Oct 2010 Weekly Stock Market Reports

Oct 31, 2010 Indicant Weekly Stock Market Report

Volume 10, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

Mid-term Elections – Part 2

As stated last week, historical standards clearly demonstrate stock market bullishness in the presidential pre-election year. The next one occurs next year in 2011. The following link repeats from last week.

Click this sentence to view a chart of the four-year election cycle.

Anticipating another bull similar to that of the 1990’s has some merit, albeit with significantly different economic and societal conditions. Economic fundamentals are currently different from that in 1994. At that time, energy costs and other commodities were very stable. Although stable in 2010, they are at a much higher cost basis. Oil prices during the mid-1990’s vacillated between $18 and $35/bbl. It is now bouncing around $80/bbl. Although consistently aligned with inflation, it has touched $140/bbl. Chinese demand imposes upward pressure on commodities, including oil.

Gold during the mid-1990’s mostly trended to the south from about $400/oz to $300/oz. That was consistent with rising productivity and modest commodity prices. Low and stable energy and commodity costs facilitated profound stock market bullishness. Of course, a stalemated political climate with a republican congress and a democratic president added pizzazz to the bull.

Socialism was not popular during the 1990’s. The entrepreneurial wave that began in the 1980’s continued accelerating during the 1990’s. Products offered by the likes of Michael Dell, Bill Gates and others helped elevate productivity, which is the sole source to increases in the quality of life. Several Japanese companies had similar individuals, including the great Shigeo Shingo.

During the 1990’s people like Bill Gates, Michael Dell, and others enjoyed significant press coverage. Adding bearish inspiration, most contemporary press popularity is political; especially since the Iraq War started and expanding with the 2008 elections. Contemporary press is enamored with politicians. From time to time, contemporary press is concerned about the likes of Steve Jobs of Apple, but he is a gray hair. Brett Favre, a great football player gets more press coverage than most business people do.

There are few youngsters, currently leading entrepreneurialism in contemporary society. The threat of increasing taxes and social causes are crowding them out; at least those very few who are capable of creating newness with real ideas, as opposed to politically generated ideas. Unfortunately, most youngsters are Obama maniacs. Many find Jon Stewart’s Daily Show as a source of intellectual stimulation. So, the youth element is not offering the bull much inspiration, contrary to the 1990’s.

Currently, commodity prices and entrepreneurialism are not inspirational to the bull. Coupling that to increasing socialism in the U.S. should have a dampening effect on bullish enthusiasm similar to that of the 1990’s. However, the “socialistic threat” in the U.S. occurred quickly with disallowed deserved bankruptcies in 2008. That momentum carried over quickly to social healthcare and cap and trade laws. That, coupled with increased regulations, is also not inspirational to the bull. The current political power structure in the U.S. remains as the biggest threat to the stock market bull. That may change, but until it does, some paranoia remains appropriate.

It is unlikely a new Congress can undo these economic damages in 2011. Even more frightening is what the lame duck Congress will do before the new Congress moves in early next year.

If the stock market senses the elections of 2012 could result in rescinding socialistic causes during the past few years, the stock market bull would be exhilarated.

The U.S. has been home to most great business leaders for the past 100+ years. There are a few exceptions. Japan’s Soichira Honda and Mr. Ono of Toyota completely and unquestionably defeated their lazy/hazy counterparts in the U.S. during the 1970’s and 1980’s. Japan’s Akio Morita of Sony evaporated the likes of RCA, Zenith, and several other U.S. counterparts during the same era. Shigeo Shingo manufacturing methods led to lower costs and higher quality. He started this in Japan, but his techniques were applied around the world during the 1980’s and 1990’s. Politicians claim credit for this, but falling oil prices, coupled with Shingo manufacturing methods, were causative, while the political claims were merely correlative.

Detroit manufacturers, though, did not apply Shingo techniques during the 1980’s and 1990’s. Detroit automotive manufacturer’s product quality continued deterioration with rising costs. Most suppliers and U.S. automakers still do not perform to Shingo methods. GM and Chrysler failed in 2008 and were, inappropriately, bailed out from closure. This sort of behavior significantly weakened U.S. manufacturing. This reduced entrepreneurial entrants into the automobile industry in the U.S.

Imagine what China could offer. Now, that could be bullish; very bullish. If China adopted the U.S. Constitution, new products and services would be unleashed surpassing those of the past 100-years. If the newly elected U.S. Congress catapults a renewed society consistent with that of the founding fathers’ documented philosophy, wealth will expand, exponentially, beyond even the most robust imagination of magical proportions.

Capitalists will resolve all problems confronting humankind. No other organizational concept or group of people is capable of resolving any problem. On the contrary, all non-capitalistically minded people are the problem.

Currently, the Long-term, Mid-term, and Short-term Indicant models continue with bullish attributes. Fundamentally, there is little support for that. Spiritually speaking, there is a movement increasing around this world that non-capitalistic minded peoples are being confronted. With that, the stock market bull continues its domination. If incumbent politicians are re-elected in surprising numbers, the traditional presidential pre-election year bull market may not manifest.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 272 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 39.9%. That annualizes to 44.8%. The Mid-term Indicant has been signaling hold for these 272-stocks and funds for an average of 46.3-weeks.

The Mid-term Indicant is avoiding 67-stocks and funds of 340- tracked by the Indicant. The avoided stocks and funds are down an average of 42.7% since the Mid-term Indicant signaled sell an average of 100.3-weeks ago.

One year ago, on Oct 30, 2009, the Mid-term Indicant was holding 195-stocks and funds out of 333 tracked for an average of 24.6-weeks. They were up by an average of 19.8% (annualized at 42.0%). There were 115-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 43.2% since their respective sell signals an average of 85.1-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 12-stocks and funds of the 344-tracked two years ago on Oct 31, 2008. They were up by an average of 163.6% (annualized at 92.8%) since their respective buy signals an average of 91.7-weeks earlier. The Mid-term Indicant was avoiding 319-stocks and funds at that time. They were down an average of 27.8% since their respective sell signals an average of 23.3-weeks earlier.

