Oct 2009 Indicant Weekly Stock Market Report

Oct 25, 2009 Indicant Weekly Stock Market Report

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

This Week’s Report

The U. S. Senate Threatens Stock Market Bull

The Daily Stock Market Report noted ETF#10-IBB’s bullish blue curve collapsed last Wednesday. IBB is an exchange-traded fund representing the NASDAQ’s biotechnology companies. Such companies are not immune to governmental intrusions into capital markets.

Click this sentence for the chart and more information.

Although healthcare reform’s immediate victims from this communistic intrusion by the U.S. Government will be insurance companies, there is no guarantee that other intrusions will not be forthcoming. All organizations in the healthcare industry will be the first to fall prey to the stock market bear in the event any healthcare reform bill becomes law.

One should understand why. Here’s why! The U.S. Government is the most inefficient organization in the United States. It is even more inefficient than General Motors and many times over. It does not even have to earn its revenue. The U.S. Government can increase revenues by a simple law passage by a handful of people in the U.S. Congress. The only difference between the U.S. Government and Enron accountants is law. Other than that, there is absolutely no difference.

Once the U.S. Government is directly involved in healthcare, its tentacles of inefficiencies will spread to all organizations within that industry. The huge flow of money directed at sick people will enhance corruption. Corruption and expanding inefficiencies will eventually lead to some sort of collapse. Unfortunately, between the point in time when the healthcare reform bill is passed and that eventual collapse, a massive erosion in the quality of life will become pervasive.

The Near-term bullish cycle of ETF#10, IBB, coincided with the loud town hall meetings last summer. The stock market bull enjoyed threatening dialog directed at incumbent politicians. Although much of the stock market continued with its bullish cycle, IBB peaked at $83.61 on September 21, 2009 when healthcare reform “progress” was being reported from the U.S. Senate.

You will notice that IBB started moving aggressively to the south as healthcare reform started to regain momentum a few weeks ago. Around mid-week last week, the U.S. Senate announced they feel they have developed a passable healthcare bill. With that announcement, the Near-term Indicant’s bullish blue curve collapsed.

This collapse is a bit ominous. Although the rest of the stock market is holding up okay, do not be surprised at increasingly bearish behavior as the noise level picks up in Washington D.C.

The bear will gain momentum in the healthcare industry, as the tentacles of the U.S. Government’s inefficiencies will spread to other organizations close to the healthcare industry. That inefficiency will no doubt spread throughout the capitalistic system. This erosion of capitalism should excite the bear to a magnitude similar to 2008’s bear market, if not more so.

The U.S. Government’s tentacles of inefficiencies will pervade all segments of the healthcare industry. New products will slow to develop as more finite resources are funneled through corruptive channels, leaving entrepreneurs empty handed. The trial lawyers will leach off the few that remain and eventually their host will be depleted.

Lethargic behavior will manifest. Caution will increase. Corruption will follow. People will die sooner.

Once socialism and communism start, it is very difficult to shut down. Its movement swells until that stupidity results in the collapse of the institutions promoting it. Prior to institutional collapses, the populace must fall into a solid and massive majority living in poverty. That is a deserved result in a democracy containing rampant stupidity.

The capital markets do not find comfort with the threat of impending massive poverty. Each time such a threat manifests, the bear is aroused. The stock market bear, communists, socialists, politicians, tree-huggers, and yawners are all pals. Loud expressions by one group arouse the other groups with the exception of yawners; they just go with the flow of weakness. The quickest way to spot this is watch the stock market. It goes down when political members of the U.S. Congress appear to be in harmony with one another and even further to the south when the executive and legislative branches of government agree. The only thing elected politicians can do is depress the wealth of their constituents, which is the bear’s exhilarate.

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

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

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

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

In addition to the buy signals, the Mid-term Indicant is signaling hold for 202 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 23,9%. That annualizes to 55.5%. The Mid-term Indicant has been signaling hold for these 202-stocks and funds for an average of 22.4-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 114-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 40.6% since the Mid-term Indicant signaled sell an average of 84.1-weeks ago.

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

One year ago, on Oct 24, 2008, the Mid-term Indicant was holding 13-stocks and funds out of 345 tracked for an average of 92.3-weeks. They were up by an average of 160.0% (annualized at 90.1%). There were 325-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 32.7% since their respective sell signals an average of 21.7-weeks earlier.

The Mid-term Indicant was signaling hold for 296-stocks and funds of the 345-tracked two years ago on Oct 26, 2007. They were up by an average of 143.2% (annualized at 66.0%) since their respective buy signals an average of 112.9-weeks earlier. The Mid-term Indicant was avoiding 48-stocks and funds at that time. They were down an average of 15.1% since their respective sell signals an average of 28.2-weeks earlier.

There were 311-stocks and funds with hold signals on Oct 20, 2006 since their buy signals an average of 78.7-weeks earlier. They were up by an average of 105.3% (annualized at 69.6%). There were 32-avoided stocks and funds at that time. They were down by an average of 16.4% from their respective sell signals an average of 23.1-weeks earlier.

On Oct 26, 2005, the Mid-term Indicant was signaling hold for 218-stocks and funds out of 320-tracked. They were up by an average of 103.0% (annualized at 54.1%) since their buy signals an average of 98.9-weeks earlier. The Mid-term Indicant was avoiding 100-stocks and funds at that time. They were down by an average of 11.3% since their sell signals an average of 24.0-weeks earlier.

Five years ago, on Oct 22, 2004, there were 239-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 64.7% (annualized at 63.0%) since their respective buy signals an average of 53.4-weeks earlier. There were 49-avoided stocks and funds then. They were down an average of 33.0% since their respective sell signals an average of 52.3-weeks earlier.

On Oct 25, 2003, there were 266-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 50.6%, annualizing at 89.5%, since the buy signals an average of 31.6-weeks earlier. There were 22-avoided stocks and funds then. They were down by an average of 23.8% since their sell signals an average of 31.6-weeks earlier.

There were 178-stocks and funds with hold signals on Oct 25, 2002. They were up by an average of 19.1% since their buy signals 15.2-weeks earlier. The 178-avoided stocks and funds were down an average of 34.0% since their respective sell signals an average of 17.5-weeks earlier.

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

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

Link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. The left swinging pendulum may be under arrest right now with Blue Dog democrats and Congressional disarray.

Some companies will perform well, regardless of the depth of the bear market. So, do not be surprised at increased buying and selling in the next several weeks. Some signals will be quickly reversed if their technical data deteriorates. Fluttering is common before a stock begins its movement toward a long period of directional intensity. The key is to differentiate stock market indecisiveness from impending bearish aggression.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

The Long-term, Mid-term, Quick-term, Near-term, and Short-term attributes describing trend are all bullish. Regardless of fundamentals that do not justify this bullish behavior, the trend is gospel. Never trade or argue against it. Some of the Near-term Blue Bulls are under a bit of bearish pressure, but the trend remains bullish.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias.

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 36.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 93.4% and the S&P500 is up 39.0% since then. The small cap index, S&P600, is up 86.0% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

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

The Dow is down 29.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 24.6% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 28.7% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

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

However, if inflation manifests, triple digit gains over a twenty-year period may not be enough. Government spending without paralleled support from the only three-wealth building economic sectors (manufacturing, agriculture, and extraction), inflation is expected to manifest and with gusto. If it does not, economic books will be rewritten. (The Blue Dog democrats may help prevent this unfavorable scenario for the time being).

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

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

The NASDAQ is down 57.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 29.3% since its similar secular peak on March 23, 2000. The Dow is down by 14.9% 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. (This remains even with the immediate Blue Dog potential).

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

The good news is the politicians in Washington D.C. have reduced their power by weakening their already weak constituents. International competitiveness will eventually erode U.S. political power and influence. With that, capitalists around the world will continue providing products of appeal, while politicians continue exuding irrelevant commentary. Let’s just hope that products of appeal is not weaponry, alone. Also, Americans may be too poor to buy products of appeal.

The Dow is up 13.6% so far this year. The NASDAQ is up 36.6% and the S&P500 is up by 19.5%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 31.0% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year.

The NASDAQ was down by 32.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 41.2%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 4.4% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down by 4.3% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 6.8% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 15.9% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 39.5% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

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

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

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Short-term rates continue configuring at a cyclical minimum. Normally, that would threaten the bull, but they are so low the immediate prognosis borders minutia. In essence, interest rate levels are irrelevant to the stock market at this time.

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

As stated the past several weeks, you can see some early warning signs of impending inflation. Although oil prices have stabilized the past few weeks, they have not fallen in the face of projected declining demand. Although oil prices have been erratic with mild bullish bias the past few weeks, the trend remains bullish. OPEC will continue instituting supply reductions. This time around, there is little likelihood of cheating OPEC members. They want prices to stabilize at $80 per barrel. The Saudi King concurs. Over the years, we have learned the Saudi King rules when it comes to oil prices. This holds true in spite of significant demand reductions in the U.S. for petro.

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

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

As stated 56-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010.

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

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

As stated 52-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few quarters.

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

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

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 0.5% since then, annualizing at 23.2%.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 4.2% since then, annualizing at 30.9%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 15.4%, annualizing at 65.9% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is up 4.7% since that buy signal, annualizing at 48.9%.

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 21.9% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 10.1% since its buy signal on Sep 11, 2009, annualizing at 87.0%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 12.3% since then, annualizing at 54.6%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 28.3% since that buy signal, annualizing at 32.3%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 15.3% since the Near-term buy signal, annualizing at 30.4%. Gold and oil are bullishly more aggressive after six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 7.9% since that bull signal. That annualizes to 34.3%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,641,101. That beats buy and hold performance of $1,517,143 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $140,440. That beats buy and hold’s $105,750 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $196,334. That beats buy and hold’s $74,704 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 48.4% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and there is no indication it is about to expire.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 244.5% (annualized at 13.6%) since the Long-term Indicant signaled bull 938-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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 included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Overall configurations continue suggesting the bear cannot dominate at this time. Some indications of bullish fatigue continue with their assertions. Force Vectors are now directionally bearish and thus supporting the bear’s ambition. But again, there is no sustainable or deep threats configuring by the bear at this time. ETF #10-IBB fell below NTI Green and Force Vector penetrated bearish domains last Wednesday. The Near-term Indicant was forced to signal sell on Friday after the market’s close.

