Nov 2009 Indicant Weekly Stock Market Report

Nov 29, 2009 Indicant Weekly Stock Market Report

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

This Week’s Report

Stock Market Bullish Breadth Contracting

Several stocks and sector funds are not configuring with bullish expectations. Many of them remain “lazy” after their initial bullish spurts several months ago. Some are even configuring bearishly.

Most stocks, representing corporations that make money are bullishly configured. However, there are enough of these “lazy” stocks worthy of mentioning a concern, regarding the current bull’s longevity.

NAS100#58, ETRS, is one of those lazy stocks. Following several years of solid and impressive bullish behavior, it has expressed limited participation in the stock market bull that originated last March.

As you can see from its chart by clicking this sentence, this particular stock has been wavering the past few weeks. Not only has it been wavering, it is configuring bearishly. Electronic Arts, Inc. was one of the NAS100 darling stocks for several years.

It participated in the bear stock market in 2008 with near perfect congruency to stock market bearishness. It did not participate in the 2000-2002 stock market bear in magnitude or breadth. In other words, this company was considered “special” with solid earnings potential even in the soft economic conditions and dynamic NASDAQ bear in 2000-2002.

As you can see from the chart, it participated briefly in March-August 2009 with the stock market bull, but has wavered the past several weeks. After propelling the Short-term bullish blue curve to the north last March, it has flattened out the past few weeks. It has not yet threatened to cross its Mid-term Bearish yellow curve. As a result, the Mid-term Indicant continues recommending the avoidance of this stock since its sell signal on June 18, 2008. It is still down 63.8% since that sell signal.

Stock prices can become bearishly configured for several reasons. They can move to the south because of poor management. Sometimes, even the best of management teams, can be victimized by industry behavior. Rolling recessions occur when various industries endure economic recessions in different periods. In this particular case, one would conclude ETRS fell abruptly to the south in 2008 for the same reason most other stocks did; total economic recession.

One of the reasons for limited buy signals the past three weeks is due to these laggard stocks and sectored funds. Stock market bullish breadth (or synergy) is not what it should be when extending the current bull’s longevity.

Strong bull markets have a history of climbing walls of worry. Congressional behavior is one major wall of worry and this particular bull has been impressive in the face of aggressive and bearish Congressional behavior. That suggests this bull will die a slow death when it expires.

However, bulls expire abruptly and deeply when countries default on exchange payments or loan payments. Last Friday’s bearish behavior was directly in response to Dubai’s request to defer loan payments for several months. However, as the day wore on, the bull responded favorably by not finishing below the early morning futures projections. At any rate, Dubai’s attitude toward making their scheduled loan payments is discerning. That coupled with the lack of bullish breadth is adding some nervousness to this bull. Nervousness never performs well.

The primary wall of worry this year for the stock market bull has been aggressive anti-capitalistic aggression regarding healthcare and cap and trade. That is the primary reason gold prices have skyrocketed. Gold is rising based on fearful policies unfolding in Washington D.C. It will continue to rise as long as the capital markets are threatened with anti-capitalistic policies from politicians.

Limited bullish breadth is evolving another threat to this bull’s longevity. Corporations, such as ETRS and similar other stocks and sectored funds, are simply not participating with the current bull. Many of them are biasing in favor of the bear.

Dubai’s problems will certainly depress the bull if it continues to fester cash flow related problems for the intended recipients of the loan payments. Credit will tighten, as creditors lose confidence in collections. That will excite the bear and could do so quickly in the event other countries or other large debtors express difficulties in honoring their prior legal agreements that relate to money.

However, in the mean time, the Near-term and Quick-term Bull remain in tact, but confronted by significant fundamental threats.

Keep your eye on the daily stock market report.

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 four sell signals.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 189 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 27.4%. That annualizes to 48.9%. The Mid-term Indicant has been signaling hold for these 189-stocks and funds for an average of 29.1-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 124-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 36.3% since the Mid-term Indicant signaled sell an average of 81.6-weeks ago.

The letters, NLT, identify stocks and funds no longer traded. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. NLT companies and funds are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

One year ago, on Nov 28, 2008, the Mid-term Indicant was holding 23-stocks and funds out of 344 tracked for an average of 52.2-weeks. They were up by an average of 84.5% (annualized at 84.3%). There were 317-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 33.6% since their respective sell signals an average of 27.3-weeks earlier.

The Mid-term Indicant was signaling hold for 235-stocks and funds of the 345-tracked two years ago on Nov 30, 2007. They were up by an average of 152.6% (annualized at 60.8%) since their respective buy signals an average of 130.4-weeks earlier. The Mid-term Indicant was avoiding 107-stocks and funds at that time. They were down an average of 4.7% since their respective sell signals an average of 14.9-weeks earlier.

There were 311-stocks and funds with hold signals on Nov 24, 2006 since their buy signals an average of 83.5-weeks earlier. They were up by an average of 107.6% (annualized at 67.0%). There were 31-avoided stocks and funds at that time. They were down by an average of 12.4% from their respective sell signals an average of 19.2-weeks earlier.

On Nov 25, 2005, the Mid-term Indicant was signaling hold for 269-stocks and funds out of 320-tracked. They were up by an average of 97.3% (annualized at 62.5%) since their buy signals an average of 80.9-weeks earlier. The Mid-term Indicant was avoiding 51-stocks and funds at that time. They were down by an average of 16.5% since their sell signals an average of 25.8-weeks earlier.

Five years ago, on Nov 26, 2004, there were 301-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 70.4% (annualized at 68.9%) since their respective buy signals an average of 54.8-weeks earlier. There were 19-avoided stocks and funds then. They were down an average of 43.4% since their respective sell signals an average of 54.8-weeks earlier.

On Nov 28, 2003, there were 262-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 59.0%, annualizing at 88.5%, since the buy signals an average of 34.6-weeks earlier. There were 19-avoided stocks and funds then. They were down by an average of 27.1% since their sell signals an average of 34.6-weeks earlier.

There were 280-stocks and funds with hold signals on Nov 29, 2002. They were up by an average of 22.2%, annualizing at 120.0%, since their buy signals 9.6-weeks earlier. The seven-avoided stocks and funds were down an average of 29.8% since their respective sell signals an average of 22.7-weeks earlier.

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

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

Click this link to this week’s buy and sell signals.

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. Socio-economic interference can devastate your holdings from time to time. Congressional behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

All updated information can be accessed from the following link. 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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend are all bullish. The economy is on the mend and earnings should also improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset, yet. The biggest threat on the immediate horizon is Congressional action. The bull prefers governmental inaction. International loan defaults also threaten the bull.

The Mid-term Indicant is poised for several more buy signals in the next few weeks. The Short-term Indicant needs to rid itself of a few remnant attributes that continue supporting bearish ambition. Those bearish attributes are the reason for no buy signals the past two weekends.

The Mid-term Indicant has noticed several stocks and funds are shying away from crossing above the Mid-term Indicant’s bearish yellow curve. That is a common attribute for double dip bear cycles. This was also influential on not allowing any more buy signals the past few weeks even though the heart and soul of bullish seasonality is underway.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also favoring bullish expectations. Keep in mind, the Near-term Bull remains under attack by the bear, even though that attack has been muted the past few weeks. The bull was not as strong in its response to such attacks and thus could provide the bear a bit more encouragement.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed. Other previously strong companies, such as RIMM, are in trouble. The Mid-term Indicant continues avoiding RIMM.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models participate in bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 41.5% since its secular weekly low on October 9, 2002. The NASDAQ is up 91.9% and the S&P500 is up 40.5% since then. The small cap index, S&P600, is up 78.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to establish a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics supported by 100% accuracy the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 27.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 25.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 31.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few months, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

The NASDAQ is down 57.5% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.5% since its similar secular peak on March 23, 2000. The Dow is down by 12.0% 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. (This remains even with the immediate Blue Dog potential).

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The Dow is up 17.6% so far this year. The NASDAQ is up 36.1% and the S&P500 is up by 20.8%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 21.6% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year of 2009.

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 bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 46.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 4.9% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was up 4.0% in 2005’s post election year, which maintained congruency to the historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 9.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.9% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 42.4% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. Last year’s inconsistency is somewhat influential. Variant directional intensity in one year is, quite often, followed with the opposite variant with similar magnitude in the following year.

The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year. As the popularity of Congress and the U.S. President wane, the stock market senses a reduction in their power. That is bullish.

Politicians offer nothing pertinent to the quality of life, including health or wealth. They “talk about it” but just one RN offers more toward health and one good entrepreneur offers more toward wealth than the collection of all politicians, kings, queens, and dictators since the beginning of time. Those “control freaks” only talk and rob folks of their wealth and health.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates remain configured at cyclical minimums. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market at this time. The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As previously stated, the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl for a lengthy period.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a solid cyclical shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment. Gold is a Red Bull and setting record highs. As stated for several months, gold is a solid long-term investment. It measures regulator incompetence, which is accelerating, and maintains value relative to political interference and deteriorated commerce.

Gold is obviously anticipating significant inflationary behavior with the paper currencies. A tremendous amount has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod may cost well over $10,000. Only the “established elite” will enjoy those sort of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow.

As stated 61-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010.

The above and below paragraph may become obsolete, based on Blue Dog Democrats upsetting the assumed control of Congress by socialists, communists, and creeps. If they back down and join the evil ones, then the paragraphs remain in tact.

The question remains, is the public resistance to healthcare reform really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform is garnishing most of the attention, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market.

As stated 56-weeks ago, “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.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few months.

As stated the past 13-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted.

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. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 3.7% since then, annualizing at 31.8%. It has been bullish the past three weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 12.2% since then, annualizing at 52.3%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 12.2%, annualizing at 37.0% since its buy signal on July 31, 2009.

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. The Mid-term Indicant signaled buy on Sep 18, 2009. It is down 3.9% since that buy 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 26.2% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 3.1% since its buy signal on Sep 11, 2009, annualizing at 14.5%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 9.8% since then, annualizing at 30.5%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 42.7% since that buy signal, annualizing at 43.8%. 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 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 28.2% since the Near-term buy signal, annualizing at 46.9%.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 8.5% since that bull signal. That annualizes to 25.9%. Bear signals will occur in the event Congress passes healthcare legislation, turning it over to the most inefficient organization in the United States.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,611,124. That beats buy and hold performance of $1,568,526 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,987. That beats buy and hold’s $106,914 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $194,873. That beats buy and hold’s $74,148 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, 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 Mid-term Indicant 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. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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 sell for ProFunds Ultra Short on April 3, 2009. It is down 50.0% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bull cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and that battle is occurring now.

Click here for Mid-term Indicant Table of Mutual Funds

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 256.2% (annualized at 14.1%) since the Long-term Indicant signaled bull 943-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. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. A link to the Long-term Indicant is below. You will notice long-term projections are shifting bearishly.

