October 2007 Indicant Weekly Stock Market Reports

October 28, 2007 Indicant Weekly Stock Market Report

Volume 10, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Heart and Soul of Bullish Seasonality – Part 5

Bullish convergence last week halted the bear’s desire to wreak havoc to the underlying bullish bias. Technically, the upper trading range limit is providing the bear with enough energy to offset bullish continuation. Economic fundamentals support this technical phenomenon, but technical elements should continue to dominate over the next few months; that is the underlying bullish trend should continue.

The market approached the upper trading range limit a few weeks ago after succumbing to the sub-prime lending crisis a few months ago. Click the following link to gain some additional perspective on this.

http://www.indicant.net/Members/Updates/STI-Mkts/IVI.htm

Scroll down to the NASDAQ chart first. You will notice increased robustness in the Indicant Volume Indicator. That robust behavior was coupled with bearish market behavior. That bearish behavior, as projected by the Indicant, was a mere bearish spurt. Bearish spurts occur from time to time when the short-term traders become wrapped up with the news of the day and dump their shares. Bearish spurts do not detract from the underlying bullish bias. They have no sustainability.

Many of you have heard the expression, “the stock market climbs walls of worry.” The stock market will occasionally reflect the news of the day. When the news of the days is not eventually substantiated with profit or economic numbers and facts, that bearishness is quickly disrupted by bullish responses.

Last summer’s sub-prime lending crisis helped propel the market to the south. Nervous short-term traders sold their stocks in large numbers. They got caught up with sensationalism that used by the press to sell more product. The stock market got a little confused by all this. Once the numbers and facts manifested, the stock market corrected back to its underlying bullish trend.

Recent new regarding rising oil and commodity prices will continue to depress bullish ambition. However, until those rising energy and raw material costs impregnate the CPI, the stock market will continue with its underlying bullish bias. The market does not wait until “after the fact.” It is always anticipating economic outlook and corporate profits. When it anticipates accurately, rest assured the facts and numbers will manifest into economic disappointment.

Historical standards suggests economic disappointment will occur in 2009, which is the next presidential post election year. That is when politicians continue to promise and deliver “give away programs” to their constituents in hopes of gaining more votes and political power. The stock market has historically reacted bearishly to these episodes of creeping socialism. The stock market does not like that sort of stuff and moves bearishly.

At any rate, the heart and soul of bullish seasonality should continue offering resistance to bearish ambition. The upper trading range limit has depressed bullish ambition. Such bull/bear battles are not new. Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

The Mid-term Indicant generated one buy signal and ten sell signals.

In addition to the sell signals, the Mid-term Indicant is avoiding 48-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 15.1% since the Mid-term Indicant signaled sell an average of 28.2-weeks ago.

There were only 33-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 14.8% since their respective sell signals an average of 23.1-weeks earlier.

Two years ago, on Oct 28, 2005, the Mid-term Indicant was avoiding 102-stocks and funds that were down an average of 10.7% since their respective sell signals an average of 24.4-weeks earlier. Three years ago on Oct 29, 2004 there were 43-avoided stocks and funds. They were down by an average of 33.3% from their respective sell signals an average of 53.8-weeks earlier. On Oct 25, 2003, the Mid-term Indicant was avoiding only 22-stocks and funds out of 296-tracked at that time. They were down by an average of 23.8% since their sell signals an average of 31.6-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Oct 26, 2002, there were 75-avoided stocks and funds. They were down an average of 34.0% since their respective sell signals an average of 15.2-weeks earlier.

In addition to the buy signal, the Mid-term Indicant is signaling hold for 286 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 143.2%. That annualizes to 66.0%. The Mid-term Indicant has been signaling hold for these 286-stocks and funds for an average of 112.9-weeks.

