby bull was born yesterday for the Dow Utilities and today for the other blue chip related indices. Some attributes are configuring in favor of a bullish cycle. This should be enjoyed through Christmas, but the daily report will advise daily of potential enjoyment.

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

There was one buy signal and no-sell signals. There are 13-ETF’s with hold signals. The are up by an average of 2.8% (annualized at 459.7%) since their buy signals an average of 0.3-weeks ago. The SQI is avoiding 17-ETF’s. They are down by an average of 23.5% since their sell signals an average of 11.5-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There was one buy signal and no sell signals. There are 14-ETF’s with hold signals. They are up by an average of 3.0% since their buy signals 0.3-weeks ago, annualizing at 498.6%. There are 16-ETF’s with avoid signals. They are down by an average of 26.0% since their sell signals an average of 12.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There was one buy signal and no-sell signals. There are 14-ETF’s with hold signals. They are up by an average of 3.0% (annualized at 498.6%) since their buy signals 0.3-weeks ago. The Quick-term Indicant is avoiding 16-ETF’s. They are down by an average of 26.9% since their sell signals an average of 10.0-weeks ago.

Current Strategy –October 27, 2008-Mon-There is too much risk in holding any ETF. Force Vectors weakened after crossing Vector Pressure late last week. Yellow bears with negative Vector Pressure will not receive buy signals again in this cycle for most of these ETF’s. The short-funds, such as QID, are too hot to buy at this point. October 28, 2008-Tue-Some Force Vectors shifted north, justifying some buy signals. The major indices are in position to have a chance for traction, but keep in mind that desired traction for bullish purposes has not yet configured. October 29, 2008-Same as yesterday. October 31, 2008-Fri-Some of the blue chips are attempting to gain bullish traction and justification for buy a few ETF’s as noted in this report. The bull is a baby and vulnerable. Many of the indices crossed above yellow, which invokes some additional volatility. Force Vectors are configured with some staying power, though, which should encourage more bull signals in the near future.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-nine of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 20.9%. This remains bearish.

None of the 30-ETF’s are above their bullish red curves. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 24.5%. which is also non-bullish. The heart and soul of bullish seasonality is justification for some participation in the market and assuming associated risks for the traders. However, the next series of signals to buy will not occur without configured support. The last two series were induced by historical standards. Buy signals earlier this week are being substantiated with the Short-term Bull signal today, October 31, 2008.

The QTI differential is bearish by 45.4%. This is the ninety-third consecutive trading day of a bearish reading. It has been weakening in its bearish support most of this past week.

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

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

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

The average distance from breakout contact is 38.3%. Double digit variances from breakout contact for 209-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. There has been no contact in six of the last 16-trading days, lending support to decreasing bearishness. Unfortunately, contact in four of the last eight trading days suggest the bear was just winded a bit, but with full interest in continued domination. However, recent bullishness may help fatigue the bear’s ambition. This is the fourth consecutive day without bearish contact.

The average distance between the price and breakdown is 17.3%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 54 of the last 89-trading days. Single digit expressions in five of the last nine trading days is an increasing concern about additional bearish aggression. Other attributes had been offering minor resistance, but unfortunately waned late last week. Here they go again with some bullishness, but this time there is a higher probability of bullish traction.

The breakout/breakdown differential is bearish by 21.1%. This attribute is supporting bearish ambition but weakening in that support.

ETF Force Vector Configurations

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

Twenty-four Force Vectors are in bullish domains. This is an increase by twenty-two from yesterday and again with a bullish majority, which is supportive of the bull.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

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

Two of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Configurations continue suggesting decreasing bearish support.

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

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

Quick-term and Short-term Indicant Summary

A solid bearish bias shift was born on June 11, 2008. It expired on August 1, 2008. The current bias is bearish and it originated on September 5, 2008. However, do not be surprised at a shift to bullish bias in the next few days that may last through Christmas. The aforementioned statement is now five weeks old and losing merit. However, recent bullish expressions are closer to a higher probability of gaining bullish traction. Keep in mind such traction remains absent even with yesterday’s Short-term bull signal for the Dow Utilities and today’s Short-term Bull Signal for the Dow30.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. See the Mid-term Indicant for its status.

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled sell for QID  last on October 16, 2008. It is down 8.8% since then. As stated last Monday, this fund was too hot to hold. It was up over 25% at that time.

Other Contrarian Funds

ETF#03-Natural Resources   - This ETF is down 30.2% since the Quick-term Indicant sell signal on July 24, 2008. This is a leading indicator to economic health. As long as it is moving south, the outlook for energy consumption is bearish and that means most other economic elements are bearish. Vector Pressure is deep inside bearish domains.

ETF#11-Gold and Precious Metals   received a sell signal on October 20, 2008. It is down 9.1% since then. Although this particular commodity may hold well, configurations are suggesting excessive risk in holding.

ETF#14-Long Government  is down 2.0% since the sell signal on September 30, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Last week enjoyed bullish convergence. That is the first time for this enjoyment since last summer.

Indicant Conclusion

As stated last weekend, some buy signals were induced by a shift in some bullish configurations.

As stated last week, interest rates are falling, which is bullish. Oil prices are declining. Those two elements, alone, are typically enough to stimulate bullish activity. The problem is the economy, but the stock market will focus on economic conditions in 2009 and 2010.

The expected bullish cycle has begun, albeit late from prior expectations. It will most likely be a bullish spurt, lasting through Christmas. There is little doubt about a deeper bearish cycle into 2009 and 2010 by virtue of a reverse tangential line that is over 90% accurate in predicting such phenomenon.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

11/02/08

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