There were 286-stocks and funds with hold signals on Oct 26, 2007 since their buy signals an average of 112.9-weeks earlier. They were up by an average of 143.2% (annualized at 66.0%). There were 48-avoided stocks and funds at that time. They were down by an average of 15.1% from their respective sell signals an average of 28.2-weeks earlier.

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

Five years ago, on Oct 28, 2005, there were 216-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 104.2% (annualized at 53.9%) since their respective buy signals an average of 100.5-weeks earlier. There were 102-avoided stocks and funds then. They were down an average of 10.7% since their respective sell signals an average of 24.4-weeks earlier.

On Oct 29, 2004, there were 243-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 67.1%, annualizing at 64.8%, since their respective buy signals an average of 53.8-weeks earlier. There were 43-avoided stocks and funds then. They were down by an average of 33.3% since their sell signals an average of 53.8-weeks earlier.

There were 261-stocks and funds with hold signals on Oct 31, 2003. They were up by an average of 54.5%, annualizing at 93.4%, since their buy signals 30.4-weeks earlier. The 25-avoided stocks and funds were down an average of 23.9% since their respective sell signals an average of 30.4-weeks earlier.

On Nov 1, 2002, there were 211-stocks and funds with a hold signal, enjoying a 16.9% gain since their respective buy signals an average of 10.0-weeks earlier. That annualized at 88.4%. There were 38-avoided stocks at that time. They were down by an average of 29.6% since their sell signals an average of 19.1-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.

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

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

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

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

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

The Mid-term and Short-term Indicant continue with strong support for the bull. The mid-term election year continues gaining traction toward stock market bullishness. If elections do not occur, as expected, be prepared for a bearish response.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest, but they should be tight.

For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If the green curve is rising and above your buy price, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you should set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 52.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 125.1% and the S&P500 is up 52.3% since then. The small cap index, S&P600, is up 118.5% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 50.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 22.5% since its similar secular peak on March 23, 2000. The Dow is down by 5.2% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. We’re now only 15-years from that attainment.

The NASDAQ year-to-date performance was bearish by 31.2% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 33.3% 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 NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 45.0%. 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 1.4% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 3.9% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was up 6.6% 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 16.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 37.5% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 33.0% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 13.5% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 21.5% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 12.3% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 16.1% 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.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The Near-term Bear cycle of 2010, originating during the weeks of May 9 and May 16, may not propel additional near-term cycles below the March 9, 2009 cyclical bottoms. Even with that, statistics supported with 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices. This will eventually occur, but not in this cycle.

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

The Dow is up 69.8% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 97.6% and the S&P500 is up 74.9% since then. The S&P600, Small Cap Index, is up 105.5% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The bull is gaining traction at this time.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year. The pre-election year is the most bullish along the 4-year cycle. In essence, the anticipated firing of incumbent politicians in the U.S. arouses the bull.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Dynamics continue shifting in favor of robust international economic growth; especially that of Asia. Europe will lag with its old money socialism and lazy hazy unionism. The U.S. remains a crapshoot, but biased in favor of very slow growth under the threat of redistributing wealth. There is no difference between a tyrannical king confiscating assets than elected leaders in a democracy doing the same. The results are never friendly to overall prosperity, limited only to those who take. Of course, assets shrink over time and eventually there is little remaining to take. Political dynamics are countering recent socialistic movements. Capitalism has too long a history of success for easy abandonment.

Commodity price’s quick-term cycle continues to rise. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are enjoying Red Bull status. This remains economically bullish.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot. Do not be surprised at $2,000/oz by 2014. At the same webpage, you will notice oil is less stable. As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. The high end forecast, though, projects $120/bbl by 2012. The King will have to approve that, though.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. It continues to skyrocket. That is economically bullish with inflationary considerations later. The CRB Bridge Futures has shifted from waffling to more bullish aggression. It is also a solid Red Bull.

As promised by Bernanke, the discount rate (and prime) rate are holding flat from their depressed levels. The fed funds closing rate and call money also continue flat and very depressed. The 2012 forecast suggests values closer to zero than any other value.

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. The 2012 forecasted values do not yet indicate any significant increases. Keep in mind these forecasts are purely statistical, but qualitative inquiries are not suggesting different projections at this time.

Mortgage rates resumed their bearish cycle the past several weeks. They all remain Yellow Bears with continuing statistically depressed projections.

The British Pound is no longer a Yellow Bear, but statistical projections continue with a bearish outlook for that currency. However, the Brits are moving from left to right on the political spectrum, which is one reason its pathetic currency is no longer a Yellow Bear. It is continues attempting Red Bull status, but not quite there.

The Japanese Yen continues to strengthen. However, even with Japanese governmental intervention it remains as a Yellow Bear. Keep in mind, the chart’s expression is per U.S. dollar and thus its Yellow Bear status suggests the Yen is stronger. Interestingly, Japan is somewhat socialistic, but still enjoying prior benefits of their great industrial engineer, Shigeo Shingo, who is now deceased. This is an interesting dynamic, whereby superior industrial engineering can offer significant abundance to any society in spite of their political structure as long as the political structure does not interfere. The Japanese system tends to help the idea of enhancing productivity, which is the sole contributor to increases in the quality of life.

Scrolling down, you will find the Canadian dollar is trading at a stable rate. The Euro remains as a Red Bull. The Canadian dollar, like the Yen, is strengthening as a Yellow Bear. The CA$ tends to parallel oil prices.

The consumer price index and producer price index continue to be relatively stable.

Several weeks ago, we renewed participation in the current bullish spurt. It may not be just a mere bullish spurt. The mid-term elections continue to promise an increased likelihood of a stalemated U.S. Government. Furthermore, there are some increasing probabilities of repealing some of the Congressional stupidity that has permeated the capital markets since 2006, when the democrats took control. The media continues relating presidential terms to stock market behavior, when in fact, it is Congress that passes laws and develops budgets. The media is ignorant. Most are encumbered with simple journalism degrees or other liberal arts jibber-jabber.