The Near-term Bull is 33-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. The most recent inflection point acquiesced to bullish desires. A new inflection period could be forming with three collapsed NTI Blue curves in the past few weeks. The bear could gain momentum until the next Congressional recess. Congressional harmony on healthcare reform is acting as a lid to bullish market behavior.

Quick-term Red Bulls are not to be argued with. Until Quick-term Red Bulls expire, this bull should be considered a thoroughbred. This is supported on a near-term basis as Near-term Blue Bulls continue in their support. The Near-term Blue Bulls reasserted their dominance with recent bullish aggression. It will be interesting to see if bearishly moving Force Vectors do not excite the bear on a Short-term basis. There was a bit of such excitement on Friday. Congressional behavior may delay the heart and soul of bullish seasonality over the next few weeks.

Declining Force Vectors may invoke the bear to express mischievousness. You saw some of that today. The Near-term, Quick-term, and Short-term attributes continue with bullish trend. Although difficult at times, it is better to not fight the trend.

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

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

Contrarian VIX is the lone Near-term Bear. It is down 5.1% since the bear signal 6.1-weeks ago. As expected, it was bearish in eleven of the most recent 14-days, until day. As stated the past few days, its Force Vector is bearishly mature, suggesting a potential bullish bounce, which occurred. It should be bullish over the next few days, while the market should be a bit bearish.

The remaining eleven major indices are up by an average of 21.6%, annualizing at 56.1%, since the NTI signaled bull an average of 20.0-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 15.6%, annualizing at 42.0%, since their bull signals an average of 19.3-weeks ago.

The lone bear, VIX, is down 37.8% since its bear signal 27.1-weeks ago. It will not receive a Quick-term Bull signal until it crosses above bearish yellow curve.

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

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

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

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

QIT-Yellow Bears-None of the non-contrarian’s exist and thus without any bearish bias. Contrarian VIX is the only Yellow Bear. Its valiant attempt to rid itself of this pitiful configuration appears to be failing, but remains positioned for a bullish bounce. However, playing this is against trend.

NTI-Blue Bulls-Only four exist, which is now a minority of non-contrarian Blue Bulls supporting Near-term bullish bias. (Several Blue Bulls were lost today).

NTI-Bullish Blue Curve Trend-Near-term bullish unanimity with eleven of 11-non-contrarian indices in bullish trend, supporting bullish bias; Contrarian VIX NTI Blue collapsed two weeks ago and has not recovered, but attempting to mount a bullish charge.

NTI-Bearish Green Curve- Non-bearish majority with 10-of 11-non-contrarian indices in bullish trend. (Dow Utilities not in bullish trend).

STI-Vector Pressure-Mild bullish configuration with only five of 11-non-contrarian indices in bullish trend. (Five shifted bearishly today).

Short-term Summary-Overall-The five primary trends, Blue, Green, Red, Yellow, and Vector Pressure are bullish and the trend should not be argued with. The Near-term Bullish Blue is weakening though.

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

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

-Political Climate – Congress in session is bearish, but technical data is overriding at this point. Strong bullishness not likely to return until the next Congressional recess. Force Vectors dipped deeply to the south when Senator Kennedy’s replacement was announced. The stock market does not find sixty Democratic Senators bullish. Fifty-nine was tolerable, but sixty is more threatening to the bull. That threat is now diminished by virtue of the high number of Near-term Blue Bulls.

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

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

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

As stated for several weeks, the NYSE and NASDAQ Indicant Volume Indicators continue configuring without potential robustness. They continue shifting lethargically. As stated the past several weeks, current configurations suggest limited support for bullish or bearish behavior. This favors the prevailing bullish direction. The heart and soul of bullish seasonality can provide bullishness without robust volume. From a calendar perspective, the heart and soul of bullish seasonality is now underway.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 18.5%, annualizing at 55.7%, since their buy signals an average of 17.2-weeks ago. In addition to the sell signal of ETF#10-IBB, the NTI is avoiding one ETF; contrarian QID. It is down 18.9% since its sell signal 13.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 21.5% since their buy signals an average of 21.0-weeks ago. Those with hold signals are annualizing at 53.2%. Although there were no sell signals, the lone avoided ETF, QID, is down by 53.2% since its sell signal on Mar 26, 2009.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 72-trading days ago to 27-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are nine-ETF’s with this bullish and non-bearish configuration. There remains no dynamic bearish threat with sustainable duration at this time. However, this attribute continues weakening in support of the bull. It is now with minority support of the bull, losing majority support several days ago. This is a bit discerning since Force Vectors are gaining crispness on their southerly movement.

Near-term Indicant ETF Key Attributes

11-NTI Blue Bulls; Lost eight today and now a minority position offers Near-term bullish support.

28-NTI Blue Curves are sloping north and providing majority bullish support.

26-NTI Green Curves are sloping north, expressing majority support for continued non-bearishness.

Quick-term Indicant ETF Key Attributes

27-QTI Red Bulls represent a solid majority supporting Quick-term bullishness.

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

Zero-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness.

30-QTI Bearish yellow curves are sloping north, highlighting solid non-bearishness. Only contrarian QID is sloping south.

The Short-term Indicant ETF Key Attributes:

Four-Force Vectors in bullish domains but cycle is bullishly mature, offering the bear an opportunity to respond. (18-fell from bullish domains the past three days, adding to the bear’s ambition).

Two-Force Vectors are in bearish domains and thus non-threatening to the bull, but that threat is increasing just a bit with a new penetration into bearish domains today.

Nine-Vector Pressures in bullish domains, offering minority support of bullish bias. Majority support was lost Oct 2, 2009.

18-Vector Pressures are moving in a bullish direction with majority support of the bull. Gained 11-on Oct 14, 2009; lost seven from bullish trend the past two days.

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

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

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

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 18.9% since that sell signal.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 51.8% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $32.23 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 12.3% since those buy signals, annualizing at 54.6%. This fund had been struggling, but bullish in 17-of the last 32-days. It has been strongly bullish in nine of the last 15-days, following eight consecutive days of bearish behavior. It’s behavior has recently been inverse to dollar’s strength. It should move inversely with TLT, which is bullish on strong dollar days. It was strongly bearish this Friday.

ETF#11-Gold and Precious Metals is up 28.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 30.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $89.45 and still rising at an accelerating rate.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 15.3% since then, annualizing at 30.4%.

It is a QTI Red Bull and a NTI Blue Bull. That suggests a real safe holding position.

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

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 0.2% since that buy signal, annualizing at 1.2%. It will be difficult for this hold to produce profitability as long as the stock market is bullish.

Major ETF Events

Oct 23, 2009-Fri-Healthcare reform is again gaining momentum in the Senate. With that, ETF#10-IBB has been excessively bearish and thus triggering the Near-term Indicant to signal sell on Friday.

Oct 22, 2009-Thu-Five ETF Force Vectors fell below bullish domains suggesting the bull is preparing to rest. Additionally nine Force Vectors pierced Vector Pressure adding to the bull’s resting prognosis. Five Vector Pressures shifted south due to this Force Vector piercing.

Oct 21, 2009-Wed-ETF#10 IBB fell below NTI Green. Do not be surprised at other ETF’s following suit. However, there is not enough bearish synergy to overcome the bull at this time.

Oct 20, 2009-Tue-S&P600 Index lost Blue Bull status. It is the only major index with that condition and thus non-threatening.

Oct 19, 2009-Mon-Contrarian VIX and TLT were both bullish on stock market bullishness. That non-contrarian behavior for contrarian ETF’s offers the bear an opportunity to at least be heard. However, there remains no significant bearish threat.

Current Strategy-Short-term Indicant-Oct 23, 2009-Although the trend remains bullish for the stock market, do not be surprised at a correction to bearish green until the next Congressional recess. Oct 22, 2009-Bullish Near-term, Quick-term, and Short-term trend lines remain in tact. Do not fight the trend. With the exception of VIX, Force Vectors moving south, but a few remain in bullish domains, and thus with limited threat to the bull. Oct 21, 2009-Wed-Bullish trend remains in tact. There is a bit of trouble, though, with ETF#10-IBB-NTI Bullish Blue Curve collapsing. It is now qualified as a NTI-Green Bear. However, there is no sell signal since the market is absent of any bearish synergy. Oct 20, 2009-Tue-Same as yesterday, but VIX’s Force Vector is again rising, offering the bear a bit of hope. Keep in mind, though, the near-term, quick-term, and short-term trends are bullish. Oct 19, 2009-Mon-Too many attributes are trending bullishly and thus no reason to anticipate any strong or sustainable bearish behavior.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Mild bearish convergence last week follows bullish convergence in the prior week. The convergent/divergent patterns have more or less lost their patterns of contribution of directional intensity. Bearish convergence has been endured in eight of the past 17-weeks. Combined bullish convergence/divergence in the eight of the last 14-weeks remains mildly influential bullish desires. The combination of these suggests the bull cannot expire without a significant battle. Political influences can cause the bull’s expiration, but the populist movement against politicians remains fundamentally bullish.

Indicant Conclusion

As stated the past two weeks, low interest rates offer very narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. Politicians are under fire by the populists. Timidity is increasing in Washington D.C. and that is bullish. Unfortunately, the Senate is finding agreement on healthcare and thus the stock market was appropriately bearish last week.

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

10/25/09

Oct 18, 2009 Indicant Weekly Stock Market Report

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

The Heart and Soul of Bullish Seasonality

About this time nearly every year, the stock market enjoys its strongest period of bullish behavior. There are several fundamental reasons for this. One of the major ones is Congressional recesses typically occur for longer periods during the Thanksgiving and Christmas holidays. As previously stated by the Congressional Effect Fund, the stock market is primarily bullish when Congress is in recess.

From January 1, 1965 through December 31, 2008, the stock market was bullish by an annualized rate of 16.15% when congress is out of session, while up only 0.13% when in session. In essence, the Congressional Effect founder, Eric Singer, has significant statistical support highlighting the fact that Congress is destructive to wealth. The Congressional Effect is even more dramatic since 2000. The S&P500 has annualized at a growth rate of 8.5% when Congress is out of session, while it has been down 12.45% when in session.