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 included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Vector Pressure shifted back to the south today. That should incentivize the bear a bit. Keep your eyes on the Near-term Bearish Green curve. It is still rising for most of the major stock market indices and non-contrarian ETF’s. That offers a point of bearish resistance. Until the major stock market indices and non-contrarian ETF’s interact with the NTI Bearish Green curve, the bull will remain in tact. Dubai’s threatened loan default, alone, is not enough to send the stock market into a long sustainable bearish cycle. However, if prices fall below green, then the reasons are basically irrelevant as the direction becomes the only relevance. There is no need to worry until prices interact with green, which has been a solid buffering point to bearish ambition since last March. Simply wait for this interaction.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled one new bull and no new bears.

The eleven non-contrarian major indices are up by an average of 22.0%, annualizing at 45.7%, since the NTI signaled bull an average of 25.0-weeks ago. A bull signal was generated for the VIX.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 16.0%, annualizing at 34.3%, since their bull signals an average of 24.3-weeks ago.

The lone QTI bear, VIX, is down 31.0% since its bear signal 32.1-weeks ago. VIX eclipsed bearish yellow on Thursday, Oct 29, 2009, technically qualifying for a Quick-term Bull signal. The major indices did not provide enough bearish synergy to support a VIX bull signal. Since then, the VIX weakened, but keep in mind, it is developing a baseline support level for future aggression. You saw some of that aggression on Friday, November 27, 2009. The Quick-term needs to see a bit more bearish energy from the major indices before the Quick-term Indicant will signal bull for VIX and bear for the overall stock market.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

QTI-Red Bull Count; A majority of nine support bullish bias.

QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias.

NTI-Blue Bull Count; Most lost on today’s bearish aggression and thus no bullish support.

NTI-Bullish Blue Curve Trend;11-non-contrarian in bullish trend. VIX blue collapsed last Monday.

NTI-Bearish Green Curve Trend - Non-bearish majority with ten of 11-non-contrarian indices in bullish trend, supporting near-term non-bearishness.

STI-Force Vector Cyclical Direction-One non-contrarian moving north. Bear cycle relatively mature, suggesting limited exposure to an ambitious bear.

STI-Vector Pressure Trend-Minority of only one moving bullishly, offering limited non-bearishness.

Short-term Summary-Overall-Vector Pressure is no longer offering short-term bullish protection, while the high number of Red Bulls are guarding against sustainable bearish aggression.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, Dow Utilities, NASDAQ100, and S&P400. The S&P600-Index lost this protection during the week of November 9, 2009. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines. The other indices will most likely receive bear signals when they fall below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal. Since last March, the bull has responded when attributes neared bear signal justifications.

-Reverse Tangential Bearish Detection - Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb by significant magnitudes before the execution of this phenomenon).

-Political Climate – The Senate’s preliminary passage of healthcare is a bit bearish. Dubai is threatening loan defaults is responsible for Friday’s bearish aggression. Congress will be returning to work and that will add to some bearish incentives.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor early next year. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when? As long as the aforementioned attributes are suggesting bullishness and non-bearishness, the bull will continue dominance.

Click the Short-term Indicant to see the combined table of the Near-term Indicant, Quick-term, and Short-term Indicant. The table has links to charts for each. Each chart contains all three models and there are two separate buy and sell signals for either the Near-term and/or Quick-term Indicant.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

The NYSE and NASDAQ Indicant Volume Indicators continue moving lethargically and at an accelerating pace. Much of this is due to holiday seasonality. Last Monday’s aggressive bullish behavior was accompanied with flat volume, but relatively high when adjusted for seasonality. Tuesday’s volume was mild on mild bearishness, suggesting little interest in shifting directional intensity. Wednesday’s volume suggests Wall Street workers do not need any overtime as it was exceptionally light; even for holiday adjustments. Friday’s volume was light on aggressive bearish behavior.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 27-ETF’s. They are up by an average of 14.2%, annualizing at 45.6%, since their buy signals an average of 16.2-weeks ago.

Although there were no sell signals, the NTI is avoiding four-ETF’s. They are up by an average of 2.1% since their sell signals an average of 3.0-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 22.1% since their buy signals an average of 25.9-weeks ago. Those with hold signals are annualizing at 44.4%.

Although there were no sell signals, the two avoided ETF’s are down by an average of 25.9% since their sell signals an average of 18.1-weeks ago.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; minority of six offering limited bullish support.

NTI Blue Curve Trend; 28-sloping north; strong bullish support.

NTI Green Curve Trend; 28-sloping north; strong majority support for non-bearishness. The bear cannot dominate with this attribute.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 28-represent a majority, supporting Quick-term bullishness.

QTI Bullish Red Curve Trend; 28-sloping north in solid majority support for Quick-term bullishness.

QTI Yellow Bear Count; zero non-contrarian represents a solid majority supporting Quick-term non-bearishness.

QTI Bearish Yellow Curve Trend; 28-sloping north, highlighting solid non-bearishness. Lost one non-contrarian last Thursday.

The Short-term Indicant ETF Key Attributes:

Force Vector Bullish Domain Occupancy; Four in bullish domains, which is mildly non-bearish. Although bullish cycle is mature, they are hovering and thus non-threatening to the bull in spite of Friday’s bearish aggression and threatening loan defaults by Dubai.

Force Vectors Bearish Domain Occupancy; 24 in bearish domains offering bear additional encouragement.

Vector Pressure Bullish Domain Occupancy; 3-in bullish domains, offering mild support for the bull.

Vector Pressure Trend; minority of seven moving in bullish direction, offering limited bullish support. Even if the bear has its way, its destruction will be muted as a result of these rising pressures with current configurations.

Click here to get a quick overview of the regular mutual funds as they stood several months ago. As you can see, many of them are down by double digit percentage points since the Mid-term Indicant signaled sell in late 2007 and in early 2008. The Mid-term Indicant is updated each weekend with a link to the member’s section. Members can click this sentence to get a more recent update. You will notice buy signals the past few weeks for the first time in several months.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is up 4.0% since that sell signal. It remains configured for potential “short-term bullishness” but significantly more overall stock market bearish synergy is required to signal buy for this fund and QQQQ must demonstrate some additional interest in bearish behavior.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 53.2% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $29.84 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 9.8% since those buy signals, annualizing at 30.5%.

ETF#11-Gold and Precious Metals is up 42.7% since the QTI signaled buy on December 11, 2008. Annualized growth is at 43.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $92.18 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 28.2% since then, annualizing at 46.9%.

As stated for the last several months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will highlight that potential when this occurs.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 1.8% since that buy signal. It will be difficult for this hold to produce profitability as long as the stock market is bullish. You should notice that it is not succumbing to bearish influences, while also not being motivated by its potential bullish desires.

Major ETF Events

Nov 26, 2009-Most Vector Pressures shifted back to the south today, offering the bear a bit more encouragement. However, in spite of Dubai’s threatened defaults on loan payments, the bull remains in tact.

Nov 25, 2009-Six ETF Short-term Vector Pressures shifted back to the south. The gain in two Near-term Blue Bulls is somewhat offsetting.

Nov 24, 2009-One non-contrarian’s QTI Bearish Yellow Curve shifted to bearish slope today. This is minor, relative to overall stock market, it is worthy of mention, since this is the first time this occurred since last February.

Nov 23, 2009-VIX Near-term Blue Curve collapsed today. That suggests little VIX bullish interest on the immediate horizon, which is non-bearish for the overall stock market.

Current Strategy-Short-term Indicant-Nov 27, 2009-Although bullish pressure decreased considerably, rising NTI green curves offer bearish resistance and thus no need to panic. Nov 24, 2009-Same as yesterday; most attributes are non-bearish. Nov 23, 2009-Most of the Near-term and Quick-term Indicant attributes continue holding bullish configurations.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

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

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

Last week’s flat market behavior is resetting the counter on divergent/convergent cycles.

Indicant Conclusion

As stated the past seven weeks, low interest rates offer narrowed alternative investment opportunities. The argument holds that sideline cash is not smart. As long as this perception prevails, the bull cycle should continue.

International loan defaults add a new bearish threat in addition to the Congressional bearish threat. The stock market bear was aroused last Friday at Dubai’s request to extended interest and principle payments by several months.

However, configurations remain supportive of the current Short-term bull.

Keep up with the daily stock market report as the Quick-term and Near-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

11/29/09

Nov 22, 2009 Indicant Weekly Stock Market Report

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

Democracies Eventually Fail

The majority’s tyranny is the Achilles heel of the designed intentions of democracy. The underlying principle of any democracy is that the majority should influence the direction of their society. This principle holds true in spite of the majority’s viewpoint; good, bad, or evil.

Majority rule is a form of collectivism. Such cultures have a tendency to ensure that all within the unit possess the same capabilities. In other words, individualism is forsaken for the good of the unit. All members of a collective unit should have the exact same possessions; no more and no less than their fellow members.

The underlying principle of collectivism is faulty. Any groupings of people require a leader. Sometimes the majority selects the leader; sometimes the leader assumes the position of leadership via coercion. Regardless of the selection method of the leader, the masses follow; sometimes willingly; sometimes unwillingly.

The Bolshevik Revolution is a recent example of the masses willingly following leadership. That leadership destroyed the autocratic Tsarist. The Bolshevik followers shouted with joy and glee with feelings of righteousness in 1917. The Bolshevik followers and their leaders had a sensation that the right thing had been accomplished. The idea here was the Tsarist lived a life of pleasure and comfort while the masses lived poorly. Bolshevik followers believed that over throwing the Tsarists would heighten their living standards.

Here’s what happened. Once the Bolshevik (communist) leaders were in complete power, they simply moved into the mansions formerly housing Tsarists and lived a life of comfort while each generation of the followers endured decreasing quality of life.

In essence, nothing was accomplished for the masses, but quite a bit was accomplished for the Bolshevik leaders. The communist leaders lived a life of comfort and pleasure, while their followers endured increasing discomfort and fewer pleasures.

By the third generation, following the Bolshevik Revolution, all members of the collective unit in the communist party were encumbered by poverty. The goal of achieving equality for all was achieved by the communists. All were equally poor and very poor indeed except the communist leaders.

In essence, the productive output of each individual fell to the productive output of the laziest slob in the unit. First generation “productive types” noticed how unproductive their neighbors were. So, those first generation folks lowered their productive output to be equal to their lazy neighbor. They must have surmised, “Why should I produce a lot, take my small share, then give the rest of my output to lazy slobs?”

After three generations since the Bolshevik Revolution, most of the grandchildren of the original Bolshevik followers stood for hours in lines for their bread and vodka.

Members of a democracy are not different from the Bolshevik members. Both groups possess the same green, brown, or blue eyes. Both groups walk on two legs. Both groups have three and a half pound brains with all sorts of swirling thoughts; some good, some bad, and some in between.

A democracy can quickly shift from a republic to a communist state. All the majority has to do is vote for communist politicians in the next election. That, of course, would be the last election until such time the masses found a new leader to lead them to the physical removal of their communist leaders.