All prior bearish commentary in this section has been arrested, based on the mid-term election phenomenon, current political polling, the Short-term and Mid-term Indicant bull signals. The current environment remains bullish. That, coupled with capitalistic expansionary practices in Asia, is increasingly bullish. The geographical sectors, as a measure of bullish magnitudes, will be interesting to track in the years ahead.

Finally, during the past two to three years, more Americans have read the U.S. Constitution in response to contemporary politicians straying from it. Contemporary politicians are dilettantes when compared to the founding fathers, who had real jobs and endured life and death threats during their development of it. Most politicians in the past hundred years or so have expressed disdain toward the constitutional limitations imposed upon them. They, for the most part, are pure dilettantes.

Although always under threat by any incumbent politician, the current political spectrum is favorable to the bull. Since the founding fathers, there have been very few good politicians. Those wandering three-pound brains that penetrate the halls of U.S. public buildings are mostly empty of substance, compared to the founding fathers. As long as the U.S. sticks to principles contained in the U.S. Constitution, the stock market bull will enjoy more victories than defeats. There needs to be significant repeals of recent legislation and the Federal Government needs significant downsizing, where inefficiencies are maximized.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 9.5%, annualizing at 81.0% since then.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 28.5% since then, annualizing at 24.4%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 8.3%, annualized at 70.9% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 10.5%, annualized at 90.3%, since the most recent buy signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy on Oct 8, 2010. It is down 0.2% since then, annualizing at 3.7%.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 10.0% since that buy signal, annualizing at 86.0%.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 8.9% since then, annualizing at 72.6%. It was up 242.4% (annualized at 44.8%) since the 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 64.4% since that buy signal, annualizing at 33.8%. 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 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 13.0% since that buy signal, annualizing at 57.6%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010.

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

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

Several weeks ago, the Mid-term Indicant could find no other reason for fighting the bull. Although there is fundamental support for such a battle, the mid-term election year, coupled with the current political climate, is very “politically” bullish. There are no longer any mid-term threatening attributes favoring the bear. Therefore, the Mid-term Indicant is signaling bull for all major indices.

All the major indices are up by an average of 15.4% since their bull signals an average of 29.6-weeks ago. That annualizes at 27.0%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,159,765. That beats buy and hold performance of $1,691,540 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,838. That beats buy and hold’s $115,904 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $214,472. That beats buy and hold’s $86,942 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid 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. The stock market did not succumb to the bear during the post election year, 2009. There will be another bear cycle at some future point. Boasting will be more available at that time.

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.

You will notice quite a few changes in the NASDAQ100 components. Former components were moved to the Indicant select stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 69.9% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then and a sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being

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 284.1% (annualized at 14.9%) since the Long-term Indicant signaled bull 991-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

There is not much difference. These “boring days” would not be as such during periods of non-bullish expectations. More “pundit” press is now recognizing the congressional economic damage, as well as that from other political institutions. This is adding bullish pizzazz. Eventually, though, the commonality phenomenon will lose the political correlation to stock market performance.

As long as NTI Blue is rising, there is nothing to worry about for those desiring a bullish stock market.

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

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

The eleven existing bulls are up 6.2% since the NTI signaled bull an average of 6.8-weeks ago. That annualizes to 47.3%.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 2.4% since that bear signal.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant. There is one bear signal (VIX).

Short-term Market Summary

The major indices are NTI Blue Bulls, which are solidly bullish. They are also Red Bulls, mitigating bearish ambition.

As stated on Oct 5, this bull appears real. It may be enjoying the absence of a Congressional budget. Politicians are ashamed it would approach a 3-trillion dollar deficit. Finally, those congressional rascals found a boiling point. They are in trouble and with that, the stock market is not! Congress is out of session, mitigating their economic damage adding bullish inspiration.

-Tangential Protection – None!

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat has subsided for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. This is being threatened by explosive Asian economies and the classical pre-election presidential year’s stock market bullishness, which starts on January 1, 2011. Those historical bullish cycles typically originate in the mid-term election year, which concludes on December 31, 2010. Configurations suggest this bullish cycle has started and prices will not fall to those reverse tangential projections until a later date. Those sour values will most likely occur once hyper-inflation and/or high interest rates and/or both kick in, which is inevitable, but that could be a few years from now. So, until then enjoy the bull in spite of its sometimes illogical behavior.

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 continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

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

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

Indicant Volume Indicators

Both volume indicators are moving robustly. This configuration bodes well for increased dynamic stock market behavior. Currently, that favors the bull.

Oct 29, 2010-Fri-Flat volume on flat behavior is merely a resting bull. Bullish bias prevails.

Oct 28, 2010-Thu-Same as yesterday with increasing IVI robustness. That favors the bull.

Oct 27, 2010-Wed-Flat volume is not boisterous support for bearish behavior.

Oct 26, 2010-Tue-Same as yesterday; no evidence of any shift from bullish bias.

Oct 25, 2010-Mon-Mild volume on mild bullishness supports continuation of bullish bias.

Oct 22, 2010-Fri-Light volume on flat behavior supports status quo; bullish bias.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 6.7% since their buy signals an average of 7.2-weeks ago. This annualizes at 48.5%.

The NTI is avoiding three-ETF’s. They are down by an average of 18.3% since their sell signals an average of 5.6-weeks ago. They are contrarians, QID, VXX, and TLT.

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 10.6% since their buy signals an average of 14.4-weeks ago. This annualizes at 38.4%.

The Quick-term Indicant is avoiding 2-ETF’s (QID and VXX). They are down by an average of 53.1% since their sell signals an average of 43.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase, supporting bull. Twenty-seven ETF’s are Red Bulls, mitigating dynamic bearish threats. NTI Bullish Blue remains aggressively bullish for most of the non-contrarian ETF’s. A few are shaky, but bearish synergy is absent.

The bear is having difficulty mustering up energy against the bullishly sloping Near-term Bullish Blue Curve. The bear appears readying itself for lengthy hibernation, leading into and beyond the mid-term elections. There are always bear attacks from time to time, but irrelevant and unsustainable against current attributes.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 8.9%, annualizing at 72.6%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. The “energy bear” cannot find sustainable forces with current bullish attributes.

ETF#11-Gold and Precious Metals is up 64.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $114.63 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. It is up 13.0% since the Near-term buy signal, annualizing at 57.6%.