Another reason for the heart and soul of bullish seasonality relates to harvest time. Upon collection of payments, agriculturists would plow money into the stock market and then start pulling it out after the capital gains period. Although the agrarian society has diminished considerably in the last sixty years, the heart and soul of bullish seasonality has continued with pronounced movement.

Summer time distractions are muted by October/November. More people are more focused on the stock market during the autumn months, which typically induces a bullish bias. This heightened interest results into more money flow into the stock market. The demand for stocks against a somewhat fixed supply of stock leads to higher prices.

This historical standard did not manifest in last year’s deep bear market. It is unlikely there will be back-to-back years with disappointing performance in the heart and soul of bullish seasonality.

If the Near-term Indicant bull remains in tact next week, the Mid-term Indicant will signal many more buys, as the heart and soul of bullish seasonality should unfold and continue shoving stock prices higher.

Keep in mind, this is an emotionally based bull cycle. It is not supported by earnings fundamentals. Corporate earnings will not support prices at post heart and soul periods. Also, low interest rates have minimized investment alternatives to the stock market. Once inflation ramps up and it will, stock prices will plummet, as investors will find more appeal elsewhere.

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 eight buy signals and no sell signals.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 195 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 24.1%. That annualizes to 56.4%. The Mid-term Indicant has been signaling hold for these 195-stocks and funds for an average of 22.2-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 114-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 39.5% since the Mid-term Indicant signaled sell an average of 83.1-weeks ago.

One year ago, on Oct 17, 2008, the Mid-term Indicant was holding 19-stocks and funds out of 345 tracked for an average of 87.8-weeks. They were up by an average of 136.9% (annualized at 81.1%). There were 326-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 27.3% since their respective sell signals an average of 20.8-weeks earlier.

The Mid-term Indicant was signaling hold for 296-stocks and funds of the 345-tracked two years ago on Oct 19, 2007. They were up by an average of 133.2% (annualized at 62.5%) since their respective buy signals an average of 110.8-weeks earlier. The Mid-term Indicant was avoiding 42-stocks and funds at that time. They were down an average of 17.7% since their respective sell signals an average of 32.5-weeks earlier.

There were 311-stocks and funds with hold signals on Oct 13, 2006 since their buy signals an average of 77.7-weeks earlier. They were up by an average of 106.2% (annualized at 71.0%). There were 32-avoided stocks and funds at that time. They were down by an average of 16.1% from their respective sell signals an average of 22.3-weeks earlier.

On Oct 19, 2005, the Mid-term Indicant was signaling hold for 218-stocks and funds out of 320-tracked. They were up by an average of 103.2% (annualized at 54.8%) since their buy signals an average of 97.9-weeks earlier. The Mid-term Indicant was avoiding 97-stocks and funds at that time. They were down by an average of 12.0% since their sell signals an average of 24.0-weeks earlier.

Five years ago, on Oct 15, 2004, there were 240-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 63.7% (annualized at 63.5%) since their respective buy signals an average of 52.2-weeks earlier. There were 52-avoided stocks and funds then. They were down an average of 33.1% since their respective sell signals an average of 51.5-weeks earlier.

On Oct 18, 2003, there were 266-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 51.8%, annualizing at 95.4%, since the buy signals an average of 31.7-weeks earlier. There were 19-avoided stocks and funds then. They were down by an average of 23.3% since their sell signals an average of 31.7-weeks earlier.

There were 76-stocks and funds with hold signals on Oct 19, 2002. They were up by an average of 25.8% since their buy signals 21.5-weeks earlier. There were also 190-buy signals on this weekend in 2002. Those with hold signals were annualizing at 62.5%. The 109-avoided stocks and funds were down an average of 31.4% since their respective 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.

Link to this week’s buy and sell signals.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias.

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 37.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 93.6% and the S&P500 is up 40.0% since then. The small cap index, S&P600, is up 90.6% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 29.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 24.6% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 26.9% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

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

The NASDAQ is down 57.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.8% since its similar secular peak on March 23, 2000. The Dow is down by 14.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

The Dow is up 13.9% so far this year. The NASDAQ is up 36.8% and the S&P500 is up by 20.4%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 30.3% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with historical standards in this post election year.

The NASDAQ was down by 36.8% 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 bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 46.0%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 4.6% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down by 5.1% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 7.2% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 14.4% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 35.2% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As anticipated, mortgage rates have been bearish the past nine weeks. Mortgage rates continue interacting with bearish yellow. If they break below bearish yellow, do not be surprised at a continuation of decreasing rates. If they bounce north off yellow, one could conclude supply and demand equilibrium is manifesting. There was a mild bounce last week.

As stated 55-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010.

As stated 51-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few quarters.

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

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

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 7.2% since then, annualizing at 61.7%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 17.4%, annualizing at 81.3% since its buy signal on July 31, 2009.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 19.6% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 12.6% since its buy signal on Sep 11, 2009, annualizing at 129.3%.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 13.6% since then, annualizing at 66.2%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 27.9% since that buy signal, annualizing at 30.9%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 15.0% since the Near-term buy signal, annualizing at 30.9%. Gold and oil are bullishly more aggressive after six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 7.8% since that bull signal. That annualizes to 40.4%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,333,097. That beats buy and hold performance of $1,520,753 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,491. That beats buy and hold’s $106,541 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $196,546. That beats buy and hold’s $74,758 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 47.5% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and there is no indication it is about to expire.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 245.3% (annualized at 13.6%) since the Long-term Indicant signaled bull 937-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Overall configurations continue suggesting the bear cannot dominate at this time. Some indications of bullish fatigue continue with their assertions. Force Vectors are bullishly mature, offering the bear a chance to respond. But again, there is no sustainable or deep threats configuring by the bear.

The Near-term Bull is 32-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. Configurations are again suggesting the beginnings of another inflection point, whereby the market may move laterally with intermittent volatility.

Quick-term Red Bulls are not to be argued with. Until Quick-term Red Bulls expire, this bull should be considered a thoroughbred. This is supported on a near-term basis as Near-term Blue Bulls continue in their support. The Near-term Blue Bulls reasserted their dominance with recent bullish aggression. It will be interesting to see if the bullishly mature Force Vectors do not excite the bear on a Short-term basis. If they do not, the heart and soul of bullish seasonality can unfold with additional bullish gusto for the stock market. Non-bullish behavior the past two days lends support to this possibility.

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

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

Contrarian VIX is the lone Near-term Bear. It is down 9.3% since the bear signal 5.1-weeks ago. As expected, it has been bearish in nine of the past ten days. Its Force Vector is bearishly mature, suggesting a potential bullish bounce. Rising Vector Pressure and price below Green should motivate the VIX bull (bearish market). If not, the overall bullish stock market will remain dominant.

The remaining eleven major indices are up by an average of 23.2%, annualizing at 63.6%, since the NTI signaled bull an average of 19.0-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 17.0%, annualizing at 48.5%, since their bull signals an average of 18.3-weeks ago.

The lone bear, VIX, is down 40.5% since its bear signal 26.1-weeks ago. It will not receive a Quick-term Bull signal until it crosses above bearish yellow curve.

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

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

QTI-Bullish Red Curve Trend-Bullish unanimity with 11 of 11 Non-contrarian indices in bullish trend.

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

NTI-Blue Bulls-Eleven exist. Unanimous Blue Bulls support Near-term bullish bias.

NTI-Bullish Blue Curve Trend-Near-term bullish majority of eleven of 11-non-contrarian indices in bullish trend; Contrarian VIX NTI Blue collapsed last week.

NTI-Bearish Green Curve- Non-bearish majority with 10-of 11-non-contrarian indices in bullish trend.

STI-Vector Pressure-Strong bullish configuration with eleven of 11-non-contrarian indices in bullish trend.

Short-term Summary-Overall-Vector Pressure again rising and thus no longer discerning to the Short-term Bull.

-Political Climate – Congress in session is bearish, but technical data is overriding at this point. Strong bullishness not likely to return until the next Congressional recess. Force Vectors dipped deeply to the south when Senator Kennedy’s replacement was announced. The stock market does not find sixty Democratic Senators bullish. Fifty-nine was tolerable, but sixty is more threatening to the bull. This threat appears to be gaining momentum, but not yet at critical mass.

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

Click the Short-term Indicant to see the combined table of the Near-term Indicant and Quick-term Indicant. The table has links to charts for each. There is one chart containing both the Near-term and Quick-term Indicant.

As stated for several weeks, the NYSE and NASDAQ Indicant Volume Indicators continue configuring without potential robustness. They continue shifting lethargically. As stated the past several weeks, current configurations suggest limited support for bullish or bearish behavior. This favors the prevailing bullish direction, but somewhat lazily. There remains more robust volume support for bullish behavior in the past few weeks, supporting, at worse, non-bearishness. Last Wednesday’s bullish aggression was accompanied with a volume surge, suggesting the heart and soul of bullish seasonality may be unfolding in spite of passivity the past two days.

Current Strategy-Short-term Indicant-Oct 16, 2009-Same as yesterday; nothing threatening. Oct 15, 2009-Stock market’s bullish trend remains solid. Oct 14, 2009-Trend is bullish and today’s bullish aggression continues aligning “trading” behavior with the trend. Oct 13, 2009-Same as yesterday. Congressional mischievousness is threatening the bull. Force Vectors are above Vector Pressure, which obviously did not encourage the bull. On the contrary, the bear should find some encouragement, but non-threatening to the bull. Oct 12, 2009-Configurations remain with bullish support. However, Force Vectors crossed about Vector Pressure and are somewhat bullishly mature. However, this is non-threatening to the bull with mild potential for bearishness.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 19.1%, annualizing at 60.8%, since their buy signals an average of 16.3-weeks ago. Although there were no sell signals, the NTI is avoiding one ETF; contrarian QID. It is down 17.5% since its sell signal 12.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 22.5% since their buy signals an average of 20.0-weeks ago. Those with hold signals are annualizing at 58.4%. Although there were no sell signals, the lone avoided ETF, QID, is down by 50.9% since its sell signal on Mar 26, 2009.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 67-trading days ago to 28-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There are eight-ETF’s with this bullish and non-bearish configuration. There remains no dynamic bearish threat with sustainable duration at this time. However, this attribute continues weakening in support of the bull. It is now with minority support of the bull, losing majority support several days ago. This is a bit discerning since Force Vectors are bullishly mature and most have penetrated Vector Pressure.

