Oct 2008 Indicant Weekly Stock Market Report

October 26, 2008 Indicant Weekly Stock Market Report

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

Phenomenon of Commonality – Part 2

Evidence suggests the stock market will bottom in 2010 on a cyclical basis. Socialistic meddling directed at the capital markets has made enough inroads to depress stock prices on a secular basis.

U.S. politicians with their so-called “social engineering” initiated sick economic conditions leading to this bear market. Politicians are always the impregnators of bear markets. Politicians are the cancer to capitalism. As stated many times in this weekly report, politicians can only harm capitalism and the associated quality of life for all humankind.

Socialism results in the populace’s gravitation to the weakest members of society. For example, at the height of communism all members were equally poor and very poor at that. Their poverty levels fell to the lowest level during the pre-communist period. The only members of the communist society who enjoyed pleasantries were those in the top levels of government. They controlled all the weaponry and thus enjoyed the power. Less than 0.01% lived like kings, while 99.99% lived in poverty. U.S. politicians bias behavior similar to that sort of thinking because of some unknown disease they all have.

Spreading wealth never happens. Spreading poverty is what does happen. The problem with democracies, such as that of the west, too many of the populace are too stupid to apply their voting faith to the former. Their great grandchildren finally figure it out as there is little else to do, while asking the question, “is my entire life going to be spent standing in the soup, bread, and vodka lines?” The process toward correcting stupidity of their ancestors is asking the question, “Can there at least be one line for soup, bread, and vodka?”

After a few generations of extreme poverty-like conditions, those standing in line begin discussing their “revolutionary thinking.” After generations watch their political leadership being chauffeured around town in heated Mercedes Benz, while they are standing in lines in sub-freezing temperatures, they finally generate the proper animosities toward their political leadership.

Thruster groups are formed even in communism. Those thruster groups eventually consolidate into a powerful political group. The process is slower in communism as those in political power have all of the weaponry and kill the early thrust group forces. By empirical observation, it took about three generations in Russia but would have taken longer without the efforts of Admiral Rickover’s nuclear powered submarines sneaking under the arctic circle and Star War threats from the U.S.

All Americans should be upset and they should use their political clout, while they still have it, and vote 100% of the Congressional incumbents out of office. Of course, they will be replaced by other politicians. To mitigate political damage, the Americans should never reelect any incumbent to any office at any time. The longer they are in political position, the worse their disease becomes. None have your interest at heart. They simply lie about that.

Deep bearish seasonality ended two weeks ago. You will notice the sharp drop on the white line segment of the Dow by clicking the following link.

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

The heart and soul of bullish seasonality, in terms of fixed technical data, started last week. As you can see, this fixed technical data did not influence the market’s directional intensity. The bear continued its dominance. Good greed will eventually take hold and stimulate a bullish bounce for those of you interested in short-term trading. Fundamentally, this bear market is a long way from being over.

The so-called Bush years, 2003-2007, were indeed impressive with the bullish cycle. The capital markets cascaded northerly as capitalism expanded throughout the planet. Prosperity expanded with unprecedented gains when considering international economies. The number of capitalists populating the planet was the highest since the beginning of time. A 100,000 Dow would be possible by 2025, as the earth would produce ten Henry Ford-types as opposed to just one in the U.S.

Capitalists solve all problems; governments solve none. Politicians create problems and solve none. The U.S. imported minerals and commodities from all corners of the planet in vast quantities the past several years. This expanded wealth abroad, but depressed wealth domestically, as politicians constrained extraction of petroleum.

The dollars exported returned to the U.S. in the form of investment and taxes. Politicians got their hand on those dollars and screwed up the economy; not only in the U.S. but around the world. Now, the rest of the world sees U.S. politicians as not too different from dictators around the world in their use of money provided by others. Consequently, the inflow of money from international sources will dry up. That will dampen the stock market’s bull. The Dow and other indices will not enjoy as much growth as it would have otherwise, if capitalistically influenced. So, all buy and hold potential retirees will endure a lower quality of life for one and only one reason; politicians!

Since the bumbling idiots who become politicians by virtue of some yet to be identified disease use money other than their own, the quality of their decisions regarding money is low; very low. That, coupled with the yet to be unidentified disease they have, not only stimulates vast amounts of negative consequences, it devastates the quality of life for all. It already has and the worse has yet to begin.

Karl Marx did this in a big way. He was the one who said, power is granted to those “who count the votes.” American political forces are attempting to gain control over counting the votes, as opposed to a true democracy, which left alone is weak in itself. It is further weakened by not representing the values of the constituents of the democracy, but representing an expansion of control by those with the yet to be identified disease that politicians have.

The bear loves the unleashing of diseased thoughts by politicians. It will invoke its desires for many years to come. That is because the constituents of the U.S. are not smart enough to figure this out. The great grandchildren of today’s society will figure it out, unless we are lucky.

World War III will be the luck one is looking for. It is the only quick solution to stave off continued depressed economic activity for generations to come. Politicians will not know how to build weaponry and will be forced to call on those who do know how.

Man’s basic nature is to prefer death over confinement. That is the inherent reason for war as those with “political disease” are bent on “controlling the masses.” There is no other good reason. Ideologues are often cited as the reason, but those are irrelevant. The only relevance to economic wealth is addressed through agriculture, manufacturing, and extraction. All other discussion topics and stupid “talking points” have nothing to do with nothing.

You can see the 1930’s reshaping through the stock market. This time, it will be worse. Many of the 1930’s population knew how to grow food and be completely independent of social and economic dynamics. Today, very few know how to survive. Most are completely dependent on many. When the many get hungry, rest assured they will not be taking care of those poor souls who need them. Non-economic value-adding social workers will have to take care of themselves, spending time planting and picking crop from their backyards and staying up at night defending their property from those who were incapable or lacked interest in doing the same. In essence, they may have to shoot those they formerly cared for. Economic prosperity is the only provision of civility and that is provided by agriculturists, manufacturers, and extractors; not politicians or man-made law.

Those who can manufacture have always ruled over those who could not. Many countries around the world can manufacture. The U.S. has lost much of its manufacturing base in the last 25-years. It will lose more as taxes increase. The power of the U.S. is not guaranteed. It was earned because of the brave. Being born in the U.S. does not guarantee bravery. It now more or less guarantees one becomes fat! But that will change with increasing socialism.

For the most part, the brave are dead. The weakest are surfacing more into political leadership as hard working folks do not keep up with the mumbo-jumbo of politicians. Once the cycle of political damage is near its conclusion, rest assured the highly productive will take action to eliminate the scum and leeches that “spread the poverty.”

Look at the below link for the 1928-1932 stock market. Alfred P. Sloan argued unsuccessfully with political leadership, while FDR worsened economic conditions.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1928-1932.htm

Even with capitalists arguing with the evils of political influence, the stock market climbed, which is what we will be looking for even with this bear. Click the following link for the 1933-1936 bull market. Keep in mind this bull market originated at 10-cents to the 1929 dollar. So, it was pennies and many remained poor for long periods due to political meddling.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1932-1936.htm

As you can see, this presidential cycle enjoyed a nice ride to the north, but still down by over half from the 1929 peak.

It took about three to four years for the stock market to recognize FDR’s programs was full of smoke and mirrors. Click the following link to see the vestiges of socialism four years into the program.

http://www.indicant.net/Non-Members/Tours/MTIRYS-Mkts-US/MTIRYS-01-DJI-1936-1940.htm

FDR now needed a war and it was unbelievable the populace continued re-electing him. That is one reason why General Motors sought profits from overseas during that era and FDR continued depressing the profits from capitalistic endeavors. So, once good greed propels the market to the north, keep your eye on politicians. If those who created the current problem are continually re-elected, expect the bear’s return.

If 2007-2010 bear holds similar to that of the above 1929-1932-bear, the bear cycle is only about half way through. In other words, by 2010, the Dow would be around 2500-3000 and the 1992 long-term investor would still be in good shape, relative to 100-hundred year standards but lacking tremendously in quality of life if political interference had not driven the market to the south.

On somewhat of a positive note, the economy is significantly more diverse than the 1930’s. Hard workers, such as Alfred P. Sloan at General Motors never lost money; even in the 1930’s. Management talent today is weaker than that of the 1930’s in the Fortune 500-ranks. They are Clintonian for the most part. They lie! So, investing in individual stocks will be dangerous in the years to come.

Even with increased taxes, there will be some honest hard working startups providing good investment opportunities. More gun laws will put the mafia in charge of retail distribution of guns. Manufacturers will continue making them, but without the sign out front. Most will be underground; literally. Now, that is an observation in the event the government continues inroads into capital markets. If not, then such a scenario will be unlikely.

Some of hard working folks will address the economic weaknesses created by political blundering and stupid social engineering. Therein lies the element of hope for future economic activity. Rest assured the government will not solve the problem. Their every move will only worsen it. Politicians created the problem and rest assured they will not solve the problem.

If the American people, along with the crooked vote counting methods, return congressional incumbents to power in the upcoming election, they deserve their plight. Those found guilty of crooked vote counting should receive the death sentence for their deaths will be far fewer in numbers than those who die from the economic fallout that follows such wrong. Democracies always fail, but societies with Karl Marx vote management methods live in poverty for generations. Rest assured with all these follies and related corruption, the bear will thrive.

Even with all of that, there will be quick-term bullish spurts; some rising 100%. For example, if the Dow falls to 2500, it will rise to, say 5,000, then back down to 3,000 or so, similar to those swings from 1932 up to World War II. Cyclically, money will be made, as long as there remain some elements of capitalism.

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

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

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

The Mid-term Indicant generated no buy signals and six sell signals. There have been 509-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired seven weeks ago and the bear is continues enjoying “open season.”

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

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 13 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 160.0%. That annualizes to 90.1%. The Mid-term Indicant has been signaling hold for these 13-stocks and funds for an average of 92.3-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 325-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 32.7% since the Mid-term Indicant signaled sell an average of 21.7-weeks ago.

One year ago, on Oct 26, 2007, the Mid-term Indicant was holding 296-stocks and funds out of the 345 tracked for an average of 112.9-weeks. They were up by an average of 143.2% (annualized at 66.0%). There were 48-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 15.1% since their respective sell signals an average of 28.2-weeks earlier.

The Mid-term Indicant was signaling hold for 311-stocks and funds of the 345-tracked two years ago on Oct 27, 2006. They were up by an average of 106.0% (annualized at 69.1%) since their respective buy signals an average of 79.7-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down an average of 14.8% since their respective sell signals an average of 23.1-weeks earlier.

There were 216-stocks and funds with hold signals on Oct 21, 2005 since their buy signals an average of 100.5-weeks earlier. They were up by an average of 104.2% (annualized at 53.9%). There were 102-avoided stocks and funds at that time. They were down by an average of 10.7% from their respective sell signals an average of 24.4-weeks earlier.

On Oct 22, 2004, the Mid-term Indicant was signaling hold for 239-stocks and funds out of 296-tracked. They were up by an average of 64.7% (annualized at 63.0%) since their buy signals an average of 53.4-weeks earlier. The Mid-term Indicant was avoiding 49-stocks and funds at that time. They were down by an average of 23.8% since their sell signals an average of 52.3-weeks earlier.

Five years ago, on Oct 25, 2003, there were 261-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 50.6% (annualized at 89.5%) since their respective buy signals an average of 29.4-weeks earlier. There were 22-avoided stocks and funds then. They were down an average of 23.8% since their respective sell signals an average of 31.6-weeks earlier.

On Oct 26, 2002, there were 75-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 19.1%, annualizing at 65.3%. There were 75-avoided stocks and funds then. They were down by an average of 34.0% since their sell signals an average of 15.2-weeks earlier.

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

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

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

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

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 15.0% since its secular low on October 9, 2002. The NASDAQ is up 48.9% and the S&P500 is up 12.9% since then. The small cap index, S&P600, is up 47.3%. None of the major indices are bullishly biased at this time on a Mid-term Indicant basis. This is the first time since 2002, the S&P600 is not the leader of the major indices.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear has now obviously unfolded. All Mid-term, Short-term, and Quick-term bullish attributes expired several weeks ago. However, there is an increasing probability the heart and soul of bullish seasonality will configure this year even in the face of sour economic conditions. Although the aforementioned statement remains true, this seasonal phenomenon will begin at a much lower baseline.

The Dow is down 40.8% since its last closing peak on Oct 9, 2007. The NASDAQ is down 45.7% since its last peak on Oct 31, 2007. The S&P600 is down 43.5% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 69.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 42.6% since its similar secular peak on March 23, 2000. The Dow is down by 28.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 36.8% so far this year. The NASDAQ is down 41.5% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

However, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality. Deep bearish seasonality technically expired as of Friday, October 17, 2008. The heart and soul of bullish seasonality is available to exert its influence on the stock market. However, it varies off of the standards from year to year. For example in 2006 is started in mid-August. In 2007 it was much later and did not last as long. This year, there have been no signs of this occurring, but the time is near.

