November 2011 Weekly Stock Market Reports

Nov 27, 2011 Indicant Weekly Stock Market Report

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

Undoing Prior Political Economic Damage Slows

The presidential debates suggested heightened political interest of undoing prior economic damage by politicians. The stock market bull charged ahead this past September like clockwork with those debates. That is one reason why the pre-election year is the most bullish one. Politicians openly attacking incumbent politicians always drive bullish behavior. The louder and more negative, the more bullish the stock market behaves.

The presidential debates illustrated an interest in flat tax, simplified taxes, repealing nationalized healthcare, eliminating federal bureaucracies, slashing wasteful spending, etc. The current tax code represents about 200-years of severe political damage to the economy.

Nationalized healthcare will result in politicians and government bureaucrats going to the front of the long lines for healthcare. Long lines manifest from any centralized bureaucracy, regardless of any organization, anywhere in the world. That is one reason why the S&P100 is the worst performer of the major indices. Bureaucrats in any organization promulgate slowness and weakened conclusions, of which most of that slowness is encouraged by the bureaucrat’s constant questioning of “what is in it for me?”

If you are sick, you will be given a number and wait your turn. If the bureaucrat gets sick, immediate medical attention will be granted to that bureaucrat. That is just human nature. The one with influence and power exercises it. The only cure is the elimination of bureaucrats. If you are CEO and want your stock price to go up, fire them and do it today. It is unlikely any politician would fire federal bureaucrats. Since there is no profit motive, it will not happen.

All nationalized processes yield less than 10% productivity relative to the private sector, which is already low in privatized healthcare. Nationalizing it will reduce that productivity by another 90%.

The more vociferous candidates promoting the dismantling of massive ineffectiveness in Washington DC correlated very well with stock market bullishness during September and their popularity. The bear was aroused as their popularity fell. One particular candidate is not a politician. All of the others are professional politicians. The establishment has done a good job is deafening popularity

The incumbent president of the United States is not countering the republican candidates with leadership. He is lying and attempting to sway enough economic leeches to vote for him. The scary part of that is how close the polls are. The United States is very near to having a majority of economic leeches, combined with massive numbers of economic illiterates. Politicians work very hard to create a voting majority of those weaklings.

The failure of MF Global offers evidence of how dangerous politicians are to your quality of life. Not many will interpret this properly. Here is the proper interpretation. The former governor of New Jersey, Jon Corzine, bought European debt after assuming the helm at MF Global after being ousted as New Jersey’s governor. This highlights one fact. Egomaniacs, who become politicians, see nothing wrong with debt. If he were highly influential in government spending, the United States would hasten its road to bankruptcy. He is no different from any other politician. They are bent on bankrupting the U.S. They are incapable of proactively understanding this. They simply see nothing wrong with it as their illusions of majesty drive their action. It costs a lot of money to appear majestic with a complete absence of substance. The stock market bear is aroused with related hype and especially so when a near majority believes the hype.

The incumbent president of the United States and most Congressmen, who promulgate increasing debt, enjoy strength in the polls. That, coupled with European leadership ineptness, appears to have shattered the heart and soul of bullish seasonality. Bearish behavior in a pre-election year at this time of year is very unusual.

There were several Mid-term bear signals for the major indices this weekend. Sell signals for stocks and funds also continued this weekend. This is caused by European political ineptness and the closeness of polls in the United States. If Europeans continue displaying their ineptness and socialists are re-elected in the 2012-U.S. elections, the stock market could very easily decay into a secular bear. The stock market will not wait for the conclusion to all of that. It will anticipate that. If there is no heart and soul of bullish seasonality, it may be starting now. Current polling suggests an uneasy probability of re-electing current incumbents. The quality of life for all will start a steady decline. If economic leeches expand to a clear majority in the U.S., the best days have come and gone.

Keep in mind the Dow Utilities is a Mid-term Indicant Red Bull. Even though the stock market is encountering bearish incursions, this Red Bull proves the capital markets have not completely given up on capitalistic solutions to problems. Unfortunately, it is the only Red Bull, but as long as it remains bullish, the heart and soul of bullish seasonality can still manifest.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

This section highlights last week’s biggest gainers and losers within each group of stocks and funds tracked by the Mid-term Indicant.

NAS#18-WYNN was down 12.1% last week. It was the NASDAQ100’s biggest loser, which is not that bad when considering last week’s strong bearish behavior. It is up 83.0% since the Mid-term Indicant’s buy signal in Aug 2009. NAS#86-BIIB was up a paltry 1.4% last week. It was the most bullish of the NASDAQ100 stocks. It is up 88.5% since the MTI buy signal in Sep 2010.

ISTK#88-BRCD was up 10.1% last week as the Indicant Select Stock’s biggest gainer. It is down 6.8% since the MTI sell signal last July. ISTK#25-NOK was down 18.7% last week. It was this group’s worst loser. It is down 79.0% since the MTI sell signal on August 29, 2008. This stock succumbed to 2008 bearishness and it remains bearish.

Interestingly, the Dow30 and Dow Utilities had no gainers last week.

DJIA#06-BAC was down 10.6% last week, as the Dow’s biggest loser. This stock is down by 85.9% since the MTI sell signal on January 4, 2008. DJIA#24-WMT was down 0.6% last week. It was the least bad Dow stock last week. It is up only 7.3% since the MTI buy signal in Sep 17, 2010.

DJU#05-AES was down 5.6% last week. It is now down 0.9% since the MTI buy signal five weeks ago. DJU#02-ED was down 1.7% last week. It was the least bad performer last week. It is up, however, by 43.4% since the MTI signaled buy in Aug 2009.

MF#09-SSGRX was down 9.0% last week on weak economic projections. This is a bit disappointing. A sell signal was triggered this weekend. MF#22-USPIX was up 9.3% last week on strong stock market bearish behavior. It is down 76.0% since the MTI sell signal on April 3, 2009.

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 twenty-five-sell signals. The 109-buy signals in the past seven weeks have been interrupted with forty-five sell signals the past two weekends.

The Mid-term Indicant is signaling hold for 240 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 48.2%. That annualizes to 32.6%. The Mid-term Indicant has been signaling hold for these 240-stocks and funds for an average of 76.8-weeks.

The Mid-term Indicant is avoiding 58-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 34.5% since the Mid-term Indicant signaled sell an average of 58.1-weeks ago.

One year ago, on Nov 26, 2010, the Mid-term Indicant was holding 286-stocks and funds out of 339 tracked for an average of 49.6-weeks. They were up by an average of 39.0% (annualized at 40.9%). There were 50-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 51.8% since their respective sell signals an average of 100.6-weeks earlier one year ago. There were three buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 189-stocks and funds of the 317-tracked two years ago on Nov 27, 2009. They were up by an average of 27.4%, annualized at 48.9%, since their respective buy signals an average of 29.1-weeks earlier. The Mid-term Indicant was avoiding 124-stocks and funds at that time. They were down an average of 36.3% since their respective sell signals an average of 81.6-weeks earlier. There were no buy signals, while there were 159-buy signals in the prior 18-weeks. There were four sell signals on this weekend in 2009.

There were only 23-stocks and funds with hold signals of the 344-tracked by the Mid-term Indicant on Nov 21, 2008 since their buy signals an average of 51.4-weeks earlier. They were up by an average of 74.2% (annualized at 75.1%). There were 314-avoided stocks and funds at that time. They were down by an average of 39.6% from their respective sell signals an average of 26.6-weeks earlier. There were seven sell signals on this weekend in 2008 in addition to the 563-sell signals in the prior 54-weeks, as the bear market was nearing its ultimate depth, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008 even with the weighted influence to do so with the heart and soul of bullish seasonality.

On Nov 23, 2007, the Mid-term Indicant was signaling hold for 237-stocks and funds out of 345-tracked. They were up by an average of 145.2% (annualized at 58.6%) since their 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 by an average of 13.3% since their sell signals an average of 16.9-weeks earlier. There were no buy signals and 16-sell signals on this weekend in 2007 in addition to 44-sell signals in the prior four weeks. The 2003-Mid-term bull cycle was past its peak at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies. A huge number of sell signals continued for the next several months as the bear market gained momentum throughout most of 2008, through early 2009.

Five years ago, on Nov 24, 2006, there were 311-hold signals for stocks and funds out of the 344 tracked by the Mid-term Indicant at that time. They were up an average of 107.6% (annualized at 67.0%) since their respective buy signals an average of 83.5-weeks earlier. There were 31-avoided stocks and funds then. They were down an average of 12.4% since their respective sell signals an average of 19.2-weeks earlier. There were two buy signals and no sell signals on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Nov 25, 2005, there were 269-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 97.3%, annualizing at 62.5%, since their respective buy signals an average of 80.9-weeks earlier. There were 51-avoided stocks and funds then. They were down by an average of 16.5% since their sell signals an average of 25.8-weeks earlier. There were no buy signals and no sell signal on this weekend in 2005.

There were 301-stocks and funds with hold signals on Nov 26, 2004. They were up by an average of 70.4%, annualizing at 68.9%, since their buy signals 53.1-weeks earlier. The 19-avoided stocks and funds were down an average of 43.4% since their respective sell signals an average of 54.8-weeks earlier. There were no buy signals and no sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Nov 28, 2003, there were 261-stocks and funds with a hold signal, enjoying a 59.0% gain since their respective buy signals an average of 34.6-weeks earlier. That annualized at 88.5%. There were only 19-avoided stocks at that time. They were down by an average of 27.1% since their sell signals an average of 35.0-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 13-buy signals in addition to 397-buy signals in the prior 36-weeks. There were three-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 39-weeks old on this weekend in 2003.

On Nov 29, 2002, there were 280-stocks and funds with hold signals. They were up 22.2% since their buy signals an average of 9.6-weeks earlier, annualizing at 120.0%. There were seven-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 9.6-weeks earlier. The avoided stocks and funds were down 29.8%. There were six-buy signals in addition to 502-buy signals in the prior 18-weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug. 2002-buy signals retained hold signals through late 2007 and early 2008, while others endured sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were two-sell signals on this weekend in 2002.

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 here. It is in the member’s only section.

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. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of stock market bears. 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 and the related quality of life for the productive and honest.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

All major indices no longer remain configured with bullish attributes. Unfortunately, they weakened this past week, but still holding with bull signals. Several stocks and funds reconfigured with solid bearish attributes, but many remain solidly bullish. Those receiving sell signals are configured with excessive risks for holding.

Although mid-term cyclical attributes remain in support of the stock market bull, the stock market bear is threatening the heart and soul of bullish seasonality.

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% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 8% or green curve values, depending on your personal preferences.

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. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

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. If the green curve is rising and above your buy price, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you should set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid in related sectors, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will emerge.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant 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 54.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 119.1% and the S&P500 is up 49.2% since then. The small cap index, S&P600, is up 117.5% 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. That will again be an attribute to monitor in coming months. Configurations shifted in support of normal pre-election year bullishness three weeks ago, but now being challenged by the stock market bear.

The NASDAQ is down 51.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 24.1% since its similar secular peak on March 23, 2000. The Dow is down by 4.2% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years. Technically, one could call that a secular bear; albeit a mild one.

The Dow has stumbled three times when encountering its 2000 peak value. Will it do that again? The S&P500 topped its 2000 peak for a few brief weeks in 2007. The NASDAQ has never come close, as its prior peak price was hype driven. The DOTCOM sector does not perform agriculture, manufacture, or extract. Therefore, most companies within that index created no wealth. It remains appropriately bearish relative to the 2000 phony peak prices.

If socialism expands, the NASDAQ may not hit its 2000 peak until after 2050 and that depends on a resumption of entrepreneurial support by politicians. Significant downsizing of federal governments and related regulatory shrinkage will stimulate a reassessment of the previous sentence. If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. Look at the resumes of intellectual elites who argue against these points. You will detect they are pure economic leeches arguing on behalf of such regulations, which is a source of their livelihoods. None has ever produced anything of value.

The NASDAQ year-to-date performance was bearish by 23.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001. However, it was a weak expression, but bullish nonetheless.

The NASDAQ was down by 24.0% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years. The heart and soul of bullish seasonality was solid at this time in 2002, but endured a couple of disruptive incursions by the stock market bear in December and again in Feb-Mar 2003.

The NASDAQ YTD 2003 performance was up 45.5%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by a paltry 5.0% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was up 4.0% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post-election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 11.6% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 7.5% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 44.8% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 38.0% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 12.1% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 3.0% this year. The S&P500 is down 7.9% and the NASDAQ is down 8.0%, respectively, this year. As you can see, the stock market bull has been shying away from the idea that historical standards of stock market bullishness should repeat this year.

The Dow is down 20.7% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 14.6% since its last cyclical peak on Oct 31, 2007. The S&P500 is down 26.0% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 21-weeks ago. That was the second time this year such accomplishment was enjoyed. Eclipsing and holding above 2007 cyclical peaks remains elusive with the exception of the NAS100. It is now down by 3.9% since its cyclical peak of Oct 31, 2007. As of this past weekend, all major indices are below their 2007 peaks. They are simply having difficulty justifying an escape from those 2007-peak prices.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 28.4% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. It still does. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak eight weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 3.9% below that weekly closing peak on Oct 31, 2007. It is disappointing it cannot hold above those 2007 peak levels. Bearish aggression the past two weeks demonstrates the difficulty in holding above that 2007 peak.