Near-term Indicant ETF Key Attributes

22-NTI Blue Bulls; Majority position offers Near-term bullish support.

27-NTI Blue Curves are sloping north and thus remain supportive of the NTI Bull with unanimity. TLT’s NTI Bullish Blue Curve collapsed yesterday. IBB and IYR NTI Blues have not collapsed but they are flat lining, offering the bear some incentive to attack.

28-NTI Green Curves are sloping north, expressing support for continued non-bearishness.

28-NTI Non-bearish ETF’s are above bearish green curve and thus with non-bearish support with near unanimity. TLT fell below NTI Bearish Green Curve last Wednesday. TLT is very close to a potential bounce point at QTI bearish yellow and thus the reason for no sell signal.

Quick-term Indicant ETF Key Attributes

28-QTI Red Bulls represent a solid majority supporting Quick-term bullishness.

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

Zero-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness.

30-QTI Bearish yellow curves are sloping north, highlighting solid non-bearishness. Only contrarian QID is sloping south.

The Short-term Indicant ETF Key Attributes:

24-Force Vectors in bullish domains but cycle is bullishly mature, offering the bear an opportunity to respond. Three fell from bullish domains today.

One-Force Vectors are in bearish domains and thus non-threatening to the bull.

Eight-Vector Pressures in bullish domains offering minority support of bullish bias. Majority support was lost Oct 2, 2009.

26-Vector Pressures are moving in a bullish direction with majority support of the bull. Gained 11-on Oct 14, 2009.

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

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

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 17.5% since that sell signal.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 50.9% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $32.76 and still falling. Yesterday’s report erroneously indicated yellow at $31.19.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 13.6% since those buy signals, annualizing at 66.2%. This fund had been struggling, but bullish in 15-of the last 27-days. It has been strongly bullish in seven of the past ten days, following eight consecutive days of bearish behavior. It’s behavior has recently been inverse to dollar’s strength.

ETF#11-Gold and Precious Metals is up 27.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 27.9%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $88.99 and still rising at an accelerating rate.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 15.0% since then, annualizing at 30.9%.

It is a QTI Red Bull and a NTI Blue Bull. That suggests a real safe holding position.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 0.8% since that buy signal, annualizing at 4.6%. It will be difficult for this hold to produce profitability as long as the stock market is bullish.

Major ETF Events

Oct 16, 2009-ETF EWJ lost QTI Red Bull status. None threatening at this point.

Oct 15, 2009-ETF’s BBB and IYR Bullish Blue flat lining. This is not yet significant, but worth monitoring.

Oct 14, 2009-Today’s bullish aggression regained yesterday’s lost QTI Red Bulls and NTI Blue Bulls. TLT Bullish Blue Curve collapsed.

Oct 13, 2009-Congress worked last night and stifled the bull today. Lost several QTI Red Bulls and several NTI Blue Bulls.

Oct 12, 2009-There was a gain of two Near-term Blue Bulls today. (Congress taking a holiday). They will be back tomorrow.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence in the prior two weeks were offset by bullish convergence last week. Bearish convergence has been endured in seven of the past 16-weeks. Combined bullish convergence/divergence in the eight of the last 13-weeks remains bullish. The combination of these suggests the bull cannot expire without a significant battle. Political influences can cause the bull’s expiration, but the populist movement against politicians remains fundamentally bullish.

Indicant Conclusion

As stated last week, low interest rates offer very narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. Politicians are under fire by the populists. Timidity is increasing in Washington D.C. and that is bullish.

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

10/18/09

Oct 11, 2009 Indicant Weekly Stock Market Report

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

This Week’s Report

The Political Honeymoon Effect on the Stock Market

Since 1833, a $10,000 investment in the stock market only in presidential-post-election-years has lost money. Such an investment strategy would have an account balance of only $8,758 as of 2005. This is the only year on the four-year political cycle that loses money.

There is somewhat of a honeymoon relationship with Congress during the newly elected president’s first year of office. Congress does not want to offend the newly elected president. Presidential poll numbers are typically high shortly after the election. Politicians seldom move against the political wind and will go along with the president. That is bearish.

Since the government and politicians consume resources without creating economic value, this honeymoon effect is destructive the wealth. Business and investors instinctively know this and thus the reason for the bearish impact on the stock market.

As the president’s popularity wanes, Congress slants their behavior again toward the political wind. The president’s popularity is typically low in the mid-term presidential election year. The mid-term election year is where stock market bottoms typically occur due to increasing political discord between the executive and legislative branches of government.

Since it is impossible for government and politicians to create wealth, popularity also wanes on Congressional members. Many are voted out during the mid-term election year. The new Congress is a bit more hostile toward the executive branch of government. There is no honeymoon at this point. The stock market delights at this post honeymoon environment and generally starts its bullish behavior during the mid-term election year and escalates dramatically in the pre-election year.

History has shifted quite a bit since 1981. At the conclusion of Ronald Reagan’s first year in office, the 1833-post-election-year account balance was only $4,195. It was up to $5,357 at the conclusion of Reagan’s second post-election-year in 1985. It could be argued this trend reversal was a function of political discourse between the executive and legislative branches of government. As one gets older and actually endures history, one can argue this point. The Democratic Congress during the middle 1980’s projected significant disdain for Ronald Reagan. The stock market delighted at that and was solidly bullish. Reagan’s tax rate reductions added fuel to the bullish stock market during that time.

George H.W. Bush’s first year in office concluded with a solid 27% gain, raising the post-election-year account balance to $6,804. Both of Bill Clinton’s post-election-years enjoyed similar bullishness with gains of 13.7% in 1993 and 22.6% in 1997. Interestingly, the Republicans gained control of the U.S. House of Representatives in 1995 for the first time since 1954. That level of political discourse was extremely bullish for the stock market.

Most of you recall the mid-term election year of 2002 enjoyed finding a market bottom on Oct 4, using weekly closing data. That is typical of mid-term election years. Market bottoms coincide with the market’s anticipation of personnel turnover in Congress. The bull’s magnitude in this anticipation is a function of the nature of that turnover. If the incoming Congress is friendly to the executive branch, the bull’s movement is muted. If agenda’s, such as Newt Gingrich’s “Contract with America” is diabolically opposed to the executive branch’s agenda, which occurred in 1995, the bullish movement is dynamic and profound. In this particular case, the friction was so great, the bull’s magnitude was unprecedented, historical, and record setting in the 1990’s.

The last classical cyclical bottom in the mid-term election year was in 1982. A classical stock market bottom occurs when the mid-term election year finds a bottom lower than the post election year’s highs. Since 1982, all mid-term election year bottoms were higher than the preceding post-election-year highs. In essence, the great bull market, originating in 1982, obsoleted this measure of stock market predictability. Since 1982, there were some significant bearish cycles in the mid-term election year, but were all above the previous post-election-years’ highs.

If the current post-election-year were to close out as of this weekend, the post-election-year account balance would be $9,844. That would bring it close to breakeven with the 1833 investment. With inflation, it would be considerably less.

The most recent mid-term election year, 2006, enjoyed 16.3% stock market gain. The stock market anticipated bullishness from a Democratic Congress and a Republican president. Unfortunately, the president reached across the aisle and behaved somewhat like a democrat. The stock market peaked in 2007 and crashed in 2008’s election year, which is normally bullish.

The bull’s rally so far this year is about half as good as those in the 1990’s. Here’s the problem. A socialistic president and a communistically behaving Congress threaten the stock market’s bull. If history repeats and it does from time to time, the stock market will continue to express bullish behavior through January 2010. A classical market bottom would then be found later in the mid-term election year of 2010. That suggests the stock market may approach 2009 lows. Reverse tangential lines suggest the market will fall below July 2009 stock market levels.

The political environment is somewhat stalemated by the populist’s movement against Congress and the President with regard to healthcare reforms. This offers a glimmer probability that the bull can roar right through 2010. Much of that depends on Congressional and presidential behavior. Those desiring bullish stock market behavior need to push for a stalemated government and passive politicians.

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

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

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

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

In addition to the buy signals, the Mid-term Indicant is signaling hold for 188 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 23.5%. That annualizes to 56.2%. The Mid-term Indicant has been signaling hold for these 188-stocks and funds for an average of 21.7-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 122-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 38.9% since the Mid-term Indicant signaled sell an average of 80.2-weeks ago.

One year ago, on Oct 10, 2008, the Mid-term Indicant was holding 19-stocks and funds out of 345 tracked for an average of 87.0-weeks. They were up by an average of 137.5% (annualized at 82.2%). There were 295-avoided stocks and funds at that time in addition to 31 new sell signals. The avoided stocks and funds were down an average of 33.9% since their respective sell signals an average of 22.2-weeks earlier.

The Mid-term Indicant was signaling hold for 295-stocks and funds of the 345-tracked two years ago on Oct 12, 2007. They were up by an average of 142.8% (annualized at 67.3%) since their respective buy signals an average of 110.3-weeks earlier. The Mid-term Indicant was avoiding 41-stocks and funds at that time. They were down an average of 14.6% since their respective sell signals an average of 32.1-weeks earlier.

There were 310-stocks and funds with hold signals on Oct 6, 2006 since their buy signals an average of 76.9-weeks earlier. They were up by an average of 100.5% (annualized at 68.0%). There were 33-avoided stocks and funds at that time. They were down by an average of 16.5% from their respective sell signals an average of 21.2-weeks earlier.

On Oct 7, 2005, the Mid-term Indicant was signaling hold for 221-stocks and funds out of 320-tracked. They were up by an average of 105.8% (annualized at 56.8%) since their buy signals an average of 96.8-weeks earlier. The Mid-term Indicant was avoiding 96-stocks and funds at that time. They were down by an average of 10.8% since their sell signals an average of 23.2-weeks earlier.

Five years ago, on Oct 8, 2004, there were 240-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 64.3% (annualized at 65.3%) since their respective buy signals an average of 51.2-weeks earlier. There were 50-avoided stocks and funds then. They were down an average of 32.6% since their respective sell signals an average of 51.1-weeks earlier.