History suggests this takes about three to four generations. It takes that much time for devolutionary pressures to yield productive outputs to the lowest output in the unit. The end of low output/communists occurs when the discomfort levels of the masses find the inconvenience of standing in line for hours for one loaf of bread and then moving to a similar long line of poor souls for vodka that is required to drowning out their sorrows becomes intolerable.

Majority rule is difficult to replace. Physical laws prevent minority rule. After all, any majority can defeat any minority, if capability and weaponry are the same for both sides. So, over a long period, most cultures are ruled by their respective majorities. That is, until such time, their leaders take complete control over the masses.

American journalists, Theodore White, said, “The flood of money that gushes into politics today is a pollution of democracy.” Political leaders will not adequately deal with institutions that are too big to fail. Those institutions protected by politicians with your tax dollars are a major source of their campaign financing and constant re-elections.

In essence, these huge sums of money directed to incumbent politicians support a famous quote by John Simon, who said, “Democracy encourages the majority to decide things about which the majority is ignorant.” You saw that in every election since 2004 and especially in 2006.

The majority does not understand queuing theory. To understand queuing theory, one must first understand calculus and statistics. Rather than writing an expose on queuing theory, the simplest expression of it is, Wait Time Equals Demand over Capacity.

If a medical doctor’s capacity is ten hours per day with ten patients in the waiting room, each needing one hour of the doctor’s attention, then the tenth patient will receive service by the doctor at the conclusion of the ninth hour. The doctor will conclude processing the tenth patient at the conclusion of the tenth hour. If the number of patients increase to twenty, the twentieth patient will be serviced late on the following day.

If a bunch of politicians passes healthcare reform, most of whom do not understand queuing theory and who never passed calculus or took statistics, the waiting time in the doctor’s office will increase exponentially. That ten-hour wait will increase by days, then months, then years, just as the long lines for vodka and bread in Russia.

One with subject matter expertise can quickly identify one who lacks it. Most politicians in Washington D.C. never took calculus or understand queuing theory. The harsh reality of the constituent elements of that knowledge base will exert itself. Politicians do not know what they are doing. All one has to do is listen to them. They and their constituents who voted them into power are indeed ignorant. Consequently, the beginning stages of this democracy’s unraveling are unfolding before your very eyes.

Causes that follow healthcare legislation will surprise you. At some future point, politicians garnishing votes from the majority will someday proclaim that everyone has a right to own a Cadillac. By then, though, the wheels on the Cadillac will be wobbling. However, the majority will vote for that politician so they can have a Cadillac.

After everyone has a Cadillac, politicians in an effort to garnish votes will say that everyone has a right to jet airplanes. Of course, by then, the jets would not get off the ground. Sure, a few of them would fire up and plow through everyone’s huts, knocking over Cadillacs, rusting next to those huts, killing most in the village. Since there will be no doctors, most of those killed by the jets that cannot get off the ground will at least help those who are in pain.

Vote garnishing promises by ignorant and lying politicians, who have continuing access to excessive campaign financing to and from the “political elite” to ensure their continued reelections will result in the failure of the democracy. Similar events have occurred in the past and this one is setting up to conclude the same.

That is bearish for the stock market. The Senate passed the bill. It is still not law. Do not be surprised if the stock market bull rests next week. Much depends on how the stock market will interpret the next step of the healthcare reform bill.

However, in the mean time, the Near-term and Quick-term Bull remain in tact, but teetering on the brink of expiration.

Keep your eye on the daily stock market report.

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.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 193 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 26.4%. That annualizes to 49.9%. The Mid-term Indicant has been signaling hold for these 193-stocks and funds for an average of 27.6-weeks.

In addition to the sell signal, the Mid-term Indicant is avoiding 123-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 35.7% since the Mid-term Indicant signaled sell an average of 80.6-weeks ago.

Stocks and funds, no longer traded, are identified with the letters, NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. NLT companies and funds are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

One year ago, on Nov 21, 2008, the Mid-term Indicant was holding 23-stocks and funds out of 344 tracked for an average of 51.4-weeks. They were up by an average of 74.2% (annualized at 75.1%). There were 314-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 39.6% since their respective sell signals an average of 26.6-weeks earlier.

The Mid-term Indicant was signaling hold for 237-stocks and funds of the 345-tracked two years ago on Nov 23, 2007. They were up by an average of 145.2% (annualized at 58.6%) since their respective buy signals an average of 128.9-weeks earlier. The Mid-term Indicant was avoiding 92-stocks and funds at that time. They were down an average of 13.3% since their respective sell signals an average of 16.9-weeks earlier.

There were 310-stocks and funds with hold signals on Nov 17, 2006 since their buy signals an average of 82.8-weeks earlier. They were up by an average of 109.7% (annualized at 68.9%). There were 33-avoided stocks and funds at that time. They were down by an average of 11.9% from their respective sell signals an average of 18.7-weeks earlier.

On Nov 18, 2005, the Mid-term Indicant was signaling hold for 265-stocks and funds out of 320-tracked. They were up by an average of 94.6% (annualized at 60.9%) since their buy signals an average of 80.7-weeks earlier. The Mid-term Indicant was avoiding 50-stocks and funds at that time. They were down by an average of 17.7% since their sell signals an average of 24.8-weeks earlier.

Five years ago, on Nov 19, 2004, there were 299-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 67.6% (annualized at 67.1%) since their respective buy signals an average of 52.4-weeks earlier. There were 16-avoided stocks and funds then. They were down an average of 45.4% since their respective sell signals an average of 55.5-weeks earlier.

On Nov 21, 2003, there were 262-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 51.7%, annualizing at 79.9%, since the buy signals an average of 33.6-weeks earlier. There were 29-avoided stocks and funds then. They were down by an average of 25.2% since their sell signals an average of 33.8-weeks earlier.

There were 268-stocks and funds with hold signals on Nov 22, 2002. They were up by an average of 20.9%, annualizing at 115.0%, since their buy signals 9.4-weeks earlier. The 11-avoided stocks and funds were down an average of 30.5% since their respective sell signals an average of 21.8-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.

Link to this week’s buy and sell signals.

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. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

All updated information can be accessed from the following link. 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

Short-term indicators improved slightly last week, prompting QID’s sell signal and VIX’s bear signal. Those defensive measures taken a few weeks ago proved to be unnecessary. This bull is a thoroughbred, in spite of minimal fundamental justifications for its existence.

The Mid-term Indicant is poised for several more buy signals in the next few weeks. The Short-term Indicant needs to rid itself of a few remnant attributes that continue supporting bearish inspirations. Those bearish attributes are the reason for no buy signals this weekend.

The Mid-term Indicant has noticed several stocks and funds are shying away from crossing above the Mid-term Indicant’s bearish yellow curve. That is a common attribute for double dip bear cycles. This was also influential on not allowing any more buy signals this weekend even though the heart and soul of bullish seasonality is underway.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias. Keep in mind, the Near-term Bull remains under attack by the bear, even though that attack has been muted the past two weeks. The bull was not as strong in its response to such attacks and thus could provide the bear a bit more encouragement.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 41.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 92.6% and the S&P500 is up 40.5% since then. The small cap index, S&P600, is up 81.0% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

Interestingly, most of the major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008. The resilience of the current Near-term Bull cycle suggests it may indeed have enough sustainability to permanently mark a major cyclical bottom. In other words, the next Near-term Bear cycle may not fall below the March 9, 2009 bottoming. Even with that, statistics support 100% accuracy in the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is down 27.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 24.9% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 30.6% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few weeks, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

If inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being. This should become more apparent this coming week. The bear will be aroused with significant ambition if the Blue Dogs acquiesce to Congressional peer pressure).

Another consideration is deflation, but with lower probabilities. Consumer spending, which has been the predominant economic force may not return to previous levels. A significant amount of consumer spending was funded from over-priced real estate. The economy and stock market were confronted by phony wealth that was not delivered from the three wealth building pillars; manufacturing, agriculture, and extraction. Wealth can only be produced; not taken.

Recent market dynamics suggest inflationary concerns with a weakening dollar. The equity markets do not like either inflation or deflation. The combination of absolute values of either inflation or deflation plus prevailing interest rates of over 8% is solidly bearish when considering historical standards. Current conditions are not close to that threatening value at this time.

The NASDAQ year-to-date performance was bearish by 23.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year of 2009.

The NASDAQ was down by 27.2% 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 bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 40.9%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 3.4% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was up 2.4% in 2005’s post election year, which maintained congruency to the historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 11.2% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 7.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 50.4% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. Last year’s inconsistency is somewhat influential, as two strong back-to-back inconsistencies are rare. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year. As the popularity of Congress and the U.S. President wane, the stock market senses a reduction in their power. That is bullish.

Unfortunately, Congress continues spouting their commitment to healthcare reform. That is bearish. The House voted for this on Saturday, Nov 7, 2009. Congress took the following week off and the market was appropriately bullish. Current sentiment holds that healthcare reform will not pass the Senate. However, keep in mind that Congress can “surprise.”

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As previously stated the kingdom will assert its leadership and regulate supplies to demands that will result in approximately $80/bbl.

Gold is obviously anticipating significant inflationary behavior with the paper currencies. A tremendous amount has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation has to follow at some future point. Increased socialism will inherently reduce supply, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point an I-Pod may cost well over $10,000. Once that nonsensicality has passed, deflation will most likely follow.

As stated 60-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010. However, there are some indications the heart and soul will disappoint this year.

As stated 55-weeks ago, “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.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few months.

As stated the past 12-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted.

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. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 1.9% since then, annualizing at 19.6%. It has been bullish the past two weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 11.8% since then, annualizing at 55.1%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 12.1%, annualizing at 38.8% since its buy signal on July 31, 2009.

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 26.7% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 2.7% since its buy signal on Sep 11, 2009, annualizing at 13.7%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 9.0% since then, annualizing at 29.8%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 40.0% since that buy signal, annualizing at 41.9%. 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 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 25.9% since the Near-term buy signal, annualizing at 44.4%. Gold and oil are bullishly more aggressive the past six months, following the prior six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 8.6% since that bull signal. That annualizes to 28.1%. Bear signals will occur in the event Congress passes healthcare legislation, turning it over to the most inefficient organization in the United States.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,634,790. That beats buy and hold performance of $1,569,779 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,972. That beats buy and hold’s $106,904 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $195,566. That beats buy and hold’s $74,412 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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 sell for ProFunds Ultra Short on April 3, 2009. It is down 49.7% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bull cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and that battle is occurring now.

Click here for Mid-term Indicant Table of Mutual Funds

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 256.5% (annualized at 14.2%) since the Long-term Indicant signaled bull 942-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. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. A link to the Long-term Indicant is below. You will notice long-term projections are shifting bearishly.

The Quick/Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls remain in majority and thus protective against dynamic sustainable bearish behavior. Near-term rising green curves add a bit of comfort to the bull’s longevity.

The primary concerns remain the same. Although Vector Pressure is again inclining, bullishly mature Force Vectors remain as a mild threat on a short-term basis. Their lateral moving behavior minimizes potential for this threat. However, they are again angling to the south and point of minor concern. They are in bullish domains, so any bearish expressions would not be severe or long lasting.