Most major last cyclical bottoms 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 last weekly cyclical bottom on November 20, 2008.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with a short-term view and increasingly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle. If prices fall below reverse tangential projections, new pivot points will be defined.

The Dow is up 71.6% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 92.5% and the S&P500 is up 71.3% since then. The S&P600, Small Cap Index, is up 104.3% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be underway, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull, but polls are suggesting it is too close to inspire the stock market bull. That, coupled with European weakness, confronts the stock market bull.

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 this paragraph has remained unchanged for a couple of years, do not fall asleep. It will change. It will be significant and dramatic when it does change. The markets both free and controlled are not constant. This will result in a massive bear market, depending on the magnitude of combined interest rates and inflation. As you have seen the past several weeks, the potential for a massive and long-lasting bear is possible, as dilettantes, worldwide, continue converting their currencies to meaningless expressions. Interestingly, an “instinctive” resistance to this is manifesting, which could obsolete the previous sentence. Unfortunately, the dilettantes have not been locked-up, yet. The rate of undoing prior economic damage by politicians is slowing and may not manifest.

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat in their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is one reason why the historical record demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA, which is unfavorable to any economic activity. Unfortunately, the paper currency basis of worldwide economies is under threat, as the culmination of OPM disease by politicians may be approaching the “critical dimension.”

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. They have been yielding zero for the past 16-weeks.

The Euro jumped to Red Bull status 45-weeks ago. It lost that Red Bull status ten weeks ago with a continuing sharp drop against the greenback. You can see it has a triple camelback with negative (bearish) trend.

The Canadian dollar also strengthened the past few days, but remains within the tolerances of its weakening cycle. It is more solidly resuming a cycle of weakness. The CA$ moved in the neutral zone (between Red and Yellow) eleven weeks ago. It remains as a Red Bull (bearish for the CA$), which threatens its cycle of strengthening. The Japanese Yen continued its strengthening cycle. The Japanese yen remains extraordinarily strong due to that country’s superior management in the private sector.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior in six of the past ten weeks, it continues trading well above the 2012 yearend forecast curve. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow 16-weeks ago on souring economic news, but rebounded the five weeks ago and weakening again the past three weeks. It escaped Yellow Bear status, as expected. It is now in the neutral zone.

Commodity prices continue falling from their recent record highs due to souring economic forecast. None are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears or within the zone of neutrality. Their mid-term cycle remains bullish but under attack by the commodities bear.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status, but it continues resisting that condition with a strong rebound in two of the last four weeks. It fell last week on the U.S. strengthening behavior.

Commodity prices, overall, are favoring potential for a bearish cycle. If it manifests, some elements of inflationary threats will be dampened.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. They continue along a bearish cycle.

The consumer price index and producer price index are computing unfavorable results. Inflationary threats are now being computed. However, the combined absolute value of interest rates and inflation or deflation remains relatively safe at this time.

Overall, hard economic data is supportive of lackluster economic behavior and currently non-threatening toward inflation or deflation.

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 again signaled buy on Sep 17, 2010. It is down 7.9% since then. Gold has demonstrated lackluster performance the past several weeks.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 12.6% since that buy signal. If Force falls into bearish domains, it will receive a sell signal. It resisted that this past week, offering some mild hope for the gold bull.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It received a buy signal on Oct 28, 2011 after missing an 18% opportunity in the last 12-months with most due to rapid bullishness ahead of Force Vector justification to signal buy. It is down 13.3% since that buy signal. It has not yet qualified for a sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 28, 2011 after missing about 20% of opportunity. It is down 14.0% since that buy signal but resisting configurations supporting a sell signal. One could add more investment here, but with the idea a sell signal could occur in the next week or two.

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 was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell on this past Friday, Nov 25, 2011.

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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It again signaled buy on Oct 28, 2011 after missing about 24% of opportunity. It is down 14.8% since that buy signal and also does not qualify for a sell signal.

The Near-term and Quick-term signaled sell for ETF#03 – Energy and Natural Resources on Nov 23, 2011. It is down by 0.7% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 102.6% since that buy signal, annualizing at 34.2%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since that sell signal and its most recent buy signal on Oct 26, 2011. It is down 2.6% since that buy signal. Call options are attractive at this point.

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

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

The Mid-term Indicant is signaling bull for all, but four, of the major indices. They are down by an average of 4.9%, since their bull signals an average of 14.2-weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,548,441. That beats buy and hold performance of $1,708,775 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $132,633. That beats buy and hold’s $113,495 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $208,435. That beats buy and hold’s $84,657 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid 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. The stock market did not succumb to the bear during the post-election year, 2009, which is the historical standard.

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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 76.0% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund.

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 288.0% (annualized at 14.3%) since the Long-term Indicant signaled bull 1,047-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The 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 or Saturday afternoon.

Short-term Indicant Stock Market Report – Summary

A short-term bearish convergent cycle is configured in favor of the stock market bear.

As stated last Thursday, “the Force Vector cycle is bearishly mature. That should trigger a bullish response. If not, the bear will rejoice and gain yet more momentum. If there is no bullish response on Friday, the Mid-term cycle may be configure in support of the bear. If that occurs mid-term sell signals will be triggered.”

There were indeed some sell/bear signals by the Mid-term Indicant. However, bearish convergence along the Mid-term cycle has not yet manifested. That is a bit disappointing to the stock market bear, but the battle is not over.

Remaining are several stocks and funds with strong bullish configurations. As long as the exists, recent bearish intrusions may be limited to just the short-term cycle. If those intrusions penetrate the mid-term cycle en mass, a secular stock market bear may be forming. The bear has a lot of work to accomplish to do that. It will be interesting to see if it can muster enough energy to pull that off.

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

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull only for contrarian VIX. It is down by 0.6% since the NTI bull signal 1.1-weeks ago. The short-term cycle no longer contains divergent attributes. It is solidly bearish.

The Near-term Indicant is signaling bear for all eleven major non-contrarian indices. They are down by an average of 2.2% since their bear signals an average of 0.5-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears. Contrarian VIX is the only bull. Its performance is the same as the near-term cycle. The eleven major bears are down 1.9% since their bear signals an average of 0.4-weeks ago.

Indicant Volume Indicators

Both IVI’s sloped downward on recent bullishness, which suggests a lack of bullish inspiration. This is troubling. Adding to that concern is the NASDAQ’s IVI falling into low interest domains during the current near-term bull cycle. Some of that, however, is due to seasonal volume.

Nov 25-Fri-Light seasonal volume offers nothing.

Nov 23-Wed-Again light holiday volume on an aggressive bear offers little evidentiary support for the bear, but volume is of little consequence if those holding decide to discontinue doing so in a few weeks.

Nov 22-Tue-Light holiday volume on mild bearishness offers no obviation of directional intensity.

Nov 21-Mon-Volume was seasonally high on bearish aggression, increasingly in support of stock market bearishness.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 5-ETF’s. They are up by an average of 1.8% since their buy signals an average of 1.6-weeks ago, annualizing at 58.3%.

The NTI is avoiding 27-ETF’s. They are down by an average of 2.7% since their near-term sell signals an average of 0.5-weeks ago.

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

The Quick-term Indicant is signaling hold for nine-ETF’s. They are up by an average of 11.1% since their buy signals an average of 21.1-weeks ago. This annualizes at 27.2%.

The Quick-term Indicant is avoiding 20-ETFs. They are down 3.2% since the QTI sell signals an average of 0.7-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant and Near-term Indicant signaled sell this past Thursday. Price fell below both bearish curves with declining Pressure and Force deep inside bearish domains. The Force Vector cycle is mature, offering a potential bullish bounce with a day or two. However, configurations are too bearish to continue holding. It is down 0.7% since those sell signals.

ETF#11-Gold and Precious Metals is up 102.6% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $150.41 and still rising. Relaxation remains in order, since your buy price approximates $80.65 versus today’s closing price of $163.40. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled buy on Oct 26, 2011, as Force catapulted itself into bullish domains and above Pressure. Since then Force has fallen below both, enhancing a near-term bearish bias. It is down 2.4% since that buy signal. It will be interesting if this near-term bullish cycle can hold up in the face of potential profit taking. Near-term bullish configurations are being challenged by the NTI gold bear. Judgments on the bear’s success or failure cannot be assessed until price falls below NTI Green. That is when a near-term sell signal will occur. It is above green by 21-cents.

Click this sentence for additional charting and current forecasting of the actual price of gold.

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received buy signals from the Near-term Indicant and Quick-term Indicant this past Thursday. It is up 1.2% since those buy signals, annualizing at 53.9%.

The former forecast of TLT falling to QTI Yellow by Dec 31, 2011 had to be withdrawn this past week, as the stock market bear should shift this fund into a new bullish cycle.

ETF#31-QID received a buy signal this past Thursday from the Quick-term Indicant as price crossed above QTI Yellow. It is up 1.5% since then, annualizing at 261.9%. The Near-term Indicant signaled buy on Nov 17, 2011, as price climbed above NTI Blue with rising Force in bullish domains. Keep in mind, its Force Vector was disfigured and passive. However, it accelerated on Friday, Nov 18 with noticeable behavior consistent with bullish robustness. It is up 11.2% since then, annualizing at 505.5%.

The Quick-term and Near-term Indicant signaled buy on Oct 17, 2011 for ETF#32-VXX. It is up 1.6% since then, annualizing at 70.6%.

Major ETF Events

Nov 25-Fri-Three major ETF’s fell below QTI Yellow. Some Force Vectors are starting to shift north, offering bullish potential next week. However, there will be no bull/buy signals until Force crosses above Pressure and into bullish domains.

Nov 23-Wed-More indices and ETF’s fell below NTI Green and QTI Yellow. Although Force Vector cycles are maturing, excessive risks in holding suggest you need to be selling.

Nov 22-Tue-Several more indices and ETF’s fell below NTI Green and QTI Yellow. However, some are displaying significant resistance to bearish desires. Also, ETF#10-IBB displayed enough bullish attributes to trigger a buy signal.

Nov 21-Mon-Several bear/sell signals occurred today, as prices fell below NTI Green.

Current Strategy-Short-term Indicant-Nov 25, 2011-Bearish divergence has been replaced with bearish convergence along the short-term cycle. It will be interesting if the bearishly mature Force Vectors trigger a bullish response. If not, the bear will rejoice.

Reverse Tangential Projections

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.

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 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.

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

The stock market enjoyed bullish convergence for four consecutive weeks through week-ending Oct 28, 2011. That would normally influence continued bullish behavior. That bullish phenomenon is now irrelevant. Unfortunately, the stock market has endured four consecutive weeks of combined bearish convergent and bearish divergent behavior with the last two weeks with convergent bearishness.

Indicant Conclusion

As stated last week, the NASDAQ100 again toppled its 2007 peak seven weeks ago along the Mid-term cycle. That was the third time in the past year this has occurred. Each time it retreated. It did so again, making such a retreat for the fourth time in this cycle. That is adding credence to the idea of a secular bear market. However, the Dow Utilities continues arguing that point.

Political stalemate and austerity against nonsensical waste in Europe should encourage the stock market bull. Unfortunately, that desired conclusion may not manifest. The stock market bull may not continue for the next three to five months. In addition to European problems, California is now imposing problems similar to that of Greece.

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

11/27/2011

Nov 20, 2011 Indicant Weekly Stock Market Report

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

Confronting the Heart and Soul of Bullish Seasonality

In the wild, the weak perish. It does not take long for predators to single the weak out and eat. The human species is different, where politicians placate the weak and attack the strong. That is because the human species produces more weak than strong. Thus more votes.

Pareto’s law may be universal. That is, it is impossible for all humans to compete with equal outcomes. History suggests when people attempt to adjust this theoretical universal law, economic and social calamity follows. Pareto’s Law recognized that 20% of the people own 80% of the wealth. The universal interpretation is that maybe it should be that way, since it typically manifests naturally in pure laissez faire economic policies. If it is truly a natural manifestation, then one could argue it is a universal requirement. Attempting to manipulate an outcome different from this natural manifestation, through coercive economic policies, results in societies similar to the long lines in Russia or the city of Detroit.

Politicians have twisted the 80-20 rule by invoking a phony 99-1 rule. Deep into psyche of all politicians is their desire to be the 1%, who have all power, while the other 99% service their needs. The rich 1% are smart about making money, but maybe not that familiar with history. They will not be in the 1% group if politicians gain absolute power. They will quickly fall into the masses of the 99% with equal servitude capacity.

History clearly demonstrates attempts to alter the 80-20 phenomena results in social chaos and economic decline and/or nightmarish conditions for the altered society.

Societal calamity has been increasing the past several months with “Occupy Wall Street.” Rapes, murders, and the destruction of assets are clear elements of social calamity. Although most are dope heads, expressing lunacy, their message centers on a desire to disrupt the theoretical universal law. The capital markets know that only 20% of the people are productive. The stock market bear will be thoroughly aroused if the 80%-weaklings gang up on the 20%, who offer most economic viability. Although in the end, the 80%-weaklings will eventually lose, as they always have, the disruption to universal law could induce a long lasting bear market and related economic collapses.

Some U.S. politicians are supporting the “Occupy Wall Street” protestors. That highlights how they support the weak. Spoon-feeding the masses to support their innate egomaniacal desires for wearing a crown is at the heart of the problem. Of course, the conclusion to this nonsensical behavior results in nothing to feed. That is a generational element with each generation not knowing when it is the last generation in the process of nonsensicality. Societal threats are indeed bearish and even more so when established political leaders support it. That is one of those tyranny by the majority notions. As Ben Franklin once said, “a democracy is two wolves and a sheep voting on what’s for lunch.”