On Oct 11, 2003, there were 263-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 52.9%, annualizing at 98.7%, since the buy signals an average of 31.0-weeks earlier. There were 24-avoided stocks and funds then. They were down by an average of 22.5% since their sell signals an average of 27.9-weeks earlier.

There were 52-stocks and funds with hold signals on Oct 12, 2002. They were up by an average of 25.2% since their buy signals 24.8-weeks earlier. They were annualizing at 52.8%. The 212-avoided stocks and funds were down an average of 25.6% since their respective 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.

Link to this week’s buy and sell signals.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

The bull responded last week to prior week’s bearishness. The heart and soul of bullish seasonality is nearing. Normalcy should invite yet more bullish behavior. Congress is contemplating a recess, which is bullish.

The only reason there were not more Mid-term buy signals is declining Vector Pressure and friendly announcements regarding healthcare. However, overall configurations are supported with bullishly trending data. The trend is not to be argued with when addressing hold positions.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% due to the Near-term, Quick-term, Short-term Indicant signaling bullish bias while the Mid-term Indicant is also shifting toward that bias in spite of recent meandering behavior.

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 35.4% since its secular weekly low on October 9, 2002. The NASDAQ is up 92.0% and the S&P500 is up 37.9% since then. The small cap index, S&P600, is up 89.4% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 30.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 25.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 27.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

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

The NASDAQ is down 57.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 29.9% since its similar secular peak on March 23, 2000. The Dow is down by 15.8% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

The Dow is up 12.4% so far this year. The NASDAQ is up 35.7% and the S&P500 is up by 18.6%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 36.4% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 42.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 43.2%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 4.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down by 3.9% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 4.8% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 16.1% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 38.0% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As anticipated, mortgage rates have been bearish the past eight weeks. Mortgage rates are interacting with bearish yellow. If they break below bearish yellow, do not be surprised at a continuation of low mortgage rates. If they bounce north off of yellow, one could conclude supply and demand equilibrium is manifesting.

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

As stated 54-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010.

As stated 50-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few quarters.

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

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

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 up 1.0% since that sell signal. It has been bearish in 19-of the last 40-weeks. It has been bullish in 16-of the last 26-weeks but has not yet qualified for a Mid-term Indicant buy signal. It was solidly bullish last week, offsetting prior week’s bearish aggression.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 6.9% since then.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 11.8%, annualizing at 60.8% since its buy signal on July 31, 2009.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It is down 23.0% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is up 7.4% since its buy signal on Sep 11, 2009.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 8.2% since then, annualizing at 43.9%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 27.5% since that buy signal, annualizing at 32.8%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 14.6% since the Near-term buy signal, annualizing at 31.3%. Gold and oil are bullishly more aggressive after six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 7.8% since that bull signal. That annualizes to 40.4%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,333,097. That beats buy and hold performance of $1,500,828 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,385. That beats buy and hold’s $104,955 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $194,950. That beats buy and hold’s $74,178 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 46.7% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is a thoroughbred. It will not expire without a battle and there is no indication it is about to expire.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 240.8% (annualized at 13.4%) since the Long-term Indicant signaled bull 936-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Overall configurations continue suggesting the bear cannot dominate at this time. Some indications of bullish fatigue continue with their assertions. As expected, the bull responded this week to last week’s bearish aggression. Force Vectors are now bullishly mature, offering the bear a chance to respond.

The Near-term Bull is 31-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. This bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. Until last Oct 2, 2009, the bear had been silent in its responses to bullish expressions. That strong bearish expression remains a tad bit influential on the current cycle. In other words the bear is lurking, but not in good enough condition to frighten the bull.

Current configurations had been offering very little encouragement to the bear. The bear found encouragement with the collapse of ETF#06-EWJ’s (Chart) NTI Bullish Blue Curve on Sep 29, 2009. It lost its QTI Red Bull status last Wednesday. ETF#12-XLU’s Bullish Blue Curve also collapsed last Friday. They are the only non-contrarian ETF’s with this bearish configuration. In essence there is not enough bearish synergy to signal sell for these ETF’s at this time.

Bullishness remains fundamental. Alternative investments, such as CD’s, money markets, etc. cannot earn enough to exceed even the mildest inflation. Interest rates should remain low until inflation gets out of hand. Also, Congress is stalemated, which is bullish, but threatened with the recent announced replacement of Senator Kennedy’s senate seat. However, a stalemated Congress and low interest rates remain as two powerful fundamentals favoring continued bullishness.

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

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

Contrarian VIX is the lone Near-term Bear. It is down 1.7% since the bear signal 4.1-weeks ago. As expected it was bearish the past five days. Its Force Vector is now moving south and no longer a Blue Bull. Its Force Vector is penetrating Vector Pressure and also its price is nearing NTI Green curve. If it is not bullish (and market bearish) in the next two days, there is an increased probability of a strongly bullish stock market and a bearish VIX.

The remaining eleven major indices are up by an average of 21.4%, annualizing at 61.9%, since the NTI signaled bull an average of 18.0-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 15.4%, annualizing at 46.3%, since their bull signals an average of 17.3-weeks ago.

The lone bear, VIX, is down 35.5% since its bear signal 25.1-weeks ago. It will not receive a Quick-term Bull signal until it crosses above bearish yellow curve.

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

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

QTI-Bullish Red Curve Trend-Bullish unanimity with 11 of 11 Non-contrarian indices in bullish trend.

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

NTI-Blue Bulls-Nine now exist. Majority Blue Bull support for Near-term bullish bias.

NTI-Bullish Blue Curve Trend- Near-bullish unanimity with eleven of 11 Non-contrarian indices in bullish trend; Contrarian VIX NTI Blue collapsed today.

NTI-Bearish Green Curve- Non-bearish unanimity with 11 of 11 Non-contrarian indices in bullish trend.

STI-Vector Pressure-Non-bullish configuration with only one of 11-non-contrarian indices in bullish trend.

Short-term Summary-Overall, Quick-term and Near-term Indicant support bullishness. Declining Vector Pressure is a source of concern and Force Vector’s penetration of Vector Pressure can incite some additional volatility.

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

As stated for several weeks, the NYSE and NASDAQ Indicant Volume Indicators continue configuring without potential robustness. Current configurations suggest limited support for bullish or bearish behavior. As stated the past several weeks, this favors the prevailing direction, which is bullish. There remains more robust volume support for bullish behavior in the past few weeks, supporting, at worse, non-bearishness. Also, volume on bullish behavior the past three days has been light, suggesting limitations on this bullish cycle.

Current Strategy-Short-term Indicant-Oct 9, 2009-Nothing different; there is no point in fighting the bullish trend. Oct 8, 2009-Nothing different; waiting for Force Vector interaction with Vector Pressure. That should occur in about three days. Oct 7, 2009-Same as yesterday. Oct 6, 2009-Force Vectors should continue to rise to at least Vector Pressure. Right now, none of the non-contrarian indices possess that configuration. As you can see, today’s bullishness supported yesterday’s prognosis. Oct 5, 2009-Bearishly mature Force Vectors should incite continuation of today’s bullish behavior for a few more days. Do not be surprised at increased volatility as a stream of earnings will delight and disappoint.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 17.8%, annualizing at 60.2%, since their buy signals an average of 15.3-weeks ago. Although there were no sell signals, the NTI is avoiding one ETF; contrarian QID. It is down 16.1% since its sell signal 11.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 21.1% since their buy signals an average of 19.0-weeks ago. Those with hold signals are annualizing at 57.6%. Although there were no sell signals, the lone avoided ETF, QID, is down by 50.1% since its sell signal on Mar 26, 2009.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 63-trading days ago to 28-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon.

Vector Pressure in bullish domains is also a bear depressant. There is now only one-ETF’s with this bullish and non-bearish configuration. There remains no dynamic bearish threat with sustainable duration at this time. However, this attribute continues weakening in support of the bull. It is now with minority support of the bull, losing majority support one week ago. This is a bit discerning since Force Vectors are now bullishly mature and most have penetrated Vector Pressure.

Near-term Indicant ETF Key Attributes

22-NTI Blue Bulls; Majority position offers Near-term bullish support.

29-NTI Blue Curves are sloping north and thus remain supportive of the NTI Bull. ETF#06 Bullish Blue Curve collapsed on Sep 29, 2009 and remains in that condition. ETF#12-XLU collapsed on Friday, Oct 2, 2009, adding a bit of bearish encouragement. No other non-contrarian ETF’s have yet to collapse. However, contrarian QID collapsed on Oct 8, 2009.

28-NTI Green Curves are sloping north, expressing support for continued non-bearishness.

Quick-term Indicant ETF Key Attributes

29-QTI Red Bulls represent a solid majority supporting Quick-term bullishness.

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

Zero-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness.

30-QTI Bearish yellow curves are sloping north, highlighting solid non-bearishness. Only contrarian QID sloping south.

The Short-term Indicant ETF Key Attributes:

20-Force Vectors in bullish domains but cycle is bullishly mature, offering the bear an opportunity to respond.

One-Force Vector in bearish domains, as bullish cycle was quick in developing.

One-Vector Pressure in bullish domains offering minority support of bullish bias. Majority support was lost Oct 2, 2009. The bull was obviously offended, based on solid bullish responses the past few days.

Six-Vector Pressures are moving in a bullish direction with minority support of the bull. This is a bit discerning; just a bit, but there was a gain of two the past two days.

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

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

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 16.1% since that sell signal.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 50.1% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $33.31 and still falling.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 8.2% since those buy signals, annualizing at 43.9%. This fund had been struggling, but bullish in eleven of the last 22-days. It was strongly bullish in four of the past five days, following eight consecutive days of bearish behavior. It’s behavior has recently been inverse to dollar’s strength.

ETF#11-Gold and Precious Metals is up 27.5% since the QTI signaled buy on December 11, 2008. Annualized growth is at 32.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $88.58 and still rising at an accelerating rate.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 14.6% since then, annualizing at 31.3%.

It is a QTI Red Bull and a NTI Blue Bull. That suggests a real safe holding position.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 1.2% since that buy signal, annualizing at 8.4%. It will be difficult for this hold to produce profitability as long as the market is bullish. You saw that today (Oct 9, 2009).