Be aware of Congressional surprises. Healthcare continues to be a threatening element to this bull. The Senate is expected to vote on the bill later this Saturday night. If the bill passes for deliberation, do not be surprised at a bearish reaction. Passage for deliberation is believed to be a mere formality for passage into law. Also, insiders may leak reliable information and the bear may anticipate.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The eleven non-contrarian major indices are up by an average of 22.2%, annualizing at 48.2%, since the NTI signaled bull an average of 24.0-weeks ago. The lone avoid signal (VIX) is down 2.8% since the bear signal 0.6-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 16.2%, annualizing at 36.3%, since their bull signals an average of 23.3-weeks ago.

The lone QTI bear, VIX, is down 38.1% since its bear signal 31.1-weeks ago. VIX eclipsed bearish yellow on Thursday, Oct 29, 2009, technically qualifying for a Quick-term Bull signal. The major indices did not provide enough bearish synergy to support a bull signal. Since then, the VIX weakened, but keep in mind, it is developing a baseline support level for future aggression.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

QTI-Red Bull Count; A solid majority of nine support bullish bias, but lost one last Thursday.

QTI-Bullish Red Curve Trend; Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

QTI-Bearish Yellow Curve Trend; Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

QIT-Yellow Bear Count; None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias.

NTI-Blue Bull Count; There are five blue bulls, suggesting NTI bullish support. The loss of five last Thursday and one today has resulted in minority support and somewhat weakened.

NTI-Bullish Blue Curve Trend;12-non-contrarian in bullish trend, supporting bullish trend, including contrarian VIX.

NTI-Bearish Green Curve Trend - Non-bearish minority with seven of 11-non-contrarian indices in bullish trend. Five shifted into bearish slope several days ago, increasing concerns about bearish aggression. Although that concern remains, it is now a minor one. Two more resumed bullish trend today.

STI-Force Vector Cyclical Direction-Zero non-contrarian moving north, offering bearish spurt potential. Force Vectors are “listing” to the right, supporting non-bearishness. Last Thursday’s bearishness generated a more bearish angular configuration, but still residing in bullish domains.

STI-Vector Pressure Trend-All but VIX bullishly directed.

Short-term Summary-Overall-The high number of Quick-term Red Bulls and Near-term Blue Bulls are protective against dynamic and sustainable bearish aggression. However, the impending senatorial vote on healthcare legislation is increasingly threatening to the stock market’s bull.

-Political Climate – Congress in session is bearish. Technical data continues overriding congressional bearish threats with bullish attributes at this point, albeit weakening under the noisy threats by the U.S. Senate and House. Strong bullishness is not likely to return until the next major Congressional recess. However, recent elections in New Jersey and Virginia could accelerate this. However, technical data continues supporting the current bull. There are a few remnants of mild bearish bias, but now bordering minutiae. The only concern is VIX’s rising NTI Green curve and its Force Vector still remains mildly supportive of VIX bullishness and stock market bearishness.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors. Those latter two will be explained as they evolve.

The NYSE and NASDAQ Indicant Volume Indicators are becoming increasingly lethargic due, in part, to the holidays. Last Monday’s bullish behavior was accompanied with significantly higher volume, suggesting increased support for the bull. Last Tuesday’s volume on mildly bullish behavior was light, suggesting little interest in shifting direction. Wednesday’s volume was slightly higher on mild bearish behavior. Thursday’s bearishness was not accompanied with high volume, suggesting limited aggressive support for continued bearishness. Today’s volume was very light on mild bearish behavior. Overall, the increasingly lethargic volume indicators are suggesting little interest in promulgating dynamic cyclical behavior in either direction. In essence last Monday’s bullishness was wiped out by bearishness during the course of last week. Passive behavior is supported by lethargic volume configurations. Some of this is due to holiday seasonality.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 27-ETF’s. They are up by an average of 14.5%, annualizing at 49.5%, since their buy signals an average of 15.2-weeks ago.

Although there were no sell signals, the NTI is avoiding four-ETF’s. They are up by an average of 2.5% since their sell signals an average of 2.0-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up an average of 22.5% since their buy signals an average of 24.9-weeks ago. Those with hold signals are annualizing at 46.9%.

Although there were no sell signals, the two avoided ETF’s are down by an average of 26.1% since their sell signals an average of 17.1-weeks ago.

Last Thursday’s sell signal for ETF #06, EWJ, could not be avoided. Price fell below NTI bearish green and QTI bearish yellow. Vector Pressure is drifting south. Although there is no bearish synergy or breadth, continued holding for this ETF threatens accumulated profits.

Near-term Indicant ETF Key Attributes

NTI Blue Bulls Count; Nine-mild bullish support.

NTI Blue Curve Trend; 28-sloping north, offering improved strong bullish support.

NTI Green Curve Trend; 15-sloping north, expressing mild minority support for non-bearishness. As long as this holds up, the bear cannot dominate. This is now steadying following several days of weakening non-bearish support. A majority of 16 or more would be a bit more comfortable for those desiring continued bullishness.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; 21-represent a mild majority, supporting Quick-term bullishness.

QTI Bullish Red Curve Trend; 28-sloping north in solid majority support for Quick-term bullishness.

QTI Yellow Bear Count; 1-non-contrarian represents a solid majority supporting Quick-term non-bearishness. It is a bit discerning that one non-contrarian is now a yellow bear.

QTI Bearish Yellow Curve Trend; 29-sloping north, highlighting solid non-bearishness. Only contrarian ETF’s, QID and TLT are sloping south. Since both are contrarian, this attribute remains non-bearish.

The Short-term Indicant ETF Key Attributes:

Force Vector Bullish Domain Occupancy; Eleven in bullish domains, which is non-bearish. Although bullish cycle is mature, they are hovering and thus non-threatening to the bull.

Force Vectors Bearish Domain Occupancy; one in bearish domains offering little bearish support.

Vector Pressure Bullish Domain Occupancy; 3-in bullish domains, offering mild support for the bull.

Vector Pressure Trend; 27-moving in bullish direction, which is a significant increase the past few days. This is offering additional bullish support. Even if the bear has its way, its destruction will be muted as a result of these rising pressures.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on November 16, 2009. It is up 4.6% since that sell signal. It remains configured for potential “short-term bullishness” but significant more overall stock market bearish synergy is required to signal buy for this fund.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 52.9% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $30.23 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 9.0% since those buy signals, annualizing at 29.8%. Bullish vitality appears to be weakening.

ETF#11-Gold and Precious Metals is up 40.0% since the QTI signaled buy on December 11, 2008. Annualized growth is at 41.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $91.58 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 25.9% since then, annualizing at 44.4%.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 0.4% since that buy signal. It will be difficult for this hold to produce profitability as long as the stock market is bullish. You should notice that it is not succumbing to bearish influences, while also not being motivated by its potential bullish desires.

Major ETF Events

Nov 20, 2009-Fri-Lost a few blue bulls today, but non-threatening in either direction.

Nov 19, 2009-Thu-First non-contrarian QTI sell signal occurred today in over six months. It is ETF#06, EWJ.

Nov 18, 2009-Wed-Same as yesterday.

Nov 17, 2009-Tue-Low volume, suggesting little interest in dynamic behavior in either direction.

Nov 16, 2009-Mon-Strong bullish behavior and laterally moving Force Vectors support bull.

Current Strategy-Short-term Indicant-Nov 20, 2009-As long as most ETF’s and major indices remain above near-term green curve, the bear cannot dominate. If the stock market reacts bearishly to the Senate’s vote Saturday night, sustainable bearish dominance cannot be possible as long as the Near-term Indicant Green curve continues moving north. This will be true even if the Near-term Blue Curves collapse under the weight of Senatorial stupidity. Nov 19, 2009-Regardless of what reasons are provided by the media describing bearish behavior’s causative reasons, it is a direct function of the Senatorial threat to vote “yes” on their 2,000+ page nonsensical legislation. Be cautious, as the bear may anticipate a passage this weekend. Nov 18, 2009-Senate is schedule to vote on healthcare legislation in a few days. The stock market’s low volume suggests many are “waiting.” Do not be surprised at a bearish reaction in the event the bill passes. Nov 17, 2009-Most attributes support bull, but a few of them are still asserting bearish potential. Regardless though, the bear cannot become dominant at this time. Nov 16, 2009-The bull reasserted its dominance. Force Vectors did not shift sharply south, suggesting the bull’s continued dominance. Some Near-term attributes are bordering in their support of the bear. This suggests potential for volatility, but the bull continues to express little interest in expiring.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

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

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

Two consecutive weeks of bearish convergence have been followed by bullish divergence the last three weeks. That minimizes concerns regarding four consecutive weeks of bearish convergence, which is significantly bearish. That was the concern three weeks ago.

Indicant Conclusion

As stated the past six weeks, low interest rates offer narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. However, a new phenomenon may unfold. More money may be directed toward real estate and less toward stocks.

Even though politicians may feel threatened by their constituents, their arrogance may lead them to passing health care legislation. The huge amount of money chasing stocks to the north the past few months should slow if the legislative branch of government threatens capitalism. If politicians become more aggressive at wealth destruction, the bear will dominate regardless of cash potential chasing stocks. Earnings potential will be muted with rising socialism.

Keep up with the daily stock market report as the Quick-term and Near-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

11/22/09

Nov 15, 2009 Indicant Weekly Stock Market Report

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

This Week’s Report

Buy and Hold?

Fund managers attempt ownership of the best companies in their sectors. Some of those fund managers are successful at finding the best companies in their respective sectors. Other fund managers do not do a good job. Those funds underperform those that do a better job of finding good companies.

During weak economic conditions, all funds move bearishly. Some fall further and deeper than others do. For example, energy related funds did not participate in the 1980’s stock market bull. Many fell by over 60% during the 1980’s bull market. Declining oil prices victimized stocks and related funds that were committed to the energy sector.

From time to time, there are rolling recessions. For example, during the 1970’s, the energy sector was extremely bullish, while the overall stock market was bearish.

Those two bullish and bearish cycles reflected oil prices. Oil prices skyrocketed in the 1970’s and they crashed in the 1980’s. Most companies in the energy sector paralleled those major bullish and bearish cycles. One could argue that a mutual fund manager’s talent is a function of sector behavior, as opposed to some esoteric method of stock picking.

For several years, the Wall Street Journal would toss darts and select stocks based on where the darts stuck. They would basket those stocks and check them the next year. On many occasions, those stocks outperformed the highest performing mutual fund manager. So, if you want to create your own mutual fund, you may consider this approach. Just paste your newspaper on a wall that can be receptive to darts, toss about ten of them, and buy those stocks the next day. History suggests those stocks will outperform most mutual funds.