Adding bearish inspiration was Spain’s failure in selling all of its bond offerings last week. The markets did not find it attractive to buy sovereign bonds with seemingly attractive interest rates to support yet more debt for Spain. When a sovereign nation, where revenue increases are very easy, cannot sell its bonds, trouble looms. Confiscation of private property should not viewed as an option. It always is in the minds of the evil.

California, like most of Europe and especially Greece, is nearing default potential. If the U.S. government has to bail out California, do not be surprised at significant inflationary pressures and a solidly bearish stock market. Triggers to such a bear may not be limited to inflation.

The highly productive are leaving California. The lazy and non-productive are moving to California to enjoy well-known benefits. Of course, simple arithmetic clearly demonstrates declining revenues and increasing outflows. Most politicians do not understand the arithmetic of economics. The only arithmetic they understand is vote counting.

On a smaller scale is Detroit. It will be unable to pay its bills within a year. The deadbeats started heading to Detroit years ago when success in the automotive industry produced massive amounts of wealth. That supported social welfare and yet more lazy arrived to Detroit. Now, the automotive sector is scattered across the nation, avoiding the lazy, including unions. Detroit has and will continue paying the price for generations of wasteful policies.

All politicians have an inherent desire to wear a crown. That is a primary source of their motivations. Kings of the past typically had to earn that right on the battle field. Contemporary aristocrats simply jawbone anyone willing to listen to them. Rather than listening to them, it would be better to laugh at them for their behavior is meaningless to the underlying cause of humanity; that is to increase productivity, which is the sole source of the quality of life for all. Politicians are the antithesis to productivity. Politician’s rhetoric and behavior concludes consistently with economic destruction. It is impossible for it to be otherwise.

There is an upward limit to leeching. A leech is only a leech. In other words, even if a rational person proved to an economic leech they are within days of sucking their host completely dry, the leech will keep on sucking. You have heard them talk. They are completely irrational. For example, Barnie Frank once said, “we could do more if we had more power.” Rest assured he actually believes that in spite of the swelling chaos that would follow. So, do not expect your political leaders to suddenly shift their direction from irrational to rational. On the contrary, under threat, they will promulgate yet more irrationality even during the last breadth of the hosts they leech from.

Political corruption in Washington DC is expanding. Politicians write laws and then buy or sell stocks well ahead of the publication of those laws. Politicians loan companies money, like Solyndra, in return for campaign contributions. The Solyndra executives are dilettantes. The complying politicians are dilettantes. Both groups cannot do what they do without taking monies from you. They are at the top of the hierarchy of economic leeches. The Occupy Wall Street crowd is too stupid to identify the real enemy. They are actually puppets of the real enemy. That is a threat to the stock market bull, as fringe groups supported by the establishment. The Nazi Party manifested from similar relationships.

Is the stock market in a secular bear cycle? Based on the above, one could argue on behalf of that. Until the major indices cross above and hold above their 2007-cyclical peaks, there is no possible argument against that proposition. The bull cycle, originating in March 2009, has not yet constructed an escape from secular bear considerations.

So, what we have here are 1) corrupt politicians, 2) sovereign countries who cannot sell bonds, 3) states that cannot pay its bills, 4) a federal government that is in more debt than the states, 5) irrational protests by some the 80%, and 6) a stock market with significant demonstrated inabilities to pass above 2007 peaks.

Polls are surprisingly close with respect to firing all incumbent politicians. As long as the polls are close, the stock market bull will not be inspired. The bull prefers high personnel turnover in Washington D.C.

All of the above is subjective with respect to external forces influencing the stock market’s future behavior. It took as much effort to record that as any political speech or news broadcaster’s yip-yap. Constructing any subjective position is always effortless and for the most part meaningless. So, take a look at some objective observations that can identify bull or bear, backed by a significant amount of effort.

First, as long as the Dow Utilities does not succumb to bearish ambition, the bear should not be able to mount a long-lasting and deep bear market. As you can see from the chart, it remains clearly bullish. It is a solid Mid-term bull and a Red Bull at that. Keep in mind, it can lag cyclical shifts, which brings up the next point.

Notice the S&P500’s Force Vector. It is on the top of the chart. It fell sharply last week from a bullishly mature position. If it falls below Pressure and/or into bearish domains, a bear signal will be triggered. Most of the other major indices are similarly configured. When that bear signal is issued, it is simply a bear. It could last ten years or more or just one week. Regardless of how long it last, it is a bear.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

This section highlights last week’s biggest gainers and losers within each group of stocks and funds tracked by the Mid-term Indicant.

The biggest gainer last week was NAS100#47-DTV, which was up a paltry 1.7%. It is up 92.2% since the Mid-term Indicant signaled buy in April 2009. The NAS100’s biggest loser was NAS#71-NTAP, which was down 17.6%. However, It is up 54.7% since the MTI buy signal in July 2009.

ISTK#38-ENER was up 16.7%, as the Indicant Select Stock’s biggest gainer. That solid gain did nothing to trigger a buy signal. It is down 99.0% since the MTI sell signal in Oct 2008. ISTK#47-ENZ was the biggest loser, as it was down 15.0%. It is down 35.8% since the MTI sell signal this past August. Even the slightest hint of stock market bearishness triggers massive bearishness on negatively trending stocks. The weak are punished more than the strong during troubling times.

DJIA#18-HPQ was the Dow’s biggest gainer. It was up by a miniscule amount of 1.5%. It is down 22.2% since the Mid-term Indicant signaled sell this past May. DJIA#01-AA was the Dow’s biggest loser. It was down by 8.6%. It is down 34.2% since the Mid-term Indicant sell signal this past July.

The Dow Utilities had no gainers last week. The least worse was DJU#05-AES. It was down 0.3% last week. It is up 5.0% since the MTI buy signal four weeks ago. Utility’s biggest loser was DJU#12-DUK. It was down 4.0% last week, but up 30.3% since the MTI signaled buy in July 2009.

MF#22-USPIX was mutual fund’s biggest gainer, which was up 8.6%. It is down, however, by 78.1% since the MTI sell signal in April 2009. MF#28-FSAGX was the biggest loser, being down by 7.9% last week. It is down by 8.2% since the MTI buy signal this past July. It is hovering above the shorter-term green curve, which prevents a sell signal.

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 twenty-sell signals. The 109-buy signals in the past six weeks were interrupted with the twenty sell signals this week.

The Mid-term Indicant is signaling hold for 265 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 49.1%. That annualizes to 36.2%. The Mid-term Indicant has been signaling hold for these 265-stocks and funds for an average of 70.5-weeks.

The Mid-term Indicant is avoiding 50-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 40.9% since the Mid-term Indicant signaled sell an average of 77.5-weeks ago.

One year ago, on Nov 19, 2010, the Mid-term Indicant was holding 286-stocks and funds out of 339 tracked for an average of 48.6-weeks. They were up by an average of 39.1% (annualized at 41.9%). There were 53-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 48.4% since their respective sell signals an average of 99.6-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 193-stocks and funds of the 317-tracked two years ago on Nov 20, 2009. They were up by an average of 26.4%, annualized at 49.9%, since their respective buy signals an average of 27.6-weeks earlier. The Mid-term Indicant was avoiding 123-stocks and funds at that time. They were down an average of 35.7% since their respective sell signals an average of 80.6-weeks earlier. There were no buy signals, while there were 159-buy signals in the prior 17-weeks. There was one sell signal on this weekend in 2009.

There were only 30-stocks and funds with hold signals of the 344-tracked by the Mid-term Indicant on Nov 14, 2008 since their buy signals an average of 41.2-weeks earlier. They were up by an average of 60.7% (annualized at 76.5%). There were 313-avoided stocks and funds at that time. They were down by an average of 35.3% from their respective sell signals an average of 25.7-weeks earlier. There was one sell signal on this weekend in 2008 in addition to the 562-sell signals in the prior 53-weeks, as the bear market was nearing its ultimate depth, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008 even with the weighted influence to do so with the heart and soul of bullish seasonality.

On Nov 16, 2007, the Mid-term Indicant was signaling hold for 253-stocks and funds out of 345-tracked. They were up by an average of 141.1% (annualized at 59.6%) since their 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 by an average of 10.9% since their sell signals an average of 17.0-weeks earlier. There were no buy signals and eight-sell signal on this weekend in 2007. The 2003-Mid-term bull cycle was past its peak at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies. A huge number of sell signals continued for the next several months as the bear market gained momentum from this point through early 2009.

Five years ago, on Nov 17, 2006, there were 310-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 109.7% (annualized at 68.9%) since their respective buy signals an average of 82.8-weeks earlier. There were 33-avoided stocks and funds then. They were down an average of 11.9% since their respective sell signals an average of 18.7-weeks earlier. There was one buy signal and no sell signals on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Nov 18, 2005, there were 265-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 94.6%, annualizing at 60.9%, since their respective buy signals an average of 80.7-weeks earlier. There were 50-avoided stocks and funds then. They were down by an average of 17.7% since their sell signals an average of 24.8-weeks earlier. There were four-buy signals and one sell signal on this weekend in 2005.

There were 299-stocks and funds with hold signals on Nov 19, 2004. They were up by an average of 67.6%, annualizing at 67.1%, since their buy signals 52.4-weeks earlier. The 16-avoided stocks and funds were down an average of 45.4% since their respective sell signals an average of 52.4-weeks earlier. There were two-buy signals and three sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Nov 21, 2003, there were 262-stocks and funds with a hold signal, enjoying a 51.7% gain since their respective buy signals an average of 33.6-weeks earlier. That annualized at 79.9%. There were only 29-avoided stocks at that time. They were down by an average of 25.2% since their sell signals an average of 33.6-weeks earlier. The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There was one-buy signal in addition to 396-buy signals in the prior 35-weeks. There were four-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 38-weeks old on this weekend in 2003.

On Nov 22, 2002, there were 268-stocks and funds with hold signals. They were up 20.9% since their buy signals an average of 9.4-weeks earlier, annualizing at 115.0%. There were eleven-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 21.8-weeks earlier. The avoided stocks and funds were down 30.5%. There were 15-buy signals in addition to 487-buy signals in the prior 17-weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug. 2002-buy signals retained hold signals through late 2007 and early 2008, while others endured sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were two-sell signals on this weekend in 2002.

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 here. It is in the member’s only section.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

All major indices remain configured with bullish attributes. Unfortunately, they weakened this past week, but still holding with bull signals. Several stocks and funds reconfigured with solid bearish attributes. Those receiving sell signals are configured with excessive risks for holding.

Although mid-term cyclical attributes remain in support of the stock market bull, the stock market bear is threatening the heart and soul of bullish seasonality.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 61.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 130.9% and the S&P500 is up 56.5% since then. The small cap index, S&P600, is up 134.2% 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. That will again be an attribute to monitor in coming months. Configurations shifted in support of normal pre-election year bullishness two weeks ago, but now being challenged by the stock market bear.

The NASDAQ is down 49.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 20.4% since its similar secular peak on March 23, 2000. The Dow is up by 0.6% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years.

The NASDAQ year-to-date performance was bearish by 23.2% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001. However, it was a weak expression, but bullish nonetheless.

The NASDAQ was down by 28.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years. The heart and soul of bullish seasonality was solid at this time in 2002, but endured a couple of disruptive incursions by the stock market bear in December and again in Feb-Mar 2003.

The NASDAQ YTD 2003 performance was up 40.9%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by a paltry 5.0% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was up 2.4% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post-election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 10.9% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 9.2% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 44.1% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 39.1% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 10.8% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 1.9% this year. The S&P500 is down 3.3% and the NASDAQ is down 3.0%, respectively, this year. Dynamic bullish behavior the past few weeks has moved the stock market back into a more conventional position of bullishness associated with pre-election years. As you can see, the stock market bull has been shying away from the idea that historical standards should repeat this year.

The Dow is down 16.7% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 10.0% since its last cyclical peak on Oct 31, 2007. The S&P500 is down 22.3% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 20-weeks ago. That was the second time this year such accomplishment was enjoyed. Eclipsing and holding above 2007 cyclical peaks remains elusive with the exception of the NAS100. However, it is up by only 0.7% since its cyclical peak of Oct 31, 2007.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 24.9% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. It still does. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak six weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 0.7% above that weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak. Last week’s bearish aggression demonstrates the difficulty in holding above that 2007 peak. Even though the NASDAQ100 was bearish the past four weeks, it continues holding above that potential point of resistance.

The Dow is up 80.2% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 102.8% and the S&P500 is up 79.7% since then. The S&P600, Small Cap Index, is up 120.0% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be underway in spite of recent bull/buy signals, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull. The primary problem confronting the stock market bull is Europe.

The bull cycle, originating in March 2009, is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes a while for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past several weeks with heightened political chatter. However, that chatter has been countered with arguing political chatter. That suggests little political accomplishment. That is bullish. Unfortunately, political chatter and support of the lazy is international. Although U.S. politicians are stalemated, foreign politicians are influencing the stock market’s directional intensity.

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish. The short-term and mid-term cycles are increasingly supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are. Europe continues treating debt like play money and the jury is still out on that. Prior configurations suggesting defaults are not on the immediate horizon are now being challenged. The capital markets have demonstrated abilities to sniff out such events before they actually occur. Last week’s bearish behavior suggests an odor of default.