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

The NASDAQ year-to-date performance was bearish by 29.9% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 33.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 39.7%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 4.4%. It was down by 2.7% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 6.3% on this weekend and finished that year up by 9.5%. It was up by 14.9% at this time last year and finished 2007 up by 9.8%.

Do not be surprised at a Quick-term and Short-term bullish cycle in the next few days.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. As of October 3, 2008 most of the recent buys have since received sell signals. As of last week, many of the 2002 and early 2003 buys received sell signals. Profits were made on most of them and some of the by triple digits. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

If your stock or fund is above the bearish yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 8% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 10% trailing stop loss.

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

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

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates are stabilizing and they are low.

Inflationary threats may wane, as economic demand is soft. Deflation may become a new problem. The stock market does not like deflation even more than it dislikes inflation. The bull will remain absent if commodity prices do not stabilize.

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

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 37.4% since that sell signal.

Fidelity Gold, Fund #28 is down 53.5% since the Midterm Indicant signaled sell on August 1, 2008.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 28.8% since that sell signal.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 26.3% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 36.1% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 27.8% since that sell signal.

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

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. However, keep in mind OPEC can very quickly reverse this trend. They have done it before and remain capable of doing it again. So far, they are quiet.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 38.4% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 23 of the past 39-weeks and in 15 of the past 19-weeks. This ETF remains configured for bearishness on a Short-term basis.

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

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are down an average of 29.0%. Do not be surprised at bull signals in the next week or two, as the heart and soul of bullish seasonality begins to unfold. The early October drop was huge. It was, though, within the confines of deep bearish seasonality. You will notice deep bearish seasonality is the white line segment on the charts.

Click this sentence to view a summary of their performance.

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

That beats buy and hold performance of $1,274,753 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $85,882 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $53,815 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,749.2%, 106.8%, and 313.2%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled buy for this fund on September 12, 2008. It is up 78.7% since that buy signal, annualizing at 674.5%. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

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 189.5% (annualized at 11.1%) since the Long-term Indicant signaled bull 886-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty. No bullish support.

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

Quick-term Non-Bearishness: QTI differential is bearish 64.1%.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 43.9% with continued bearish support.

Short-term Indicant: Breakdown contact density has relaxed in five of the last ten days. Unfortunately, it resurrected the past four days, supporting Short-term bearishness.

Short-term Indicant: Relative breakdown position had been relaxing, but again penetrated by the forces of the bear.

Force Vectors: Northerly direction was disrupted, but biasing to continue northward trek (bullish). Although, this remains true, risks are too great at this time for participation.

Vector Pressure: A minority of two in bullish domains.

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

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

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

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. Force Vector interaction with Vector Pressure did not behave friendly to the bull. The bear still reigns.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market. This remains true, but participation is for gamblers.

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

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

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

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

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

DJIA

10/20/08-Mon-Although bullish Force Vector is mature, this index should work its way back to bearish yellow curve. From there, greater insights to obviations regarding directional intensity should manifest. 10/21/08-Tue-Force Vector pausing at intersection with Vector Pressure. Today’s bearishness is common and not a indicator of future direction. Those desiring bullish behavior do not want to see it shift dynamically to the south. The probability of that occurring is less than 20%. 10/22/08-Wed-In spite of today’s bearishness, Force Vector moved north, albeit ever so mildly. A bullish spurt should be unfolding. 10/23/08-Thu-Bullish spurt having difficulty exerting its influence, but the bear is also tired. A micro-cycle bottom is forming, facilitating an increased probability of a bullish spurt. 10/24/08-Fri-Force Vectors turned south by not dynamically. Unfortunately, the anticipated bullish spurt will initiate from a lower position than desired.

DJ Composites

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Same as DJIA. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Force Vector now above Vector Pressure. Although mature, it is common for it to continue rising after the deep record setting decline. 10/24/08-Fri-Same as DJIA.

DJ Transports

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Force Vector has shifted south falling short of Vector Pressure. This hesitancy is due oil’s uncertainty. Quick-term buying opportunity should be considered when you see Force Vector shift north. 10/22/08-Wed-Same as DJIA and contrary to yesterday, Force Vectors moved north. 10/23/08-Thu-Force Vector continues north, but still struggling to climb over Vector Pressure, which remains bearish. 10/24/08-Fri-Same as DJIA

DJ Utilities

10/20/08-Mon-This index has now crossed above yellow. Force Vectors crossed N on the bottom of the chart. The idea now is to see if there is a consolidation at this point; that is no deep drops below bearish yellow. 10/21/08-Tue-Index value topped bearish yellow yesterday. Today’s bearishness did not fall below yellow, allowing enhanced opportunity for a “bullish” consolidation. 10/22/08-Wed-Index fell below yellow again, disappointing those desiring immediate bullishness. However, do not despair. Volatility is common on around bearish yellow. 10/23/08-Thu-Force Vector now inside bullish domains. This last time it was there was on September 2, 2008 before the crash. It is encouraging to those desiring bullish behavior that its current level is higher than prior peak. 10/24/08-Fri-This is the only major index where Force Vector climbed into deep bullish domains. As you can see, today’s bearish aggression did not influence this particular Force Vector, suggesting mild bullish support.

NASDAQ

10/20/08-Mon-Same as DJIA. That is about 50-more points to the north at this point. 10/21/08-Tue-Force Vector shifted south but remained above Vector Pressure, suggesting an increased probability of imminent bullishness back to bearish yellow. That would now be a 115-point jump. 10/22/08-Wed-Same as DJIA, but this index is about as anemic as they come when desiring a bullish expression. The good news is that many bull cycles originate from such configurations.10/23/08-Thu-Force Vector dipped south offering a mild threat to continued bearishness. There is no obvious support for the bull as of today’s close. 10/24/08-Fri-Conversely to the Dow Utilities, the NASDAQ Force Vector met no resistance is falling below Vector Pressure. There is again no floor to prevent further bearish aggression.

NASDAQ100

10/20/08-Mon-Same as DJIA. Right now the gap between current index value and bearish yellow is only 15-points. When first crossing bearish yellow, do not be surprised at wild fluttering above and below bearish yellow. 10/21/08-Tue-Same as NASDAQ except the jump is about a 100-points. 10/22/08-Wed-Same as NASDAQ. 10/23/08-Thu-Force Vector remains interested in close proximity with Vector Pressure suggesting little bearish or bullish interest at this time. 10/24/08-Fri-Same as NASDAQ.

S&P500

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Same as NASDAQ except a 60-point jump. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Same as NASDAQ100. 10/24/08-Fri-Same as NASDAQ.

S&P100

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Same as NASDAQ except a mere 20-point jump. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Same as NASDAQ100. 10/24/08-Fri-Same as NASDAQ.

S&P400

10/20/08-Mon-Same as DJIA. There are about 40-more points of upside potential here. 10/21/08-Tue-Force Vector still shy of Vector Pressure. This remains very bearish in position, but can still be a participant in the heart and soul of bullish seasonality. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Continuing with bearish threat as Force Vector struggling to climb above Vector Pressure. 10/24/08-Fri-Same as NASDAQ.

S&P600

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Same as S&P400. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Same as S&P400. 10/24/08-Fri-Same as NASDAQ.

NYSE

10/20/08-Mon-Same as DJIA. 10/21/08-Tue-Same as DJIA. 10/22/08-Wed-Same as DJIA. 10/23/08-Thu-Same as NASDAQ100. 10/24/08-Fri-Same as NASDAQ.

VIX

10/20/08-Mon-Significant downside potential remains configured. 10/21/08-Tue-Configuration suggests continuing volatility, but with a southerly bias, supporting mild stock market bullishness. 10/22/08-Wed-Same as yesterday. 10/23/08-Thu-Same as Tuesday. 10/24/08-Fri-This again contacted breakout with a maturing southerly Force Vector. The bear will continue with bias until such time Vector Pressure falls below deep bullish domains. This bodes well for a bearish stock market, but a bullish spurt can still occur in the near term.

Overall Comment Regarding Major Indices: 10/20/08-Mon-A bullish spurt is forming, but volatility will not wane until the major indices solidify above bearish yellow and the bullish red curve forms an upward slope of at least 30-degrees. 10/21/08-The Dow Utilities is key as it is the only index offering potential consolidation for bullish behavior at this time. If it fails before the other indices offer this opportunity, the heart and soul of bullish seasonality will be threatened. That is unlikely though. 10/22/08-Wed-Utilities lost position for consolidation, but today’s bearishness did not inflict terminal damage to the immediate chance of doing so. 10/23/08-Thu-Overall, the bull is timid and the bear is tired. This bodes well for a bullish spurt. Greed should kick on the perception of an undervalued stock market. Keep in mind, the bear is not over on a longer-term basis. 10/24/08-Fri-Today’s bearishness was supported by global breadth offering additional resistance to the heart and soul of bullish seasonality. Be very conservative on any buy signals, but keep in mind additional buys will lower your average cost and there is little doubt the market will exceed such average costs in the near term.

The Short-term Indicant signaled bear on September 4, 2008. The Dow is down 25.1% and the NASDAQ is down 31.3% since then. As stated last week, bullish spurt potential is increasing on a Quick-term basis, while the Short-term Indicant continues with a bearish configuration.

As stated on Friday, September 19, 2008, you saw non-economic, socialistic bullish behavior on Thursday and Friday. Rest assured the bear will not expire with socialistic causes. More of the same will eventually generate a complete collapse in the capital market system. Risk taking requires failure and the failing require punishment. When failure is removed, there can be no winners without the losers. In other words, everyone becomes equally poor.

Be cautious of political rhetoric with the word, fairness. Fairness means the populace’s strength is equal to its weakest.

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

After several days of robust expressions in August/September supporting the bear, the NYSE and NASDAQ Indicant Volume Indicators shifted lethargically for a few days during the socialistic government meddling. The recently expiring robustness paralleled dynamic bearish behavior, fostering the bear’s directional intensity. This remains in obviation of bearish support on a longer cyclical basis. Keep in mind, recessionary outlooks will not incite a dynamic bull cycle, but a quick-term bull nonetheless. Recent uptick volume has correlated more with bullish behavior than bearish, suggesting a mild interest in propelling the heart and soul of bullish seasonality. Unfortunately, fundamentals are overriding technical indicators for the time being.

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

There were no buy signals and 15-sell signals. In addition to the sell signals, the SQI is avoiding 16-ETF’s. They are down by an average of 31.1% since their sell signals an average of 11.2-weeks ago.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and 15-sell signals. In addition to the sell signals, there are 16-ETF’s with avoid signals. They are down by an average of 31.2% since their sell signals an average of 11.2-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and 14-sell signals. In addition to the sell signals, the Quick-term Indicant is avoiding 16-ETF’s. They are down by an average of 31.8% since their sell signals an average of 9.0-weeks ago.

Current Strategy –October 20, 2008-Mon-Passively participate in the impending bullish spurt, which could last through Christmas. Once confirmed with index solidification above bearish yellow, more aggression may be warranted. You will know this if the Quick-term Indicant signals buy for more ETF’s. Keep in mind, bouncy (volatile) behavior will be prevalent while most values are below bearish yellow. October 21, 2008-Tue-Same as yesterday. October 22, 2008-Wed-Same as yesterday; traders must be tolerant of volatile day to day behavior. Bearish yellow and indices are nearing interaction. October 24, 2008-Fri-Two series of buy and sell signals by the Quick-term and Short-term Indicant were not good signals. This was due, in part, to anticipation of the heart and soul of bullish seasonality. Please see note below:

NOTE October 24, 2008: The next buy signals will not be considered until Force Vectors exceed Vector Pressure to the extent Vector Pressure is rising. The last two series of buy signals were anticipatory and this will not occur again without the required configurations supporting any changes to signals and regardless of stock market behavior.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-nine of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 30.3%. This remains bearish.

One of the 30-ETF’s are above their bullish red curves. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 33.8%. which is also non-bullish. The heart and soul of bullish seasonality is justification for some participation in the market and assuming associated risks for the traders. However, the next series of signals to buy will not occur without configured support.

The QTI differential is bearish by 64.1%. This is the ninety-seventh consecutive trading day of a bearish reading.

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

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

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

The average distance from breakout contact is 44.7%. Double digit variances from breakout contact for 204-consecutive trading-days has been non-bullish.

Twenty-two of the thirty ETF’s are contacting their breakdown lines. There has been no contact in six of the last 11-trading days, lending support to decreasing bearishness. Unfortunately, contact in the last three days suggest the bear was just winded a bit, but with full interest in continued domination.

The average distance between the price and breakdown is a mere 0.8%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 53 of the last 84-trading days. Single digit expressions the past four days is an increasing concern about additional bearish aggression. Other attributes had been offering minor resistance, but unfortunately waned this week.