There is one exception to this. Index funds have enjoyed a history of outperforming most other funds. In the late 1990’s famed Wall Street journalist, Louis Rukeyser, promoted the Rydex family of funds to allow more investor’s access to RYOCX. At that time, its popularity was very high and there were no more slots available for the average investor. Many people complained of their inability to buy shares in this highly desired mutual fund. Exchange traded funds were still in their early stages of development and not yet available. There was no QQQQ at that time. RYOCX tracks the NASDAQ100 stocks, which is the same as QQQQ.

The Rydex NAS100 fund, RYOCX, was in high demand in the late 1990’s. It is unknown if Mr. Rukeyser was successful in getting more slots open for investors. Unfortunately, for those who may have enjoyed any more open slots, fortunes were not made. On the contrary, this fund endured 80% drop from early 2000 through 2002, paralleling the NASDAQ100 index huge drop. This is a common occurrence under the auspices of the phenomenon of commonality. The phenomenon of commonality allows only a few to profit. CNBC ran ads during this time suggesting that it is better to “stay the course.” Well, it has been nearly ten years and that fund and many of its constituent stocks are still down by nearly 50%. One should ask, which course?

Even though index funds generally outperform other mutual funds, none are pleasant portfolio possessions when economic conditions are sour. All funds go down during periods of poor earnings. Most corporations do not make much money during recessionary economies. Most corporations require a steady increase in revenue to make money. Sales volume hides a lot of corporate problems and related incompetence. This is especially true in the dilettante infested large caps.

The current bull cycle is mature and could very well continue to be dominant for long period, spanning years. However, it is outpacing earnings. It, like all bulls, will eventually expire and replaced by a bearish stock market. Consumers are not going to spend and the economy of the past fifty years has been consumer driven. Socialistic causes by politicians are also a threat to this bull.

Bull markets climbed walls of worry many times in the past. If the Senate waffles on passing the healthcare bill, the bull should be encouraged. On the other hand, if earnings do not step it up, the bull could become discouraged even with senatorial waffling. The mid-term election of 2010 is a key focal point. The stock market will probably anticipate its outcome during the early months of 2010. If the stock market anticipates a re-election of existing incumbents, it would not be surprising to see the current bull expire and replaced by a zealous bear. If earnings do not accelerate, the stock market must adjust even with a huge amount of money setting on the sidelines and senatorial waffling.

Many of the mutual funds, including index funds, are vacillating around the Quick-term bearish yellow curves. That is somewhat discerning on a mid-term horizon basis. Congress is returning to work this coming week, which is generally bearish. The stock market was bullish last week while Congress was out of session. The stock market should be bearish next week since Congress is returning to work. Remember, governments do not create wealth. On the contrary, they reduce it.

Force Vectors appear to have pinnacled. If Congress starts bickering, then they may extend, rather than fall. The bull does not object to bickering congressional representatives. This coming week is important from a technical perspective. The heart and soul of bullish seasonality is now underway, but the Federal deficit, high unemployment with no end in sight, disappointing earnings, tight credit, and socialistic causes threaten this bull. Will this one continue climbing walls of worry?

Keep your eye on the daily stock market report.

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 one buy signal and one sell signal.

In addition to the buy signal, the Mid-term Indicant is signaling hold for 193 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 27.7%. That annualizes to 54.3%. The Mid-term Indicant has been signaling hold for these 193-stocks and funds for an average of 26.6-weeks.

In addition to the sell signal, the Mid-term Indicant is avoiding 122-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 32.2% since the Mid-term Indicant signaled sell an average of 79.6-weeks ago.

One year ago, on Nov 14, 2008, the Mid-term Indicant was holding 30-stocks and funds out of 344 tracked for an average of 41.2-weeks. They were up by an average of 60.7% (annualized at 76.5%). There were 313-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 35.3% since their respective sell signals an average of 25.7-weeks earlier.

The Mid-term Indicant was signaling hold for 253-stocks and funds of the 345-tracked two years ago on Nov 16, 2007. They were up by an average of 141.1% (annualized at 59.6%) since their respective buy signals an average of 123.2-weeks earlier. The Mid-term Indicant was avoiding 84-stocks and funds at that time. They were down an average of 10.9% since their respective sell signals an average of 17.0-weeks earlier.

There were 310-stocks and funds with hold signals on Nov 10, 2006 since their buy signals an average of 81.8-weeks earlier. They were up by an average of 103.5% (annualized at 65.8%). There were 34-avoided stocks and funds at that time. They were down by an average of 11.8% from their respective sell signals an average of 24.1-weeks earlier.

On Nov 11, 2005, the Mid-term Indicant was signaling hold for 253-stocks and funds out of 320-tracked. They were up by an average of 93.4% (annualized at 58.6%) since their buy signals an average of 82.9-weeks earlier. The Mid-term Indicant was avoiding 54-stocks and funds at that time. They were down by an average of 16.1% since their sell signals an average of 25.5-weeks earlier.

Five years ago, on Nov 12, 2004, there were 297-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 68.7% (annualized at 69.1%) since their respective buy signals an average of 51.7-weeks earlier. There were 17-avoided stocks and funds then. They were down an average of 45.6% since their respective sell signals an average of 54.6-weeks earlier.

On Nov 14, 2003, there were 264-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 54.9%, annualizing at 89.6%, since the buy signals an average of 31.9-weeks earlier. There were 22-avoided stocks and funds then. They were down by an average of 24.3% since their sell signals an average of 33.3-weeks earlier.

There were 268-stocks and funds with hold signals on Nov 15, 2002. They were up by an average of 14.4%, annualizing at 88.5%, since their buy signals 8.4-weeks earlier. The 23-avoided stocks and funds were down an average of 22.4% since their respective 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.

Link to this week’s buy and sell signals.

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. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

All updated information can be accessed from the following link. 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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend are all bullish. The economy is on the mend and earnings should also improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset yet. The biggest threat on the immediate horizon is congressional action. The bull prefers governmental inaction.

The only problem is the Short-term Indicant’s declining Vector Pressure for most of the major indices and ETF’s. As a defensive measure, we bought QID and signaled bull for VIX. Early next week will either display the wisdom of this or sell/bear will ensue for QID and VIX.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

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

Stop Loss Management

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 41.0% since its secular weekly low on October 9, 2002. The NASDAQ is up 94.6% and the S&P500 is up 40.8% since then. The small cap index, S&P600, is up 81.8% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 27.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 24.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 30.3% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few weeks, but muted the past few weeks with Congressional threats to capitalism. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

However, if inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being. This should become more apparent this coming week. The bear will be aroused with significant ambition if the Blue Dogs acquiesce to congressional peer pressure).

Recent market dynamics suggest inflationary concerns with a weakening dollar. The equity markets do not like either inflation or deflation. The combination of absolute values of either plus prevailing interest rates of over 8% is solidly bearish when considering historical standards. Current conditions are not close to that threatening value at this time.

The NASDAQ is down 58.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 30.0% since its similar secular peak on March 23, 2000. The Dow is down by 14.5% 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. (This remains even with the immediate Blue Dog potential).

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believes their proposed fixes, which was not even read by the lawmakers. They are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and controls. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The Dow is up 14.2% so far this year. The NASDAQ is up 34.0% and the S&P500 is up by 18.4%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 23.4% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year of 2009.

The NASDAQ was down by 30.2% 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 bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 47.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 4.1% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was up 1.2% in 2005’s post election year, which maintained congruency to the historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 9.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 10.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 39.8% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. Last year’s inconsistency is somewhat influential, as two strong back-to-back inconsistencies are rare. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year. As the popularity of Congress and the U.S. President wane, the stock market senses a reduction in their power. That is bullish.

Unfortunately, Congress is again spouting their commitment to healthcare reform. That is bearish. The House voted for this on Saturday, Nov 7, 2009. Congress took the following week off and the market was appropriately bullish. Current sentiment holds that healthcare reform will not pass the Senate. However, keep in mind that Congress can “surprise.”

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Although the Fed has indicated interest rates will remain low, there was an uptick last week in both the Fed’s lending and mortgage rates. At some point, the U.S. dollar will require protection and at that time, interest rates will increase.

Although oil prices have been erratic with mild bullish bias the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices. This holds true in spite of significant demand reductions in the U.S. for petro.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand and thus protect pricing policies. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations. Oil remains a Red Bull, even though it drifted south last week.

As stated 59-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010. However, there are some indications the heart and soul will disappoint this year.

As stated 54-weeks ago, “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.” The bear has been passive since early March 2009, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few months.

As stated the past eleven weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 10.0% since then, annualizing at 51.6%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 13.5%, annualizing at 46.4% since its buy signal on July 31, 2009.

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 25.3% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 5.7% since its buy signal on Sep 11, 2009, annualizing at 32.7%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 10.3% since then, annualizing at 36.4%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 36.1% since that buy signal, annualizing at 38.5%. 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 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 22.3% since the Near-term buy signal, annualizing at 39.6%. Gold and oil are bullishly more aggressive the past six months, following the prior six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 9.2% since that bull signal. That annualizes to 31.8%. Bear signals will occur in the event Congress passes healthcare legislation, turning it over to the most inefficient organization in the United States.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,497,820. That beats buy and hold performance of $1,562,524 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $142,246. That beats buy and hold’s $107,109 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $197,556. That beats buy and hold’s $75,169 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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 sell for ProFunds Ultra Short on April 3, 2009. It is down 51.0% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bull cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and that battle is occurring now.

Click here for Mid-term Indicant Table of Mutual Funds

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 254.8% (annualized at 14.1%) since the Long-term Indicant signaled bull 941-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. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are shifting bearishly.

The Quick/Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

The Near-term Bull remains under assault by the stock market bear. However, the bull can withstand several daily assaults, as it remains strong. Skirmishes between bull and bear should be increasing over the next few days. Congress returning to work next week, coupled with pinnacled Force Vectors suggests a bearish edge early next week. Also, Friday’s bullish behavior was without breadth and with significantly low volume.

Quick-term Red Bulls remain in majority and thus protective against dynamic sustainable bearish behavior. An immediate question will be the comfort level of these newly configured Red Bulls. Discomfort will be inspirational to the bear.

The primary concerns at this time are declining Vector Pressure and the bullish energy consumed in positioning Force Vectors at their current position. Although the bull may become passive or possibly meander into bearish direction, it is still dominant. Early next week will offering greater obviations of stock market directional intensity.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

There are no Near-term bears among the major indices, including contrarian VIX. VIX’s aggressively bullish Force Vector has been followed by an equally bearish one. This suggests increasing volatility with a slight bias favoring VIX bullishness and stock market bearishness.

All twelve major indices are up by an average of 19.6%, annualizing at 48.0%, since the NTI signaled bull an average of 21.3-weeks ago. These statistics include contrarian VIX. That will be temporary, as the VIX bull will expire or the major indices’ bulls will expire. Bull signals for both cannot exist too long. The S&P500 Index NTI bullish blue did not collapse in the late October bearish attacks, suggesting the bull remains adamant about its longevity. A burgeoning problem is the small cap index. It is the most vulnerable to bearish attacks and typically endures more punishment by the bear, just at is enjoys greater boosts by the bull. The large caps cannot be bullish without small cap participation and thus another reason for cautionary commentary.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 16.8%, annualizing at 39.3%, since their bull signals an average of 22.3-weeks ago.