TLT is no longer a QTI Red Bull and a NTI Blue Bull. It apparently did not find comfort at those lofty levels. Its Force Vector is bearishly mature and thus a interest point on its bearish early next week. Do not be surprised at a bullish bounce.

Major ETF Events

Oct 9, 2009-Significant gains in NTI Blue Bulls but there Force Vectors penetrated Vector Pressure, suggesting a period of cooling. Do not fight the trend, though, which is bullish.

Oct 8, 2009-Thu-Several new Near-term Bull Blues today.

Oct 5, 2009-Mon-Two new Near-term Blue Bulls.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Bearish convergence occurred the past two weeks. This is somewhat discerning, as it only takes four consecutive weeks of such behavior to stimulate bearish aggression. This bearish attribute has occurred in seven of the past 15-weeks. However, combined bullish convergence/divergence in the seven of the last 12-weeks remains bullish. The combination of these suggests the bull cannot expire without a significant battle. Political influences can cause the bull’s expiration, but the populist movement against politicians remains fundamentally bullish.

Indicant Conclusion

Low interest rates offer very narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. Politicians are under fire by the populists. Timidity is increasing in Washington D.C. and that is bullish.

As stated two weeks ago, the stock market was merely passing through a cooling phase. It was simply too high. It does not need to go down too much to cool off. All it has to do is meander and allow the various supporting attributes to catch up and then consolidate for yet more bullishness through the heart and soul of bullish seasonality. You saw some of that behavior with last week’s bullish aggression.

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

10/11/09

Oct 4, 2009 Indicant Weekly Stock Market Report

This Week’s Report

W, V, or M Economic Cycles

On the bullish days, pundits promote the V-Shaped economic recovery. Conversely, the W-shape is promoted on the bearish days. Some theorists predict one or the other without regard to market behavior. What does one do when both arguments sound logical? Simply wait for the Near-term and Quick-term Indicant to validate either one.

Friday’s unemployment report adds a bit of spice to the W-argument when the numbers “disappointed.” The idea with the W is that increasing numbers of unemployed will eventually lead to a second recessionary dip. Interestingly, the bear could not muster much momentum on the disappointing news in a follow-up to last Thursday’s aggressive bearish behavior, lending support to the V-shape argument.

Lingering high unemployment is much more than just an economic problem. It can and usually does lead to social problems. That can foster severe shifts in culture. Major power shifts, quite often, occur with increases in poverty. This opens up “political” opportunities for those, not in power. There is always another witch doctor promoting a better cure. The non-knowing listen to them and therein lies a new problem.

Continuing workforce reductions will lead to reduced profit margins. Labor is what makes money. Without labor productively employed, high fixed costs, which do not vary with shifts in revenue, diminish profits. Capital stock will fall again and thus reduce capital cash infusions to corporations. That can lead to yet more layoffs and a continuing shrinkage of industry.

High fixed costs include brick and mortar, utilities, capital equipment, and salaries. The game corporations will play is similar to the banking scheme. They will write down assets. You will see many “one time charges” in the years to come. Those “one time charges” depress earnings just that one time, allowing higher profits to be reported in future periods; just by pencil whipping the numbers. There is nothing wrong with that, but keep your eyes on cash flow.

Salaries will be the last cuts made. Most managers do not take salary cuts. They elect to shut down production, consolidate assets, implement work force reductions, write down assets, etc. There is certainly nothing wrong with holding salaries as a fixed expense. However, if cash flow as a percentage of shareholder equity is not highly positive, do not buy the stock. Most executives in Fortune 500 ranks do not know how to do this. For many, the primary focus is in taking as much as they can take for as long as they can get away with it.

It is painfully obvious government leaders, politicians, are friends with bankers. So, the bankers will have the money. But the same collection of idiots who caused the current economic crisis, bankers and politicians, do not know what they are doing now. They are merely rotating the money between themselves for the time being. The problem with their thinking is since little money is being pumped into the only three wealth producing areas of the economy, inflation will unfold.

Manufacturing, agriculture, and extraction are the only three sectors of the economy that create wealth. All the others, including government, banks, and even healthcare do not create economic wealth. They are mere beneficiaries of the three pillars of wealth creation.

The only subsector in the healthcare industry that creates economic wealth are “products” manufactured to support it. A patient visiting a doctor does not create economic wealth. Once the doctor collects payment from his patient, the purchase of a product, such as a car, phone, TV, etc. facilitates economic wealth. If the doctor keeps the patient alive and that patient is productive in manufacturing, agriculture, or extraction, then indirectly, one can argue that economic wealth was facilitated, but even with that, not created.

If that patient is a politician, then one could argue there is a negative impact to economic wealth. This is not limited to politicians. Anyone, who does not work in manufacturing, agriculture, or extraction that is kept alive by a doctor does not add economic wealth. That relationship is just money passing around. If none of the doctor’s patient’s work in manufacturing, agriculture, or extraction, the doctor will find his collections from patients useless. If the doctor does not have his own garden, he will become to hungry to be effective. He and his patients will starve to death.

Politicians are excessively focused on healthcare. It represents a high percentage of the U.S. GNP. The problem with healthcare is simple. Baby boomers are getting older and becoming less productive. Several decades of prosperity has resulted in bad health habits. That adds to rising health issues in the U.S. It is one of those supply demand issues. The inequality between supply and demand cannot find a legislative solution. The rising numbers of an aging population and the disproportionate increases bad health practices is the reason demand far exceeds supply. The only solution is to increase the supply of healthcare providers or decrease the demand against the current capacity of healthcare providers.

Legislative solutions to supply and demand problems will lead to rationing. This is pure inarguable math. The President of the United States recently revealed he never took calculus. It would not be surprising that most politicians in the U.S. Congress never took calculus. Those who have never taken calculus are incapable of understanding the problem and rest assured their intrusions into the problem will only make it worse. Unfortunately, history suggests that most political leaders have not understood calculus. With that, wars and economic problems always follow the intrusion of those types of folks.

We should amend the U.S. Constitution. It would go as follows: “No one can run for political office in the United States at any level of government without have taken and passed calculus.” Furthermore, “anyone running for President must have aced calculus.” Rest assured, they would better understand the dynamics of capitalism. Some of those idiots claim capitalism is a failure at every recession. They only demonstrate their limitations in understanding what is real.

The letter, W, is configured with four legs. The first one moves down (recession) and the second one moves up (recovery) and followed with another one that moves down (recession again), which is followed by another upward moving leg (second recovery). It is the fourth leg that is of concern. Will it occur? There is little doubt about the third leg (another recession). The third leg is increasingly favored as long as jobs are being lost.

All politicians have to do is implement an economic stimulus that includes income tax reductions, property tax reductions, and sales tax eliminations. There is one more thing; eliminate all environmental protection laws. That would fix the economy.

Politicians will not do this. They want as much money flowing through Washington D.C. as possible. The more money passing through the capitol, the more they can skim. They are masters at skimming. Most have taken eighth grade algebra. They understand that one-half of one percent of a big number is a big number. The bigger the second number, the more there is for them.

Thinking secularly, it is possible for an M to take hold. The first leg moves up, analogizing the years 1700 through 1929 (economic expansion). There were quite a few V cycles in this secular M cycle. Then from 1929 through 1945, the second leg unfolded, which moved down (FDR’s economic contraction). After WWII, President Eisenhower played a lot of golf and did very little for the economy. The third M leg, moved up from 1946 through most of 2006. Wealth accumulated at a very fast pace during this third leg of M. Even the dessert folks in the Middle East got rich because of western behavior.

Universal law has a way of balancing. Profound wealth accumulation since WWII has led to significant amounts of cash flowing through Washington D.C. This success has led to increasing numbers of leech groups, such as Acorn. Such non-productive groups have grown in massive numbers. This increasing number of pitiful souls has generated yet more folks grasping at the country’s coffers. Those in political power love being in position to determine who gets what. Thus, their non-calculus thinking is only influenced by their pitiful egotistical needs.

Those who are unemployed may not be pitiful souls, but rest assured they will blame those in power for their plight. The fourth leg of the M will be influence on how the unemployed think. If they think along evil lines and support an Adolph Hitler type of person, then the fourth leg of M will unfold and take hold for generations. If they think along the lines of Thomas Jefferson and Henry Ford, then the W will take hold very quickly. Keep in mind that Thomas and Henry did not think the same, but the results of their efforts were the same; more wealth and happiness for many.

The fourth leg of the M cycle is not unfathomable. Debt continues to increase and unprecedented rates. The skimmer’s take is increasing. This is occurring at rate far exceeding productive output. The fourth leg of the W may be superseded by fourth leg of the M. The high unemployment is directly consequential to political skimming. If the populace continues reelecting incumbents, the fourth leg of M will accelerate.

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.

Although there were no buy signals, the Mid-term Indicant is signaling hold for 188 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 18.4%. That annualizes to 46.4%. The Mid-term Indicant has been signaling hold for these 188-stocks and funds for an average of 20.7-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 129-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 40.7% since the Mid-term Indicant signaled sell an average of 78.6-weeks ago.

One year ago, on Oct 3, 2008, the Mid-term Indicant was holding 50-stocks and funds out of 345 tracked for an average of 117.7-weeks. They were up by an average of 137.0% (annualized at 60.5%). There were 246-avoided stocks and funds at that time in addition to 49 new sell signals. The avoided stocks and funds were down an average of 23.8% since their respective sell signals an average of 26.3-weeks earlier.

The Mid-term Indicant was signaling hold for 289-stocks and funds of the 345-tracked two years ago on Oct 5, 2007. They were up by an average of 105.1% (annualized at 71.8%) since their respective buy signals an average of 111.7-weeks earlier. The Mid-term Indicant was avoiding 49-stocks and funds at that time. They were down an average of 12.6% since their respective sell signals an average of 28.5-weeks earlier.

There were 308-stocks and funds with hold signals on Sep 29, 2006 since their buy signals an average of 76.1-weeks earlier. They were up by an average of 105.1% (annualized at 71.8%). There were 35-avoided stocks and funds at that time. They were down by an average of 15.5% from their respective sell signals an average of 20.1-weeks earlier.