The breakout/breakdown differential is bearish by 43.9%. This attribute is supporting bearish ambition.

ETF Force Vector Configurations

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

Two of the 30-Force Vectors is in bullish domains. This is not a bullish majority and thus non-supportive of the bull. Although this condition favors a bullish bounce, it is supportive of the bearish trend.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close. There have been no option buy signals the past few days as the market has been somewhat volatile, but yet, contained in a relatively tight range until the past three days, where breakdown contact occurred. There is no potential floor at this time to stop the bull’s bleeding.

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

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

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

Quick-term and Short-term Indicant Summary

Force Vectors finally interacted with Vector Pressure. Unfortunately, that interaction aroused the bear as opposed to funding the bull with some enthusiasm. Although the ETF’s and major indices attempted some stabilization, the bear resurrected its disdain for that condition and dropped the market further. There will be no buy signals until some natural floors manifest, such as Vector Pressure and Bearish Yellow.

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

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

The Indicant signaled sell for QID last on March 16, 2008. It is up 18.7% since then. Although it has a strong bullish position, it should not hold due to extensive volatility. This fund can move by double digit amounts at a very quick pace.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 40.7% since the Quick-term Indicant sell signal on July 24, 2008. This is a leading indicator to economic health. As long as it is moving south, the outlook for energy consumption is bearish and that means most other economic elements are bearish. Vector Pressure is deep inside bearish domains.

ETF#11-Gold and Precious Metals received a sell signal on October 20, 2008. It is down 8.0% since then. Although this particular commodity may hold well, configurations are suggesting excessive risk in continued holding.

ETF#14-Long Government is up 2.1% since the sell signal on September 30, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Three of the prior four week endured solid bearish convergence. That is solidly in support of the bear. Keep in mind, the heart and soul of bullish seasonality is about to begin.

Indicant Conclusion

The market has not yet found its lowest point. However, it should enjoy a bullish cycle that should begin immediately. Unfortunately, last week endure a consolidated international bearish expression. However, the Quick-term Indicant suggests this bearishness is near the end, but it was too risky to continue holding this week for several of the Quick-term ETF’s. Do not be surprised at buying next week.

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

Force Vectors northerly movement was unfavorably disrupted last week in favor of the bear. Vector Pressure is suggesting oversold conditions, which is bullish.

Do not be surprised at a bullish cycle, starting in the next few days. However, wait for buy signals. Recent Quick-term buy signals were reversed with sell signals this past weekend, but there is a high probability of new buy signals in the next few days and with more breadth than the last round of buy signals.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/26/08

October 19, 2008 Indicant Weekly Stock Market Report

Volume 10, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Overusing Bottom – Part 2 from July 20, 2008

Over the next few months, you will learn more about tangential constructions, including the reverse tangential lines. There is a major one under construction now. It facilitates a forward view of the market’s directional intensity. Right now, that view is bearish, but not on the immediate horizon.

Just as has been the case most of this year pundits are tossing out the word, bottom, again. The stock market has not found bottom yet even though there is plenty of room for a bullish spurt and the heart and soul of bullish seasonality. However, for the longer-term passive investor, stocks have not yet found bottom. Lying is the problem. Capital markets cannot support lying.

Some conservative pundits blame recent stock market bearishness on anticipated increased capital gains tax. Liberal pundits counter by saying no one has capital gains. Both groups are too hung up on their political views and are simply trying to influence yours.

Rest assured there are plenty of us with capital gains issues. Most of the mutual funds sell signals the past few months were purchased in late 2002 and early 2003. Those investors enjoyed triple digit gains. Many longer-term investors bought right after the 1987 crash and others bought in 1992. Many of their investments are enjoying quadruple digit gains. They will endure capital gains taxes if those gains were not enjoyed in retirement accounts.

The stock market peaked long before the capital gains threat. It peaked when the economy was threatened by a severe shortage in cash flow. Enron type accounting resurfaced shortly thereafter as those who are products of the “finest” academic and financial institutions in the U.S. could not fess up their ignorance. So, as usual, they lied.

The market always sniffs out stupidity. Cash flow as a percentage of shareholder equity is a primary influence on stock market directional intensity. As the liars were overstating asset valuations, the cash was drying up. The stock market knows this and has punished accordingly.

Coupled with the Wall Street liars and Washington DC liars, rising oil prices were taxing consumers during the past two years. Oil company stocks did well, but other stocks were taking it on the chin. The Federal Reserve was increasing interest rates along the same lines as Chairman Volker in the 1970’s. They plot oil prices on one sheet of graph paper and then plot what interest rates will be on another sheet of graph paper. They make both sheets of paper congruent. They actually get paid for this 8^th grade assignment.

As it turned out, many reported the Federal Reserve was wrong in raising interest rates in the face of rising oil prices. There are solid arguments for this, but the root cause was explained in the September 28, 2008 Weekly Report. Government meddling is the root cause.

As long as government meddling remains in effect, rest assured the bear will persist. It would not hurt to re-read the July 20, 2008 Weekly Stock Market Report. It is still in effect. The last paragraph in that report is repeated here. If you hear someone saying, “the market has bottomed” in the next few weeks and months, you will be better off by switching to King of the Hill or an old episode of I Love Lucy. They are more entertaining.

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

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

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

The Mid-term Indicant generated no buy signals and no sell signals. There have been 503-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired six weeks ago and the bear is again enjoying “open season.”

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

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 19 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 136.9%. That annualizes to 81.1%. The Mid-term Indicant has been signaling hold for these 19-stocks and funds for an average of 87.8-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 326-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 27.3% since the Mid-term Indicant signaled sell an average of 20.8-weeks ago.

One year ago, on Oct 19, 2007, the Mid-term Indicant was holding 296-stocks and funds out of the 345 tracked for an average of 110.8-weeks. They were up by an average of 133.2% (annualized at 62.5%). There were 42-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 17.7% since their respective sell signals an average of 32.5-weeks earlier.

The Mid-term Indicant was signaling hold for 311-stocks and funds of the 345-tracked two years ago on Oct 20, 2006. They were up by an average of 105.3% (annualized at 69.6%) since their respective buy signals an average of 78.7-weeks earlier. The Mid-term Indicant was avoiding 32-stocks and funds at that time. They were down an average of 16.4% since their respective sell signals an average of 23.1-weeks earlier.

There were 218-stocks and funds with hold signals on Oct 21, 2005 since their buy signals an average of 98.9-weeks earlier. They were up by an average of 103.0% (annualized at 54.1%). There were 100-avoided stocks and funds at that time. They were down by an average of 11.3% from their respective sell signals an average of 24.0-weeks earlier.

On Oct 15, 2004, the Mid-term Indicant was signaling hold for 240-stocks and funds out of 296-tracked. They were up by an average of 63.7% (annualized at 63.5%) since their buy signals an average of 52.2-weeks earlier. The Mid-term Indicant was avoiding 52-stocks and funds at that time. They were down by an average of 33.1% since their sell signals an average of 51.5-weeks earlier.

Five years ago, on Oct 18, 2003, there were 266-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 51.8% (annualized at 95.4%) since their respective buy signals an average of 28.3-weeks earlier. There were 19-avoided stocks and funds then. They were down an average of 23.3% since their respective sell signals an average of 31.7-weeks earlier.

On Oct 19, 2002, there were 76-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 25.8%, annualizing at 62.5%. There were 109-avoided stocks and funds then. They were down by an average of 31.4% since their sell signals an average of 15.8-weeks earlier.

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 21.5% since its secular low on October 9, 2002. The NASDAQ is up 53.6% and the S&P500 is up 21.1% since then. The small cap index, S&P600, is up 65.4%. None of the major indices are bullishly biased at this time on a Mid-term Indicant basis.

The Dow is down 37.5% since its last closing peak on Oct 9, 2007. The NASDAQ is down 40.1% since its last peak on Oct 31, 2007. The S&P600 is down 36.6% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 66.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 38.4% since its similar secular peak on March 23, 2000. The Dow is down by 24.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 33.3% so far this year. The NASDAQ is down 35.5% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

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

The NASDAQ year-to-date performance was bearish by 33.4% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, the heart and soul of bullish seasonality is now technically available to foster a Quick-term bullish cycle.

The NASDAQ was down by 34.8% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 43.2%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 4.6%. It was down by 4.8% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 6.3% on this weekend and finished that year up by 9.5%. It was up by 15.6% at this time last year and finished 2007 up by 9.8%.

Do not be surprised at a Quick-term and Short-term bullish cycle in the next few days.

Keep your eye on the daily stock market report.

Stop Loss Management

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past three weeks, interest rates are all over the map; somewhat nonsensical. CD’s are above 5% while the Fed Rate is less than 1%. Bankrupt banks offering 5% on CD’s is an apparent attempt to get cash infusions. Based on demonstrated incompetence at some banks and financial institutions, make certain such investments do not exceed $100,000. Congress elevated the FDIC limits to $250,000. If they (Congress) keep it up, it will not matter, as the value of the greenback will contain the same value as the colored money in the Monopoly Game that is resting in your closet.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is down 24.7% since that sell signal.

Fidelity Gold, Fund #28 is down 43.6% since the Midterm Indicant signaled sell on August 1, 2008.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 19.8% since that sell signal.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 22.0% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 30.1% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 22.7% since that sell signal.

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

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 35.2% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 22 of the past 38-weeks and in 14 of the past 18-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It is down 5.8% since then. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 26.0%. This fund’s bearish influence may not yet be over, but should not fall in price as much as other commodities.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are down an average of 23.9%. Do not be surprised at bull signals in the next week or two, as the heart and soul of bullish seasonality begins to unfold. The early October drop was huge. It was, though, within the confines of deep bearish seasonality, which should concluded within a week or two. You will notice deep bearish seasonality is the white line segment on the charts.

Click this sentence to view a summary of their performance.

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

That beats buy and hold performance of $1,346,755 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $92,129 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $59,553 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2596.9%, 92.8%, and 274.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for this fund on September 12, 2008. It is up 52.0% since that buy signal, annualizing at 535.1%. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 205.8% (annualized at 12.1%) since the Long-term Indicant signaled bull 885-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: None of thirty. No bullish support, but irrelevant at this point.

Quick-term Yellow Bears/Threats: Twenty-nine of thirty. Tuesday’s comment of prices rising to yellow needs to be compounded that yellow may fall to the price.

Quick-term Non-Bearishness: QTI differential is bearish 53.7%. This is again bearish, but the heart and soul of bullish seasonality will still happen.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 34.4% with continued bearish support.

Short-term Indicant: Breakdown contact density has relaxed in four of the last five days, highlighting an increased probability of a tiring bear.

Short-term Indicant: Relative breakdown position is relaxing.

Force Vectors: Moving north offering mild chance of a bullish spurt.

Vector Pressure: A minority of three in bullish domains, offering bearish support. Last Monday’s angry bull is sputtering, but still being supported, although mildly.

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

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. There is a high likelihood it will be replaced with bullish bias in the next few days. This will occur when Force Vectors interact with Vector Pressure.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market.

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

Volume: Robustness supported bear while the newly configuring lethargy will not be as supportive of the bullish spurt which could unfold in the next few days.

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

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

DJIA

10/13/08-Mon-Behavior when Force Vector interacts with Vector Pressure. That will be a few more days from now. Socialistic behavior is not a good reason to be excited about today’s aggression by the bull. 10/14/08-Tue-Will remain with bear signal until Force Vector crosses above X and the Index is a Red Bull. That will take several more days for that to occur. 10/15/08-Wed-Same as yesterday. Investors do not fight the trend. The trend is south. Interestingly, for the trader, Force Vectors continue moving north, but from a very bearish position. 10/16/08-Thu-Today’s Dow swing exceeded 700 points. Technically, the rising Force Vector is maturing and increasing bearish chances. Conversely, the Dow and other indices should contact yellow in the next few days. The problem with that is that yellow is falling more rapidly than the indices are rising. However, such an interaction should have a stabilizing effect before the next cycle unfolds. 10/17/08-Fri-Force Vectors are mature, opening the threat of returning bearish expressions. Buying at this point has some risks, but an equal opportunity for reward on a short-term basis.

DJ Composites

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

DJ Transports

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. Additionally, the transports again contacted breakdown. There is now no floor to the onslaught by the bear. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

DJ Utilities

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

NASDAQ

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. The NASDAQ is again contact breakdown. There is no floor to bearish onslaught. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

NASDAQ100

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as NASDAQ. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

S&P500

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. 10/16/08-Thu-Same as DJIA. Additionally, this Force Vector fell more deeply that the larger blue chips. It will most likely be the laziest in the event the heart and soul of bullish seasonality manifests this year. 10/17/08-Fri-Same as DJIA.