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.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. They have been yielding zero for the past 15-weeks.

The Euro jumped to Red Bull status 44-weeks ago. It lost that Red Bull status nine weeks ago with a continuing sharp drop against the greenback. It was solidly bearish this past week, as the U.S. economy is much stronger than that of Europe.

The Canadian dollar also strengthened the past few days, but remains within the tolerances of its cycle of weakening. It is more solidly resuming a cycle of weakness. The Japanese Yen continued its strengthening cycle. The CA$ moved in the neutral zone (between Red and Yellow) eleven weeks ago. It is remains as a Red Bull (bearish for the CA$), which threatens its cycle of strengthening. The Japanese yen remains extraordinarily strong due to that country’s superior management in the private sector.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior in five of the past nine weeks, it continues trading well above the 2012 yearend forecast curve. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow 15-weeks ago on souring economic news, but rebounded the four weeks ago and weakening again the past two weeks. It escaped Yellow Bear status, as expected. It is now in the neutral zone.

Commodity prices, overall, are favoring potential for a bearish cycle. If it manifests, some elements of inflationary threats will be dampened.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. They continue along a bearish cycle.

Overall, hard economic data is supportive of lackluster economic behavior and currently non-threatening toward inflation or deflation.

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 again signaled buy on Sep 17, 2010. It is up 0.1%, annualizing at 0.1% since then. Gold has demonstrated lackluster performance this past year.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 8.2% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is down by 0.6% since then, annualizing at -0.6%. The slower moving Quick-term Indicant signaled buy on Oct 21, 2011. It is up 7.1% since then, annualizing at 65.1%. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 107.8% 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since that sell signal and its most recent buy signal on Oct 26, 2011. It is up 0.1% since that buy signal, annualizing at 2.1%.

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

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

The Mid-term Indicant is signaling bull for all major indices. They are down by an average of 0.8%, annualizing at -0.8% since their bull signals an average of 9.6-weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,982,957. That beats buy and hold performance of $1,794,637 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,156. That beats buy and hold’s $119,076 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $220,040. That beats buy and hold’s $89,199 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 136.9%, 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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 78.1% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund.

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 307.5% (annualized at 15.3%) since the Long-term Indicant signaled bull 1,046-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report – Summary

As stated since Monday, Oct 31, 2011,“if configurations sour in favor of the stock market bear, appropriate actions will be advised herein. Right now, the stock bull remains solid.”

Unfortunately, the NASDAQ100 index received a bear signal today, as it fell below NTI Green. All of the other major non-contrarian indices remain as near-term bulls. Therefore, there are several significant potential resistance points to argue with the ambition of a stock market bear.

As stated on this past Nov 10, “the Near-term Green price is a focal point, as Force across the board has fallen below Pressure and few into bearish domains. Until prices fall below NTI Green, the bear cannot regain solid cyclical dominance. Just as QTI Yellow Curve triggered significant price turbulence, price interaction with NTI Green will not. Prices will either bounce north off the NTI Green curve or fall below it. The former will be a solid bullish attribute and the latter will certainly arouse the bear. Currently, NTI Green is increasing, which should settle the issue within a few days.” This is getting close; real close.

Oscillating Force just below the bull/bear domain demarcation is unusual. 80% of the time, they are directionally clear on the charts. They are disfiguring as bullish and bearish Force are pushing them with near equal Pressure.

The lack of volume support continues to pester the near-term bullish cycle. It is now into seasonal slowness, which could continue to inspire volatile behavior until after Thanksgiving in the U.S.

The Mid-term Indicant did not signal any bears this weekend, as last week’s bearish behavior did not shift enough attributes to signal bear. The weekly report will elaborate in more detail about what to monitor.

Spain could not sell all of its bond offerings this past Thursday, triggering a bearish stock market. If leeches are allowed to continue sucking, the stock market bear will be delighted.

California, whose economy has lived off profound real estate prices for a couple of generations will probably pay the price for easy money for a couple of generations. However, it is big enough to have a bearish influence on the stock market.

Finally, the current near-term bull cycle is counter trend and counter cyclical to the short-term and mid-term cycle. Most of the QTI Red and Yellow curves are trending south. That is another reason for the volatility. Reversing trend is never easy regardless of the phenomenon under study.

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

Index Report Card Summary

The Near-term Indicant signaled no new bulls and one new bear. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for ten of the eleven major non-contrarian indices and contrarian VIX. They are down an average of 1.3% since the NTI bull signals an average of 3.7-weeks ago. That annualizes at -1.3%. The Near-term Indicant signaled bull for contrarian VIX this past Thursday, as it crossed above NTI Blue with Force in bullish domains and above Pressure.

The Quick-term Indicant is signaling bull for eleven non-contrarian indices and contrarian VIX. Those with bull signals are down by 1.5% since their bull signals 3.7-weeks ago.

Indicant Volume Indicators

Volume indicators need to improve their configurations to help propel the stock market bull onward and upward. Recent relationships are indeed bullish, but the short-term cyclical configurations need to be more supportive of the bull for sustainability. Both IVI’s sloped downward on recent bullishness, which suggests a lack of bullish inspiration. This is a bit troubling. Adding to that concern is the NASDAQ’s IVI falling into low interest domains during the current near-term bull cycle. Some of that, however, is due to seasonal volume.

Nov 18-Fri-Low volume on mixed behavior offers no interpretation. Yesterday’s aggressive support for the bear remains influential.

Nov 17-Thu-Aggressive volume on bearish aggression suggests serious challenges to the heart and soul of bullish seasonality.

Nov 16-Wed-Low volume on late day bearish aggression is not the complete story. Tomorrow’s volume and stock market behavior will be more telling.

Nov 15-Tue-Same as yesterday, but on mild bullish behavior.

Nov 14-Mon-Low volume on bearish behavior is not encouraging to the stock market bear.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 26-ETF’s. They are up by an average of 0.9% since their buy signals an average of 4.3-weeks ago, annualizing at 10.8%.

The NTI is avoiding two-ETF’s. They are down by an average of 0.5% since their near-term sell signals an average of 4.8-weeks ago.

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

The Quick-term Indicant is signaling hold for 24-ETF’s. They are up by an average of 4.2% since their buy signals an average of 10.6-weeks ago. This annualizes at 20.5%.

The Quick-term Indicant is avoiding seven-ETFs. They are flat since the QTI sell signals an average of 1.2-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled buy on Oct 21, 2011. It is down 0.6% since then. The Near-term Indicant signaled buy on Oct 10, 2011. It is up 7.1% since that buy signal, annualizing at 65.1%. Its Force Vector is no longer behaving bullishly, as it fell into bearish domains this past Thursday. Its price remains above NTI Green and QTI Yellow. With oil vacillating around $100/bbl, those two curves should offer bullish bounce points in the event the stock market bear continues pestering energy’s NTI bull cycle. Sell signals will occur when price contacts NTI Green.

ETF#11-Gold and Precious Metals is up 107.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 36.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $149.87 and still rising. Relaxation remains in order, since your buy price approximates $80.65 versus today’s closing price of $167.62. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled buy on Oct 26, 2011, as Force catapulted itself into bullish domains and above Pressure. Since then Force has fallen below both, enhancing a near-term bearish bias. It is up 0.1% since that buy signal, annualizing at 2.1%. It will be interesting if this near-term bullish cycle can hold up in the face of potential profit taking. Near-term bullish configurations are being challenged by the NTI gold bear. Judgments on the bear’s success or failure cannot be assessed until price falls to NTI Green. That is when a near-term sell signal will occur.

Click this sentence for additional charting and current forecasting of the actual price of gold.

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received buy signals from the Near-term Indicant and Quick-term Indicant this past Thursday. Price crossed above NTI Blue this past Thursday with Force in bullish domains. Therefore, buy signals had to be generated.

Tracking from Oct 28, 2011 informal forecast. That forecast predicted TLT would fall to QTI Yellow in this near-term cycle before end Dec 2011. Price today was $119.34. QTI Yellow is $100.46. This forecast was threatened on Thu, Nov 3, with Force crossing above Pressure and residing in bullish domains. Behavior the next few days will be interesting for this contrarian ETF. The forecast will be withdrawn if Force does not quickly retreat to a more bearish bias. Force nudged above Pressure this past Thu. If it moves robustly to the north, this forecast will have to be withdrawn. So far, Force has been timid, offering mild hope for this forecast to manifest.

ETF#31-QID received a sell signal on Oct 10, 2011 from both the Quick-term Indicant. It is down 0.7% since then. The Near-term Indicant signaled buy this past Thursday, as price climbed above NTI Blue with rising Force in bullish domains. Keep in mind, its Force Vector was disfigured and passive. However, it accelerated this Friday with noticeable behavior consistent with bullish robustness.

The Quick-term and Near-term Indicant signaled buy this past Thursday, for ETF#32-VXX. Its price crossed above NTI Blue today, forcing this buy signal. Its Force Vector moved south this Fri, but still remains above Pressure and inside bullish domains.

Major ETF Events

Nov 18-Fri-A few more sell signals were triggered for non-contrarian ETF’s with a Near-term bear signal for the NASDAQ100.

Nov 17-Thu-All contrarian funds either received buy signals and/or retained hold signals. Stock market divergence is manifesting with recent bearish incursions with rising near-term curves.

Nov 16-Wed-None

Nov 15-Tue-None

Nov 14-Mon-Bearish behavior did not shift attributes in support of the stock market bear.

Current Strategy-Short-term Indicant-Nov 18, 2011-Most, not all, short-term attributes continue favoring a bullish stock market, albeit weakening the past two weeks. As stated the past three weeks, “continue buying on bearish days.” Discontinue this and consider buying contrarian funds. Hold non-contrarians until you see a sell signal for those that you may have bought. The near-term stock market bull will not expire until prices fall below NTI Green, which continues to increase.

Reverse Tangential Projections

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.

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

The stock market enjoyed bullish convergence for four consecutive weeks through weekending Oct 28, 2011. That remains influential on bullish expectations and consistent with originations of the heart and soul of bullish seasonality despite disruptive divergent behavior the past three weeks. The four consecutive weeks of bullish convergence trumps recent volatility with a bearish tint to it. However, the past three weeks have endured a combination of bearish convergence and divergence. Last week was configured with solid bearish convergence. A bearish stock market next week will obsolete the influence of weekending Oct 28, 2011 phenomena.

Indicant Conclusion

As stated last week, the NASDAQ100 again toppled its 2007 peak six weeks ago along the Mid-term cycle. This is the third time in the past year this has occurred. Each time it retreated. Although the NAS100 was solidly bearish last week, the other major indices were equally bearish. The NAS100 held its ground during stock market bearishness and volatility the past three weeks. As long as it does that, the bear cannot dominate. Unfortunately, the NAS100 is less than 1% above the 2007-cyclical peak. Secular bear considerations will manifest if the NAS100 is solidly bearish next week.

The other major indices remain below the 2007 levels. However, all mid-term attributes are bullish, but no longer solid. With that, the mid-term cycle cannot support the major indices surpassing those 2007 peaks along the current mid-term cycle.

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

11/20/2011

Nov 13, 2011 Indicant Weekly Stock Market Report

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

Regarding Recent Cyclical Peaks

The major indices continued challenge toward eclipsing 2007 cyclical peaks offers some inspiration to the stock market bull. An inability to do so offers the stock market bear inspiration. Both phenomena are underway. The question is which will win.

Four years after the democratically controlled congress and a liberal leaning president, George W. Bush, colluded in their nonsensical “help the weak policies,” the stock market bull has been too timid to proclaim things are better now than when those lunatics took power. Nancy Pelosi continues expressing her lunacy, proclaiming unemployment would be at 15% if it were not for the democrats. Where is the proof? Where is the proof the economy would have fallen into a deep depression without the 2008/9 bailouts? Without proof, those little three pound brains from political circles will continue barking their claims. Their barking is not scary. The fact that people listen and believe is scary.

The biggest threat to the stock market bull is politicians. Natural business cycles always correct while political meddling extends and delays those corrections. The biggest threat to your financial prosperity is politicians. Every now and then, an egomaniac can fool 50+% of the masses and gain power. History clearly demonstrates periods where the masses are weak. When that happens, the egomaniacs take over and invoke destructive behavior.

The founding fathers of the United States lived history. They pulled their pants all the way up, wore a belt, and were not brain-dead from i-Pods, i-Pads, and i-Looney Tunes. Historians wrote with less personal bias two-hundred years ago than today, where liberal artsy types think they know how it “should have been” as opposed to how it was. Those founding fathers went to significant lengths to prevent one individual from having complete power. They knew how power can corrupt a simple mortal. Their system is designed to prevent that from occurring. The stock market bull has enjoyed that for over 250-years. The only time the stock market does not display its ecstasy is during the presidential post-election year, where politicians coalesce into a harmonistic relationship. That is always bearish.

A huge number of contemporary politicians continue to hold their incumbency based on how much they can take from you and give to their constituents. Leeches have no choice but to continue leeching until their host dies. Once one becomes a leech, they will always be a leech. Killing the host is 100% inevitable. The stock market knows this threat and behaves in a manner consistent with the magnitude of such threats.

The heart and soul of bullish seasonality occurs every year. It originates sometimes between late September and early November. The point of origination coincides with reduced political bantering due to the long number of political holidays during that period. Also, the nature of the season tends to pacify most politicians with a celebratory theme of Thanksgiving and Christmas.