Gold Force climbed into bullish domains this Friday. Next week’s Force behavior will be interesting. The Near-term Indicant will not signal sell until it interacts with green.

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

As stated for nearly the past two years, 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 advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring oratories. With that, in terms of U.S. dollars, gold’s long-term trend remains bullish. Some are claiming a Gold bubble. That is a mere marketing tactic..attention getting stuff. The Short-term Indicant does not care about bubbles. It signals sell/avoid before the bubble pops.

ETF#14-TLT-Long Government received a buy signal from Quick-term Indicant models on Apr 27, 2010. It is up 12.0% since that buy signal, annualizing at 23.3%. It is unlikely this fund will remain bullish, concurrent with stock market bullishness. Its contrarian nature suggests it should shift bearishly as long as the stock market remains bullish. The Quick-term Indicant will not signal sell until price interacts with yellow. This bearish prognosis is gaining momentum.

The Near-term Indicant signaled sell on Oct 14, 2010, as its price fell below NTI Green with Force moving south in bearish domains. It is down 1.1% since then. Pressure shifted negatively into bearish domains on Wed Oct 27, 2010, adding bearish inspiration. Dropping Force added bearish support. It was solidly bearish in two of the past four day days, losing nearly 3.0% on those two down days.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 19.2% since then. All attributes remain bearish.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 34.7% since then. Its Force Vector appears near a potential bottom, but Pressure is low. That is not inspirational to the VIX and VXX bull. This ETN does not perfectly parallel its parental index, VIX.

Major ETF Events

Oct 29, 2010-Fri-GLD Force crossed into bullish domains. Next week’s behavior will be interesting.

Oct 28, 2010-Thu-None

Oct 27, 2010-Wed-TLT again very bearish on mild bearish behavior, conflicting with its normal contrarian nature.

Oct 26, 2010-Tue-TLT was very bearish on today’s flat stock market behavior. See earlier comments.

Oct 25, 2010-Mon-None; just a boring bull, which are cherished.

Oct 22, 2010-Fri-None

Current Strategy-Short-term Indicant- Oct 29, 2010-Fri-Same. Oct 27, 2010-Wed-Same. Oct 26, 2010-Tue-Same. Oct 25-Mon-Holding remains safe.

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

Six of the eight last weeks enjoyed bullish convergence/divergence. Even though shy of the desired configuration of four consecutive weeks of bullish convergence, the stock market remains strongly bullish. Do not be surprised at mild behavior or even a mild correction the next few weeks. Such passivity should be viewed, as healthy. Last week offered no evidence of bullish or bearish bias, as it was basically flat. Commodities, though, were bullish, which is consistent with inflationary projections.

Indicant Conclusion

The encroaching mid-term election year stock market bullishness continues with gusto. These bullish anticipations enjoy thorough technical support. The Indicant Volume Indicator bottomed four weeks ago, suggesting volume will increase in coming weeks. Modest volume on last week’s flat market behavior does not deter current bullish prognosis.

As stated the past 56-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena, coupled with low interest rates, continue in support of the bull. Inflation has not yet threatened the bull. Keep in mind, though, it will at some point in the future.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/31/2010

Oct 24, 2010 Indicant Weekly Stock Market Report

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

Mid-term Elections Near

Historical standards clearly demonstrate stock market bullishness in the pre-election year. The next one occurs next year.

Click this sentence to view a chart of the four-year election cycle.

The reason the pre-election year is the most bullish is because of the typical loss of power by the incumbent president and congressional employee turnover. Presidents do not create wealth. On the contrary, they debit it. Congress loses efficiency with the turnover in personnel and that is always bullish for the stock market.

The bull is stimulated even more when the legislative and executive branches of government do not get along. The most dramatic example of that was in the 1990’s. That, coupled with worldwide declines in communism, propelled the stock market to unparalleled growth rates.

The gap between the pre-election year and the post election year is astounding. The $10,000 investment in 1832 only during post election years is now at just over $10,000, while the same investments during the pre-election years was over $300,000 at the end of 2007.

We all know why. The political establishment rallies around the newly elected president shortly after the election and more or less does what the new president wants. The result of all that nonsense is a reduction in wealth. This delights the stock market bear.

The political establishment endures chaos and becomes discombobulated shortly after the mid-term elections. Their power to debit wealth is shaken. That delights the stock market bull since it knows more wealth will be created by virtue of political inefficiencies.

That bullish delight typically originates in the mid-term election year. The results of the mid-term election conclude in just over two weeks. The stock market bull started its historical march several weeks ago in anticipation of this phenomenon.

Since 1832, the United States has enjoyed a powerful position of economic influence. That influence is dwindling as more and more Americans have their hands out. They are weak. As that “weakling sector” of the population expands, the U.S. will become weaker. This four year election cycle may not hold its political pattern, as political behaviors in banana republics are irrelevant.

In essence, vote getting in the U.S. is more and more about how much politicians can “give away.” Since they produce nothing, they must first, “take.” Giving capacity is outstripping productive capacity at an increasing rate. Productive capacity will proportionately decline with the increasing weaklings in American society. It will achieve a critical mass someday. That critical mass will occur sooner rather than later, if the executive and legislative branches get along with each other after November 2.

Do not be surprised at a bearish response if the democrats hold congressional majorities in both houses after November 2, 2010.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant added the Congressional Effect Fund, CEFFX, to its tracking list on Oct 22, 2010. It is MTI-MF#53. An unnatural sell signal was triggered followed by a buy signal. This is necessary for newly tracked securities.

The Mid-term Indicant is signaling hold for 272 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 39.1%. That annualizes to 44.9%. The Mid-term Indicant has been signaling hold for these 272-stocks and funds for an average of 45.3-weeks.

The Mid-term Indicant is avoiding 67-stocks and funds of 340- tracked by the Indicant. The avoided stocks and funds are down an average of 42.9% since the Mid-term Indicant signaled sell an average of 99.3-weeks ago.