One year ago, on Oct 27, 2006, the Mid-term Indicant was holding 311-stocks and funds out of the 345 tracked for an average of 79.7-weeks. Those 311-stocks and funds were up by an average of 106.0% (annualized at 69.1%). The Mid-term Indicant was signaling hold for 216-stocks and funds of the 320-tracked two years ago on Oct 28, 2005. They were up by an average of 104.2% (annualized at 53.9%) since their respective buy signals an average of 100.5-weeks earlier. There were 243-stocks and funds with hold signals on Oct 29, 2004 since their buy signals an average of 53.8-weeks earlier. They were up by an average of 67.1% (annualized at 64.8%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Oct 25, 2003, the Mid-term Indicant was signaling hold for 266-stocks and funds out of 296-tracked. They were up by an average of 50.6% (annualized at 89.5%) since their buy signals an average of 29.4-weeks earlier. Five years ago, on Oct 26, 2002, there were 178-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up an average of 19.1% (annualized at 65.3%) since their respective buy signals an average of 17.5-weeks earlier.

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

The Daily Indicant Stock Market Report for the last trading day of the current week is near the conclusion of this weekly stock market report. It is emailed each weekend, separately, so you can read it, either as a separate document, or in this document.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 89.5% since its secular low on October 9, 2002. The NASDAQ is up 151.7% and the S&P500 is up 97.7%. The small cap index, S&P600, is up 150.7%. The underlying bull that originated on October 9, 2002 no longer remains solid, but it remains a bull in spite of recent bearishness.

The NASDAQ is down 44.5% since its last weekly secular peak on March 9, 2000. The S&P500 is up 1.8% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one. The Dow is up 17.8% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming in the new peak area. The NASDAQ needs to climb another 80.0% to achieve a new record high. Do not be surprised if this occurs after the year, 2025.

The Dow is up 10.8% so far this year. The S&P500 is up 8.2% and the NASDAQ up 16.1%. At this time last year, the Dow was up 13.5%, with the S&P500 up 11.3% and the NASDAQ up 7.9%. The major indices remain behind last year’s performance due to aggressive bearish behavior a few weeks ago. This was due, in part, to the upper range trading limit. The major indices did not find comfort when they bullishly approached that limit.

The NASDAQ through this week of 2001 was down 28.4%. It was down 31.8% through this week of 2002. It recovered with a gain of 39.7% by this weekend of 2003. It was again down 3.7% in 2004 on this weekend as a product of the 2004 meandering bear. At this time of year in 2005, it was down slightly by 3.5% due to the same meandering bear from 2004. At this time last year, it was again up by 7.9%. This year, it is up 16.1%. As you can see, it is depressed this year from the last presidential pre-election year of 2003.

As you can see, the only years the NASDAQ has been up at this time of year has been the presidential pre-election years (2003 and 2007) and last year’s mid-term election year.

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 11.5% on this weekend in 2001. In 2002, it was down by 15.7%, but with less severity than the NASDAQ’s 31.8% drop in 2002. In the last presidential election year of 2003, the NASDAQ’s 39.7% rise delivered more excitement than the Dow’s humble 14.9% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 5.4% as the market concluded deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 4.1%. On this weekend, the Dow was up 13.5% in 2006, which conflicted with historical standards and seasonal normalcy. The Indicant stated the bullish bias shift on August 15, 2006 obsoleted historical standards. As previously stated, so far this year the Dow is up 10.8%, which is the third most bullish year-to-date performance this century.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 9.4%, while the NASDAQ is up 13.8% and the S&P500 is up by 6.7%. Even with summer-time bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality in late January of this year. This is a testament to the strength of the bull even though it has undergone its third major bearish expression of this year.

Where is the market headed for the remainder of this year? Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

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

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

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

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

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, they were included in this email message but now display them on the website. This is available to the public, while the specific buy and sell transactions are limited to members only. The below table is public information and not updated on a frequent basis.

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates were flat last week, but maintaining their southerly (stock market favorable) direction. As stated the past five weeks, the stock market bull will enjoy that for the time being. Keep in mind, the stock market will keep its eye on inflationary threats during the euphoria of declining interest rates. Two weeks ago, the market tolerated bearish assertions. Those assertions are justified, as commodity prices continue to skyrocket. Oil is especially threatening to the bull’s ambition.