On Sep 30, 2005, the Mid-term Indicant was signaling hold for 222-stocks and funds out of 320-tracked. They were up by an average of 112.8% (annualized at 61.4%) since their buy signals an average of 95.5-weeks earlier. The Mid-term Indicant was avoiding 93-stocks and funds at that time. They were down by an average of 9.4% since their sell signals an average of 23.1-weeks earlier.

Five years ago, on Oct 1, 2004, there were 204-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 73.6% (annualized at 66.6%) since their respective buy signals an average of 57.4-weeks earlier. There were 50-avoided stocks and funds then. They were down an average of 32.4% since their respective sell signals an average of 52.4-weeks earlier.

On Oct 4, 2003, there were 219-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 58.5%, annualizing at 98.0%, since the buy signals an average of 31.0-weeks earlier. There were 30-avoided stocks and funds then. They were down by an average of 20.9% since their sell signals an average of 29.7-weeks earlier.

There were 54-stocks and funds with hold signals on Oct 5, 2002. They were up 20.2%, since their buy signals 21.6-weeks earlier. They were annualizing at 48.6%. The 226-avoided stocks and funds were down an average of 24.7% since their respective 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.

Link to this week’s buy and sell signals.

All updated information can be accessed from the following link. You will need your login ID and password.

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

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

The stock market remains a bit too hot and simply cooling off. The heart and soul of bullish seasonality begins in a few weeks, when deep bearish seasonality expires. The market was bullish during the early part of deep bearish seasonality, which should trigger some offsetting bearishness. This is one reason why there were no buy signals this weekend.

Another reason is Congress remaining in session.

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

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

Stop Loss Management

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 30.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 83.8% and the S&P500 is up 32.0% since then. The small cap index, S&P600, is up 78.8% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The Dow is down 33.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 28.4% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 31.4% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking, like bear markets are with simultaneous bottoming among the major indices.

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

The NASDAQ is down 59.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 32.9% since its similar secular peak on March 23, 2000. The Dow is down by 19.1% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. (This remains even with the immediate Blue Dog potential).

The Dow is up 8.1% so far this year. The NASDAQ is up 29.9% and the S&P500 is up by 13.5%. Keep in mind the post election year is the most bearish and has lost money since 1832. The stock market is not conforming to this historical standard at this time, but will in the event socialism becomes legislated.

The NASDAQ year-to-date performance was bearish by 39.6% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. So far, the NASDAQ is incongruent with this post election year.

The NASDAQ was down by 39.1% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which is consistent with the mid-term year’s historical standards.

The NASDAQ YTD 2003 performance was up by 37.5%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 3.1% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down by 1.1% in 2005’s post election year, which maintained congruency to the historical standards of losses. Many of you recall that 2004 and 2005 were meandering bear markets. 2005 finished up by a mere 1.4%, which was an excellent year based on post election year historical standards of bearishness.

In 2006, the NASDAQ was up 1.5% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 13.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness. It was down 25.5% at this time last year. The NASDAQ finished down by 40.5% in 2008. That was contrarian performance to historical election year bullishness and the most bearish presidential election year since related records from 1832.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

As stated fourteen weeks ago, mortgage rates continue moving north and aggressively so, but most likely an aberration. As anticipated, they softened the past seven weeks. Mortgage rates are vacillating in a neutral zone with a mortgage rate bearish bias.

A several weeks ago, commodities have elevated into the neutral zone from their bullish mini-cycle. Bearish yellow is attempting a shift to the north. That should incite a period of indecisiveness, which is occurring now. Improving economic conditions and the potential for inflation suggests commodities are a good long-term investment.

The Near-term Indicant is no longer observing concerns regarding gold. As stated for several months, it remains too risky to sell on a Quick-term basis, but there will be no hesitation in selling if prices fall below the QTI bearish yellow curve. Gold is again configuring with solid bullishness. Gold continues hovering around $1,000, but softened the past two weeks on a strong dollar.

As stated 53-weeks ago, once the euphoria of the socialistic methods are complete, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of recent bullish expressions. This cycle should endure a double dip. However, the second dip may not occur until early next year after the “heart and soul” of bullish seasonality concludes around Feb 2010.

As stated 49-weeks ago, “probabilities remain high that any bullish cycle will be followed by a deep bear market in 2009. If taxes are raised on the highly productive and capital gains, do not be surprised at a 1,000 Dow by 2010.” The bear has been passive since early March, but it still has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs have upset this line of thinking and we will know more when Congressional behavior is demonstrated over the next few quarters.

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

Rising Near-term Indicant Green and Blue curves with bullish Vector Pressure and QTI Red Bulls offers pronounced protection against the bear. The bull is being threatened again with the return of Congress. Vector Pressure started shifting to the south five weeks ago, but still remains high enough to prevent the bear from dominating.

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 8.0% since that sell signal. It has been bearish in 19-of the last 39-weeks. It has been bullish in 15-of the last 25-weeks but has not yet qualified for a Mid-term Indicant buy signal. It was solidly bearish last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is down 5.1% since then.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 4.0%, annualizing at 22.8% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009. It is down 7.1% since that buy signal. It has been bullish in 19-of the last 30-weeks, but bearish in ten of the last 16-weeks.

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 30.8% since that sell signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It is down 2.2% since its buy signal on Sep 11, 2009.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#03 – Energy and Natural Resources on Aug 3, 2009. It is up 0.1% since then, annualizing at 0.6%. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 22.0% since that buy signal, annualizing at 26.8%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 28.2%. The Near-term Indicant signaled buy on April 24, 2009. It is up 9.6% since the Near-term buy signal, annualizing at 21.6%. Gold and oil are bullishly more aggressive after six months of flat behavior.

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

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

The Mid-term Indicant signaled bull on July 31, 2009. The ten major indices are up by an average of 3.2% since that bull signal. That annualizes to 18.3%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,249,540. That beats buy and hold performance of $1,443,431 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,356. That beats buy and hold’s $100,422 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $186,642. That beats buy and hold’s $71,016 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 42.3% since then. It remains too risky to buy since the Near-term Indicant Bull continues resisting bearish assaults. Although this is classically a post-election-year hold, current technical indicators are advising to avoid this fund until the Near-term bullish cycle expires. However, this Near-term Bull is turning into a thoroughbred and will not expire without a battle.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 227.8% (annualized at 12.7%) since the Long-term Indicant signaled bull 935-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning. However, the Long-term Indicant is getting very close to signaling bear. A link to the Long-term Indicant is below. You will notice long-term projections are bearish.

http://www.indicant.net/Members/Updates/LTI-Markets-DJIA/DJIA.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. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

Overall configurations continue suggesting the bear cannot dominate at this time. Some indications of bullish fatigue continue with their assertions. Thursday’s bearish aggression should be met with a bullish response in the next day or two. The bull disappointed today, but the bear was somewhat anemic with disappointing unemployment figures. Force Vectors are either inside bearish domains or very near that point. The past two times this occurred, the bull responded. Even if the bull does not respond, bullish attributes remain strong on both a Near-term and Quick-term basis.

The Near-term Bull is 30-weeks old. The average Near-term life cycles approximate 10-14-weeks. This does not mean they are always followed by a reversal cycle. Extended inflections can occur for several days or even weeks ahead of a renewed Near-term bull or bear cycle. This bull demonstrated dynamic responses to the bear’s influence in mid-July. If the bear does not demonstrate equal or greater magnitude in responses, this Near-term Bull will delay its expiration. Until last Thursday, the bear had been silent in its responses to bullish expressions. It will be interesting to see if the bull is equally meek. It expressed meekness on Friday, offering no response.

Current configurations had been offering very little encouragement to the bear at this time. The bear found encouragement with the collapse of ETF#06-EWJ’s (Chart) NTI Bullish Blue Curve on Sep 29, 2009. It lost its QTI Red Bull status last Wednesday and a few more were lost today. ETF#12-XLU’s Bullish Blue Curve also collapsed on Friday. They are the only non-contrarian ETF’s with this bearish configuration. In essence there is not enough bearish synergy to signal sell for these ETF’s at this time.

Quick-term Red Bulls are not to be argued with. Until Quick-term Red Bulls expire, this bull should be considered a thoroughbred, which is increasingly obvious. This is supported on a near-term basis as Near-term Blue Bulls continue in their support. The Near-term Blue Bulls are in a bit of trouble, but nowhere near being overcome by Near-term Bears.

The anticipated non-bullishness the past few days manifested. It would not be surprising for the bull to respond, maybe not in magnitude, in the next few days. There remains no significant bearish threat on the immediate horizon. The bull will most likely rest until Congressional recess and then resume dynamic behavior as long as long as Congress is stalled. The slightest hint of Congressional synergy with the executive branch will excite and stimulate the bear.

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

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

Contrarian VIX is the lone Near-term Bear. It is up 21.9% since the bear signal 3.1-weeks ago. It should move back to the south in the next few days. After that, configurations will be more obviating of its underlying directional intensity.

The remaining eleven major indices are up by an average of 16.1%, annualizing at 49.4%, since the NTI signaled bull an average of 17.0-weeks ago.

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

Although there were no new bull signals, the Quick-term Indicant is signaling bull for 11-major indices. They are up 10.4%, annualizing at 33.1%, since their bull signals an average of 16.3-weeks ago.

The lone bear, VIX, is down 20.1% since its bear signal 24.1-weeks ago. It will not receive a Quick-term Bull signal until it crosses above bearish yellow curve.

On-going attribute watch for major indices: Biases are dated at the time of observation. The next sentence advises of conditions and indicators each day, unless they are also dated.

QTI Red Bull Status-Jul 27, 2009-Bullish bias. Ten of 11-non-contrarian indices are red bulls. Oct 1, 2009-Dow Utilities QTI Red Bull lost today. However, a solid majority of Red Bulls remain.

QTI Yellow Bear Status-Jul 23, 2009-Non-bearish bias. There are no non-contrarian yellow bears. VIX is a yellow bear.

-NTI Blue Bull Status-Oct 01, 2009-Non-Bullish bias. None of the 11-non-contrarian indices are blue bulls. The bull should be highly offended at this and should respond immediately.