That phenomenon extends through January. The heart and soul of bullish seasonality tends to expire around the time of the president’s state of the union address. Since WWII, most of those speeches contain proclamations of “give away programs.” The stock market bear is generally aroused around the time of the state of the union speech. That arousal typically expires the bullish cycle that is referred to as the heart and soul of bullish seasonality.

The pre-election year is the most bullish along the four-year presidential election cycle. The reason for this is simple. Political contrarianism occurs with groups of politicians barking proclamations against other groups of politicians. The absence of political harmony inspires the stock market bull. That typically carries through the election-year, which is the second most bullish along the four-year cycle. Once the elections are completed, political harmony manifests and the stock market bear is again aroused. That is why the post-election year has not made any stock market money since 1832.

This is a presidential pre-election year. It is historically the most bullish year along the four-year cycle. New stock market highs are typically established in pre-election years. The stock market has endured significant trouble in doing so this year. That is abnormal, which is somewhat consistent with secular bears. Until 2007-peak prices are eclipsed one cannot argue that the current stock market could be in a secular, long-term bear.

This weekend, the S&P500 regained a bullish position for the year. It is now up 0.5% this year. The DJIA did this a few weeks ago. It is the only major index, of the Big-3, that is above its 2000 peak price, while the NASDAQ is still down 46.9% since its weekly closing peak on Mar 9, 2000.

The only major index of the ten tracked by the Mid-term Indicant above its 2007 peak is the NASDAQ100. It is up 5.2% since its last cyclical peak on Oct 31, 2007. As long as it holds above that peak, the stock market bull should be inspired. If not, the stock market bear will find inspiration. The weakest index, the S&P100, is down 22.2% since its Oct 9, 2007 peak. Of course, it has the highest concentration of dilettantes in its management ranks.

Prior political damage is not always calculable by the stock market bull. In essence the 2007-Congress’ damage may carry forward for a generation or two. Their meddling with the idea that everyone should live in a mansion actually pushes nearly everyone closer to living in teepees except them and their pals on Wall Street and in Corporate America. This phenomenon may shed light on why the founding fathers granted the populace the right to bear arms.

All of the major indices can be accessed by clicking this sentence. You want each major index to cross above its 2007 peak prices in this mid-term cycle. The first step in this process is for the major indices to cross above their 2011-peaks.

All but one of the major indices remains below their 2011 peaks. The only major index at its 2011-peak, right now, is the Dow Jones Utilities. As long as this index continues resisting bearish incursions, the stock market cannot completely dominate.

In conclusion, this year’s heart and soul of bullish seasonality needs to eclipse 2007 peaks. The stock market will do this if it senses political weakness; that is, politicians undoing their prior damage. You do not need to keep up with politicians to monitor this. All you have to do is watch the stock market. It will tell you how well this is being accomplished.

Corruption is increasing. If you decide the stock market is not the way to make money, do the following. Start up a solar panel company. Donate a couple of hundred thousand dollars to a democrat. In return, that democrat will loan you hundreds of millions from the government. Upon receipt, elevate your salary and officer draws. Get as rich as you can and then file bankruptcy for the company. You will be just fine. Five years in country club prison would be the worse you could expect. Of course, if you shave, you will have to look at yourself in the mirror. Apparently, some do not mind doing that.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

This section highlights last week’s biggest gainers and losers within each group of stocks and funds tracked by the Mid-term Indicant.

Last week’s behavior was mild even though the stock market compared with massive cardiac arrest. Those wild pluses and minuses offset one another.

NAS#46-DISH was up 9.8% last week. It is up 23.9% since MTI-buy signal a year ago on Nov 5, 2010. You may notice on the same page that NAS#47-DTV has been much more aggressive in the current bullish cycle. It is up 89.0% since the MTI-buy signal in April 2009. NAS#77-VRTX was down 14.3% last week. It received a sell signal this weekend, as it fell below MTI-Yellow with declining Force. Its long-term trend is bullish. Therefore, last week’s punishment may not be everlasting. In spite of that, however, all stocks that currently exist and in the future will eventually endure everlasting punishment. It is better to re-buy than endure everlasting punishment. Holding yellow bears has significant risks. One never knows when the dilettantes influence policy, which by the way, is pure corporate leeching and/or massive stupidity with a complete and absolute emphasis on the first.

ISTK#35-PLUGD was 16.0% last week. It is down 93.4% since the MTI sell signal in early 2008. If the worldwide economy ever becomes solidly bullish and more politically stable, companies such as this enjoy significant potential. However, always keep an eye on the management. Periodically, a majority of hirelings can be dilettantes. It is currently a MTI Yellow Bear with negative Pressure. ISTK#38-ENER was down 35.7% last week. It is down 99.6% since the MTI-sell signal in Oct 2008. This stock traded as high at $79.38 and now considered a penny stock with Friday’s close at thirty cents. It is unusual for the biggest gainer and loser to be within the same sector and industry on the same week. Nothing dramatic can be drawn from that, but worthy of mention.

DJIA#27-MRK was up 5.7% last week. It is up 7.9% since the MTI-buy signal last month. This stock has a long-term bearish trend, but does enjoy some periodic bullish/bearish cycles from time to time along a short-term cycle. This company is, however, dilettante infested with significant expense and time practicing legalized extortion in Washington DC. Just hobnobbing around with politicians will contaminate one beyond repair. The purpose is always simple; that is, gain as much unearned wealth as possible without regard to ethics. DJIA#06-BAC was down 4.3% last week. As you can see, it is also a MTI-Yellow Bear. It is down 83.0% since the MTI-sell signal in Jan 2008. As you can see, as earlier stated, it is better to re-buy a stock than hold MTI Yellow Bears.

DJU#13-EXC was Utilities biggest gainer last week. It was up 2.4%. It is up 1.1% since the MTI-buy signal last month. It has a very interesting and narrow trading range. Although it is an MTI Yellow Bear, the short-term Green curve is the focal point of the next sell signal in this cycle. DJU#14-CNP was Utilities biggest loser last week with a drop of 2.5%. It is up 53.9% since the MTI-buy signal two years ago. This stock has been enduring a long-term bearish trend, but has trended nicely to the north since the Y2K bear concluded in 2002.

MF#34-FSHOX was up 2.9% as mutual funds biggest gainer. This fund enjoys a relatively mild, but consistent, long-term bullish trend. It is up 4.5% since the MTI-buy signal last month. MF#74-FSEAX was the biggest loser of those mutual funds tracked by the Mid-term Indicant. It was down 2.5%. It is down 3.4% since the MTI buy signal three weeks ago. Foreign investments are struggling with Asian related funds being confronted with currency related problems. This fund remains, however, with a hold signal since it is not a MTI Yellow Bear.

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 two-buy signals and two-sell signals. That brings the total number of buy-signals to 109 in the past five weeks.

The Mid-term Indicant is signaling hold for 283 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.5%. That annualizes to 40.4%. The Mid-term Indicant has been signaling hold for these 280-stocks and funds for an average of 67.6-weeks.

The Mid-term Indicant is avoiding 48-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 39.9% since the Mid-term Indicant signaled sell an average of 77.0-weeks ago.

One year ago, on Nov 12, 2010, the Mid-term Indicant was holding 286-stocks and funds out of 339 tracked for an average of 47.6-weeks. They were up by an average of 38.9% (annualized at 42.6%). There were 53-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 48.6% since their respective sell signals an average of 98.6-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 193-stocks and funds of the 317-tracked two years ago on Nov 13, 2009. They were up by an average of 27.7%, annualized at 54.3%, since their respective buy signals an average of 26.6-weeks earlier. The Mid-term Indicant was avoiding 122-stocks and funds at that time. They were down an average of 32.2% since their respective sell signals an average of 79.6-weeks earlier. There was one buy signal in addition to the 159-buy signals in the prior 16-weeks. There was one sell signal on this weekend in 2009.

There were only 24-stocks and funds with hold signals of the 344-tracked by the Mid-term Indicant on Nov 7, 2008 since their buy signals an average of 49.1-weeks earlier. They were up by an average of 83.0% (annualized at 87.9%). There were 313-avoided stocks and funds at that time. They were down by an average of 30.9% from their respective sell signals an average of 24.7-weeks earlier. There were no sell signals on this weekend in 2008 in addition to the 562-sell signals in the prior 52-weeks, as the bear market was nearing its ultimate depth, but still incomplete in its final destruction. There were seven-buy signals on this weekend in 2008 with the weighted influence of the heart and soul of bullish seasonality.

On Nov 9, 2007, the Mid-term Indicant was signaling hold for 261-stocks and funds out of 345-tracked. They were up by an average of 138.8% (annualized at 60.4%) since their 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 by an average of 19.6% since their sell signals an average of 26.7-weeks earlier. There were no buy signals and 25-sell signal on this weekend in 2007. The 2003-Mid-term bull cycle was past its peak at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Nov 10, 2006, there were 310-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 103.5% (annualized at 65.8%) since their respective buy signals an average of 81.8-weeks earlier. There were 34-avoided stocks and funds then. They were down an average of 11.8% since their respective sell signals an average of 24.1-weeks earlier. There were no buy signals and no sell signals on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Nov 11, 2005, there were 253-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 93.4%, annualizing at 58.6%, since their respective buy signals an average of 82.9-weeks earlier. There were 54-avoided stocks and funds then. They were down by an average of 16.1% since their sell signals an average of 25.5-weeks earlier. There were 13-buy signals and no sell signals on this weekend in 2005.

There were 297-stocks and funds with hold signals on Nov 12, 2004. They were up by an average of 68.7%, annualizing at 69.1%, since their buy signals 51.7-weeks earlier. The 17-avoided stocks and funds were down an average of 45.6% since their respective sell signals an average of 54.6-weeks earlier. There were five-buy signals and one sell signal on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Nov 14, 2003, there were 264-stocks and funds with a hold signal, enjoying a 54.9% gain since their respective buy signals an average of 31.9-weeks earlier. That annualized at 89.6%. There were only 22-avoided stocks at that time. They were down by an average of 24.3% since their sell signals an average of 33.3-weeks earlier. The Mid-term Indicant was tracking 264 stocks and funds from 2002 through late 2004. There were two-buy signals in addition to 394-buy signals in the prior 34-weeks. There were eight-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 37-weeks old on this weekend in 2003.

On Nov 15, 2002, there were 268-stocks and funds with hold signals. They were up 14.4% since their buy signals an average of 8.4-weeks earlier, annualizing at 88.5%. There were 23-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 14.1-weeks earlier. The avoided stocks and funds were down 22.4%. There were two-buy signals in addition to 485-buy signals in the prior 16-weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others endured sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were three-sell signals on this weekend in 2002.

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 here. It is in the member’s only section.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

All major indices are configuring with bullish attributes. Several mutual funds and stocks garnished similar configurations the past four weeks. The heart and soul appears to be manifesting in spite of last week’s stock market bearish behavior.

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 66.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 140.4% and the S&P500 is up 62.7% since then. The small cap index, S&P600, is up 141.4% 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. That will again be an attribute to monitor in coming months. Configurations shifted in support of normal pre-election year bullishness the past two weeks.

The NASDAQ is down 46.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.3% since its similar secular peak on March 23, 2000. The Dow is up by 3.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years.

The Dow has stumbled three times when encountering its 2000 peak value. Will it do that again? The S&P500 topped its 2000 peak for a few brief weeks in 2007. The NASDAQ has never come close, as its prior peak price was hype driven. The DOTCOM sector does not perform agriculture, manufacture, or extract. Therefore, no wealth was created and it remains appropriately bearish relative to the 2000 phony peak prices.

The NASDAQ year-to-date performance was bearish by 26.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001.

The NASDAQ was down by 32.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years. The heart and soul of bullish seasonality was solid at this time in 2002, but endured a couple of disruptive incursions by the stock market bear in December and again in Feb-Mar 2003.

The NASDAQ YTD 2003 performance was up 44.6%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by a paltry 2.9% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was up 1.2% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post-election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 8.4% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 8.8% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 40.4% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 37.4% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 12.6% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 5.0% this year. The S&P500 is up 0.5% and the NASDAQ is up 1.0%, respectively, this year. Dynamic bullish behavior the past few weeks has moved the stock market back into a more conventional position of bullishness associated with pre-election years. As you can see, the stock market bull has been shying away from the idea that historical standards should repeat this year.

The Dow is down 14.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 6.3% since its last cyclical peak on Oct 31, 2007. The S&P500 is down 19.3% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 19-weeks ago. That was the second time this year such accomplishment was enjoyed. Eclipsing and holding above 2007 cyclical peaks remains elusive with the exception of the NAS100.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 22.2% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak five weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 5.2% above that weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak. Even though the NASDAQ100 was bearish the past three weeks, it held above that potential point of resistance.

The Dow is up 85.6% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 111.2% and the S&P500 is up 86.8% since then. The S&P600, Small Cap Index, is up 126.7% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be underway in spite of recent bull/buy signals, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull. The primary problem confronting the stock market bull is Europe.

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish. The short-term and mid-term cycles are increasingly supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are. Europe continues treating debt like play money and the jury is still out on that. However, current configurations suggest defaults are not on the immediate horizon. The capital markets have demonstrated abilities to sniff out such events before they actually occur.