S&P100

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as Dow. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

S&P400

10/13/08-Mon-Same as above. 10/14/08-Tue-Same as above. 10-15-09-Wed-Same as NASDAQ. 10/16/08-Thu-Same as DJIA. 10/17/08-Fri-Same as DJIA.

S&P600

NYSE

10/13/08-Mon-Force Vectors did not budge on today’s bullish aggression. It should by tomorrow. Awaiting monitoring behavior of markets when Force Vectors interact with Vector Pressure. 10/14/08-Tue-Same as Dow. 10-15-09-Wed-Same as Dow. 10/16/08-Thu-Same as DJIA. This is similar to the S&P500. 10/17/08-Fri-Same as DJIA.

VIX

10/13/08-Mon-Force Vectors did not budge on today’s bullish aggression. It should by tomorrow. Awaiting monitoring behavior of markets when Force Vectors interact with Vector Pressure. 10/14/08-Tue-Force Vector finally moved south, offering a mild increase in probability for the overall stock market to bullishly bias. 10-15-09-Wed-Probability remains mild, but increasing, but still low. 10/17/08-Fri-Same as last Wednesday.

Overall Comment: October 13, 2008-Mon-Governmental cash infusion aroused the bull. It will take years for capitalists to make up for the robbery. Right now, we must wait for various interactions; such as Force Vector and Vector Pressure and Price with respect to bearish yellow curve. The bear simply retreated. The battle is not over, but the heart and soul of bullish seasonality has a chance to play out. 10/14/08-Tue-At the very least, a technical bullish rally should occur. Although fighting the bearish trend, those of you interested in trading will enjoy participation. 10-15-09-Wed-It is better to not fight the trend. The trend is south even though Force Vector behavior is offering some support for a technical rally. Be aware, though, the bearish trend is firmly in place. 10/16/09-Thu-Intraday trading ranges remain volatile, upsetting normalcy. Do not be surprised at this continuing volatility, both intraday and from day to day, until the indices cross above yellow. Once there volatility can remain, but stability will follow about two weeks after the initial crossing above bearish yellow. The feint of heart should remain in cash. 10/17/08-Fri-Creeping socialism has been displaced by an accelerated model, but vestiges of the heart and soul of bullish seasonality should play out this year.

The Short-term Indicant signaled bear on September 4, 2008. The Dow is down 20.9% and the NASDAQ is down 24.2% since then. Although bullish spurt potential is increasing on a Quick-term basis, the Short-term Indicant continues with a bearish configuration.

Be cautious of political rhetoric with the word, fairness. Fairness means the populace’s strength is equal to its weakest.

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

After several days of robust expressions supporting the bear, the NYSE and NASDAQ Indicant Volume Indicators shifted lethargically for a few days during the socialistic government meddling. The recently expiring robustness paralleled dynamic bearish behavior, fostering the bear’s directional intensity. This remains in obviation of bearish support on a longer cyclical basis. Keep in mind, recessionary outlooks will not incite a dynamic bull cycle, but a bull nonetheless.

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

There were no buy signals and no sell signals. There are 16-ETF’s with hold signals. They are down by an average of 1.6% since their buy signals 0.3-weeks ago. The SQI is avoiding 15-ETF’s at this time. They are down by an average of 28.0% since their sell signals an average of 10.9-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. There are 16-ETF’s with hold signals. They down an average of 1.6% since their buy signals an average of 0.3-weeks ago. There are 15-ETF’s with avoid signals. They are down by an average of 28.1% since their sell signals an average of 10.9-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. There are 16-ETF’s with hold signals. They are down 1.6% since their sell signals 0.3-weeks ago. The Quick-term Indicant is avoiding 15-ETF’s. They are down by an average of 29.2% since their sell signals an average of 8.5-weeks ago.

Current Strategy –October 13, 2008-Mon-Today’s bullish expression is typical following deep bearish expressions, such as last week. The various Indicant models signaled buy for several ETF’s. Tomorrow’s opening, if down, would be great. Still buy, but conservatively. If market is up, go ahead and buy. The heart and soul of bullish seasonality is here. It has a history of bullish expressions during the harshest of economic circumstances. October 14, 2008-Tue-Although yesterday’s buy signals are against the trend (bearish), those with buy signals should move back to yellow. There is a huge gap between price and yellow and thus worth the risk in buying for those with a penchant for trading. Keep in mind, 2009 should be bearish. October 15, 2008-Wed-Fighting the trend is not smart with rising socialism. The next buy signals will most likely not occur until prices move above bearish yellow. October 16, 2008 – Today’s 700 intraday bullish swing suggests a bullish spurt is near at the very minimum. That coupled with an exhausted bear, suggests buying again. The last three rounds of quick-term buy signals were un-principled in that they were generated below bearish yellow. This is due, in part, to the heart and soul of bullish seasonality. Although volatile expressions are expected, a bullish spurt could manifest into a nice bullish cycle of about ten to twelve weeks for those of you who are active traders.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-nine of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 24.8%. This remains bearish.

None of the 30-ETF’s are above their bullish red curves. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 28.9%. which is also non-bullish. The heart and soul of bullish seasonality is justification for some participation in the market and assuming associated risks for the traders.

The QTI differential is bearish by 53.7%. This is the ninety-second consecutive trading day of a bearish reading.

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

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

The average distance from breakout contact is 39.7%. Double digit variances from breakout contact for 199-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. There has been no contact in five of the last six trading days, lending support to decreasing bearishness. The heart and soul of bullish seasonality has been delayed, but still expected to occur.

The average distance between the price and breakdown is 5.3%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 49 of the last 79-trading days. This attribute recovered with a double digit reading last Monday and Tuesday, but has been a bearish single digit expression the past three days.

The breakout/breakdown differential is bearish by 34.4%. This attribute is supporting bearish ambition, but expected to wane in that support with the heart and soul of bullish seasonality. Unfortunately, socialism and related economic behavior may dampen enthusiasm for this seasonal phenomenon this year.

ETF Force Vector Configurations

None of the Force Vectors are in bullish domains. This is not a bullish majority and thus non-supportive of the bull. Although this condition favors a bullish bounce, it is supportive of the bearish trend.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close. There have been 19-put option buy signals and four call option buy signals in the past 22-trading days.

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

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

Quick-term and Short-term Indicant Summary

A solid bearish bias shift was born on June 11, 2008. It expired on August 1, 2008. The current bias is bearish and it originated on September 5, 2008. However, do not be surprised at a shift to bullish bias in the next few days that may last through Christmas. The aforementioned statement is now three weeks old. As stated last week, Force Vectors shifted back to the north last Friday. When that happens much can be learned with eventually interaction with Vector Pressure, which should be in a couple of weeks. Again, configurations are volatile, but deep bearish expressions are of limited probability right now.

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

The Indicant signaled sell for QID last Thursday. It is down 0.7% since then.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 37.6% since the Quick-term Indicant sell signal on July 24, 2008. This is a leading indicator to economic health. As long as it is moving south, the outlook for energy consumption is bearish and that means most other economic elements are bearish. Vector Pressure is deep inside bearish domains.

ETF#11-Gold and Precious Metals is down 5.8% since last Tuesday’s buy signal. Although commodities will most likely continue falling, this particular one may not participate.

ETF#14-Long Government is down since 0.9% the sell signal on September 30, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

After two consecutive weeks of solid bearish convergence, the market enjoyed last week’s mild bullish divergent behavior. That is solidly in support of the bear. Keep in mind, the heart and soul of bullish seasonality is about to begin.

Indicant Conclusion

The market has not yet found its lowest point. However, it should enjoy a bullish cycle that should begin immediately. Buy more of the Quick-term suggestions on weakness. Be prepared to sell before the next bear cycle which should occur next week.

Interest rates are falling, which is bullish. Oil is declining. Those two elements, alone, are typically enough to stimulate bullish activity. The problem is the economy, but the stock market will focus on economic conditions in 2009.

Force Vectors are now moving north off of their absolute minimums. Vector Pressure is suggesting oversold conditions, which is bullish.

Do not be surprised at a bullish cycle, starting in the next few days. However, wait for buy signals.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/19/08

October 12, 2008 Indicant Weekly Stock Market Report

Volume 10, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Phenomenon of Commonality

Italian economist, Vilfredo Pareto, discovered that 80% of wealth is owned by 20% of the population in the late 1800’s. That phenomenon continues. This is in compliance with the phenomenon of commonality. The phenomenon of commonality holds that the masses cannot be successful in wealth accumulation. This is true through the stock market. If one buys a stock at $1 and sells it at $100, wealth was accumulated for that person, but was unearned. The person buying the stock at $100 and selling it at $1 is among the 80% poorer group. More investors do the latter than the former.

All social groups are a mix of thruster groups, each with their own interest. For example, the NAACP is a thruster group. The KKK is another thruster group. Atheism is a thruster group. Christianity is another thruster group. Within each thruster group, there are sub-thruster groups. For example, the Episcopal Church has many thruster groups and that is causing that church to splinter off into smaller churches.

Thruster groups are always evolving and devolving. Politically, there are two broad thruster groups; liberals and conservatives. Within each of those two broad groups, there are several smaller thruster groups, such as religious conservatives, fiscal liberals, etc. All thruster groups are irrelevant to the cause of wealth creation. Only those involved in manufacturing, agriculture, or extraction create wealth. No other thruster group or economic sector does that. Financial institutions do not create wealth.

Economically, there are many thruster groups. The largest is the middle class. Last week’s report discussed the obviation of politician’s constant promising the middle class increased prosperity for one and only one reason. That is that group offers the largest number of votes. That group contributes the least to economic prosperity.

FDR supported unions because of their large numbers. Alfred P. Sloan fought the unions. Alfred P. Sloan and his executives offered only a few hundred votes, while the UAW offered a few hundred thousand votes. FDR would not have been re-elected by supporting Alfred P. Sloan and his executive teams. Any politician would support the UAW regardless of economic harm. That is tyranny by the majority and always results in the eventual failure of democracy. That is one reason why the U.S. tries to be a Republic, but most of the idiot pundits you hear on television do not even know this. They think the majority is always right and on the contrary, by virtue of the phenomena of commonality, the majority is quite often wrong.

There are two common themes in all thruster groups. They think the purpose of their thrust is the correct one and those in opposite thruster groups are wrong. In manufacturing, agriculture, or extraction, there are purposes of thruster. There are no arguments or TV pundits yip-yapping their opinions regarding the purpose of the thrust. There are only winners and losers. The winners produce with lower costs, higher quality, and outstanding customer service. The losers fall short in those categories. It is not endless jibber-jabber, but final.

The other common theme in thruster groups is their desire for increased wealth. Some thruster groups work honestly to accumulate it, while others take the dishonest route. Being lazy is a form of dishonesty. When the lazy approach the majority in a democracy, the next dictator takes over. Most of them are no good.

There are two broad methods toward accumulating wealth. Honest hard work and associated success is one way. Another way of accumulating wealth is through dishonest means, such as robbing banks or falsifying financial reports, like Enron, Bear Stearns, and an increasing number of such institutions, such as Fannie Mae and Freddie Mac. Politicians always lie and there should be no surprise at that.

Wealth accumulation cannot be accomplished by displacing the wealth of another person or group of people unless the only source of occupation is manufacturing, agriculture, or extraction. For example, wining a lottery enhanced the wealth of one person. To do that, one has to displace the wealth of many. Lotteries are really skewed in favor of less than 1% wealth accumulators winning the lottery versus the destruction of wealth by over 99% of the participants. The stock market and capitalism is much friendlier with the 80-20-rule.

Communists overcame the problem of Pareto’s Law by developing a social structure where there were no winners or losers. The chain rule applied; that is its strength is as strong as its weakest link. Since membership in that social structure contained lazy people, all participants under communist rule devolved to that lowest level; lazy. To eliminate winners, all had to become losers. The disdain for 1% to 20% winners among the 80% to 99% losers can rise to the point where the populace propels to reverse whatever course is underway. The political organization, Acorn, is among those that envy the 20% richer group. Acorn is a thruster group within the political arena. They do not add economic wealth. They assist the dumb and lazy to participate. If successful, democracy will eventually fell.

The West created a system whereby the more successful 20% were economically elevated, the 80% poorer group’s wealth also increased at an advancing rate of improvement. For example, Bill Gates accumulated billions, but in doing so, he directly and indirectly created thousands of millionaires. No government employee or politician can make that claim. However, the wisdom of Thomas Jefferson and John Adams set up a system that allowed the likes of Bill Gates, Henry Ford, etc. to accumulate profound wealth. In doing so, a significant portion of that wealth sprinkled into the 80% group. That elevated the overall quality of life for millions upon millions in the 80% group. Since Thomas Jefferson and John Adams, there have been zero good politicians. The only difference is their lying has increased exponentially.