The lone QTI bear, VIX, is down 34.8% since its bear signal 30.1-weeks ago. VIX eclipsed bearish yellow on Thursday, Oct 29, 2009, technically qualifying for a Quick-term Bull signal. A bit more bearish synergy from the other indices is required before the QTI will signal bull for VIX. The VIX Force Vector has now cooled and extremely so. The expected bullish bounce occurred last Thursday and it should continue for a few more days. Obviations of directional stock market intensity will be enhanced as a function of the bounce’s magnitude.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

QTI-Red Bulls-A majority of nine support bullish bias.

QTI-Bullish Red Curve Trend-Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

QTI-Bearish Yellow Curve-Non-bearish unanimity with 11 of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias.

QIT-Yellow Bears-None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias.

NTI-Blue Bulls-There are seven blue bulls, suggesting NTI bullish support. (three lost since last Wed).

NTI-Bullish Blue Curve Trend-11-non-contrarian in bullish trend, supporting bullish trend, including contrarian VIX.

NTI-Bearish Green Curve - Non-bearish minority with five of 11-non-contrarian indices in bullish trend. Five shifted into bearish slope week before last, increasing concerns about bearish aggression.

STI-Force Vector-Two non-contrarians moving north, which is down by nine from last Thursday. If their impending downward movement parallels market bearishness, the bear will gain momentum. Do not be surprised at some bearish intrusions in the next few days. You saw the beginning of a series of such intrusions last Thursday.

STI-Vector Pressure-Only contrarian VIX is in bullish trend and thus no pressure support for the stock market bull.

Short-term Summary-Overall-Although bearish threats remain, the high number of Quick-term Red Bulls and Near-term Blue Bulls are protective against dynamic and sustainable bearish aggression.

-Reverse Tangential Bearish Detection - Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

-Political Climate – Congress in session is bearish, even though out of session this past week. Technical data continues overriding congressional bearishness with bullish attributes at this point, albeit weakening under the noisy threats by the U.S. Senate and House. Strong bullishness is not likely to return until the next major Congressional recess. However, recent elections in New Jersey and Virginia could accelerate this. However, technical data continues supporting the current bull with a mild bias favoring the bear to influence the stock market, but not destructively so.

The NYSE and NASDAQ Indicant Volume Indicators are becoming increasingly lethargic due, in part, to the holidays. Today’s bullish behavior was accompanied with light volume, suggesting limited support for the bull. That contrast with yesterday’s heavier volume on bearish aggression.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 19-ETF’s. They are up by an average of 22.7%, annualizing at 53.1%, since their buy signals an average of 22.2-weeks ago. These hold signals include contrarian QID. It and most of the other ETF’s cannot maintain simultaneous holds for too long.

Although there were no sell signals, the NTI is avoiding 12-ETF’s. They are up by an average of 5.2% since their respective sell signals an average of 2.3-weeks ago. Most of these ETF’s are enduring bullishly mature Force Vectors and several are enduring negatively sloping NTI bearish green curves and/or below QTI Bullish Red. Thus the reason for continuing with bear signal. They remain vulnerable to bearish desires. If the bear executes on those desires, they will fall quicker and deeper than the others.

Time is nearing on this, as Force Vectors have pinnacled. If these avoided ETF’s continue moving bullishly with declining and/or wavering Force Vectors, then buy signals will ensue. This should occur early next week.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 22.4% since their buy signals an average of 24.0-weeks ago. Those with hold signals are annualizing at 48.4%. Although there were no sell signals, the lone avoided ETF, QID, is down by 54.1% since its sell signal on Mar 26, 2009.

Near-term Indicant ETF Key Attributes

20-NTI Blue Bulls; Strong bullish support with majority position.

27-NTI Blue Curves are sloping north, offering improved bullish support.

12-NTI Green Curves are sloping north, expressing minority support for non-bearishness. As long as this holds up, the bear cannot dominate. This is weakening non-bearish support.

Quick-term Indicant ETF Key Attributes

21-QTI Red Bulls represent a improved majority, supporting Quick-term bullishness. As long as there is just one non-contrarian Red Bull, the bear cannot dominate with deep sustainability.

27-QTI Bullish Red Curves are sloping north in solid majority support for Quick-term bullishness.

2-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness. Contrarian TLT and QID are the only yellow bears and thus non-threatening to the QTI Bull.

29-QTI Bearish yellow curves are sloping north, highlighting solid non-bearishness. Only contrarian ETF’s, QID and TLT are sloping south. Since both are contrarian, this attribute remains non-bearish.

The Short-term Indicant ETF Key Attributes:

28-Force Vectors in bullish domains, which is non-bearish. However, they are mature and it is a bit threatening to the bull for bullishly mature Force Vectors with declining Vector Pressure.

Zero-Force Vectors are in bearish domains. As stated last Thursday, the bull’s response did not reverse the bearishly mature Force Vectors. The bull has a bit more opportunity to fix this problem, but has been weakened by not doing it sooner. Force Vectors are now beginning to interact with Vector Pressure and appear configured to be weak in doing so. This could motivate the bear.

Zero-Vector Pressures in bullish domains, offering no support for the bull.

29-Vector Pressures moving in bullish direction, which is a significant increase the past two days. This is offering additional bullish support. Even if the bear has its way, its destruction will be muted as a result of these rising pressures.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

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

The Near-term Indicant signaled buy for QID on Oct 28, 2009. It is down 12.2% since that buy signal. Configurations remain in support of this bull signal. Keep in mind, though, as long as QQQQ is enjoying a hold signal, the QID hold is a bit precarious.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 54.1% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $30.74 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 10.3% since those buy signals, annualizing at 36.4%. This fund had been struggling, but bullish in 25-of the last 47-days. It has been strongly bullish in 17-of the last 30-days, following eight consecutive days of bearish behavior. As stated last Wednesday, bullish vitality, though, appears to be weakening.

ETF#11-Gold and Precious Metals is up 36.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 38.5%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $91.04 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 22.3% since then, annualizing at 39.6%.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is down 0.9% since that buy signal. It will be difficult for this hold to produce profitability as long as the stock market is bullish. However, the stock market remains under attack by the bear. The weakening dollar has not been friendly to this ETF.

Major ETF Events

Nov 13, 2009-Fri-Although the stock market was mildly bullish today, there was little breadth. Most Force Vectors pinnacled and they will be moving south early next week. If stock prices do not parallel this southerly movement, the bull will continue its dominance and move on to new cyclical highs. Odds favor, however, an increased bearish influence, but nowhere threatening the bull’s longevity.

Nov 12, 2009-Thu-Bearish behavior is coinciding with maturing Force Vectors.

Nov 11, 2009-Wed-Several ETF Vector Pressures shifted from bearish to bullish direction today. If this holds up through the next few days, the avoid signals will be removed with buy signals for several ETF’s.

Nov 10, 2009-Tue-There were no major events today. However, bullishly maturing Foce Vectors with declining Vector Pressure is a bit discerning.

Nov 9, 2009-Mon-Force Vectors for major indices and ETF’s crossed above Vector Pressure today. These Force Vectors are bullishly mature and with minimal battle energy to fend off additional attacks by the bear.

Current Strategy-Short-term Indicant-Nov 13, 2009-Pinnacling Force Vectors will elucidate the stock market’s directional intensity early next week. Congress returns to work next Monday. That gives the bear an advantage, but keep in mind this bull is a thoroughbred and capable of surviving bear attacks. Nov 12, 2009-Bear demonstrated interest today and should gain some momentum over the next few days. Nov 11, 2009-If bear continues hibernation, the bull should regain aggression, but bullish mature Force Vectors continue suggesting the bear will wake up on the immediate horizon. Nov 10, 2009-Bullishly mature Force Vectors should invite bearish expressions. Keep in mind the bull is still a “the bull” but it is never straight up. Bearish attacks are imminent. Nov 9, 2009-Bull remains in tact, but bullish energy is sapped on a near-term basis. Meandering behavior would be a nice substitute to bearish aggression. Several near-term, quick-term, and short-term attributes are currently aligned against sustainable bearish aggression. There are also several near-term attributes increasingly non-supportive of the bull, but nowhere near identifying expiration of the bull.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

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

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

Two consecutive weeks of bearish convergence have been followed by bullish divergence the last two weeks. That minimizes concerns regarding four consecutive weeks of bearish convergence, which is significantly bearish. That was the concern two weeks ago.

Indicant Conclusion

As stated the past five weeks, low interest rates offer narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. However, a new phenomenon may unfold. More money may be directed toward real estate and less toward stocks.

Keep up with the daily stock market report as the Quick-term and Near-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

11/15/09

Nov 8, 2009 Indicant Weekly Stock Market Report

This Week’s Report

Real vs. Phony Progressives

Upon defeat, New Jersey Governor Jon Corzine indicated progressives would not give up on their ideals. The term, progressive, is not new, when used by the politically minded people. Progressives, liberals, conservatives, etc. are pretty much wasted ideals. Most mean nothing. All simply want to tell others how they should behave. All are equally guilty of being control freaks in varying degrees.

Who were the real progressives? Although argumentative, the greatest “real” progressive was Serbian born Nicola Tesla. He invented the electric motor. He also invented the radio. (Marconi did not, as many people believe). Tesla also invented X-Ray technology.

Tesla’s electric motor is arguably an invention that enhanced the quality of life for consumers and manufacturing labor more than any other instrument. Tesla’s technology was applied to generators that led to the creation of the utilities sector. Tesla alternating current was selected over Thomas Edison’s promotion of direct current.

Speaking of Edison, one could argue that his light bulb also profoundly enhanced the quality of life for consumers, those in extraction industries, and manufacturing industries. Edison was sharp enough to develop a product that could function well on either AC or DC current.

The electric motor and light bulbs with related technology powerfully enhanced manufacturing and extraction productivity. This led to profound cost reductions and thus allowed more people to have more affordable possession. Henry Ford applied Tesla/Edison technologies and added a few tricks from some of his employees, such as Charles E. Sorenson. Not too many people know much about Charles Sorenson. He was the creator of the infamous Ford Production Line.

Shigeo Shingo, a Japanese consultant, with significant contribution to the infamous Toyota Production System is another real progressive. Shingo’s efforts and outstanding documentation of how to apply superior methods and techniques led to profound quality improvements to products of pleasure, such as automobiles, televisions, steel, and varied other products. Those techniques further lowered costs that led to yet even more people enjoying valuable possessions.

Efforts by the likes of Bill Gates, Steven Jobs, and Michael Dell added profoundly progressive products and processes that facilitated yet more access to the masses that led to profound productivity improvements by the masses. Consequently, the stock market moved bullishly with unprecedented bullishness.