The stock market will react bearishly to inflationary threats. It is ignoring rising commodity prices and especially oil prices right now. The bull is generally strong during the heart and soul of bullish seasonality, regardless of fundamental conflicts. Rest assured, though, the market will punish the bull after the heart and soul of bullish seasonality if economic conditions are not corrected to the bull’s delight.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 431.5% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 65.1%. It moved to the north in 38 of the past 59-weeks. It has been solidly bullish in nine of the last ten weeks.

Fidelity Gold, Fund #28, is up 25.0% since its buy signal on September 7, 2007. It is annualized at 183.8% since that buy signal. This fund was also solidly bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 357.4% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 67.8%.

Vanguard Energy #18, VGENX, is up 261.5% (annualized at 56.5%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 234.2% (annualized at 59.4%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 203.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 47.8%.

These energy related funds were solidly bearish last week.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 78.4% since then. It is annualized at 34.7%. This fund has been bullish in eight of the past nine weeks. It was solidly bullish last week.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 257.9% (annualized at 55.4%). This fund was solidly bullish last week.

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

There were no new bull signals and no new bear signals. New trip lines were assigned. As we near the conclusion of the presidential election cycle, expect an increased number of bull/bear signals with fluttering behavior.

All ten major indices are bulls. They are up by an average of 34.1% since the Mid-term Indicant signaled bull an average of 119-weeks ago. That annualizes to 14.9%.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $41,823,803

That beats buy and hold performance of $2,110,517 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $198,226. That beats buy and hold’s $150,385 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $234,629. That beats buy and hold’s $97,223 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.5%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 38.7% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 377.0% (annualized at 23.5%) since the Long-term Indicant signaled bull 834-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Nineteen of thirty; bullish bias holding.

Quick-term Yellow Bears/Threats: Two; retaining non-bearish support, but also weakened.

Quick-term Non-Bearishness: Strong; inflationary fears threaten the bull, but the slightest inflationary weakness will invite vigorous bullish responses.

Short-term Non-Bearishness: Strong. The July-August bearish threat expired on Monday, September 17, 2007. The Heart and Soul of bullish seasonality began on that day. On October 17 and October 19, the market reacted bearishly to the upper trading range limits. Although resistance to bullish desires are obvious, consider this phenomenon as a bearish spurt in the fact of the underlying bullish trend.

Force Vectors: Configurations continue supporting bullish bias.

Vector Pressure: Twenty-two in bullish domains with near-unanimous support for bullish bias.

Long-term Hold Positions: Safe.

Immediate Tactics: Hold. The bull is maintaining dominance, even in the face of recent bearish aggression.

Current Quick-term Bias: Bullish with near-term weakness.

Overall (Long-term) Market Status: Bullish bias prevailing, but weakened.

Profit Potential from Naked Options: Probability of increased volatility is increasing.

Volume: Configurations are supporting bullish bias.

Comment from September 17, 2007

Configurations are shifting away from bearish support………….

Observation on September 18, 2007. The Dow’s 335-point gain today (9/18/07) is not jittery behavior. It is not a bullish spurt. It reflects the beginning of the heart and soul of bullish seasonality. Enjoy!

October 19, 2007 Addendum. Recent bearish aggression is configured as a spurt in the face of the underlying bull at this time. Several attributes will advise if this bearish aggression is sustainable. Current configurations suggest it is not sustainable. Keep in mind these attributes can shift quickly.

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

The Dow is up 0.5% and the NASDAQ is up 5.8% since the Short-term Indicant signaled bull on September 18, 2007. The heart and soul of bullish seasonality should dominate for several months. Recent bearish expressions should not detract from this bullish theme with the underlying configurations.

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

As stated the past few days, both Indicant Volume Indicator’s are now moving robustly. This configuration is accompanied with mixed market behavior with a slight bearish flavor. This will tame the bull somewhat. Again, none of the attributes and configurations support sustainable bearish behavior.