The ruling class in a communist society is less than 1% of the population. That ruling class lives a good life. They do not have to stand in long lines for bread or vodka. The other 99% do. The reason for this is simple; bureaucrats are in charge of industry. Most people cannot project that abstract until it happens. After a few generations of living in poverty, the communist method will also eventually fail. The cycle from capitalism to communism and back to capitalism may be a natural requirement for the human species. You are witnessing the downward cycle from capitalism to communism right now in the West and the opposite cycle in the East.

Bureaucrats in any organization, from government to corporate America cannot perform at a high level. Bureaucrats are too far removed from the process that is providing the goods or services. That is an organizational problem; not a problem with people.

The U.S. government is devolving to that of a communistic organization. There are bureaucrats making decisions. It is impossible for their decisions to be good decisions. There are several reasons for this; their decisions have nothing to do with their money and by default, their decisions will not be optimized for maximum potential regarding wealth creation. There is absolutely minimal consideration for risks, since it is not their money. Your decisions about your own money is much better than a bureaucrats decision with your money. You will think more about its potential use and associated risks than someone who does not know you but has their hands on your money.

Another reason for bureaucratic incompetence is a study of the nature of people. What makes a person become a bureaucrat? They lack real ambition. They follow the path of least resistance. They resist the hard working effort of performing at a high level in marketing, finance, and operations. That is very hard, as most of us are skilled in only one of those three broad areas of management. It is much easier to write a resume and ask someone else to employ them. With that, a bureaucrat’s view of reality is void of the constraints that impose risks in their decisions. They learn little following the path of least resistance. Without knowledge of causative factors of success and failure, their decisions are made without considering all the factors. That always leads to a pitiful conclusion.

Politicians fall into that category; following the path of least resistance. They have one good skill. Their ability to vocalize their views and appealing to people is their strongest skill. The 20% rich group, for the most part, ignore them. The ultra rich tend to gravitate to socialism as they get older. Preachers and courtroom lawyers have a similar skill of being vocally appealing. Being a good talker does not mean competence. On the contrary, it quite often is the opposite of competence. Problems are not solved with vocal chest pounding. All problems are solved through the quietness of scientific study. It is very serene and quiet.

Eighty percent of the world’s population does not engage in scientific thinking. More drink beer in sports bars than work late into the evening figuring out solutions to problems. That is why 80% of the folks do not have wealth. Politicians appeal to that group. They are led to believe they can have the fun life with minimal effort. They do not realize that the majority of the wealthy who earned their wealth are hard at work, while they are slopping in their beer. Many in the 80% poorer group figure that some unknown phenomena hand the 20% richer group all their money. Since the 80% poorer group do not earn their state in life, they figure the 20% richer group must be at some unfair advantage. Politicians play this angle more often than not. And it works.

When a critical amount of wealth has been accumulated, some thruster groups are left behind. That is because they do not have the skills required for participating in wealth accumulation. As the population increases in those laggard thruster groups, envy of those participating in the wealthier group increases. As the number of people in those lagging thruster groups increases, politicians listen and lay in a strategy to get their votes.

All political power structures are constantly threatened by thruster groups. Regardless of the cause of economic hardship or success, thruster groups become more vocal. A thruster group can grow in numbers and displace those who are in power. Those in power try to prevent that, for their only cause in life is to have power. Politicians have nothing to do with wealth creation. They appease growing thruster groups and eventually adopt their views. Therein lies the problem of democracies; that is tyranny by the majority. When the majority becomes ignorant, democracy collapses.

Much of the stock market’s bullish cycle since 2003 was based on phony wealth accumulation. This was described in the September 28, 2008 Weekly Stock Market Report. Government bureaucrats, corporate bureaucrats, and politicians falsified financial information that led to a perception by the investing public and international investors that all was okay. The stock market always eventually detects the fake. When it does, it punishes. It not only adjusts to where it equalizes to real wealth creation, it discounts additional punishment for the sin of deceit. That is due to an increasing lack of trust in the stock market. That distrusts leads to decreasing demand for capital stock and that leads to decreased capitalism. Some pundits in the press blame last week’s stock market behavior on manipulation. The stock market is the only truth. Opining jibber-jabber is just noise.

This phenomenon is creating new thruster groups. Millions have lost money in the stock market. That is their own fault, as the buy and hold strategy is one that requires luck. Luck works both ways. Those who enjoyed the good luck cycle of a bullish stock market are now burdened by the bad luck cycle of bearishness that always follows. However, 80% will not scientifically understand the reasons for their failure. That is why they are in the 80% group and not the 20% wealthy group. At any rate, this thruster group is a new threat to political leadership, who are saying, “we are not going to raise taxes the middle class. We will raise taxes on corporations.” Lowering taxes on the middle class helps participants in the low end thruster groups, but raising taxes on organizations compromises their 401K’s. The corporate losses are not limited to just finance. The loss can result in an overall deterioration in the quality of life for the 80% group. Keep in mind the quality of life on the 80% poorer group is directly proportionately to the success of the 20% rich group and their employers. If that loss is sudden, the 911 tragedy will look like a picnic in the park. Political leaders may not adjust their behavior until a few bombs by local terrorists unfold. That is what happens with pains of hunger or outright hatred. Hatred corresponds to economic hardship. Capitalists are the only ones who provide economic well being and the joy of life. Only those capitalists engaged in manufacturing, agriculture, or extraction add to wealth creation.

Wealth is created in only three ways; extraction, agriculture, and manufacturing. Not one person in Washington DC, any state government, any county government, any city government, church, community groups, etc. has ever created wealth since the beginning of time. However, those “civic” groups speak the most and get most of the attention. The press seldom discusses how an engineer figured out a way to get three more miles out of a gallon of gasoline. Attention is given to those who do not create wealth. That is because non-wealth creators are always talking. The wealth creator is too busy to do that sort of stuff. TV talk by pundits and politicians confuse 80% of the population. They will always be confined to the 80% group because of their ignorance. They actually believe in those who are doing the talking. Therein lies the problem to their demise.

During the day, many people attend political rallies. Some of us see them on the nightly news. Why aren’t those people at work? Jumping up and down at the words of a politician who has never participated in wealth creation is upside behavior to what propels wealth.

A new thruster group may be forming. That group may argue that the stock market should never go down. Of course, that will not work, but it could be entertained by any politician who would make the claim of having an inordinate ability to make sure the stock market would always go up. Many in the 80% group would believe such a politician. And of course, they would forever remain in the 80% group. If a politician made the stock market always go up, he’d fire all government bureaucrats.

Right now, some in the 80% group have golf carts in their garages. If economic conditions sour to the point, where the golf cart is no longer used and Saturday mornings are spent standing in the soup line, rest assured those in political power will be threatened. The population in the 1930’s was not very smart as they continued to re-elect FDR who furthered the cause of their demise. It will be interesting to see if today’s population is any smarter. If Congressional incumbents are re-elected, rest assured we have many years of bearish economic and stock market behavior ahead of us. That will lead to a decline in the quality of life for all.

Those incumbents took money from a huge portion of the population and gave it to the poor. If they are rewarded for their thieving and deceitful methods with their re-election, rest assured the population is just as stupid as the majority was in the 1930’s. If this cycle of deterioration continues, the only solution will be war; either civil or international.

If the incumbents are booted from office, expect some bullishness. However, that will not occur until 2010. The script has already been written for the immediate horizon. Billions of dollars of phoniness will not recovered quickly.

There is only one economic element that adds to the quality of life. That is growth in productivity. Productivity growth must be directed in only three areas; extraction, manufacturing, or agriculture for the quality of life to improve for the masses. As soon as those idiots who jump up and down at political rallies go back to work, there is a chance for productivity to help fix the problems created by the scum who created the problem; politicians, bureaucrats, and dilettante management at various banks and financial institutions. If the masses lay around with their hands out, then the quality of life for all people around the world will deteriorate. That will lead to war, which is always good for the economy. History may indeed repeat. Worldwide depressions will give rise to a more evil political leadership than what we have endured since the last Great Depression. From that, wars always follow. Hunger is painful and that leads more quickly to hatred than anything else.

One more point; those who can manufacture and feed have always ruled over those who could not. In this case, the winner of war with be that country who can manufacture and feed the most. If congressional incumbents are re-elected, map out plans that foster your protection for the nastiness of the most severe political and economic environment that you can imagine. Those thieves will continue robbing from the productive and giving to the non-productive.

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

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

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

The Mid-term Indicant generated no buy signals and forty-nine sell signals. There have been 472-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired five weeks ago and the bear is again enjoying “open season.” However, there is an increasing likelihood the heart and soul of bullish seasonality may take effect immediately. Technically, it will most likely be bullish spurt but this one could enjoy some sustainability through Christmas.

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 50 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 137.0%. That annualizes to 60.5%. The Mid-term Indicant has been signaling hold for these 50-stocks and funds for an average of 117.7-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 246-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 23.8% since the Mid-term Indicant signaled sell an average of 26.3-weeks ago.

One year ago, on Oct 12, 2007, the Mid-term Indicant was holding 295-stocks and funds out of the 345 tracked for an average of 110.3-weeks. They were up by an average of 142.8% (annualized at 67.3%). There were 41-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 14.6% since their respective sell signals an average of 32.1-weeks earlier.

The Mid-term Indicant was signaling hold for 311-stocks and funds of the 345-tracked two years ago on Oct 13, 2006. They were up by an average of 106.2% (annualized at 71.0%) since their respective buy signals an average of 77.7-weeks earlier. The Mid-term Indicant was avoiding 32-stocks and funds at that time. They were down an average of 16.1% since their respective sell signals an average of 24.0-weeks earlier.

There were 218-stocks and funds with hold signals on Oct 14, 2005 since their buy signals an average of 97.9-weeks earlier. They were up by an average of 103.2% (annualized at 54.8%). There were 97-avoided stocks and funds at that time. They were down by an average of 12.0% from their respective sell signals an average of 24.0-weeks earlier.

On Oct 8, 2004, the Mid-term Indicant was signaling hold for 240-stocks and funds out of 296-tracked. They were up by an average of 64.3% (annualized at 65.3%) since their buy signals an average of 51.2-weeks earlier. The Mid-term Indicant was avoiding 50-stocks and funds at that time. They were down by an average of 32.6% since their sell signals an average of 31.0-weeks earlier.

Five years ago, on Oct 11, 2003, there were 263-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 52.9% (annualized at 98.7%) since their respective buy signals an average of 27.9-weeks earlier. There were 24-avoided stocks and funds then. They were down an average of 22.5% since their respective sell signals an average of 31.0-weeks earlier.

On Oct 12, 2002, there were 52-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 25.2%, annualizing at 52.8%. There were 212-avoided stocks and funds then. They were down by an average of 25.6% since their sell signals an average of 11.3-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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 16.0% since its secular low on October 9, 2002. The NASDAQ is up 48.1% and the S&P500 is up 15.8% since then. The small cap index, S&P600, is up 65.3%. None of the major indices are bullishly biased.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding. All Mid-term, Short-term, and Quick-term bullish attributes expired several weeks ago. However, there is an increasing probability the heart and soul of bullish seasonality will configure this year even in the face of sour economic conditions. Although the aforementioned statement remains true, this seasonal phenomenon will begin at a much lower baseline.

The Dow is down 40.3% since its last closing peak on Oct 9, 2007. The NASDAQ is down 42.3% since its last peak on Oct 31, 2007. The S&P600 is down 36.6% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 67.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 41.1% since its similar secular peak on March 23, 2000. The Dow is down by 27.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 36.3% so far this year. The NASDAQ is down 37.8% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

However, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality. Deep bearish seasonality has one week remaining. Do not be surprised at the heart and soul of bullish seasonality unfolding in a week or two.

All major indices contacted their breakdown lines two Friday’s ago. Unfortunately, that continued into the next week with record setting bearish expressions. That is a common condition for bullish cycles to originate.

The NASDAQ year-to-date performance was bearish by 34.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start within a few days from now.

The NASDAQ was down by 40.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 43.4%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 4.2%. It was down by 4.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 5.0% on this weekend and finished that year up by 9.5%. It was up by 16.4% at this time last year and finished 2007 up by 9.8%.

Do not be surprised at a Quick-term and Short-term bullish cycle in the next few days.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. As of October 3, 2008 most of those recent buys have since received sell signals. As of last week, many of the 2002 and early 2003 buys received sell signals. Profits were made on most of them and some of the by triple digits. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated the past two weeks, interest rates are all over the map; somewhat nonsensical. CD’s are above 5% while the Fed Rate is less than 1%. Bankrupt banks offering 5% on CD’s is an apparent attempt to get cash infusions. Based on demonstrated incompetence at the banks and financial institutions, make certain such investments do not exceed $100,000. Congress elevated the FDIC limits to $250,000. If they (Congress) keep it up, it will not matter as the value of the greenback will contain the same value as the colored money in the Monopoly Game that is resting in your closet.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal. The Mid-term Indicant signaled sell on October 3, 2008. It is down 16.7% since that sell signal.