-NTI Green Bear Status-Sep 2, 2009-Non-bearish bias. All 11-major non-contrarian indices are above bearish green and thus non-bearish. The VIX threat, expiring Sep 11, 2009, is again emerging. It will be interesting if Vector Pressure acts as a ceiling to any of its bullish ambition. Sep 28, 2009-VIX was indeed bearish today, but its Force Vector did not pierce Vector Pressure. The threat remains. Oct 1, 2009-VIX strengthened its threat. Oct 2, 2009-Most of the major indices are very near NTI-Green. If there is interaction next week, do not be surprised at increased volatility.

-NTI Blue Bull Direction-Jul 22, 2009-Bullish bias. Eleven of eleven non-contrarians are directionally bullish. Sep 21, 2009-VIX Blue started elevating, which is mildly threatening to the overall bullish stock market.

-NTI Green Bear Direction – Jul 30, 2009-Non-bearish bias. Eleven of eleven non-contrarian are directionally non-bearish. Oct 1, 2009-VIX flattening out in attempt to create a foundation for its growth.

-STI Force Vector Position- Sep 11, 2009-Neutral bias. Sep 29, 2009 Dow Transports now in bearish domains. VIX Force Vector crossed into bullish domains. It will be interesting to monitor its level of comfort there. If comfortable, the bear may be inspired to attack. Sep 30, 2009-VIX was bullish on today’s flat market, suggesting some comfort. However its Force Vector cycle is mature, which suggests its non-bullishness. Oct 1, 2009-None are in bullish domains and only one above Vector Pressure. Nine are now in bearish domains, offering the bear a bit of encouragement. They are bearishly mature, suggesting a high probability of a bullish response. Oct 2, 2009-Six are now in bearish domains, which is down by three from last Thursday. That suggests the bull is interested in responding to these recent insults by the bear.

-STI Force Vector Direction – Sep 23, 2009-Mild Bearish Bias. Sep 24, 2009-The lazy decline shifted a bit more sharply last Thursday; most likely due to a U.S. Congressional replacement to Senator Kennedy.

-Vector Pressure Position- Jul 23, 2009-Bullish bias. Eight of 11-non-contrarian in bullish domains and thus supportive of the bull. Oct 1, 2009-Two fell into bearish domains today, supporting the “tiring bull” premise. Oct 2, 2009-One more fell from bullish domains.

-Vector Pressure Direction- Sep 28, 2009-Minor bearish bias. All 11-non-contrarian sloping south, but not significant yet. Oct 2, 2009-Significance will be highlighted on Force Vectors next upward cycle and its behavior after interacting with Vector Pressure.

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

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

QTI-Bullish Red Curve-Bullish unanimity with 11 of 11 Non-contrarian indices in bullish trend.

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

QIT-Yellow Bears-None of the non-contrarian’s exist and thus without any bearish bias. Contrarian VIX is the only Yellow Bear. It is making a valiant attempt to rid itself of this pitiful configuration.

NTI-Blue Bulls-Only one exist and it is contrarian VIX. There is no Blue Bull support for Near-term bullish bias at this time.

NTI-Bullish Blue Curve- Bullish unanimity with 11 of 11 Non-contrarian indices in bullish trend; Contrarian VIX NTI Blue also sloping bullishly, conflicting with overall market.

NTI-Bearish Green Curve- Non-bearish unanimity with 11 of 11 Non-contrarian indices in bullish trend.

STI-Vector Pressure-Non-bullish unanimity with none of 11-non-contrarian indices in bullish trend.

Short-term Summary-Declining Vector Pressure is a source of inspiration of the bear, but until last Thursday, each expression thereof had been smacked by the bull. Friday’s non-response by the bull is a bit disturbing but do not be surprised at a bullish response next week.

-Political Climate – Congress in session is bearish, but technical data is overriding at this point. Strong bullishness not likely to return until the next Congressional recess. Force Vectors dipped deeply to the south when Senator Kennedy’s replacement was announced this past Thursday. The stock market does not find sixty Democratic Senators bullish. Fifty-nine was tolerable, but sixty is a bit more threatening to the bull.

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

As stated for several weeks, the NYSE and NASDAQ Indicant Volume Indicators continue configuring without potential robustness. Current configurations suggest limited support for bullish or bearish behavior. As stated the past several weeks, this favors the prevailing direction, which is bullish. The bull did not respond to yesterday’s bearish aggression. That supports the idea of bullish fatigue, as opposed to an expiring bull. It remains dominant.

Current Strategy-Short-term Indicant-Oct 2, 2009-Fri The bear’s limitations for follow through on last Thursday’s bearish aggression suggests the bull is not ready to expire. However, it is a tired bull. Oct 1, 2009-Thu-Today’s aggression only added a few minor threats, as the bull remains dominant. Sep 30, 2009-Wed-Same as before. Sep 29, 2009-Tue-Same as yesterday. Sep 28, 2009-Mon-As stated last week, there is no dynamic bearish threat. The bull is tiring and probably weary of the Congressional session now underway. Do not be surprised at limited dynamic behavior until the next Congressional recess.

Short-term ETF Report Card, Status, and Charts

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

Although there were no buy signals, the Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 12.6%, annualizing at 45.8%, since their buy signals an average of 14.3-weeks ago. Although there were no sell signals, the NTI is avoiding one ETF; contrarian QID. It is down 9.4% since its sell signal 10.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up an average of 15.8% since their buy signals an average of 18.0-weeks ago. Those with hold signals are annualizing at 45.5%. Although there were no sell signals, the lone avoided ETF, QID, is down by 46.1% since its sell signal on Mar 26, 2009.

Quick-term Red Bulls significantly reduce the threat of dynamic and sustainable bearish behavior. As long as there are Quick-term Red Bulls, one does not have to worry about bearish dominance. Breadth protection improved from only 5-red bulls 58-trading days ago to 26-red bulls today. This is a significant non-bearish configuration with respect to disallowing dynamic behavior on the immediate horizon. This bullish attribute was weakened last Thursday with the loss of three QTI Red Bulls and one more this Friday, but remains with strong majority support for the bull.

Vector Pressure in bullish domains is also a bear depressant. There are 11-ETF’s with this bullish and non-bearish configuration. There remains no dynamic bearish threat with sustainable duration at this time. However, this attribute continues weakening in support of the bull. It is now with minority support of the bull, losing majority support on Friday.

Near-term Indicant ETF Key Attributes

Five-NTI Blue Bulls; Minority position offers Near-term bullish support, but weakening.

28-NTI Blue Curves are sloping north and thus remain supportive of the NTI Bull. ETF#06 Bullish Blue Curve collapsed on Sep 29, 2009 and remains in that condition. ETF#12-XLU collapsed on Friday, Oct 2, 2009, adding a bit of bearish encouragement. No other ETF’s have yet to collapse.

29-NTI Green Curves are sloping north, expressing support for continued non-bearishness.

There are no Near-term Green Bears other that QID.

Quick-term Indicant ETF Key Attributes

26-QTI Red Bulls represent a solid majority supporting Quick-term bullishness.

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

Zero-QTI Yellow Bears represent a solid majority supporting Quick-term non-bearishness.

30-QTI Bearish yellow curves are sloping north, highlighting solid non-bearishness.

The Short-term Indicant ETF Key Attributes:

Two Force Vectors in bullish domains, but both are contrarian; TLT and QID. Thus there is no bullish support.

12-Force Vectors in bearish domains offering the bear a bit of encouragement. Eight moved back into the neutral zone from bearish domains on Friday, Oct 2.

11-Vector Pressures in bullish domains offering minority support of bullish bias. Majority support was lost this Friday.

Two-Vector Pressures are moving in a bullish direction with minority support of the bull. This is a bit discerning; just a bit.

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

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

Contrarian Funds

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

The Near-term Indicant signaled sell for QID on Jul 23, 2009. It is down 9.4% since that sell signal. The Near-term Indicant is no longer on the verge of signaling buy for this ETF.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 46.1% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $33.85 and still falling. The rate of yellow descent is accelerating.

ETF#03-Natural Resources - The Near-term Indicant and Quick-term Indicant signaled buy on August 3, 2009. It is up 0.1% since those buy signals, annualizing at 0.6%. This fund had been struggling, but bullish in eight of the last eighteen days. It was bearish for the eighth consecutive day due, in part, due to the strength in the U.S. dollar.

ETF#11-Gold and Precious Metals is up 22.0% since the QTI signaled buy on December 11, 2008. Annualized growth is at 26.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $88.15 and still rising.

The Near-term Indicant signaled buy on Apr 24, 2009. It is up 9.6% since then, annualizing at 21.6%.

It is a QTI Red Bull and a NTI Blue Bull. That suggests a real safe holding position.

ETF#14-TLT-Long Government received a buy signal on Aug 17, 2009 from both the Near-term and Quick-term Indicant. It is up 4.5% since that buy signal, annualizing at 35.4%. It will be difficult for this hold to produce profitability as long as the market is bullish. However, a small stock market bearish spurt could help it along. It is configuring with strong bullishness; erratic Force Vector behavior in bullish domains and rising Vector Pressure are solid bullish configurations. As of today, its bullish Force Vector cycle is mature, suggesting mild non-bullishness in the next few days.

TLT is now a QTI Red Bull and a NTI Blue Bull. It is configured to find comfort at that lofty level.

Major ETF Events

Oct 2, 2009-ETF#12-XLU-NTI Bullish Blue Curve collapsed today. This brings the total to two with this condition. That is not enough to foster bearish synergy.

Oct 1, 2009-A few QTI Red Bulls were lost today, but nowhere near providing bearish synergy.

Sep 30, 2009-Dow Transports Force Vector in bearish domains, but cycle is mature.

Sep 29, 2009-ETF#06-EWJ-NTI Bullish Blue collapsed.

Sep 28, 2009-TLT was non-contrarian today.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

Indicant Conclusion

Low interest rates offer very narrowed alternative investment opportunities. Therefore, a huge amount of cash should continue chasing stock prices to the north. Politicians are under fire by the establishment. Timidity is increasing in Washington D.C. and that is bullish.

As stated last week, the stock market is merely passing through a cooling phase. It is simply too high. It does not need to go down too much to cool off. All it has to do is meander and allow the various supporting attributes to catch up and then consolidate for yet more bullishness through the heart and soul of bullish seasonality.

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

10/04/09