One year ago, on Oct 23, 2009, the Mid-term Indicant was holding 202-stocks and funds out of 333 tracked for an average of 22.4-weeks. They were up by an average of 23.9% (annualized at 55.5%). There were 114-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 40.6% since their respective sell signals an average of 84.1-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 13-stocks and funds of the 344-tracked two years ago on Oct 24, 2008. They were up by an average of 160.0% (annualized at 90.1%) since their respective buy signals an average of 92.3-weeks earlier. The Mid-term Indicant was avoiding 325-stocks and funds at that time. They were down an average of 32.7% since their respective sell signals an average of 21.7-weeks earlier.

There were 296-stocks and funds with hold signals on Oct 19, 2007 since their buy signals an average of 110.8-weeks earlier. They were up by an average of 133.2% (annualized at 62.5%). There were 42-avoided stocks and funds at that time. They were down by an average of 17.7% from their respective sell signals an average of 32.5-weeks earlier.

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

Five years ago, on Oct 21, 2005, there were 218-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 103.0% (annualized at 54.1%) since their respective buy signals an average of 98.9-weeks earlier. There were 100-avoided stocks and funds then. They were down an average of 11.3% since their respective sell signals an average of 24.0-weeks earlier.

On Oct 22, 2004, there were 239-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 64.7%, annualizing at 63.0%, since their respective buy signals an average of 52.3-weeks earlier. There were 49-avoided stocks and funds then. They were down by an average of 33.0% since their sell signals an average of 52.3-weeks earlier.

There were 266-stocks and funds with hold signals on Oct 24, 2003. They were up by an average of 50.6%, annualizing at 89.5%, since their buy signals 29.4-weeks earlier. The 22-avoided stocks and funds were down an average of 23.8% since their respective sell signals an average of 31.6-weeks earlier.

On Oct 25, 2002, there were 178-stocks and funds with a hold signal, enjoying a 19.1% gain since their respective buy signals an average of 15.2-weeks earlier. That annualized at 65.3%. There were 75-avoided stocks at that time. They were down by an average of 34.0% since their 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.

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 52.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 122.5% and the S&P500 is up 52.3% since then. The small cap index, S&P600, is up 119.0% 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. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 50.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 22.5% since its similar secular peak on March 23, 2000. The Dow is down by 5.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050. Significant downsizing of federal governments and related regulations shrink will stimulate a reassessment of the previous sentence. If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak. The quality of life will continue its slide, that began in 2006/7 with the election of a democratic majority and a George W. Bush that welcomed them. The election of 2008 added pizzazz to accelerated poverty.

The NASDAQ year-to-date performance was bearish by 30.9% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 33.7% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 42.1%. 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 4.3% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was up 6.2% 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 14.0% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 39.1% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 37.3% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 14.9% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 21.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 13.3% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 16.0% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The Dow is up 70.0% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 95.4% and the S&P500 is up 74.9% since then. The S&P600, Small Cap Index, is up 105.7% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The bull is gaining traction at this time.

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.

Dynamics continue shifting in favor of robust international economic growth; especially that of Asia. Europe will lag with its old money socialism and lazy hazy unionism. The U.S. remains a crapshoot, but biased in favor of very slow growth under the threat of redistributing wealth. There is no difference between a tyrannical king confiscating assets than elected leaders in a democracy doing the same. The results are never friendly to overall prosperity, limited only to those who take. Political dynamics are countering the socialistic movement. Capitalism has too long a history of success for easy abandonment.

Mortgage rates resumed their bearish cycle the past several weeks. They all remain Yellow Bears with continuing statistically depressed projections.

The British Pound is no longer a Yellow Bear, but statistical projections continue with a bearish outlook for that currency. However, the Brits are moving from left to right on the political spectrum, which is one reason its pathetic currency is no longer a Yellow Bear. It is now approaching Red Bull status, but not quite there.

Japanese companies could start lagging Korean companies in competing products. The Japanese are a generation older and probably enduring an increase in dilettante management. China is lagging Korea by a generation. Once the Chinese understand the importance of quality, there will be a return of good products to buy. Buying American made products requires too many trips to the repair shop. The Italians still make great shoes and the Germans make good machinery and automobiles; else, Japanese, Taiwanese, and Korean products are still with lower costs and higher quality. Their high productivity contributes to lower costs and thus their competitiveness is retained in spite of their strengthening currencies.

The consumer price index and producer price index continue to be relatively stable.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 24.2% since then, annualizing at 21.1%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 8.4%, annualized at 86.3% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 8.4%, annualized at 86.3%, since the most recent buy signal.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 9.0% since then, annualizing at 87.4%. It was up 242.4% (annualized at 44.8%) since the 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 60.9% since that buy signal, annualizing at 32.2%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 10.5% since that buy signal, annualizing at 51.1%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

All the major indices are up by an average of 15.2% since their bull signals an average of 28.6-weeks ago. That annualizes at 27.6%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,196,680. That beats buy and hold performance of $1,693,680 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,817. That beats buy and hold’s $115,886 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $212,075. That beats buy and hold’s $85,971 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

You will notice quite a few changes in the NASDAQ100 components. Former components were moved to the Indicant select stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 69.3% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then and a sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

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 284.6% (annualized at 14.9%) since the Long-term Indicant signaled bull 990-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Most attributes remain supportive of the short-term bull cycle now underway. Volume continues nudging higher, adding greater potential to this bull’s longevity.

There are a few minor concerns at this point. Volume is mixed in support, but increasingly supporting dynamic behavior. Current configurations favor the stock market bull.

Contrarian Force Vectors, such as QID, VXX, and TLT are configuring to rise. That may be inspirational to the stock market bear, but their current positions are weak. A sustainable bear cycle cannot manifest with that weakness. Pressure for those ETF/N’s is negative and until they turn positive, the stock market bear will remain anemic.

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

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

The eleven existing bulls are up 6.1% since the NTI signaled bull an average of 5.8-weeks ago. That annualizes to 54.2%.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 13.5% since that bear signal.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant. There is one bear signal (VIX).

Short-term Market Summary

The VIX remains a Yellow Bear, highlighting continued support for the stock market bull.

The major indices are NTI Blue Bulls, which are solidly bullish. They are also Red Bulls mitigating bearish ambition.