Fidelity Gold, Fund #28 is down 26.3% since the Midterm Indicant signaled sell on August 1, 2008. It is down 35.6% since that sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal. The Mid-term Indicant signaled sell on October 3, 2008. It is down 28.2% since that sell signal.

Vanguard Energy #18, VGENX, was up 141.2% from since the Mid-term Indicant buy signal April 5, 2003. It received a sell signal on October 3, 2008. It is down 24.6% since that sell signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. It is down 30.0% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003. It received a sell signal on October 3, 2008. It is down 27.9% since that sell signal.

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

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 17.2% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 21 of the past 37-weeks and in 13 of the past 17-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It is up 7.6% since then. It gained 81.4% from its August 3, 2005 buy signal until the recent sell signal. Its annualized gain amounted to 26.0%. This fund has been bullish in 38 of the past 58-weeks. It has been bullish in 19 of the last 34-weeks. It has been bearish in seven of the past 13-weeks. The Quick-term and Short-term Indicant may signal buy once its overheated configurations cool off.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are down an average of 26.5%. Do not be surprised at bull signals in the next week or two, as the heart and soul of bullish seasonality begins to unfold. Last week’s drop was huge and within the confines of deep bearish seasonality, which should concluded within a week or two. You will notice deep bearish seasonality is the white line segment on the charts.

Click this sentence to view a summary of their performance.

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

That beats buy and hold performance of $1,285,743 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $88,801 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $57,195 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2724.8%, 101.7%, and 288.8%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for this fund on September 12, 2008. It is up 77.1% since that buy signal, annualizing at 991.7%. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

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 192.0% (annualized at 11.3%) since the Long-term Indicant signaled bull 884-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty. No bullish support; the lone bull is contrarian.

Quick-term Yellow Bears/Threats: Twenty-eight of thirty. Supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 58.1%. Bull has no influence, but configuring to voice its presence in the face of a major bear market. This bear is setting performance levels approaching that of 1929-1932. However, even then bullish spurts configured.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 39.2% with continued bearish support. Do not be surprised at a shift to bullishness, but it will be awhile before this attribute confirms any bullish support.

Short-term Indicant: Breakdown contact density is high in support of the bear, but this should incite the bull to make a statement. Do not be surprised at a bullish spurt in the next few days.

Short-term Indicant: Relative breakdown position is solidly in support of the bear with single digit expressions to breakdown.

Force Vectors: Their equilibrium was destroyed by the bear last Thursday, Friday, Monday, Tuesday, Wednesday, and Thursday. There was a mild disruption to this destructiveness on Friday. Many fell to absolute minimums and even below that the past four days. Do not be surprised at volatile expressions over the next few days. Socialism, communism, management stupidity, dilettantes overseeing other dilettantes, paper pushing bureaucrats, non-value adding tribalism barking from Washington DC, etc. will not produce the smoothness of capitalistic cycles. Expect wild variations. This will be good for those who like to trade options, but real investors will be turned off. That, in the long-run, is bearish even if a bullish spurt unfolds.

Vector Pressure: A minority of three in bullish domains, offering bearish support, but also angering the bull.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation.

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. There is a high likelihood it will be replaced with bullish bias in the next few days.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market.

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

Volume: Robustness supported bear while the newly configuring lethargy will not be as supportive of the bullish spurt which could unfold in the next few days.

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

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

DJIA

Same as 10/01/08-Wed - Positions remain bearish. Force Vector is struggling to move out of bearish domains. Vector Pressure remains in bearish domains, but resisting a drop into deep bearish domains. Overall configuration is bearish. 10/02/08-Wed-Force Vector still remains above last low highlighting bullish resistance to the bear’s dominance. 10/03/08-Fri-Dow setting on breakdown. Force Vectors supporting bear in both position and direction. Vector Pressure continues moving bearishly. 10/6/08-Mon – Vector Pressure cycling bearishly, which is germane to bias. 10/7/08-Tue-There is no technical floor to interrupt bear cycle. 10/08/08-Wed-Today’s bullish/bear cyclical arguments suggests the bear is tiring. However, until bullish attributes manifest, the bear rules. 10/9/08-Thu-Although not formally forecasted, the Dow appears headed to 5,000 sometimes in 2009 or 2010. 10/10/08-Fri-Same as yesterday.

DJ Composites

10/01/08-Wed-Vector Pressure crossed into deep bearish domains. This should incentivize the bull to proceed with a spurt. But rest assured this is a bear market in spite of the impending bullish spurt. 10/02/08-Thu-Force Vector is nearing an absolute minimum. This is near a bottom within the confines of short cycles. 10/03/08-Fri Force Vectors continued moving bearishly in the face of an absolute bottom yesterday. Vector Pressure deep in bearish domains. This bodes well for bear’s longevity. 10/6/08-Mon – Notice Force Vector fell into uncharted deep, deep, bearish domains. Vector Pressure cycling south into deep bearish domains. Bear remains in tact. 10/7/08-Tue-Force Vectors shattered prior low records this century. 10/8/08-Shattering records continues. 10/9/08-Thu- Vector Pressure in bearish domains and there will be no bull signal until Force Vectors crosses above Vector Pressure. That is nowhere near. 10/10/08-Fri-Same as yesterday.

DJ Transports

10/01/08-Wed- Force Vectors shifted to the north. This suggests an impending interests in a bullish spurt. 10/02/08-Thu-Index approaching breakdown line, which is bearish. Force Vector is near an absolute bottom, suggesting the bottom is near in terms of timing, but not necessarily magnitude. 10/03/08-Fri-All attributes supporting bear. Declining oil prices not helping here. Transports are now on breakdown line. There is no floor to stop the fall. 10/6/08-Mon – Nothing new. Vector Pressure cycling south, favoring bear’s longevity. 10/7/08-Tue-Same as yesterday, in addition to Force Vector achieving new this century lows. 10/08/08-Wed-New bearish attribute records continue; now on a daily basis. This bear has the potential of dwarfing that of 1929-1932. 10/9/08-Thu-Transports are not responsive to falling oil prices; the market is suggesting such sour economic conditions that there will be nothing to transport. 10/10/08-Fri-Same as yesterday.

DJ Utilities

As stated the past few days, a solid bear remains dominant. This index is configuring for additional bearish behavior on a mid-term basis. This index, which was the strongest from 2002-2007 is now the weakest and is configuring for strong and sustainable bearish behavior. It will be interesting to see if this index is a participant in bullish spurt behavior. If not, an early interpretation would be a severe and deep recession. 10/6/08-Mon – Ditto! 10/7/08-Tue-Force Vector achieved low a few days ago, but not a record for this century. This foretells a deep, deep recession. 10/08/08-Wed-The bull is fully defeated. The bull is nearing extinction. Political talk is assisting the bear, as politicians are capable of only aggravating the markets and thus favorable to the bear. 10/9/08-Thu-This index continues suggesting a high degree of severity with respect to economic activity. 10/10/08-Fri-Same as yesterday.

NASDAQ

It is configuring with non-bearish bias on a near-term basis. Keep in mind, any immediate bullish spurt should be followed by more bearish behavior which should occur in 2009. Force Vector is at bottom. 10/02/08-Thu-The bull is severely wounded, but it should be announcing bullish spurt behavior within days.10/03/08-Fri-This index in solid contact with breakdown. There is no floor to stop the bear’s influence. Force Vector are plummeting to lows not seen since 2002. 10/6/08-Mon – Ditto! 10/7/08-Tue-NASDAQ fell off charts bottom. All attributes continue supporting bear. 10/08/08-Wed-Same as yesterday. 10/9/08-Thu-Same as yesterday. 10/10/08-Fri-Same as yesterday.

NASDAQ100

September 3, 2008-Wednesday’s collapse of the bullish red curve proved ominous. Force Vector fell into deep bearish domains, offering bearish encouragement. The NASDAQ100 did not wait until 2009 to fall below the reverse tangential line. That does not mean that 2009 will not be bearish. It just means the last configuration of bearish obviation has now been applied and there are plenty of opportunities to form new ones. In other words, this bear market is configuring with support for bearish sustainability in spite of recent governmental intervention. Vector Pressure remains inside deep bearish domains, which bodes well for the bear. Pauses and fluttering are typical in this position, but the cyclical bear remains in tact. 10/02/08-Thu-Force Vector is near its lowest position since January 2007. This is signaling a bottom on a short-term basis, but the bear will remain dominant even with the impending bullish spurt. 10/03/08-Fri-Force Vectors are near absolute bottom; a bullish spurt should start within the next few days. 10/6/08-Mon – Although difficult to see, Force Vector shifted north today. This does not mean a new bullish cycle is about to start, but it does suggest non-bearish influences may be configuring. 10/7/08-Tue-There will be “no” bullish consideration until Force Vectors contact Vector Pressure. 10/08/08-Wed-Yesterday’s statement erroneously omitted the word, no. It is corrected with quote marks “” to make certain the point is understood. 10/9/08-Thu-Force Vector is so deep that any bullish expressions will be severely dampened in magnitude. This bearish configuration will impose long-term damages to bullish potential. 10/10/08-Fri-Same as yesterday.

S&P500

There is no change from Friday, September 5, 2008. The baby bull was incapable of fending off declining Vector Pressure. This remains configured in favor of the bear. Vector Pressure is nearly inside deep bearish domains, fostering a significant chance of near-term bullishness. However, that is a trader’s configuration. The long-term investor, who has already sold should continue stock market avoidance. This bear is nowhere near expiration. 10/6/08-Mon – Vector Pressure is a focal point. Do not fight its trend. Right now that trend is south (bearish). 10/7/08-Tue-As stated yesterday, the trend is south and severely so. 10/08/08-Wed-Nothing new here; bear remains dominant. 10/9/08-Thu-Vector Pressure is deep inside bearish domains and will remain there for a long period of time. 10/10/08-Fri-Same as yesterday.

S&P100

There is no change from September 5, 2008. September 4, 2008’s disfigurement of the bull, like the other indices suffering from bearish onslaught, suggests sustainable bearish behavior. Upon completion of the next bullish cycle, which most likely would be a mere quick-term spurt, additional bearishness is expected due to the construction of reverse tangential line. 10/6/08-Mon – Same as S&P500; do not fight the trend. 10/7/08-Tue-Same as S&P500. 10/08/08-Wed-The large caps stocks will face huge losses with a significant drop in revenue. 10/9/08-Thu-Same as S&P500. 10/10/08-Fri-Same as yesterday.

S&P400

There is no change from September 5, 2008. The bull was too weak to respond. This suggests increasing bearish influences. Vector Pressure remains inside bearish domains and nearing deep bearish domains. It will be interesting to see how this index, which is one of the most bearish resistant ones, will respond. Unfortunately, it also is enduring reverse tangential bearish support. 10/01/08-Wed - However, its bearish Force Vector is maturing. That facilitates near-term bullishness, but keep in mind the bear market will remain in force. 10/03/08-Fri-The bear continues dominance. Its Force Vector is at absolute low point. There should be a bullish spurt in the next few days. 10/6/08-Mon – This index is abnormally bearish. This index, along with the S&P600 are typically most resistant to bearish ambition. Fundamentally, the market sees severe recessionary economic behavior right now. 10/7/08-Tue-The drop here is deeper than those in 2000-2002. 10/08/08-Wed-The Midcaps are uncharacteristically bearish in terms of magnitude. 10/9/08-Thu-Same as S&P500 comments. 10/10/08-Fri-Same as yesterday.

S&P600

This index, along with several others, contacted breakdown lines today and yesterday. This is solid bearishness. This index is confused more so than the others by socialistic causes. However, like several other indices most are on their lows, simultaneously, which is an attribute common to bullish spurt starting points. 10/6/08-Mon – Focus on Vector Pressure. As long as it cycles south, cash should be guarded. 10/7/08-Tue-Same as S&P400. 10/08/08-Wed-The Smallcaps are off the charts. 10/9/08-Thu-Force Vectors are at record low levels. Must wait for Force Vectors to contact Vector Pressure. That will be awhile. 10/10/08-Fri-Same as yesterday.

NYSE

10/3/07-Fri-This index continues favoring a bullish spurt, albeit from a deeply bearish configuration. 10/6/08-Mon-This index is no longer favoring bullish spurt behavior. It is down 34.5% since last peak on November 7, 2007. Even with a bullish spurt, it will be lower than current values in 2009. 10/7/08-Tue-Now down 38% from previous peak. 10/08/08-Wed-This index is down 39% from previous peak. 10/9/08-Thu-This index now down 44% from prior peak. 10/10/08-Fri-Same as yesterday.