As stated the last several days, you can see from the charts, the upper trading range limit is resisting to the bull’s desire to expand its dominance. The trend, though, remains bullish. Recent buys may be in danger of short-term loss positions due to bearish aggression. If near-term bearish bias prevails, the next major monitoring would be how much the bearish yellow curve resists bearish desires. Please read on.

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

There were no buy signals and no sell signals. Although there were no buy signals, the SQI is signaling hold for 28-ETF’s. They are up by an average of 83.7% (annualized at 35.6%) since their respective buy signals an average of 121.0-weeks ago. Although there were no sell signals, the SQI is avoiding two ETF’s at this time. They are up an average of 3.0% since their sell signals an average of one week ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 28-ETF’s. They are up an average of 91.1% (annualized 39.8%) since the STI signaled, buy, an average of 117.7-weeks ago. Although there were no sell signals, there are two ETF’s with avoid signals. They are up an average of 3.0% since their sell signals an average of one week ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 27-ETF’s. They are up by an average of 23.2% (annualized at 34.3%) since the QTI signaled buy an average of 34.8-weeks ago. Although there were no sell signals, the Quick-term Indicant is avoiding three ETF’s at this time. They are up an average of 3.1% since their sell signals an average of one week ago.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There is one conflict, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. Although complete harmony was lost on bearishness the past two weeks, this attribute continues supporting the Quick-term bullish bias shift since August 15, 2006.

Quick-term Indicant Bull/Bear Health Report

Two of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by 11.3%. This attribute is providing non-bearish support, but not as strongly as in the recent past.

Nineteen of the ETF’s are above their respective bullish red curves, which is supportive of the bullish bias. All thirty ETF average positions are 2.5% above their bullish red curves. This supports bullish bias, although weakened recently.

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

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

Seven of the thirty ETF’s are contacting their breakout lines. As stated the past several months, the high concentration of breakout-contact since August 2006 was solidly bullish. Contact in thirty-four of the last thirty-eight trading days supports bullish bias. Non contact in three of the last six trading days suggests the upper trading range limit is resisting bullish desires.

The average distance from breakout contact is 3.4%. This remains in support of the quick-term bullish bias.

None of the ETF’s are contacting breakdown lines, providing non-bearish support.

The average distance from the price and breakdown is 22.5%. This configuration provides non-bearish support, which has been the case since March 2003.

ETF Force Vector Configurations

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

Twenty-eight Force Vectors are moving bullishly. That is up considerably from bearish movement earlier this past week. In spite of Friday’s bullish behavior, the bull has lost some momentum, but remains dominant. Several Force Vectors are in lofty bullish domains and non-threatening to the underlying bullish trends.

Consider bearish expressions as mere spurts in the face of underlying bullish bias, which will offer more buying and call-option opportunities. Recent bearish aggression is a spurt.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were ten call option buy signals after Friday’s close. Although put option buy signals earlier in this past week may have produced mild profits, those last Thursday may offer more profit potential with Friday’s bullish expression. The two put option buy signals last Wednesday became irrelevant with Thursday’s bearishness. Discounted offers did were not transacted due to that bearishness.

Twenty-two ETF Vector Pressures remain in bullish domains. Although down by six from last Monday, this is providing near-unanimous and convergent bullish support. This is also highlighting resistance to bullish ambition.

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

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

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias from early February 2006 until August 15, 2006.

Message from Monday, September 17, 2007. The market is configuring nicely in support of the impending heart and soul of bullish seasonality.

Message from September 17, 2007. It is recommended to avoid writing covered call options due to increased probability of quick-term and short-term bullishness. Modified on September 24, 2007. Vector Pressure is again positive (bullish) and not configured favorably for writing covered call options.

October 16, 2007 addendum: The market is nervous about inflationary pressures. This is a valid fundamental concern that can invite long-term bearishness. The stock market will not tolerate high rates of inflation; nor high interest rates.