-Tangential Protection – None!

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.

Indicant Volume Indicators

Both volume indicators continue attempting to support a robust stock market cycle. Currently, that favors the bull. This configuration bodes well for increased dynamic stock market behavior.

Oct 22, 2010-Fri-Light volume on flat behavior supports status quo; bullish bias.

Oct 21, 2010-Thu-Mild volume on flatness offers little evidence of anything. Normalcy protects the bull.

Oct 20, 2010-Wed-Volume down slightly on bullish behavior from yesterday’s bearish aggression. The combination does not support increased bearish behavior at this time.

Oct 19, 2010-Tue-Aggressive volume on aggressive bearish behavior raised a few eyebrows. However, there is not enough support from other short-term attributes to allow the bear to forage without constraints. Numerous constraints to bearish ambition remain solidly in place.

Oct 18, 2010-Mon-Mild volume on mild bullish behavior does not challenge bullish bias.

Oct 15, 2010-Fri-NYSE Volume rose significantly. NASDAQ volume increased more modestly. This supports continued bullishness.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 6.5% since their buy signals an average of 6.2-weeks ago. This annualizes at 54.4%.

The NTI is avoiding three-ETF’s. They are down by an average of 17.9% since their sell signals an average of 4.6-weeks ago. They are contrarians, QID, VXX, and TLT.

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 10.4% since their buy signals an average of 13.4-weeks ago. This annualizes at 40.5%.

The Quick-term Indicant is avoiding 2-ETF’s (QID and VXX). They are down by an average of 52.4% since their sell signals an average of 42.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase, supporting bull. Twenty-eight ETF’s are Red Bulls, mitigating dynamic bearish threats. NTI Bullish Blue remains aggressively bullish for most of the non-contrarian ETF’s.

Several Force Vectors fell below Pressure this week. That coupled with Blue Bulls is not a major concern, but noticeable nonetheless.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 9.0%, annualizing at 87.4%, since then. This ETF remains with Red Bull status, mitigating sustainable bearish threats. It took a bear hit last Tuesday, but it remains as both a QTI Red Bull and a NTI Blue Bull, which disallow the bear to dominate. Vector Pressure remains in bullish domains. Force is taking a dip but it remains in bullish domains. The “energy bear” cannot find sustainable forces with those bullish attributes.

ETF#11-Gold and Precious Metals is up 60.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 32.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $113.80 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. It is up 10.5% since the Near-term buy signal, annualizing at 51.1%.

Gold Force is in bearish domains. That is a bit threatening to the near-term hold position based on the aggressive manner of penetrating bearish domains. The Near-term Indicant will not signal sell until it interacts with green.

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

As stated for nearly the past two years, 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 advise of that potential when it occurs. Keep in mind, currencies can be manipulated for a period. However, currencies decoupled from production and related productivity will endure inflation regardless of political witch doctoring oratories. With that, in terms of U.S. dollars, gold’s long-term trend will be bullish. Ignore the idiots who point to the intelligent calling them idiots. Gold will not lie.

ETF#14-TLT-Long Government received a buy signal from Quick-term Indicant models on Apr 27, 2010. It is up 13.0% since that buy signal, annualizing at 26.4%. It is unlikely this fund will remain bullish, concurrent with stock market bullishness. Its contrarian nature suggests it should shift bearishly as long as the stock market remains bullish. The Quick-term Indicant will not signal sell until price interacts with yellow.

The Near-term Indicant signaled sell on Oct 14, 2010, as its price fell below NTI Green with Force moving south in bearish domains. It is down 0.1% since then. Pressure is nearing bearish domains, while Force is attempting to climb from bearish domains. NTI Green did not act as a floor and unlikely this ETF will recoil back to bullishness.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 17.5% since then. Force and Pressure remain in bearish domains, highlighting QID’s exhaustion mentioned several days ago. Force is now less than pressure and not offering the short-bull much inspiration. Its Force Vector is mounting a charge, but from bearish domains and not yet much of a threat to the avoid signal.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 36.0% since then. Its Force Vector appears near a potential bottom, but Pressure is low. That is not inspirational to the VIX and VXX bull. This ETN does not perfectly parallel its parental index, VIX.

Major ETF Events

Oct 22, 2010-Fri-None

Oct 21, 2010-Thu-GLD lost Blue Bull status two times in the last three days along with Force falling into bearish domains. The dollar is being pumped up, which conflicts with its long-term demise.

Oct 20, 2010-Wed-Force Vectors continue dropping; some below Vector Pressure. However, Pressure remains positive (in bullish domains), which supports non-bearishness at worse.

Oct 19, 2010-Tue-There were several. GLD lost NTI Blue Bull status. ETF#28-Taiwan’s Force Vector’s drop into bearish domains is discerning. The stock market bear attacked today, but configurations are not yet supportive of its desire to dominate.

Oct 18, 2010-Mon-None; the bull continues dominance.

Oct 15, 2010-Fri-Big board volume was up significantly. This supports continuation of the Short-term Bull cycle.

Current Strategy-Short-term Indicant- Oct 22, 2010-Fri-Same! Oct 21, 2010-Thu-Same. Oct 20, 2010-Wed-Holding remains safe, but under a mild Force Vector threat. However, most ETF’s remain configured as Blue Bulls. The bear threat will be elevated if prices fall below the blue curve. Oct 19-Tue-Same as yesterday. Some of the recent buys may be somewhat threatening. Contrarian Force Vectors are configuring for a rebound, but their current positions relative to Pressure are weak and not yet threatening. Oct 18-Mon-Holding remains safe.

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

Six of the seven last weeks enjoyed bullish convergence/divergence. Even though shy of the desired configuration of four consecutive weeks of bullish convergence, the stock market remains strongly bullish. Do not be surprised at mild behavior or even a mild correction the next few weeks. Such passivity should be viewed, as healthy.

Indicant Conclusion

The encroaching mid-term election year stock market bullishness continues with gusto. These bullish anticipations enjoy thorough technical support. The Indicant Volume Indicator bottomed three weeks ago, suggesting volume will increase in coming weeks. Increased volume the past few days is enhancing near-perfect conditions for a sustainable bullish cycle.