The quality of life for human beings expands or contracts as a function of one and only one source; productivity. The quality of life elevates and expands when productivity is growing. The quality of life decreases and contracts when productivity is not growing. The former U.S.S.R. demonstrated this phenomenon very clearly. The behavior of Congress suggests they do not know this.

Research does not show any “real” progressive contributions by New Jersey Governor, Jon Corzine. What do these sort of people mean when they say “our progressive movements will continue?” Are they working on maybe a 5-horse power electric motor that will run one-trillion cycles on 12v DC before burning out? Are they helping General Motors reduce defects per million units produced? Are they working on generating power and energy to their constituents at lower costs?

Well, not knowing exactly how these so-called self-proclaimed progressives spend their time, one can surmise they are not working on substantive forces of progression. New products, new processes, and patent filings indicate these “progressives” are doing nothing to expand the quality of life for anyone. On the contrary, they threaten the quality of life.

A few days ago, the President of the United States, stated resistance to healthcare reform promulgates from insurance executives. Who is more trustworthy; politicians or insurance executives?

Insurance executives are certainly not progressives. They simply use actuarial tables. They calculate risks, cash inflow, cash outflow etc. and divide the net of all that by a desired profit margin to set the price. Either they make money or they do not. If their margins get thin, they simply elevate revenues by simply increasing prices by the desired profit margin via mathematical and statistical formulae. Anyone could do it. At least these under-talented souls in the insurance industry are held accountable to shareholders on a daily basis. Politicians are not. They lock into a job for two, four, or six years. Dumb constituents re-elect many of them in spite of profound incompetence and stupidity.

The so-called political progressives disallow insurance competition from state to state, while lawyers can sue anybody, anytime, anywhere, for anything. The insurance executives are constantly adjusting their profits from the massive numbers of lawsuits directed toward the medical industry. Politicians, for the most part are lawyers. They protect their industry as a fallback in case their constituents see who they really are and fire them. Others use their legal pals to circulate money through their accounts for reelection and a variety of other sinful things and activities.

A progressive with abstract content is one who conveys ideals that do not exist. They think they know something better than anyone else. Real progressives change the status quo with the production of physical objects. Effort and talent required for the conveyance of abstract philosophy is zero. Real progressives, such as Nicola Tesla, Henry Ford, Thomas Edison, Steven Jobs, etc. demonstrated “real” talent from extraordinary effort. History shows only a handful of “real” progressives, while the abstract progressives come and go. The real progressives truly changed the world for the better. Abstract progressives are pure liability to “real” progressive changes.

Healthcare reform is not real progression. It is real regression, promoted by those, who either do not understand the problem with healthcare or simply satisfying their egotistical need to control a massive amount of their fellow human-beings. If the abstract progressives win, rest assured the bear will be delighted.

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.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 194 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 24.5%. That annualizes to 49.9%. The Mid-term Indicant has been signaling hold for these 194-stocks and funds for an average of 25.6-weeks.

In addition to the sell signal, the Mid-term Indicant is avoiding 122-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 30.4% since the Mid-term Indicant signaled sell an average of 78.6-weeks ago.

Stocks and funds, no longer traded, are identified with the letters, NLT. We used to use the last signal at the time of the last trade to maintain consistencies in the report card. However, we expect several corporations to fail or merge in the coming months and years. Marking such failures with the letters, NLT, will not disrupt the report card. We can then more quickly identify replacements for those that have failed or merged into another company. The NLT companies are excluded from the report card summaries at the time of being classified as NLT. However, the report card’s historical record is not adjusted. It always reflects the recommendations and performance as it stood at the time of said performance and recommendations.

One year ago, on Nov 7, 2008, the Mid-term Indicant was holding 24-stocks and funds out of 344 tracked for an average of 49.1-weeks. They were up by an average of 83.0% (annualized at 87.9%). There were 313-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 30.9% since their respective sell signals an average of 24.7-weeks earlier.

The Mid-term Indicant was signaling hold for 261-stocks and funds of the 345-tracked two years ago on Nov 9, 2007. They were up by an average of 138.8% (annualized at 60.4%) since their respective buy signals an average of 119.5-weeks earlier. The Mid-term Indicant was avoiding 59-stocks and funds at that time. They were down an average of 19.6% since their respective sell signals an average of 26.7-weeks earlier.

There were 310-stocks and funds with hold signals on Nov 3, 2006 since their buy signals an average of 80.8-weeks earlier. They were up by an average of 102.8% (annualized at 66.1%). There were 33-avoided stocks and funds at that time. They were down by an average of 13.7% from their respective sell signals an average of 23.9-weeks earlier.

On Nov 4, 2005, the Mid-term Indicant was signaling hold for 209-stocks and funds out of 320-tracked. They were up by an average of 113.6% (annualized at 57.0%) since their buy signals an average of 103.6-weeks earlier. The Mid-term Indicant was avoiding 60-stocks and funds at that time. They were down by an average of 17.2% since their sell signals an average of 28.7-weeks earlier.

Five years ago, on Nov 5, 2004, there were 277-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 67.7% (annualized at 67.7%) since their respective buy signals an average of 53.6-weeks earlier. There were 21-avoided stocks and funds then. They were down an average of 41.1% since their respective sell signals an average of 53.7-weeks earlier.

On Nov 7, 2003, there were 267-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 55.3%, annualizing at 93.6%, since the buy signals an average of 30.7-weeks earlier. There were 23-avoided stocks and funds then. They were down by an average of 24.5% since their sell signals an average of 32.6-weeks earlier.

There were 249-stocks and funds with hold signals on Nov 8, 2002. They were up by an average of 12.7%, annualizing at 74.8%, since their buy signals 13.9-weeks earlier. The 21-avoided stocks and funds were down an average of 25.4% since their respective sell signals an average of 8.9-weeks earlier.

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

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

Link to this week’s buy and sell signals.

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. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation and politicians are the biggest threat to the stock market bull.

All updated information can be accessed from the following link. 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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend are all bullish. The economy is on the mend and earnings should also improve. The market may be a bit ahead of earnings potential, but the bullish trends have not been upset yet. The biggest threat on the immediate horizon is congressional action. The bull prefers governmental inaction.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

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

Stop Loss Management

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses.

Most of the longer-term signals of stocks and funds continue with “avoid” signals, but a few are still holding. The risk of continued holding, for the likes of Apple, remains relaxed.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 37.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 89.6% and the S&P500 is up 37.7% since then. The small cap index, S&P600, is up 79.8% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 29.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 28.5% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 31.0% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

There is one major point here. If the Near-term Indicant is signaling avoid, all short-term traders should be avoiding, in spite of the potential optimism of not finding a new bottom in the next bear cycle. The longer-term trader should continue patiently awaiting buying clearance from the Mid-term Indicant. There have been quite a few of them the past few weeks, but muted the last two weeks due to congressional threats. Older and strategic longer-term traders are still up by triple digits from the 1991 bull signal by the Long-term Indicant.

Recent market dynamics suggest inflationary concerns with a weakening dollar. The equity markets do not like either inflation or deflation. The combination of absolute values of either plus prevailing interest rate of over 8% is solidly bearish when considering historical standards. Current conditions are not close to that threatening value at this time.

The NASDAQ year-to-date performance was bearish by 25.7% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year.

The NASDAQ YTD 2003 performance was up by 48.0%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 1.8% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down by 0.3% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 7.3% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 17.0% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 39.3% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

So far, this presidential post election year is performing inconsistently with historical standards. It continues to be bullish in the face of historical bearishness. Last year’s inconsistency is somewhat influential, as two strong back-to-back inconsistencies are rare. The capital markets understand socio-political influences are predominant in the first year of most incoming administrations and thus generally non-bullish with an actual demonstration of outright bearishness in presidential post election year. As the popularity of Congress and the U.S. President wane, the stock market senses a reduction in their power. That is bullish.

Unfortunately, Congress is again spouting their commitment to healthcare reform. That is bearish. The House vote is scheduled for this Saturday, Nov 7, 2009.

The Short-term Indicant continues signaling bull in spite of the market’s historical standards and current incongruence to those standards.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As anticipated, mortgage rates have been bearish the past twelve weeks. Mortgage rates continue interacting with bearish yellow. If they break below bearish yellow, do not be surprised at a continuation of decreasing rates. If they bounce north off yellow, one could conclude the manifestation of equilibrium in supply and demand.

Demand for fuel will not subside with increasing socialism, but the rate of consumption will be muted with a decline in capitalistic opportunities. OPEC will regulate supply to that muted demand. The socialistic elite will continue living in a life of comfort, while they regulate discomfort for the masses. Domestic exploration and drilling will become more difficult with ever-increasing laws and regulations. Oil became a Red Bull this past week with steadily increasing prices.

As stated 58-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010. However, there are some indications the heart and soul will disappoint this year.

As stated the past ten weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity. If this happens, then bearish expectations of great magnitude will be muted.

The bear has been too passive. The bull has expressed behavior that correlates with the declining popularity of President Barack Obama and Congress. The market is sensing an increasing possibility that social programs will be delayed. That is bullish in the capital markets. Recent polls are showing the masses are again biasing their views in favor of stupidity. If that trend continues, the bull will expire sooner and be replaced by a dynamic bear. Bearish behavior the past three weeks supports this.

Rising Near-term Indicant Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear. The bull is being threatened again with the return of Congress and the noise they spew. Vector Pressure started shifting to the south ten weeks ago, but remains high enough to prevent the bear from dominating. However, if it continues south, the bear will dominate.

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. The Mid-term Indicant signaled buy on Oct 16, 2009. It is down 2.0% since then. It was solidly bullish last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 5.6% since then, annualizing at 31.9%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 11.8%, annualizing at 43.5% since its buy signal on July 31, 2009.

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 25.7% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 5.0% since its buy signal on Sep 11, 2009, annualizing at 32.4%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 9.9% since then, annualizing at 37.7%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 33.2% since that buy signal, annualizing at 36.2%. 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 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 19.7% since the Near-term buy signal, annualizing at 36.3%. Gold and oil are bullishly more aggressive after six months of flat behavior, although taking a bit on the chin with last week’s strengthening dollar.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 6.7% since that bull signal. That annualizes to 25.0%. Bear signals will occur in the event Congress passes healthcare legislation, turning it over to the most inefficient organization in the United States.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,788,267. That beats buy and hold performance of $1,524,267 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,100. That beats buy and hold’s $104,741 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $192,504. That beats buy and hold’s $73,247 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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 sell for ProFunds Ultra Short on April 3, 2009. It is down 47.5% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bull cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and that battle is occurring now.

Click here for Mid-term Indicant Table of Mutual Funds

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 246.3% (annualized at 13.6%) since the Long-term Indicant signaled bull 939-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. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are shifting bearishly.

The Quick/Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

The Near-term Bull remains under assault by the stock market bear. The Near-term Bull remains in trouble. However, elections in Virginia, New Jersey, and New York suggests increased potential for political stalemating. Although still a long way from Election Day 2010, the stock market bull may anticipate a return of a “do-nothing” government, which is solidly and unequivocally bullish.