October 17, 2007 addendum: You will notice the major indices are near their upper limit of the trading range. That does not mean bearish dominance is about to occur. If it does occur, your longer-term hold positions should be maintained until the major indices approach the lower limit of the trading range. Do not overreact to bearish threats; consider them as mere spurts in the face of the underlying bull.

The Quick-term Bull remains in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is not avoiding QQQQ, which does not support holding contrarian fund, ProFunds Ultra Short.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Divergence versus Convergence

The market rebounded with bullish convergence last week, following one week of bearish convergence. That bodes well for bullish sustainability.

Indicant Conclusion

Last week’s bullish convergence was a slap in the face of bearish desires. Just as the Indicant stated, bearish convergence week before last was a mere bearish spurt. The technical problem right now is the upper trading range limit on the major indices. Recent bullish expressions approaching that upper trading range limit has resulted in a bearish response.

Although there are substantive economic fears that threaten the bull, the heart and soul of bullish seasonality should establish barriers to excessive bearish ambitions.

As previously stated, consider bearish expressions as mere spurts in the face of the underlying bullish bias. That offers you more buying opportunities. Increased volatility should assist those of you with a short-term interest at more money making opportunities.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/28/07

October 21, 2007 Indicant Weekly Stock Market Report

This Week’s Report

Heart and Soul of Bullish Seasonality – Part 4

Look at 1978. There are similarities that should stimulate heightened cognizance. Click the following link.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1976-1980.htm

You will notice deep bearish seasonality took its toll in late 1978, which was a pre-election year. This is highlighted with Bear Signal #9. You will notice the stock market dropped precipitously just ahead of the Iranian Hostage Crisis. You should also notice this occurred at the conclusion of deep bearish seasonality.

At that time, the market was scarred from years of rising oil prices, rising interest rates, and high inflation. It was a bear market.

Look at last week by clicking the following link.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-01-DJIA-Curr.htm

You will notice deep bearish seasonality exerted its influence. October 19, 2007 was the last technical week of deep bearish seasonality. Consequently new trip line assignments were assigned. You should notice the dashed green line drawn from the peak point of the white segmented line, which represents the historical standards of deep bearish seasonality.

Go back to 1978, where Middle East turmoil and rising oil prices were tantamount and eerily similar to today’s environment.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1976-1980.htm

You will notice the heart and soul of bullish seasonality catapulted the market to the north along a steep bullish slope. Around the end of January 1979, which approximates the expiration of the heart and soul of bullish seasonality, the bear again exerted its influence. Economic conditions were worse then than now. Fed Chief, Volker, kept raising interest rates in the face of rising inflation and rising oil prices. Currently, interest rates are not rising.

However, the market requires some degree of optimization between interest rates and inflation. The market does not wait for the bad news on either. It anticipates and directionally sets its tone with that anticipation. Rising oil prices, in addition to other commodities, threatens the market with inflation.

The only substantive combative economic variable that can offset rising raw material costs, such as oil, steel, aluminum, precious metals, etc. is rising productivity and related reductions in labor/processing costs. Rising productivity in the West and the obsolescence of communist’s low productivity facilitated the dramatic bull in the 1990’s. The rapid industrialization in China, India, and other developing economies is facilitating bearish resistance.

Unfortunately, the stock market is asking, are these lower processing/labor costs going to be enough to offset rising raw material costs?

These expanding economies require transportation of goods, services, and executive field trips. That threatens the bottom line if transport costs continue to increase. You can see, the Dow Transports received a bear signal in 2006 after rising from its previous bull signal in 2004 by clicking the following link.

http://www.indicant.net/Members/Updates/MTIRYS-Mkts-US/MTI-RYS-06-DJT-Curr.htm

The Transports did not like the $50-oil in 2006 and punished accordingly. Regardless of the erroneous predictions by many economists in 2006 about $50-oil being at a peak and insignificant to the underlying CPI, you can see the Transports is about where it was with the 2006 bull signal. You will notice it is barely teetering above its trip line. If bearish behavior occurs next week, it will receive a bear signal even though the market is now engaged in the heart and soul of bullish seasonality.