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 promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat in their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is one reason why the historical record demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA. Also, unfortunately, the paper currency basis of worldwide economies is under threat as the culmination of OPM disease by politicians may be approaching the “critical dimension.”

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. They have been yielding zero for the past 14-weeks.

The Euro jumped to Red Bull status 43-weeks ago. It lost that Red Bull status eight weeks ago with a continuing sharp drop against the greenback.

The Canadian dollar also strengthened the past few days, but remains within the tolerances of its cycle of weakening. It is more solidly resuming a cycle of weakness. The Japanese Yen continued its strengthening cycle. The CA$ moved in the neutral zone (between Red and Yellow) eleven weeks ago. It is now above Red (bearish for the CA$), which threatens its cycle of strengthening. The Japanese yen remains extraordinarily strong.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior in four of the past eight weeks, it continues trading well above the 2012 yearend forecast curve. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow 14-weeks ago on souring economic news, but rebounded the three weeks ago and weakening again this past week. It remains as a Yellow Bear, but threatening to escape that weakness.

Commodity prices continue falling from their recent record highs due to souring economic forecast, but they rebounded solidly this past three weeks. However, none are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears. Their cycle remains bullish but under attack by the commodities bear.

Commodity prices, overall, are favoring potential for a bearish cycle. If it manifests, some elements of inflationary threats will be dampened.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. They continue along a bearish cycle.

Overall, hard economic data is supportive of lackluster economic behavior and currently non-threatening toward inflation or deflation.

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 again signaled buy on Sep 17, 2010. It is up 7.7%, annualizing at 6.6% since then. Gold is no longer enduring short-term trouble, but obviously lackluster in performance this past year.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 0.3% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is up 13.5% since then, annualizing at 152.0%. The slower moving Quick-term Indicant signaled buy on Oct 21, 2011. It is up 5.4% since then, annualizing at 92.8%. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 115.7% since that buy signal, annualizing at 39.1%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since that sell signal and its most recent buy signal on Oct 26, 2011. It is up 3.9% since that buy signal, annualizing at 88.2%.

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

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

The Mid-term Indicant is signaling bull for all major indices. They are up by an average of 2.6%, annualizing at 15.5% since their bull signals an average of 8.6-weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,891,686. That beats buy and hold performance of $1,849,031 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $144,673. That beats buy and hold’s $123,798 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $229,128. That beats buy and hold’s $92,883 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 136.9%, 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.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 80.3% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund.

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 319.9% (annualized at 15.9%) since the Long-term Indicant signaled bull 1,045-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report – Summary

As stated since Monday, Oct 31, 2011,“if configurations sour in favor of the stock market bear, appropriate actions will be advised herein. Right now, the stock bull remains solid.”

Several short-term attributes increased their support for the stock market bull earlier this week and held up in last Wednesday’s attack by the stock market bear.

Europeans must pay the price for their socialistic methods. All societies eventually bear the brunt of supporting laziness and economic leeches. Societal recognition of that can be bullish. As long as prices remain above NTI Green, the bear cannot dominate along the near-term cycle, which is the current focal point.

As stated last Thursday, “the Near-term Green price is a focal point, as Force across the board has fallen below Pressure and few into bearish domains. If prices fall to NTI Green, the bear will regain solid cyclical dominance. Currently, NIT Green is increasing, which should settle the issue within a few days.”

The lack of volume support continues to pester the near-term bullish cycle. It is now into seasonal slowness, which could invigorate continued volatility until after Thanksgiving in the U.S.

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

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for all of the major non-contrarian indices. They are up by an average of 2.5% since the NTI bull signals an average of 3.0-weeks ago. That annualizes at 42.5%. The Near-term Indicant is signaling bear only for contrarian VIX. It is up 2.7% since its bear signal 2.6-weeks ago.

The Quick-term Indicant is signaling bull for all non-contrarian indices. Their performance is the same as the Near-term Indicant since the bull signals occurred, simultaneously, with prices climbing above QTI Yellow with qualifying near-term bullish attributes. The lone bear signal is for contrarian VIX, which has the same performance as noted above by the Near-term Indicant.

Several of the troubling short-term attributes recovered late this week, solidifying the stock market bull’s position.

Indicant Volume Indicators

Nov 11-Fri-Timid volume with strong bullishness is not a confidence booster to the stock market bull, but seasonal factors are kicking in as we approach the holiday season. Regardless though, the stock market bull solidified its position today.

Nov 10-Thu-Again low volume and little support for today’s bullish behavior. However, the near-term bull cycle remains intact. Volume surges, paralleling stock market bullishness, are a bullish requirement that remains absent.

Nov 09-Wed-Low volume on bearish aggression does not support bearish continuation, but the lack of support on recent bullishness remains bothersome.

Nov 08-Tue-Low volume on above average bullish behavior is also irrelevant. With that, there is no threat to the stock market bull.

Nov 07-Mon-Below average volume irrelevant. At least the stock market bear is not finding encouragement here.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 4.0% since their buy signals an average of 3.8-weeks ago, annualizing at 54.9%.

The NTI is avoiding four-ETF’s. They are up by an average of 3.4% since their near-term sell signals an average of 2.7-weeks ago.

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

The Quick-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 6.0% since their buy signals an average of 8.8-weeks ago. This annualizes at 35.3%.

The Quick-term Indicant is avoiding four-ETFs. They are up by an average of 4.1% since the QTI sell signals an average of 2.6-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled buy on Oct 21, 2011. It is up 5.4% since then, annualizing at 92.8%. The Near-term Indicant signaled buy on Oct 10, 2011. It is up 13.5% since that buy signal, annualizing at 152.4%. As stated the past several days, its Force Vector is behaving bullishly with some mild oscillations in bullish domains. It is above QTI bearish yellow. All of this is bullish in spite of recent bearish incursions.

ETF#11-Gold and Precious Metals is up 115.7% since the QTI signaled buy on December 11, 2008. Annualized growth is at 39.1%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $149.00 and still rising. Relaxation remains in order, since your buy price approximates $80.65 versus today’s closing price of $173.96. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled buy on Oct 26, 2011, as Force catapulted itself into bullish domains and above Pressure. It is up 3.9% since that buy signal, annualizing at 88.2%. It will be interesting if this near-term bullish cycle can hold up in the face of potential profit taking. So far, configurations remain favorable to the gold bull. Force was dropping, but displayed an increase in three of the past four days.

Click this sentence for additional charting and current forecasting of the actual price of gold.

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a sell signal from the Near-term Indicant on Oct 24, 2011. It is up 2.1% since then. The QTI signaled sell on Oct 27, 2011. It is up 4.9% since then.

Tracking from Oct 28, 2011 informal forecast. That forecast predicted TLT would fall to QTI Yellow in this near-term cycle before end Dec 2011. Price today was $115.65. QTI Yellow is $99.88. The forecast was threatened on Thu, Nov 3, with Force crossing above Pressure and residing in bullish domains. Behavior the next few days will be interesting for this contrarian ETF. The forecast will be withdrawn if Force does not quickly retreat to a more bearish bias. It is now dropping in bullish domains but not yet committed to supporting the forecast, while improving configurations to do so.

ETF#31-QID received a sell signal on Oct 10, 2011 from both the Near-term and Quick-term Indicant as Force fell into bearish domains. It is down 8.5% since then. Force crossed into bullish domains on Nov 4, but price remains below NTI Blue and it fell below NTI Green. As stated since Nov 4, all of this is bearish.

The Quick-term and Near-term Indicant signaled sell on Oct 27, 2011, for ETF#32-VXX. It is up 19.5% since that sell signal. QTI Yellow is resisting bearishness. Force Vector is assisting that resistive behavior, which rose from deep inside bearish domains into bullish domains on Fri, Nov 4, but too risky to buy at this point. Its Force Vector behavior in the next few days will be interesting. If it does not fall, the stock market bear will be inspired. Its Force discontinued its incline this past Monday and started falling on Tuesday and continued doing so yesterday in spite of yesterday’s profound bullishness and stock market bearishness. That remains bearish for VIX/VXX and bullish for the stock market.

Major ETF Events

Nov 11-Fri-Stock market bullishness solidified, supporting more of the same.

Nov 10-Thu-Bullish responses to yesterday’s dynamic bearish demonstrates the bull’s desire to dominate, but the lack of volume of weakening bullishly supporting attributes is increasingly challenging to the stock market bull.

Nov 9-Wed-Aggressive stock market bearish behavior did not distort short-term bullish attributes.

Nov 8-Tue-Sevearal short-term attributes increased in their support of stock market

bullishness.

Nov 7-Mon-Staid behavior and thus no major events.

Current Strategy-Short-term Indicant-Nov 11, 2011-Most, not all, short-term attributes continue favoring a bullish stock market, albeit weakening this past week, but regained strength on this Friday’s strong bullishness. As stated the past two weeks, “continue buying on bearish days.”

Reverse Tangential Projections

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.

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

The stock market enjoyed bullish convergence for four consecutive weeks through weekending Oct 28, 2011. That remains solidly bullish and consistent with originations of the heart and soul of bullish seasonality despite disruptive divergent behavior the past two weeks. The four consecutive weeks of bullish convergence trumps recent volatility with a bearish tint to it.

Indicant Conclusion

As stated last week, the NASDAQ100 again toppled its 2007 peak five weeks ago along the Mid-term cycle. This is the third time in the past year this has occurred. Each time it retreated. Although the NAS100 was mildly bearish last week, the other major indices were equally bullish. The NAS100 held its ground during stock market bearishness and volatility the past two weeks. As long as it does that, the bear cannot dominate. The other major indices remain below the 2007 levels. However, all mid-term attributes are solidly bullish. With that, the mid-term cycle supports the major indices surpassing those 2007 peaks along the current mid-term cycle.

Political stalemate and austerity against nonsensical waste in Europe should encourage the stock market bull. As long as these events remain consistent with commonsense, the stock market bull should continue for the next three to five months.

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

11/13/2011

Nov 6, 2011 Indicant Weekly Stock Market Report

Stock Market Secularism

People rioting in the streets without a leader can be inspirational to anarchists. The leaderless search for a leader, who may have the name, Adolph.

Where will the destruction of other people’s property end? The effort required to destroy assets is little; very little. The effort required to create an asset is high; very high.

Low character does not create assets. Good character does. Low character has only two relationships with assets; they either destroy it or live off it. Good character also only has two relationships with assets; they create it and then work hard to make it more valuable.

Where did slums come from? People with low character moved into existing assets. Those assets then lowered in value. The inhabitants did not create those assets, but they lived off them. After their close proximity with those assets, they depreciated to worthlessness. Just take a look around. It is easy to spot sub-cultures of low character.

Some politicians cater to the populace of low character. Regardless of the destructive nature in that relationship, politicians encourage a continuation of low character. They construct legislation to encourage it. Their model suggests more votes for them (the politicians) will help them retain power, regardless of the destructive behavior to assets. Some politicians and their constituents are of low character. They exist by extracting assets from those of high character.

All people interact daily with two types of assets; their own and those belonging to others. Lacking respect for one’s own asset and the assets of others is a low character attribute. If 51% of the voting populace in any democracy is of low character, a secular decline in their culture manifests. History clearly reveals this obvious fact, but unfortunately, very few understand or even aware of history.

The problem with secular declines is an inherent inability to recognize it at the beginning of its tortuous cycle. Predicting a democracy’s last days is difficult. Much depends on the countermeasures that may prop up from time to time, delaying the expiration of that culture.

Identifying a secular decline is much easier in corporations. The only problem is you have to be on the inside to recognize it. Unfortunately, most on the inside do not detect secular declines, but some do. That is because most of the insiders are the problem. Those who do see it, leave in a state of disgust. Good managers, leaving a company, are usually a clear sign of excessive stupidity. Competent managers have a strong disdain for incompetence. Those who remain are basic economic leeches that drain their employers’ assets. Dilettantes are usually so egotistically blind, they cannot detect their destruction. Massive ego is a low character attribute; especially when emanating from someone who gains employment simply writing resumes and passing an interview process. In other words, hirelings who walk the halls of bankrupt Fannie Mae and Freddie Mac are just that. Many enjoy salaries exceed one-half million dollars per year and including wild bonuses, all of which are approved by your elected politicians. Of course, some of those excessive salaries and bonuses are returned to your elected politicians in the form of campaign contributions. One group of economic leeches takes from you, while those leeches feed those you elect.

An example of corporate secular decline can be viewed, directly, from a chart. There are plenty of examples. For the sake of brevity, just one is discussed. Eastman Kodak is the chosen one as it is currently seeking huge loans. It is ISTK#18-EK, which is a former DJIA stock. As you can see from the chart, it has been moving steadily to the south for over ten years. Eastman needs loans to pay its bills. That means it assets have not been increasing in value. The Japanese took it to them. None of those Japanese attended America’s so called great educational institutions. For years, Eastman recruited the finest graduates from the finest educational institutions in the U.S. and Canada. And look at the results; secular decline.

Many of the ISTKS are former NASDAQ100 stocks and a few former DJIA stocks. Scrolling down the list on this page and picking a few charts, you can find many more examples of corporate secular decline. The reason these former “good companies” are tracked, every now and then they are transferred back to their former indices. Also, a few do find resurrection, but that is rare. Finally, the Indicant has several members who create their own mutual funds and it is difficult to delete a stock with an avoid or sell signal. Some even use the charts to short stocks. So, we are slow to abandon a stock, once tracked.