Although the Near-term Bull is in trouble, it is 35-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The most recent inflection point acquiesced to bullish desires last July. A new inflection period is again forming with several collapsed NTI Blue curves the past few days. The bear is gaining momentum and is configuring to accelerate its ambition until the next Congressional recess.

Congressional harmony on healthcare reform has been acting as a lid to bullish market behavior. It continues encouraging the bear. The stock market appears to be hedging for solid bearish behavior in the event Congress passes healthcare legislation. However, Congress may be a little shy on an aggressive vote in support of healthcare reform, as it is currently written, based on recent elections. Current rumors are there will be no vote.

Quick-term Red Bulls are declining rapidly and on the verge of offering no bullish support. There are a few remaining that mitigates bearish dominance and sustainability. Bullish behavior yesterday helped out a bit, but the bear attack is not over yet.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

There are no Near-term bears among the major indices, including contrarian VIX. By rule, VIX’s Force Vector held in bullish domains for two days and it moved above the Near-term bearish green curve on Wednesday, Oct 28, 2009. Therefore, it received a bull signal, which suggests bear signals for the other indices may be near. The VIX has been bearish today, but nestled for a bullish bounce. Its Vector Pressure is nearing bullish domains and the overall stock market remains vulnerable to bearish attacks. Consequently, the Near-term Indicant continues signaling bull.

All twelve major indices are up by an average of 17.3%, annualizing at 44.5%, since the NTI signaled bull an average of 20.3-weeks ago. These statistics include contrarian VIX. That will be temporary, as the VIX bull will expire or the major indices’ bulls will expire. Bull signals for both cannot exist too long.

The Quick-term Indicant signaled no new bulls and no new bears.

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 14.2%, annualizing at 34.7%, since their bull signals an average of 21.3-weeks ago.

The lone bear, VIX, is down 32.6% since its bear signal 29.1-weeks ago. VIX eclipsed bearish yellow on Thursday, Oct 29, 2009, technically qualifying for a Quick-term Bull signal. A bit more bearish synergy from the other indices is required for the QTI will signal bull for VIX. The VIX Force Vector is very hot. It will cool down. If the VIX does not cool, paralleling its Force Vector, increased obviations of a VIX bull and stock market bear will manifest. The bull/bear battle is underway.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

QTI-Red Bulls-A majority of nine support bullish bias.

QTI-Bullish Red Curve Trend-Bullish unanimity with 11 of 11-non-contrarian indices in bullish trend, supporting bullish bias.

QTI-Bearish Yellow Curve-Non-bearish unanimity with 11 of 11 Non-contrarian indices in non-bearish trend, supporting non-bearish bias.

QIT-Yellow Bears-None of the non-contrarian’s are inflicted with this attribute and thus without any bearish bias. Contrarian VIX is no longer a yellow bear, threatening the overall stock market bull.

NTI-Blue Bulls-There are four blue bulls, suggesting mild NTI bullish support.

NTI-Bullish Blue Curve Trend-11-non-contrarian in bullish trend, supporting bullish trend.

NTI-Bearish Green Curve- Non-bearish minority with four of 11-non-contrarian indices in bullish trend. Five have shifted into bearish slope last Tue and Wed, increasing concerns about bearish aggression.

STI-Force Vector-Eleven non-contrarians moving north, offering some bullish resistance to the bear.

STI-Vector Pressure-Only contrarian VIX is in bullish trend and thus no pressure support for the stock market bull.

Short-term Summary-Overall-As stated after last Thursday’s phony bullish rally, trend is under increasing threat by the bear. There is no pressure support for the bull on a short-term basis. Declining Force Vectors discontinued their threat to the bull on a near-term basis. All, except VIX, are now in bearish domains, adding bearish threats. However, eight-QTI Red Bulls remain protective of an outright and sustainable bearish assault, but under attack by the stock market’s bear. It only takes one Quick-term Red Bull to prevent bear from dynamic and sustainable influence.

-Tangential Protection – Sep 1, 2009-Mon-Protection lines were constructed for Dow Transports, Dow Utilities, NASDAQ100, S&P400, and S&P600. These indices will not receive a Near-term bear signal until they fall below those tangential protection lines. The other indices will most likely receive bear signals when they fall below their NTI Green Curves with negatively sloping Vector Pressure. Near-term bear synergy cannot manifest until all indices are receiving a Near-term Bear signal.

-Reverse Tangential Bearish Detection - Although the current Near-term Bull has not yet expired, the following observations still holds true. The timing is unknown, but there is 100% confidence the indices and ETF’s will fall to those prices noted in the below link. (Note: You should not worry about this or consider this until you see the indices and ETF’s fall below the various attributes, such as the bearish yellow or green curves. The market can climb to significant magnitudes before the execution of this phenomenon).

-Political Climate – Congress in session is bearish, but technical data is overriding at this point, albeit weakening under the noisy threats by the U.S. Senate and House. Strong bullishness is not likely to return until the next Congressional recess. However, recent elections in New Jersey and Virginia could accelerate this. However, technical data is mildly biasing in favor of the bear.

The NYSE and NASDAQ Indicant Volume Indicators continue moving north. Although not yet robust, current configurations mildly support the bear. Although passage of healthcare legislation by Congress is not likely, it is apparent the market is positioning to properly react to a surprise and that would be bearish. Passive volume since last Tuesday suggests limited interest in dynamic behavior in either direction. Mild bias continues favoring the bear.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 19-ETF’s. They are up by an average of 20.6%, annualizing at 50.5%, since their buy signals an average of 21.2-weeks ago. These hold signals include contrarian QID. It and most of the other ETF’s cannot maintain simultaneous holds for too long. QID has disappointed the last two days, which suggest strong buying consideration at this time.

Although there were no sell signals, the NTI is avoiding 12-ETF’s. They are up by an average of 2.3% since their respective sell signals an average of 1.3-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 19.8% since their buy signals an average of 23.0-weeks ago. Those with hold signals are annualizing at 44.6%. Although there were no sell signals, the lone avoided ETF, QID, is down by 50.9% since its sell signal on Mar 26, 2009.

Near-term Indicant ETF Key Attributes

11-NTI Blue Bulls; Mild bullish support with minority position.

29-NTI Blue Curves are sloping north, offering improved bullish support.

12-NTI Green Curves are sloping north, expressing minority support for non-bearishness. As long as this holds up, the bear cannot dominate. This is weakening non-bearish support.

Quick-term Indicant ETF Key Attributes

19-QTI Red Bulls represent a weak majority, supporting Quick-term bullishness. As long as there is just one non-contrarian Red Bull, the bear cannot dominate with deep sustainability.

29-QTI Bullish Red Curves are sloping north in solid majority support for Quick-term bullishness.

2-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness. Contrarian TLT and QID are the only yellow bears and thus non-threatening to the QTI Bull.

The Short-term Indicant ETF Key Attributes:

One-Force Vectors are in bullish domains, which is non-bullish. (QID is but contrarian).

4-Force Vectors are in bearish domains. As stated last Thursday, the bull’s response did not reverse the bearishly mature Force Vectors. The bull has a bit more opportunity to fix this problem, but has been weakened by not doing it sooner. Force Vectors are now beginning to interact with Vector Pressure and appear configured to be weak in doing so. This could motivate the bear.

Zero-Vector Pressures in bullish domains, offering no support for the bull.

One-Vector Pressure moving in bullish direction. Unfortunately, it is contrarian QID, offering no support for the stock market bull and reflecting the stock market bear’s ambition.

Click the below link to see today’s Near-term, Quick-term, and Short-term Indicant signals. Links on that page will take you to a single chart with all the model’s position on each ETF.

http://www.indicant.net/Members/Updates/STI-SQI-QTI-ETF-SumPage/0UD%20QTI-ETF0-Sum.htm

Contrarian Funds

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

The Near-term Indicant signaled buy for QID on Oct 28, 2009. It is down 6.0% since that buy signal. Configurations remain in support of this bull signal. Keep in mind as long as QQQQ is enjoying a hold signal, the QID hold is a bit precarious, but still appearing solid.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 50.9% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $31.24 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 9.9% since those buy signals, annualizing at 37.7%. This fund had been struggling, but bullish in 22-of the last 42-days. It has been strongly bullish in 14-of the last 25-days, following eight consecutive days of bearish behavior.

ETF#11-Gold and Precious Metals is up 33.2% since the QTI signaled buy on December 11, 2008. Annualized growth is at 36.3%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $90.54 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 19.7% since then, annualizing at 36.2%.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is down 1.5% since that buy signal. It will be difficult for this hold to produce profitability as long as the stock market is bullish. However, the stock market remains under attack by the bear. The weakening dollar has not been friendly to this ETF.

Major ETF Events

Nov 6, 2009-Fri-Volume was very low. The last surge supported bearish behavior and thus the Short-term Indicant continues with a mild bearish bias, but not yet signaling bear.

Nov 5, 2009-Thu-Today’s bullishness was without much volume support.

Nov 4, 2009-Wed-The expected bull occurred early today, but fizzled, suggesting a bit more bearish influence. Fundamentals, such as corporate earnings and political interference continue confronting the stock market’s bull.

Nov 3, 2009-Tue-Although not directly related, statewide elections in Virginia and New Jersey suggests a rebalancing of political power; that is, disagreement leads to political/governmental stalemating and that is bullish. So, do not be surprised at a bullish bounce. Keep in mind many indices and ETF’s are setting on NTI Green, which has been a bounce point during the course of this bull.

Nov 2, 2009-Mon-Nothing major today. The stock market’s configuration appears to be hedging for a loud bearish response a “surprise” passage of healthcare reform. It is nicely configured to bounce solidly bullish in the event the “rejection vote” is large.

Current Strategy-Short-term Indicant-Nov 6, 2009-Bullish bounce off of Green has been weak. Rising Force Vector appear weak and Vector Pressure could act as a lid. Buying QID as a defensive play is recommended. If QQQQ receives a Near-term sell signal next week, then QID and related similar ETF’s that short the market should be bullish. If Near-term Indicant signals sell for QID, then do so quickly. It moves dynamically in both directions. Nov 5, 2009-Force Vectors are again rising, but against declining Vector Pressure. Current configurations are suggesting non-bullishness at best upon interaction between those two curves in the next day or two. Nov 4, 2009-The early morning bullish bounce fizzled today, suggesting the current stock market inflection will continue. Nov 3, 2009-Although there could be a bullish bounce, Force Vector interaction with Vector Pressure in a few days will enhance obviations of directional intensity. Nov 2, 2009-Bearishly mature Force Vectors should slow the bear’s threat. Do not be surprised at increased volatility in the next few days; some of which can be attributable to congressional action. Inaction is bullish.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

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

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

Two consecutive weeks of bearish convergence were followed by bullish divergence last week mitigating concerns regarding four consecutive weeks of bearish convergence, which is significantly bearish.

Indicant Conclusion

As stated the past four weeks, low interest rates offer narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north.

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

11/08/09