Clicking the following link will take you to 1976.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1972-1976.htm

!976 was also a presidential pre-election year, which typically supports the greatest degree of bullishness during the heart and soul of bullish seasonality. However, bear signal number 13 in 1976 occurred right in the middle of the heart and soul of bullish seasonality. A bull signal followed shortly thereafter and the market catapulted to the north.

The problem is a tough one. The market will most likely be volatile over the next several months, as it continues to explore the provocative question. Can declining labor/processing costs offset rising raw material and transportation costs? Sometimes the market will answer yes and respond with vigorous bullishness. At other times, it will figure the answer is no and respond bearishly.

The problem is even more complex in the North American economy. The sub-prime leading crisis adds to the economic problem. Refinancing mortgages pumped up consumer spending. That is now dried. That alone could trigger a recession. The complex part of that is the corresponding reduction in demand for consumer products is combative with inflation. The stock market does not like recessions either, while declining demand support recessionary pressures. Economic robustness is part of the economic optimization model.

The stock market’s optimization model is pretty simple. The bear exerts its influence on recessions, inflation, deflation, or rising interest rates. The bull persists when the bear has no reason to influence the market. Three of the four economic variables, recession, inflation, and interest rates, threaten the bull’s influence.

There is no need to speculate, although there is a need to be cognizant of these threats to the bull. Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

In addition to the sell signals, the Mid-term Indicant is avoiding 42-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 17.7% since the Mid-term Indicant signaled sell an average of 32.5-weeks ago.

There were only 32-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 16.4% since their respective sell signals an average of 23.1-weeks earlier.

Two years ago, on Oct 21, 2005, the Mid-term Indicant was avoiding 100-stocks and funds that were down an average of 11.3% since their respective sell signals an average of 24.0-weeks earlier. Three years ago on Oct 22, 2004 there were 49-avoided stocks and funds. They were down by an average of 33.0% from their respective sell signals an average of 52.3-weeks earlier. On Oct 18, 2003, the Mid-term Indicant was avoiding only 19-stocks and funds out of 296-tracked at that time. They were down by an average of 23.3% since their sell signals an average of 31.7-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Oct 19, 2002, there were 109-avoided stocks and funds. They were down an average of 31.4% since their respective sell signals an average of 15.8-weeks earlier. There were 107-buy signals on this weekend in 2002.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 296 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 133.2%. That annualizes to 62.5%. The Mid-term Indicant has been signaling hold for these 296-stocks and funds for an average of 110.8-weeks.

One year ago, on Oct 20, 2006, the Mid-term Indicant was holding 311-stocks and funds out of the 345 tracked for an average of 78.7-weeks. Those 311-stocks and funds were up by an average of 105.3% (annualized at 54.1%). The Mid-term Indicant was signaling hold for 218-stocks and funds of the 320-tracked two years ago on Oct 21, 2005. They were up by an average of 103.0% (annualized at 54.1%) since their respective buy signals an average of 98.9-weeks earlier. There were 239-stocks and funds with hold signals on Oct 22, 2004 since their buy signals an average of 53.4-weeks earlier. They were up by an average of 64.7% (annualized at 63.0%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Oct 18, 2003, the Mid-term Indicant was signaling hold for 266-stocks and funds out of 296-tracked. They were up by an average of 51.8% (annualized at 95.4%) since their buy signals an average of 28.3-weeks earlier. Five years ago, on Oct 19, 2002, there were only 76-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 25.8% (annualized at 62.5%) since their respective buy signals an average of 21.5-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 85.6% since its secular low on October 9, 2002. The NASDAQ is up 144.6% and the S&P500 is up 93.2%. The small cap index, S&P600, is up 143.4%. The underlying bull that originated on October 9, 2002 no longer remains solid, but it remains a bull in spite of recent bearishness.

The NASDAQ is down 46.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 1.8% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one. The Dow is up 15.3% since January 13, 2000 when it peaked