As stated the past 55-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena, coupled with low interest rates, continue in support of the bull. Inflation has not yet threatened the bull. Keep in mind, though, it will at some point in the future.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/24/2010

Oct 17, 2010 Indicant Weekly Stock Market Report

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

Weakened Politicians = Bullish Stock Market

The stock market continues its anticipation of stalemated political power. That is normal during mid-term election years. Current stock market bullishness continues its tradition, ahead of the presidential pre-election year.

If Congressional turnover results in a democratic minority in both houses with a democratic president, the stock market bull will stampede to the north. The incoming republicans will not approve much output from the executive branch. The party of “no” executing “no” is bullish. “No” is always bullish from Capitol Hill. No is a negative. Capitol Hill’s economic influence is negative. So, algebraically, a negative times a negative is positive. That is bullish.

Political disdain between legislative and executive branches slows political success. That is always bullish since legislation does not create wealth. On the contrary, legislation, for the most part, subtracts from wealth.

Adding bullish inspiration in this cycle is the powerful political energy by the Tea Party. They, so far, are promoting renewed focus to the greatness of the founding fathers and the U.S. Constitution. That should be bullish for the stock market since the “original” model has worked very well for nearly 300-years and more successfully than any other model in recorded history.

The founding father’s model facilitated the unleashing of the talents of Nicola Tesla, Henry Ford, Thomas Edison, and others like them. Those capitalists made a difference for society, providing products of value and enjoyment by the masses. Not one politician, king, or queen has ever done that.

Future history books will direct glory to those capitalistic minded folks with cartoon caricatures of politicians and a long list of their economic damages. Future societies will laugh at current and previous societies for their stupid support for political mumbo-jumbo. The Dow will be around 400,000 or so in current dollars when that happens.

Contemporary politicians have only been around for 40-70-years. Most were born with a silver foot in their mouths. They, for the most part, cannot think accurately since they have enjoyed a life with zero personal risks and productive efforts less than their risks. That sort of lifestyle dulls the brain.

High congressional turnover is always good. High turnover manifests congressional inefficiencies. Congressional inefficiency is bullish.

This inefficiency, coupled with political conflict between the legislative and executive branches, will be very stimulating to the stock market bull.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated 6-buy signals and no sell signals.

The Mid-term Indicant added the Congressional Effect Fund, CEFFX, to its tracking list. It is MTI-MF#53.

The Mid-term Indicant is signaling hold for 266 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 39.7%. That annualizes to 45.8%. The Mid-term Indicant has been signaling hold for these 266-stocks and funds for an average of 45.1-weeks.

The Mid-term Indicant is avoiding 67-stocks and funds of 340- tracked by the Indicant. The avoided stocks and funds are down an average of 42.4% since the Mid-term Indicant signaled sell an average of 98.3-weeks ago.

One year ago, on Oct 16, 2009, the Mid-term Indicant was holding 195-stocks and funds out of 333 tracked for an average of 22.2-weeks. They were up by an average of 24.1% (annualized at 56.4%). There were 114-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 39.5% since their respective sell signals an average of 83.1-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 19-stocks and funds of the 345-tracked two years ago on Oct 17, 2008. They were up by an average of 136.9% (annualized at 81.1%) since their respective buy signals an average of 87.8-weeks earlier. The Mid-term Indicant was avoiding 326-stocks and funds at that time. They were down an average of 27.3% since their respective sell signals an average of 20.8-weeks earlier.

There were 295-stocks and funds with hold signals on Oct 12, 2007 since their buy signals an average of 110.3-weeks earlier. They were up by an average of 142.8% (annualized at 67.3%). There were 41-avoided stocks and funds at that time. They were down by an average of 14.6% from their respective sell signals an average of 32.1-weeks earlier.

On Oct 13, 2006, the Mid-term Indicant was signaling hold for 311-stocks and funds out of 345-tracked. They were up by an average of 106.2% (annualized at 71.0%) since their buy signals an average of 77.7-weeks earlier. The Mid-term Indicant was avoiding 32-stocks and funds at that time. They were down by an average of 16.2% since their sell signals an average of 22.3-weeks earlier.

Five years ago, on Oct 14, 2005, there were 218-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 103.2% (annualized at 54.8%) since their respective buy signals an average of 97.9-weeks earlier. There were 97-avoided stocks and funds then. They were down an average of 12.0% since their respective sell signals an average of 24.0-weeks earlier.

On Oct 15, 2004, there were 240-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 63.7%, annualizing 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 by an average of 33.1% since their sell signals an average of 51.5-weeks earlier.

There were 266-stocks and funds with hold signals on Oct 17, 2003. They were up by an average of 51.8%, annualizing at 95.4%, since their buy signals 28.3-weeks earlier. The 19-avoided stocks and funds were down an average of 23.3% since their respective sell signals an average of 31.7-weeks earlier.

On Oct 18, 2002, there were 107-stocks and funds with a hold signal, enjoying a 25.8% gain since their respective buy signals an average of 21.5-weeks earlier. That annualized at 62.5%. There were 109-avoided stocks at that time. They were down by an average of 25.8% since their sell signals an average of 15.8-weeks earlier.

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

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

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

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

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

The Mid-term and Short-term Indicant continue with strong support for the bull. The mid-term election year appears to be gaining traction toward stock market bullishness.

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

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

Stop Loss Management

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 51.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 121.6% and the S&P500 is up 51.4% since then. The small cap index, S&P600, is up 119.0% 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. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 51.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 23.0% since its similar secular peak on March 23, 2000. The Dow is down by 5.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism continues to expand, the NASDAQ may not hit its 2000 peak until after 2050. Significant downsizing federal governments and related regulations shrink, then the previous sentence will be reassessed. If the opposite occurs with increasing federal bureaucracies, the NASDAQ will never return to its 2000 peak.