The Wall Street protestors are a culmination of the unemployed, socialists, union members, etc. In other words, with the exception of some frustrated unemployed, most are of low character. They destroy the assets of others. That is all the proof one needs with respect to their character. The troubling element of this is the encouragement of this destructive process from politicians, ranging from mayors, governors, and even the President of the United States. A culture is in trouble when formal leadership encourages asset destruction. Disrespecting assets by formal leadership is a strong clue any bearish reaction is not temporary, but the beginning of a long and painful decline in any culture and anytime at any place in the universe.

Some of the protestors desire to have their student loans forgiven because they cannot get a job to pay for their loans. Well, if one has a PhD in social studies, one just wasted a good portion of their life. This is especially true when the professors promulgated course content with a bent on personal opinion and fiction. Those desiring loan forgiveness are purebred economic leeches.

If a politician campaigns on the promise to forgive student loans and is elected, sell all common stocks and funds owning stocks. The purpose of capitalization will be lost in that circumstance. Chaos and poverty will accelerate. Such a circumstance would be unheard of only one generation ago. It would not be surprising today.

The great Shigeo Shingo of the infamous Toyota Production Systems development once said, “the faster the feedback function, the fewer the defects.” An errant operation along a process should be detected on a real time basis with its construction of a defect. That is why one could buy a Toyota Tercel in the 1970’s only to enjoy watching their children drive that same car ten years later with very few maintenance problems. Of course, the cultural elite do not impose that on their grandchildren, but the fact that many ordinary folks did, clearly illustrates Shingo’s success.

The problem in detecting any secular decline is identifying the errant operation along a process. When formal leaders encourage those with a propensity to be destructive to any asset, one could argue “defect detection.” Toyota had subsystems to prevent the production of more than one defect at a time. This is commonly referred to as Pokayoke or mistake proofing. Subsystems would auto-stop production so that a second defect would not be produced. All of this is possible when engaging in physical objects, such as a piston pin or gear. Unions discourage this sort of developed efficiency because it threatens the masses of their brotherhood.

Unfortunately, when engaging abstract objects, such as the Communist Manifesto or a union handbook, defective behavior is not detected by those who believe in those sort of abstract concepts. On the contrary, the wrong will argue vehemently against those who are correct. Therein lies the problem. The wrong, usually of weak character, either do not care they are wrong or believe they are right. Universal law always punishes wrong, but that punishment can last for long periods, as the culture endures its secular decline.

Nancy Pelosi without any proof recently claimed unemployment would be at 15% if it were not for the democrats. Her making that statement is a form of lunacy. And she is an elected official, representing those who vote for her. Formal leadership, who are lunatics, reflects very high probabilities of secular declines in a democracy.

The stock market has been enduring significant difficulty in eclipsing its 2007 highs and its 2000 highs. Some of the major indices 2007 highs were lower than their 2000 highs. That is an obvious secular bear. Ten years or more without additive stock market wealth is of concern. Coupling that to contemporary political and societal behavior should be acknowledged by anyone who is interested in investing in the capital markets.

In the late 1800’s and early 1900’s news was dominated by those of high character, such as Henry Ford, Nicola Tesla, Harvey Firestone, Thomas Edison, Alfred P. Sloan, etc. None of those high character folks would march in any group and protest any conflict with individual freedom. Most worked 14-hour days creating assets and expanding the value of their assets. The interest level was high in their new products and thus enjoying plentiful news coverage. More recently, Steven Jobs and a few others have enjoyed similar news coverage. However, such news coverage is very limited who engage in the production of physical objects, which is by far significantly more difficult than creating abstract objects (or concepts of avoiding 15% unemployment).

Contemporary news is mostly dominated by politicians around the world, rioting government bureaucrats, rioting 50-year old retirees in Europe, union members, socialists, news media personalities, most of which are liberal arts types and could not solve the most basic of real problems. Such news can have a bearish effect on the capital markets. Wandering three-pound brains within political circles encumbered with an extraordinary absence of required skills solving any problem are directing behavior every day.

On a daily basis, one can be creating assets. One can be increasing the value of assets. One can be merely consuming assets (leeches) to the point of real accelerated depreciation. Or one can be destroying assets. It seems society is increasingly unaware of who is doing what to what.

In the case of Eastman Kodak, some probably interpreted each bullish spurt, during its cycle of a bearish secular decline, as “we’re on the rebound.” Many executives at General Motors would loudly proclaim their lost market share was abated at 40%-share, then a few years later they would proclaim, “we have stopped it at 30%-share.” And then, “20% share a few years later”, etc. Secular declines, even when obvious, are seldom recognized even when deep into the cycle of decline. The conclusions of such cycles are always obvious, though.

In spite of all that, the heart and soul of bullish seasonality remains intact. However, if is a lazy one or with narrowed time breadth, you can interpret a continuation of secular decline and bearish stock market behavior. In other words, it is possible the 2003-2007 bull leg and the 2009-current bull leg were merely cyclical bullish spurts embedded in a long path of decline. Force Vector behavior, coupled other attributes will keep you informed.

Each week, this report discusses the stock market’s secular behavior in the section entitled, The Indicant Stock Market Report’s Secular Market Blend. If the major indices, during this year’s heart and soul of bullish seasonality continue in struggling fashion and failing to eclipse 2007 and/or 2000 peaks, do not expect a bullish continuation. The wrong are dominating the news with a few brief comments from time to time about Steve Jobs, who recently passed away. Interestingly, the Wall Street protestors use some of the products developed at Steve Jobs company, Apple, but yet are critical of “corporate profits.” Many of them stood in long lines to buy Apple products. Some could refer to that as being hypocritical, which is another one of those low character attributes.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

The following discusses the biggest gainers and losers with each group tracked by the Mid-term Indicant. Those groups are the NASDAQ100 stocks, Indicant Select Stocks, which are primarily energy and former NASDAQ100 stocks, the Dow Jones Industrial Average stocks, the Dow Utility stocks and conventional mutual funds. The securities with gains were the biggest gainers last week and those with losses were the biggest losers last week.

NAS#72-STX was up 11.9% last week. It is up 18.9%, annualized at 486.9% since the MTI buy signal on Oct 21, 2011. Last week, NAS#77-VRTX was down 11.9%. It is up 3.7% since the MTI buy signal a little over a year ago.

ISTK#87-LAMR was up in last week’s bearish stock market by 13.1%. That triggered an MTI buy signal, as its Force Vector skyrocketed into bullish domains. Such behavior in Force is seldom followed by bearish behavior. ISTK#08-RNWKD was down 20.2% last week. It is down 71.7% since the MTI sell signal in July 2007. Although its Force Vector is in bullish domains, price remains below the short-cycle curves. It shied to the south of those short-cycle curves in last week’s bearish stock market.

DJIA#10-HD was up a paltry 0.7% last week. That is the weakest biggest gainer in all groups since the past few weeks. Home Depot’s earnings relate to the housing bubble. Consequently, it is up only 33.5% since the MTI buy signal in July 2009. DJIA#06-BAC was down 11.7% last week. It is down 82.3% since the MTI sell signal in Jan 2008. Bank of America is one of those pathetic organizations that has defied its natural expiration with socialistic help. Saving them weakens the rest of the country.

DJU#05-AES was up 2.2% in last week’s bearish stock market. It is up 6.4% since the MTI signaled buy on this past Oct. It is annualized at 165.5% due to its recent buy signal. Although it may not perform to that level a year from now, one could consider buying on weakness due to the newness of the MTI cycle. DJU#07-PCG was down 4.8%, paralleling stock market bearishness. It has been somewhat disappointing as it is up only 1.2% since the MTI buy signal in July 2009.

MF#22-USPIX up was 3.2% in last week’s bearish stock market. That is because this fund is purely contrarian to the NASDAQ100. Therefore, it will move bullishly during stock market bearishness. It is QID’s cousin with the same basic rules for shorting the NAS100 Index. It is down 79.7% since the MTI sell signal in April 2009. Although this fund was configuring bullishly a few weeks ago, its Vector Pressure remained in bearish domains and its Force has recently collapsed deep into bearish domains. MF#71-FNORX was down 6.8% last week. It is down by that same amount since last week’s buy signal. Its bearishness last week relates to European craziness. Scrolling all six funds on the same page will reveal the stock market bear since 2007 remains in effect. Although it is difficult to set stop losses on such funds, keep your eye on Europe. If Greece defaults and/or economic leeches increase their influence in Europe, sell signals will ensue even though the Mid-term Indicant attempts to minimize trade signals for mutual funds. Its Force Vector remains in bullish domains and thus no sell signal in spite of last week’s bearishness.

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

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

The Mid-term Indicant generated five-buy signals and no sell signals. That brings the total number of buy-signals to 107 in the past four weeks.

The Mid-term Indicant is signaling hold for 280 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.4%. That annualizes to 41.0%. The Mid-term Indicant has been signaling hold for these 280-stocks and funds for an average of 66.5-weeks.

The Mid-term Indicant is avoiding 54-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 31.6% since the Mid-term Indicant signaled sell an average of 76.0-weeks ago.

One year ago, on Nov 5, 2010, the Mid-term Indicant was holding 272-stocks and funds out of 339 tracked for an average of 47.3-weeks. They were up by an average of 43.8% (annualized at 48.1%). There were 53-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 47.8% since their respective sell signals an average of 97.6-weeks earlier one year ago. There were 14-buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 194-stocks and funds of the 317-tracked two years ago on Nov 6, 2009. They were up by an average of 24.5%, annualized at 49.9%, since their respective buy signals an average of 25.6-weeks earlier. The Mid-term Indicant was avoiding 122-stocks and funds at that time. They were down an average of 30.4% since their respective sell signals an average of 78.6-weeks earlier. There were no-buy signals in addition to the 159-buy signals in the prior 15-weeks. There was one sell signal on this weekend in 2009. The stock market bear originating in late 2007 continued its retreat in defeat at this time in 2009. Of course, in retreat, the stock market bear was accumulating energy for its next attack. It always does that. Bears typically do not last too long. They have a history of undoing years of work by the stock market bull in a matter of just a few weeks.

There were only 12-stocks and funds with hold signals of the 344-tracked by the Mid-term Indicant on Oct 31, 2008 since their buy signals an average of 91.7-weeks earlier. They were up by an average of 163.6% (annualized at 92.8%). There were 319-avoided stocks and funds at that time. They were down by an average of 27.8% from their respective sell signals an average of 23.3-weeks earlier. There was one-sell signal on this weekend in 2008 in addition to the 562-sell signals in the prior 51-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There were 12-buy signals on this weekend in 2008 with the weighted influence of the heart and soul of bullish seasonality.

On Nov 2, 2007, the Mid-term Indicant was signaling hold for 286-stocks and funds out of 345-tracked. They were up by an average of 143.2% (annualized at 65.4%) since their buy signals an average of 113.8-weeks earlier. The Mid-term Indicant was avoiding 58-stocks and funds at that time. They were down by an average of 17.2% since their sell signals an average of 26.2-weeks earlier. There were no buy signals and one sell signal on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Nov 3, 2006, there were 310-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 102.8% (annualized at 66.1%) since their respective buy signals an average of 80.8-weeks earlier. There were 33-avoided stocks and funds then. They were down an average of 13.7% since their respective sell signals an average of 23.9-weeks earlier. There were no buy signals and one sell signal on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Nov 4, 2005, there were 209-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 113.6%, annualizing at 57.0%, since their respective buy signals an average of 103.6-weeks earlier. There were 60-avoided stocks and funds then. They were down by an average of 17.2% since their sell signals an average of 28.7-weeks earlier. There were 44-buy signals and seven-sell signals on this weekend in 2005.

There were 277-stocks and funds with hold signals on Nov 5, 2004. They were up by an average of 69.8%, annualizing at 67.7%, since their buy signals 53.6-weeks earlier. The 21-avoided stocks and funds were down an average of 41.0% since their respective sell signals an average of 53.7-weeks earlier. There were 21-buy signals and one sell signal on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Nov 7, 2003, there were 267-stocks and funds with a hold signal, enjoying a 55.3% gain since their respective buy signals an average of 30.7-weeks earlier. That annualized at 93.6%. There were only 23-avoided stocks at that time. They were down by an average of 24.5% since their sell signals an average of 32.6-weeks earlier. The Mid-term Indicant was tracking 266 stocks and funds from 2002 through late 2004. There were five-buy signals in addition to 389-buy signals in the prior 33-weeks. There was one-sell signal on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 36-weeks old on this weekend in 2003.

On Nov 8, 2002, there were 249-stocks and funds with hold signals. They were up 12.7% since their buy signals an average of 8.9-weeks earlier, annualizing at 74.8%. There were 21-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 13.9-weeks earlier. The avoided stocks and funds were down 25.4%. There were 42-buy signals in addition to 443-buy signals in the prior 15-weeks. Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others were reversed with sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were four-sell signals on this weekend in 2002.

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 here. It is in the member’s only section.

Comments about Mid-term Indicant Bull and Bear Signals This Weekend

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

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 64.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 141.1% and the S&P500 is up 61.3% since then. The small cap index, S&P600, is up 140.8% 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. That will again be an attribute to monitor in coming months. Configurations shifted in support of normal pre-election year bullishness the past two weeks.

The NASDAQ is down 46.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 18.0% since its similar secular peak on March 23, 2000. The Dow is up by 2.2% 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. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years.