VIX

This index violated recent configurations. It is blowing north hard and in full support of a bearish stock market. It needs to cool off and that supports bullish stock market potential. 10/6/08-Mon-Although the heart and soul of bullish seasonality is nearing, the depth of this bear’s trip cascades down the charts with huge steps. 10/7/08-Tue-Force Vector turned south. Horrendous bear cycle should be nearing an end, but the tenacity of this bear is profound. 10/9/08-Thu-Nothing new. Normalcy will not return for several months and possibly not until 2010. 10/10/08-Fri-Same as yesterday.

Overall Comment October 3, 2008-Fri-As stated the past several days, nearly all attributes continue supporting the bear. However, one major non-bearish attribute was achieved last Friday. All major indices on contacting their breakdown lines simultaneously. That suggests a technical position for a bullish rally. It will most likely be a eight to 12-week bullish spurt that will be followed by more dynamic bearish expressions well into 2009. Those bearish expressions will be deep. 10/6/08-Mon – Unfortunately, today’s bearish expression demonstrated no respect for this technical observation last Friday. However, it remains true today. Keep your eye on Vector Pressure. It is better to not fight the short-term trends and cycles and right now, the bear remains in full force. 10/7/08-Tue-Any rebounds in the immediate future will not be substantive until Force Vectors cross above Vector Pressure and even then any bullish behavior would be lethargic. Although a bullish bounce could have some punch, sustainability is out of the question. 10/08/08-Wed-The indices continue setting simultaneous lows, which is a requirement before bullish spurt behavior can develop. So the desired attribute remains in place, but its uninterrupted continuum is a bit nauseating. Patience and maintaining cash is of paramount importance. Even the Quick-term Indicant will not signal buy again until enough attributes suggest the bear will yawn for hibernation and actually hibernate. 10/9/08-Thu-Cash is king. Not sure if cash in the bank is all that safe. Under the mattress considerations may not be out of line. Atlas Shrugged is taking hold but without the heroics of true capitalists. We have a tremendous majority of dilettantes in government and large corporations. It was only a matter of time before stupidity brought the markets down. It always has and always will. 10/10/08-Fri-Same as yesterday.

The Short-term Indicant signaled bear on September 4, 2008. The Dow is down 24.5% and the NASDAQ is down 27.0% since then. Although bullish spurt potential is increasing on a Quick-term basis, the Short-term Indicant continues with a bearish configuration.

Be cautious of political rhetoric with the word, fairness. Fairness means the populace’s strength is equal to its weakest.

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

After several days of robust expressions supporting the bear, the NYSE and NASDAQ Indicant Volume Indicators shifted lethargically for a few days during the socialistic government meddling. The recently expiring robustness paralleled dynamic bearish behavior, fostering the bear’s directional intensity. This remains obviation of bearish support on a longer cyclical basis. Unfortunately, for those desiring bullish behavior, the Indicant Volume Indicators are again moving robustly in conjunction with continuing bearish behavior. That is bearish and extremely so.

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

There were no buy signals and no sell signals. The SQI is signaling hold for only one of the 31-ETF’s. It is up 7.8% since its buy signal 0.4-week ago and annualizing at 937.9%. The SQI is avoiding 30-ETF’s at this time. They are down by an average of 20.6% since their sell signals an average of 5.4-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. The Short-term Indicant is signaling hold for one ETF. It is up 7.8% since its buy signal 0.4-week ago and annualizing at 937.9%. There are 30-ETF’s with avoid signals. They are down by an average of 20.6% since their sell signals an average of 5.4-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. The Quick-term Indicant is signaling hold for one of the 31-ETF’s. It is up 7.8% since its buy signal 0.4-week ago, annualizing at 937.9%. The Quick-term Indicant is avoiding 30-ETF’s. They are down by an average of 21.1% since their sell signals an average of 4.4-weeks ago.

Current Strategy –October 6, 2008-Mon-Same as last week. Reverse tangential lines are suggesting continued bearishness long after the nonsensical behavior by nonsensical politicians who are proving to be incapable of solving the problem they created. Cash is king right now. Deflation will become the new threat. October 7, 2008-Tue-Same as yesterday. October 8, 2008 – Nothing different. Cash in king. Gold is questionable, but looking at closely. October 9, 2008-Stick to the cash is king right now. QID will be quick to deteriorate when Force Vectors turn to the north. Set tight stop loss on QID; if it sells and then zooms north, do not pout. Cash is better for the time being. October 10, 2008-One more time; cash is king.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-eight of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 27.2%. This remains bearish.

One of the 30-ETF’s is above its bullish red curve. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 30.9%. which is also non-bullish. One would not err in staying in cash. The lone red bull is non-contrarian.

The QTI differential is bearish by 58.1%. This is the eighty-six consecutive trading day of a bearish reading.

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

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

The average distance from breakout contact is 41.4%. Double digit variances from breakout contact for 195-consecutive trading-days has been non-bullish.

Eighteen of the thirty ETF’s are contacting their breakdown lines. Contact in 42-of the last 79-trading days supported bearishness. This was losing bearish influence a few weeks ago during the last bullish spurt, but now contact density is no longer relaxing. Contact in 26 of the last 42-trading days and in 16 of the past 24-days is incentive for the bear to continue dominance. Although a seasonal bullish spurt remains highly likely, it will occur so deep inside bearish domains, the various Indicant models may choose to not participate since reverse tangential lines are predicting more bearish behavior into 2009. However, the Quick-term Indicant alone may participate.

The average distance between the price and breakdown is a mere 2.2%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 47 of the last 74-trading days. Double digits provide non-bearish relief. After the phony bullish spurt induced with governmental meddling, it should be noted this is again a single digit expression and thus is supportive of the bear. Simply wait for this to return to a double digit expression.

The breakout/breakdown differential is bearish by 39.2%. This attribute is supporting bearish ambition. You will notice this is the first uptick is several days, though, but still deeply bearish.

ETF Force Vector Configurations

Two Force Vectors are in bullish domains. This is not a bullish majority and thus non-supportive of the bull. A few days ago, they were precariously positioned to energize the bear, but a hitch and post configuration was possible, supporting bullish spurt potential. As you can tell from the past eight days, the bear was indeed energized.

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.

Three of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Do not be surprised, though, at decreasing bearish support in the next few weeks.

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.

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008. It expired on August 1, 2008. The current bias is bearish and it originated on September 5, 2008. However, do not be surprised at a shift to bullish bias in the next few days that may last through Christmas. The aforementioned statement has now two weeks old. Force Vectors should shift back to the north next week. When that happens much can be learned when eventually interact with Vector Pressure, which should be in a couple of weeks.

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

The Indicant signaled buy for QID last Tuesday. It is up 7.8% since then. Maintain your stop loss really tight; one or two percent. Do not be surprised at a sell signal very shortly for this ETF.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 41.0% since the Quick-term Indicant sell signal on July 24, 2008. This is a leading indicator to economic health. As long as it is moving south, the outlook for energy consumption is bearish and that means most other economic elements are bearish.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is up 3.4% since that sell signal. It would be a high risk hold as long commodity prices are falling. Watch Vector Pressure. If it moves south, then expect continuing bearishness for this ETF, which did not enjoy bullish movement with a flight to safety. This crisis may result in gold finding its true real economic value; as opposed to one that is stuffed with emotion.

ETF#14-Long Government is up 1.3% since the sell signal on September 30, 2008. This fund has not moved inversely to market the past few days, contrary to its tradition. This suggests concerns previously mentioned regarding its safety.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Solid bearish convergence occurred the past two weeks. That is solidly in support of the bear. Keep in mind, the heart and soul of bullish seasonality is about to begin.

Indicant Conclusion

Congress is out of session. As stated last week, that is bullish. However, last week endured the largest one week bearish expression in the history of the stock market. That may be because of increasing popularity in the Congressional Index. All major indices continue resting on their breakdown lines. That is bullish. Commodity prices are falling. That is bullish, pending CPI data. If the CPI data indicates deflation, the Dow could be looking at 5,000 before 2009 concludes.

Interest rates are falling, which is bullish. The problem is the economy, but the stock market will focus on economic conditions in 2009.

Force Vectors are at absolute minimums, which require a technical turnaround. Vector Pressure is suggesting oversold conditions, which is bullish.

Do not be surprised at a bullish cycle, starting in the next few days. However, wait for buy signals.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/12/08

October 5, 2008 Indicant Weekly Stock Market Report

This Week’s Report

The Noose Is Tightening around the Politician's Neck

It took over a hundred years to create the middle class. Once the middle class was developed politicians learned they provided the largest block of votes. You will notice politicians use the term, middle class, in their speeches. Their purpose is to solicit the highest number of votes.

Politicians do not care about middle class. They, for the most part, escaped the middle class or were born with a silver spoon in their pablum. Politicians talk to the middle class for one and only one purpose; to get their votes. By getting their votes, politicians further the cause of the personal purpose; that is to further separate themselves from the middle class.

During the stock market crash of 1987, less than 30% of the U.S. population owned stocks. Stock ownership was limited to the upper crust of society. The roaring bull of the 1990’s and increasing brokerage competition fostered an increasing number of people to participate in the stock market. Now, over half of the U.S. population owns stocks. Many of them are in the middle class.

For many decades, politicians campaigned on taxing corporations more and the middle class less. There are thousands of corporations and millions in the middle class. Since the middle class offers more votes, of course politicians talk it up to that group.

Most politicians do not understand how profits are accumulated and where they go. Corporations with high cash flow use cash for capital expansions furthering corporate growth or dividend payments to shareholders.

Here’s a new problem for politicians. Increasing taxes on corporations will deflate earnings, depress corporate growth, and reduce the size of the dividend checks to shareholders. That has always happened. Increasing taxes on corporations will eventually erode the wealth of the middle class. Politicians will promise a few more thousand to the middle class in the way of tax savings. That will be painful to the middle class retirement plans and other investments as taxes are raised on corporations. The 401K-valuations will be depressed with the constant attacks on corporations. The evil are the politicians; not the corporations. Will the middle class recognize this?

Middle class membership is for a reason. They could not or did not want to get out of the middle class. For those who could not escape the middle class, one may be safe is concluding limitations in intelligence or of low energy. Therefore, it is likely, many members of the middle class believe the politicians.

As the stock market becomes depressed with increasing corporate taxation, fewer middle class will want to participate. That will dampen the demand for stocks, which will accelerate bearish bias. As corporations become poorer, many in the middle class will become poorer.

If the middle class is brighter than this sour note may be indicating on the longer-term aspects of the market ahead of the next election, then a bullish bias will be born. The question is, does the middle class recognize how politicians depress their wealth and vote for increases taxations on corporations? If the answer is yes, then the influence of politicians will erode. That would be bullish for the stock market. If the answer is no, do not be surprised at a 5,000 Dow within a year or two.

In other words, will the populace “buy into tax/wealth” allocations discussed by politicians. You will know the answer to this. If incumbents are re-elected after voting for increased socialism, then do not be surprised at a 1,000 Dow within four years. The middle class may not properly interpret the 30%-plus declines in the 401K valuations. If they recognize the true source of the causative factors in subprime crisis, incumbents will be ousted. If incumbents are allowed to return to elected office, then the spiral of socialism will continue. The bear will dominate if incumbents who voted for the $700-billion bailout return to Washington D.C. If the incumbents are tossed out of office, then politicians will learn from this and that is to quit depressing 401K valuations. That means government will have to shrink. That will tighten the noose around politicians’ necks.

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

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

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

One year ago, on Oct 5, 2007, the Mid-term Indicant was holding 289-stocks and funds out of the 345 tracked for an average of 111.7-weeks. They were up by an average of 140.3% (annualized at 65.3%). There were 49-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 12.6% since their respective sell signals an average of 28.5-weeks earlier.

The Mid-term Indicant was signaling hold for 310-stocks and funds of the 345-tracked two years ago on Oct 6, 2006. They were up by an average of 100.5% (annualized at 68.0%) since their respective buy signals an average of 76.9-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down an average of 16.5% since their respective sell signals an average of 21.2-weeks earlier.

There were 221-stocks and funds with hold signals on Oct 7, 2005 since their buy signals an average of 96.8-weeks earlier. They were up by an average of 105.8% (annualized at 56.8%). There were 96-avoided stocks and funds at that time. They were down by an average of 10.8% from their respective sell signals an average of 23.2-weeks earlier.

On Oct 1, 2004, the Mid-term Indicant was signaling hold for 204-stocks and funds out of 296-tracked. They were up by an average of 73.6% (annualized at 66.6%) since their buy signals an average of 57.0-weeks earlier. The Mid-term Indicant was avoiding 50-stocks and funds at that time. They were down by an average of 32.4% since their sell signals an average of 52.4-weeks earlier.

Five years ago, on Oct 4, 2003, there were 219-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 58.5% (annualized at 98.0%) since their respective buy signals an average of 31.0-weeks earlier. There were 30-avoided stocks and funds then. They were down an average of 20.9% since their respective sell signals an average of 29.7-weeks earlier.