The Dow has stumbled three times when encountering its 2000 peak value. Will it do that again? The S&P500 topped its 2000 peak for a few brief weeks a few years ago. The NASDAQ has never come close as its peak price was hype driven. The DOTCOM sector does not perform agriculture, manufacture, or extract. Therefore, no wealth was created and it remains appropriately bearish relative to the 2000 phony peak prices.

The NASDAQ year-to-date performance was bearish by 29.3% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001.

The NASDAQ was down by 28.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years. The heart and soul of bullish seasonality was solid at this time in 2002, but endured a couple of disruptive incursions by the stock market bear in December and again in Feb-Mar 2003.

The NASDAQ YTD 2003 performance was up 46.6%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by a paltry 1.0% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards.

It was down 03% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post-election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 5.7% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 16.4% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 32.9% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 30.3% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 13.6% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 3.5% this year. The S&P500 is down 0.4% and the NASDAQ is up 1.3%, respectively, this year. Dynamic bullish behavior the past few weeks has moved the stock market back into a more conventional position of bullishness associated with pre-election years. As you can see, the stock market bull has been shying away from the idea that historical standards should repeat this year.

The Dow is down 15.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 6.0% since its last peak on Oct 31, 2007. The S&P500 is down 19.9% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 23.0% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak four weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 5.2% above that weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak. Even though the NASDAQ100 was bearish the past two weeks, it held above that potential point of resistance.

The Dow is up 83.0% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 111.7% and the S&P500 is up 85.2% since then. The S&P600, Small Cap Index, is up 126.2% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be underway in spite of recent bull/buy signals, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull. The primary problem confronting the stock market bull is Europe.

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish. The short-term and mid-term cycles are increasingly supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are. Europe continues treating debt like play money and the jury is still out on that. However, current configurations suggest defaults are not on the immediate horizon. The capital markets have demonstrated abilities to sniff out such events before they actually occur.

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 promised by Bernanke in late 2008, the discount rate (and prime) rate continue holding flat in their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is one reason why the historical record demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA. Also, unfortunately, the paper currency basis of worldwide economies is under threat as the culmination of OPM disease by politicians may be approaching the “critical dimension.”

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. They have been yielding zero for the past 13-weeks.

The Euro jumped to Red Bull status 42-weeks ago. It lost that Red Bull status seven weeks ago with a continuing sharp drop against the greenback. There has been a mild bullish response the last four weeks, but still not returned to Red Bull status. It was down sharply two Friday’s ago due to yet more bailout packages for Greece and other cultures of the subspecies groups in Europe. It has since rebounded with vacillating broadcasts from European politicians, but down slightly again late last week.

The Canadian dollar also strengthened the past few days, but remains within the tolerances of its cycle of weakening. However, it remains in the neutral zone, but cyclically attempting to resume weakness. The Japanese Yen continued its strengthening cycle. The CA$ moved in the neutral zone (between Red and Yellow) ten weeks ago. It is now above Red (bearish for the CA$), which threatens its cycle of strengthening. The Japanese yen remains extraordinarily strong in spite of sovereign intervention by the Japanese government.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior in four of the past seven weeks, it continues trading well above the 2012 yearend forecast curve. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow 13-weeks ago on souring economic news, but rebounded the two weeks ago and weakening again this past week. It remains as a Yellow Bear, but threatening to escape that weakness.

Commodity prices continue falling from their recent record highs due to souring economic forecast, but they rebounded solidly this past two weeks. However, none are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears. Their cycle remains bullish but under attack by the commodities bear.

Commodity prices, overall, were bearish in nineteen of the last 27-weeks. They were bullish the past two weeks, based on bailouts in Europe. Souring economic forecasts continue dampening commodities bullish cycle despite recent commentary suggesting otherwise. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply 13-weeks ago on souring economic news, they enjoyed nice bullish bounces eleven-weeks ago, but down in six of the past eight weeks. After bouncing solidly to the north the past few weeks, they bounced south off of bearish Yellow curve. That is bearish.

Overall, hard economic data is supportive of lackluster economic behavior and currently non-threatening toward inflation or deflation.

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 again signaled buy on Sep 17, 2010. It is up 8.7%, annualizing at 7.6% since then. Gold is no longer enduring short-term trouble, but obviously lackluster in performance this past year.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 2.0% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

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. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It received a buy signal last weekend after missing 18% opportunity in the last 12-months with most due to rapid bullishness ahead of Force Vector justification to signal buy. It is down 2.7% since that buy 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. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It again signaled buy last weekend after missing about 24% of opportunity. It is down 1.7% since that buy signal.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is up 11.9% since then, annualizing at 171.9%. The slower moving Quick-term Indicant signaled buy on Oct 21, 2011. It is up 4.0% since then, annualizing at 101.7%. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 111.8% since that buy signal, annualizing at 38.1%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since that sell signal and its most recent buy signal on Oct 26, 2011. It is up 2.1% since that buy signal, annualizing at 82.4%.

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

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

The Mid-term Indicant is signaling bull for all major indices. They are up by an average of 2.0%, annualizing at 13.8% since their bull signals an average of 8.4-weeks ago.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,458,469. That beats buy and hold performance of $1,823,101 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $143,458. That beats buy and hold’s $122,757 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $229,761. That beats buy and hold’s $93,140 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 136.9%, 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.

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

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 314.0% (annualized at 15.6%) since the Long-term Indicant signaled bull 1,044-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, including relative performance 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.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report – Summary

As stated since last Monday, “if configurations sour in favor of the stock market bear, appropriate actions will be advised herein. Right now, the stock bull remains solid.”

In spite of bearish aggression this past Monday, Tuesday, and Friday, the above comment remains in effect.

Four QTI, among the major indices, and five ETF’s are QTI Red Bulls. Just one Red Bull prohibits dominance by the stock market bear. Stock market volatility will continue as long as European problems persist. That is why the Indicant continues advising to buy on bearish days, as the heart and soul of bullish seasonality is present.

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

Index Report Card Summary

The Near-term Indicant signaled no new bulls and no new bears. Click this sentence to see table leading to the charts.

The Near-term Indicant is signaling bull for all of the major non-contrarian indices. They are up by an average of 1.9% since the NTI bull signals an average of 2.0-weeks ago. That annualizes at 50.2%. The Near-term Indicant is signaling bear only for contrarian VIX. It is up 3.1% since its bear signal 1.6-weeks ago.

There are four Red Bulls. Just one Red Bull prevents the stock market bear from unleashing its potential. All of the major non-contrarian indices are NTI Blue Bulls, offering added protection against bearish depth and sustainability. All major index’s Vector Pressure enjoys residence in bullish domains.

There are a few problems though. Volume is not supportive of bullish sustainability. That does not mean there will be no sustainable bull, but it does mean the bull remains vulnerable to bearish incursions.

VIX’s Vector Pressure remains in bullish domains and its Force Vector is misbehaving with bullish behavior (for the VIX), which is contrarian.

Several Force Vectors fell into bearish domains on Friday. However, all retained blue bull status and not a major confrontation to bullish bias. It does deserve mention. If the markets are bearish on Monday and QTI Red Bulls and NTI Blue Bulls perish, there is a good chance bullish bias will be withdrawn. Social leaders, mainly from Europe, continue pestering the capital markets.

Overall, short-term attributes are more bullish than bearish, but there is a mild mix.

Indicant Volume Indicators

Volume indicators need to improve their configurations to help propel the stock market bull onward and upward. Recent relationships are indeed bullish, but the short-term cyclical configurations need to be more supportive of the bull for sustainability. Recent robustness has correlated with bearish behavior, which is not encouraging to the stock market bull. Both IVI’s sloped downward on recent bullishness, which suggests a lack of bullish inspiration. This is a bit troubling.

Nov 04-Fri-Light volume on solid bearish behavior is certainly not motivating the bear to attack more. The stock market and all related Forces, both technical and fundamental, are in a state of confusion. However, the short-term bias remains in favor of the stock market bull.

Nov 03-Thu-Mildly above average volume, coupled to the bullish aggression, offers a bit of encouragement to the stock market bull.

Nov 02-Wed-Mediocre volume, coupled with bullish aggression, is not that encouraging to the stock market bull.

Nov 01-Tue-Average volume on bearish aggression suggests bearishness will not be long lasting with impending bullishness wiping out the bear’s damage rather quickly. Greece can perish and the world’s economy will do just fine. This is similar to 1998’s Russian defaults, but not nearly as significant.

Oct 31-Mon-Light volume on bearish aggression relates to simple profit-taking. More are holding than selling. The supply-demand law portends continued bullishness.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 28-ETF’s. They are up by an average of 3.8% since their buy signals an average of 2.8-weeks ago, annualizing at 70.6%.

The NTI is avoiding four-ETF’s. They are up by an average of 3.6% since their near-term sell signals an average of 2.2-weeks ago.

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

The Quick-term Indicant is signaling hold for 27-ETF’s. They are up by an average of 6.0% since their buy signals an average of 8.1-weeks ago. This annualizes at 38.5%.

The Quick-term Indicant is avoiding five-ETFs. They are up by an average of 4.1% since the QTI sell signals an average of 1.3-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled buy on Oct 21, 2011. It is up 4.0% since then, annualizing at 101.7%. The Near-term Indicant signaled buy on Oct 10, 2011. It is up 11.9% since that buy signal, annualizing at 171.9%. As stated the past few days, its Force Vector is behaving bullishly with some mild oscillations in bullish domains. It is above QTI bearish yellow. All of this is bullish in spite of recent bearish incursions.

ETF#11-Gold and Precious Metals is up 111.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 38.1%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $148.50 and still rising. Relaxation remains in order, since your buy price approximates $80.65 versus today’s closing price of $170.85. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled buy on Oct 26, 2011, as Force catapulted itself into bullish domains and above Pressure. It is up 2.2% since that buy signal, annualizing at 82.4%. It will be interesting if this near-term bullish cycle can hold up in the face of potential profit taking. So far, configurations remain favorable to the gold bull. Force is dropping. Its interaction with Pressure will be interesting. That should occur sometimes next week.

Click this sentence for additional charting and current forecasting of the actual price of gold.

All prior comments in this section remain in effect, but eliminated here for brevity purposes. You will be notified when and if such commentary requires adjustment.

ETF#14-TLT-Long Government received a sell signal from the Near-term Indicant on Oct 24, 2011. It is up 2.8% since then. The QTI signaled sell on Oct 27, 2011. It is up 5.6% since then.

Tracking from Oct 28, 2011 informal forecast. That forecast predicted TLT would fall to QTI Yellow in this near-term cycle before end Dec 2011. Price today was $116.48. QTI Yellow is $99.35. Forecast threatened this past Thu, Nov 3, with Force crossing above Pressure and residing in bullish domains. Behavior the next few days will be interesting for this contrarian ETF. The forecast will be withdrawn if Force does not quickly retreat to a more bearish bias.

ETF#31-QID received a sell signal on Oct 10, 2011 from both the Near-term and Quick-term Indicant as Force fell into bearish domains. It is down 7.9% since then. Force crossed into bullish domains on Friday, but price remains below NTI Blue.

The Quick-term and Near-term Indicant signaled sell on Oct 27, 2011, for ETF#32-VXX. It is up 18.7% since that sell signal. QTI Yellow is resisting bearishness. Force Vector is assisting that resistive behavior, which rose from deep inside bearish domains into bullish domains on Fri, Nov 4, 2011, but too risky to buy at this point. Its Force Vector behavior in the next few days will be interesting. If it does not fall, the stock market bear will be inspired.

Major ETF Events

Nov 4-Fri-Some major index Force Vectors fell into bearish domains, which threatens the short-term cycle with bullish bias. However, prices remained above NTI Blue. If price fall to NTI Green with bearishly positioned Force, the heart and soul of bullish seasonality could endure a rare unfavorable variance.

Nov 3-Thu-None

Nov 2-Wed-Bullish stock market behavior in the face of unknown European conclusions is a testament to the strength of the bull’s desire.

Nov 1-Tue-Again strong bearish behavior is not supported by short-term attributes. The stock market is enduring an overbought condition. That coupled with European chaos, led to the selloff the past few days, but with limited volume.

Oct 31-Mon-Strong bearish behavior is not supported by short-term attributes. Configurations suggests simple profit taking even though, fundamentally, the Japanese are attempting to weaken their currencies.

Current Strategy-Short-term Indicant-Nov 4, 2011-Most, not all, short-term attributes continue favoring a bullish stock market. Continue buying on bearish days, such as this past Mon, Tue and Fri. Avoid financials as long as it remains as a Yellow Bear. If you bought XLF or related ETF’s on the near-term buy signal, it is okay to hold and take cues from the Near-term Indicant’s signaling, which continues with hold. Keep in mind, volatility will continue until Greece is removed from the headlines.

Reverse Tangential Projections

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.

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

The stock market enjoyed bullish convergence for four consecutive weeks through week before last. That remains solidly bullish and consistent with originations of the heart and soul of bullish seasonality despite last week’s interruption with divergent bearishness.

Indicant Conclusion

As stated last week, the NASDAQ100 again toppled its 2007 peak four weeks ago along the Mid-term cycle. This is the third time in the past year this has occurred. Each time it retreated. The other major indices still remain below the 2007 levels. However, all mid-term attributes are solidly bullish. With that, the mid-term cycle supports the major indices surpassing those 2007 peaks on the immediate horizon.

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

11/06/2011