On Oct 5, 2002, there were 54-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 20.2%, annualizing at 48.6%. There were 226-avoided stocks and funds then. They were down by an average of 24.7% since their sell signals an average of 10.1-weeks earlier.

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

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

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 41.7% since its secular low on October 9, 2002. The NASDAQ is up 74.8% and the S&P500 is up 41.5% since then. The small cap index, S&P600, is up 94.3%. None of the major indices are bullishly biased.

The Dow is down 27.1% since its last closing peak on Oct 9, 2007. The NASDAQ is down 31.9% since its last peak on Oct 31, 2007. The S&P600 is down 25.5% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 61.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.0% since its similar secular peak on March 23, 2000. The Dow is down by 11.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 22.2% so far this year. The NASDAQ is down 26.6% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

However, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality.

All major indices contacted their breakdown lines last Friday. That is a common condition for bullish cycles to originate.

The NASDAQ year-to-date performance was bearish by 36.0% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start within a few days from now.

The NASDAQ was down by 40.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 40.8%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 3.1%. It was down by 0.9% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 1.7% on this weekend and up by 13.0% at this time last year.

Do not be surprised at a Quick-term and Short-term bullish cycle in the next few days.

Keep your eye on the daily stock market report.

Stop Loss Management

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

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated last week, interest rates are all over the map; somewhat nonsensical. CD’s are above 5% while the Fed Rate is less than 1%. Bankrupt banks offering 5% on CD’s is an apparent attempt to get cash infusions. Based on demonstrated incompetence at the banks and financial institutions, make certain such investments do not exceed $100,000. Congress elevated the FDIC limits to $250,000.

Inflationary threats may wane, as economic demand is soft. Deflation may become a new problem. The stock market does not like deflation. The bull will remain absent if commodity prices do not stabilize.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal. The Mid-term Indicant signaled sell on October 3, 2008.

Fidelity Gold, Fund #28 is down 26.3% since the Midterm Indicant signaled sell on August 1, 2008.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal. The Mid-term Indicant signaled sell on October 3, 2008.

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

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

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

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

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 17.4% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 21 of the past 36-weeks and in 12 of the past 16-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It is up 7.6% since then. It gained 81.4% from its August 3, 2005 buy signal until the recent sell signal. Its annualized gain amounted to 26.0%. This fund has been bullish in 38 of the past 57-weeks. It has been bullish in 19 of the last 33-weeks. It has been bearish in six of the past 12-weeks. The Quick-term and Short-term Indicant may signal buy once its overheated configurations cool off.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are down an average of 12.5%. Do not be surprised at bull signals in the next week or two, as the heart and soul of bullish seasonality begins to unfold.

Click this sentence to view a summary of their performance.

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

That beats buy and hold performance of $1,570,878 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $107,673 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $67,524 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2212.1%, 65.0%, and 229.3%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for this fund on September 12, 2008. It is up 34.5% since that buy signal, annualizing at 591.6%. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

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 256.7% (annualized at 15.1%) since the Long-term Indicant signaled bull 883-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: One of thirty. No bullish support, which should offend the bull.

Quick-term Yellow Bears/Threats: Twenty-eight of thirty. Supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 32.8%. Bull has no influence, but configuring to voice its presence in the face of a major bear market. In other words, configurations support bullish spurt behavior. Do not be surprised at bullish expressions within a few days.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 28.3% with continued bearish support. Do not be surprised at a shift to bullishness, but it will be awhile before this attribute confirms any bullish support.

Short-term Indicant: Breakdown contact density is high in support of the bear, but this should incite the bull to make a statement. Do not be surprised at a bullish spurt in the next few days.

Short-term Indicant: Relative breakdown position is solidly in support of the bear with single digit expressions to breakdown.

Force Vectors: Their equilibrium was destroyed by the bear last Thursday. Many fell to absolute minimums. Do not be surprised at volatile expressions over the next few days. Socialism, communism, management stupidity, dilettantes overseeing other dilettantes, paper pushing bureaucrats, non-value adding tribalism barking from Washington DC, etc. will not produce the smoothness of capitalistic cycles. Expect wild variations. This will be good for those who like to trade options, but real investors will be turned off. That, in the long-run, is bearish even if a bullish spurt unfolds.

Vector Pressure: A minority of four in bullish domains, offering bearish support, but also angering the bull.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation.

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. There is a high likelihood it will be replaced with bullish bias in the next few days.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market.

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

Volume: Robustness supported bear while the newly configuring lethargy will not be as supportive of the bullish spurt which could unfold in the next few days.

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

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

DJIA

DJ Composites

DJ Transports

DJ Utilities

NASDAQ

NASDAQ100

S&P500

S&P100

S&P400

S&P600

NYSE

This index continues favoring a bullish spurt, albeit from a deeply bearish configuration.

VIX

This index violated recent configurations. It is blowing north hard and in full support of a bearish stock market. It needs to cool off and that supports bullish stock market potential.

Overall Comment October 3, 2008-Fri-As stated the past several days, nearly all attributes continued supporting the bear. However, one major non-bearish attribute was achieved today. All major indices on contacting their breakdown lines simultaneously. That suggests a technical position for a bullish rally. It will most likely be a eight to 12-week bullish spurt that will be followed by more dynamic bearish expressions well into 2009. Those bearish expressions will be deep.

The Short-term Indicant signaled bear on September 4, 2008. The Dow is down 7.7% and the NASDAQ is down 13.8% since then. Although bullish spurt potential is increasing on a Quick-term basis, the Short-term Indicant continues with a bearish configuration.

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

After several days of robust expressions supporting the bear, the NYSE and NASDAQ Indicant Volume Indicators are shifting lethargically. The recently expiring robustness paralleled dynamic bearish behavior, fostering the bear’s directional intensity. This remains obviation of bearish support on a longer cyclical basis. However, volume is cooling. The impending bullish spurt will most likely not be supported by an increase in volume. Keep your eyes on this. If increasing volume is absent during the next bullish cycle, prepare for a long and deep bear market in 2009 and through most of 2010.

Today’s volume was moderate on today’s aggressive bearishness. There is no support for dynamic bullishness. However, there is increasing likelihoods of a bullish spurt. But it will be a mere spurt. As you can tell, the Quick-term Indicant is anticipating bullish spurt behavior for ETF’s.

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

There were no buy signals and no sell signals. The SQI is signaling hold for 15 of the 31-ETF’s. They are down by an average of 5.9% since their buy signals an average of 0.4-weeks ago. The SQI is avoiding 16-ETF’s at this time. They are down by an average of 13.7% since their sell signals an average of 8.7-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. The Short-term Indicant is signaling hold for 15-ETF’s. They are down by an average of 5.9% since their buy signals an average of 0.4-weeks ago. There are 16-ETF’s with avoid signals. They are down by an average of 13.8% since their sell signals an average of 8.7-weeks ago.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. The Quick-term Indicant is signaling hold for 15-ETF’s. They are down by 4.2% since their buy signals an average of 0.4-weeks ago. The Quick-term Indicant is avoiding 16-ETF’s. They are down by an average of 15.2% since their sell signals an average of 6.7-weeks ago.

Current Strategy –September 29, 2008 – Reverse tangential lines are suggesting continued bearishness long after the nonsensical behavior by nonsensical politicians who are proving to be incapable of solving the problem they created. Cash is king right now. Deflation will become the new threat.

September 30, 2008 – The buy signals today are stimulated by the configurations suggesting a bullish spurt in nearing. The heart and soul of bullish seasonality typically lasts three to four months. Even if the politicians fail on the next bailout package, the heart and soul of bullish seasonality always configures. It may be dampened and short, but the nature of Quick-term signaling assumes the risk inherent in participating in a spurt. Keep in mind, reverse tangential configurations are highlighting a resumption of the bear after the heart and soul of bullish seasonality concludes its mission. So, the longer-term, inactive trader may prefer to set this one out.

October 1, 2008 – For those of you who like to trade, the heart and soul of bullish seasonality is nearing. It will most likely be dampened in magnitude. It is believed most of the ETF’s with buy signals yesterday will move to their bearish yellow curves. Keep in mind though, the market is a bear and will most likely not find bottom until 2010.

October 2, 2008 – This bear is projected to last until 2010. Between now and then there will be several Quick-term bullish spurts. Some of them will enjoy 12-week cycles. The heart and soul of bullish seasonality is due on the immediate horizon. The Quick-term Indicant was a bit hasty in signaling buy for several ETF’s this week in anticipation of the seasonal bullish spurt. Force Vectors are at absolute bottoms. The bull is severely wounded but it should find some momentum for its expression. Set your stop losses to tolerate another 2% off today’s closing prices. The Quick-term Indicant and the Short-term Indicant are being modified to be strictly mathematically. Fundamentals and corporate guidance are being eliminated. The lying that originated in Washington DC and carried out by Enron, MCI, Bear Stearns, Fannie Mae, Freddie Mac, etc. will completely eliminated from influence. Earnings should be viewed as fiction. The corporate elite a common liars. Cash flow is all that counts.

Oct 3, 2008 – All the major indices are contacting their breakdown lines. This is a common technical originating point for bullish cycles. The Quick-term and Short-term Indicant models are for traders. Although those models signal buy a bit early, they continue to signal hold for about half of the ETF’s. Do not be surprised at bullish behavior within days from now. This is primarily based on all major indices now on their breakdown lines and the depth of Force Vectors for both major indices and non-contrarian ETF’s. Keep in mind reverse tangential lines have formed highlighting a 90% probability of additional bearishness following the impending bullish spurt. Congress is now out of session, which is also bullish.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-eight of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 14.5%. If the ETF’s move up to bearish yellow in the impending bullish spurt, the gain would average around 14.5% but only 9% from recent buy signals. This would be consistent with bullish spurt behavior.

One of the 30-ETF’s is above its bullish red curve. This is non-bullish. All thirty ETF average positions are below bullish red by an average of 18.3%. which is also non-bullish. One would not err in staying in cash but the Quick-term Indicant is detecting a bullish spurt in the offing.

The QTI differential is bearish by 32.8%. This is the eighty-first consecutive trading day of a bearish reading.

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

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

The average distance from breakout contact is 30.6%. Double digit variances from breakout contact for 190-consecutive trading-days has been non-bullish.

Twenty-one of the thirty ETF’s are contacting their breakdown lines. Contact in 38-of the last 74-trading days supported bearishness. This was losing bearish influence a few weeks ago during the last bullish spurt, but now contact density is no longer relaxing. Contact in 21 of the last 37-trading days and in 11 of the past 19-days is incentive for the bear to continue dominance. However, do not be surprised at a seasonal bullish spurt lasting through Christmas and starting within a few days.

The average distance between the price and breakdown is a mere 2.3%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 42 of the last 69-trading days. Double digits provide non-bearish relief. After the phony bullish spurt induced with governmental meddling, it should be noted this is again a single digit expression and thus is supportive of the bear. However, it may move back to double digits in the next week or two fostering support for a nice bullish spurt for those of you who enjoying trading.

The breakout/breakdown differential is bearish by 28.3%. This attribute is supporting bearish ambition.

ETF Force Vector Configurations

One Force Vector is in bullish domains. This is not a bullish majority and thus non-supportive of the bull. A few days ago, they were precariously positioned to energize the bear, but a hitch and post configuration was possible, supporting bullish spurt potential. As you can tell from the past three days, the bear was indeed energized.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close. There have been 18-put option buy signals and three call option buy signals in the past 14-trading days. The bullish bounce on Tuesday, followed by bearish expressions on Wednesday and Thursday were friendly to last Monday’s put option buy signals. As stated after Thursday’s market close, you should have already sold those put options.

Four of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Do not be surprised, though, at decreasing bearish support in the next few weeks.

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.

Quick-term and Short-term Indicant Summary

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

The Indicant signaled sell for QID last Tuesday. It is up since then, but at a peak. It should cool off in the next few days. It should position itself for an excellent buy later this year or in early 2009.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 21.1% since the Quick-term Indicant sell signal on July 24, 2008. It is a yellow bear with a bearishly directed Force Vector. Vector Pressure remains in bearish domains.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is up 2.6% since that sell signal.

ETF#14-Long Government is up 2.8% since the sell signal on September 30, 2008.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Solid bearish convergence occurred last week. That is solidly in support of the bear. Keep in mind, the heart and soul of bullish seasonality is about to begin.

Indicant Conclusion

Congress is out of session. That is bullish. All major indices are resting on their breakdown lines. That is bullish. Commodity prices are falling. That is bullish, pending CPI data. If the CPI data indicates deflation, the Dow could be looking at 5,000 before 2009 concludes.

Interest rates are falling, which is bullish. The problem is the economy, but the stock market will focus on economic conditions in 2009.

Force Vectors are at absolute minimums, which require a technical turnaround. Vector Pressure is suggesting oversold conditions, which is bullish.

Do not be surprised at a bullish cycle, starting in the next few days.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/05/08