The NASDAQ year-to-date performance was bearish by 31.3% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 34.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 45.2%. 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 4.6% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 5.1% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was up 6.9% 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 15.1% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 38.6% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 37.8% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 14.7% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 21.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 13.7% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 16.0% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The first Near-term Bear cycle of 2010, originating during the weeks of May 9 and May 16, may not propel additional near-term cycles below the March 9, 2009 cyclical bottoms. Even with that, statistics supported with 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

The Dow is up 69.0% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 94.6% and the S&P500 is up 73.9% since then. The S&P600, Small Cap Index, is up 105.6% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The bull is gaining traction at this time.

The current bull cycle is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year. In essence, the anticipated firing of incumbent politicians in the U.S. arouses the bull.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Dynamics continue shifting in favor of robust international economic growth; especially that of Asia. Europe will lag with its old money socialism and lazy hazy unionism. The U.S. remains a crapshoot, but biased in favor of very slow growth under the threat of redistributing wealth. There is no difference between a tyrannical king confiscating assets than elected leaders in a democracy doing the same. The results are never friendly to overall prosperity, limited only to those who take. Political dynamics are countering the socialistic movement. Capitalism has too long a history of success to be abandoned with ease.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index continues moving north since early 2009. It is a Red Bull. That currently should be considered as economically bullish with inflationary considerations later. The CRB Bridge Futures has shifted from waffling to more bullish aggression. It is also a solid Red Bull.

Mortgage rates resumed their bearish cycle the past several days. They all remain Yellow Bears with continuing statistically depressed projections.

The British Pound is no longer a Yellow Bear, but statistical projections continue with a bearish outlook for that currency. However, the Brits are moving from left to right on the political spectrum, which is one reason its pathetic currency is no longer a Yellow Bear. It is now approaching Red Bull status, but not quite there.

The consumer price index and producer price index continue to be relatively stable.

We renewed participation in the current bullish spurt. It may not be just a mere bullish spurt. The mid-term elections continue to promise an increased likelihood of a stalemated U.S. Government. Furthermore, there are some increasing probabilities of repealing some of the Congressional stupidity that has permeated the capital markets since 2006, when the democrats took control. The media continues relating presidential terms to stock market behavior, when in fact, it is Congress that passes laws and develops budgets. The media is ignorant. Most are encumbered with simple journalism degrees or other liberal arts jibber-jabber.

Although always under threat by any incumbent politician, the current political spectrum is favorable to the bull. Since the founding fathers, there have been very few good politicians. Those wandering three-pound brains that penetrate the halls of U.S. public buildings are mostly empty of substance, compared to the founding fathers. As long as the U.S. sticks to those principles contained in the U.S. Constitution, the stock market bull will enjoy more victories than defeats. There needs to be significant repeals of recent legislation and the Federal Government needs significant downsizing, where inefficiencies are maximized.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 30.5% since then, annualizing at 27.1%.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 9.7%, annualized at 124.6% since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 11.4%, annualized at 146.0%, since the most recent buy signal.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 8.8% since then, annualizing at 105.9%. It was up 242.4% (annualized at 44.8%) since the 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 65.8% since that buy signal, annualizing at 35.2%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 13.9% since that buy signal, annualizing at 74.5%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

The Mid-term Indicant could find no other reason for fighting the bull. There are no longer any mid-term threatening attributes favoring the bear. Therefore, the Mid-term Indicant is signaling bull for all major indices.

All then major indices are up by an average of 14.5% since their bull signals an average of 27.6-weeks ago. That annualizes at 27.4%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,013,658. That beats buy and hold performance of $1,683,064 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $139,002. That beats buy and hold’s $115,122 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $211,167. That beats buy and hold’s $85,602 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

You will notice quite a few changes in the NASDAQ100 components. Former components were moved to the Indicant select stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 66.8% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then and a sell signal quickly ensued. That fluttering prevented the buy signal for MF#22.

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 282.2% (annualized at 14.8%) since the Long-term Indicant signaled bull 989-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Most attributes remain supportive of the short-term bull cycle now underway. Volume continues nudging higher, adding additional bullish propensity.

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

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

The eleven existing bulls are up 5.5% since the NTI signaled bull an average of 4.8-weeks ago. That annualizes to 59.8%.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 12.4% since that bear signal. The VIX became a Yellow Bear on Oct 5, 2010, stressing support for the short-term stock market bull cycle and bearishness to non-bullishness for VIX.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant. There is one bear signal (VIX).

Short-term Market Summary

The VIX is a Yellow Bear, highlighting continued support for the stock market bull. The major indices are NTI Blue Bulls, which is solidly bullish.

As stated on Oct 5, this bull appears real. It may be enjoying there is no Congressional budget. Politicians are ashamed it would approach a 3-trillion dollar deficit. Finally, those congressional rascals found a boiling point. They are in trouble and with that, the stock market is not!

-Tangential Protection – None!

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat is subsiding for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. This is being threatened by explosive Asian economies and the classical pre-election presidential year’s stock market bullishness, which starts on January 1, 2011. Those historical bullish cycles typically originate in the mid-term election year, which concludes on December 31, 2010. This historical bullish phenomenon usually starts during the mid-term election year. Configurations suggest this bullish cycle has started and prices will not fall to those reverse tangential projections until a later date. Those sour values will most likely occur once hyper-inflation and/or high interest rates and/or both kick in, which is inevitable, but that could be a few years from now. So, until then enjoy the bull in spite of its sometimes illogical behavior.

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.

Indicant Volume Indicators

Both volume indicators continue attempting to support a robust stock market cycle. Currently, that favors the bull. This configuration bodes well for increased dynamic stock market behavior.

Oct 15, 2010-Fri-NYSE Volume rose significantly. NASDAQ volume increased more modestly. This supports continued bullishness.

Oct 14, 2010-Thu-Mixed volume on flat behavior supports status quo; bullish.

Oct 13, 2010-Wed-Volume was very healthy on stock market bullishness. That delights the bull. Support continues to build in favor of the bull.

Oct 12, 2010-Tue-Volume was a bit more robust on today’s flat/mixed behavior. Mild day to day variations should be ending soon with more dynamic behavior.

Oct 11, 2010-Mon-Mild volume on flat stock market behavior does nothing to change from bullish bias.

Oct 8, 2010-Fri-Same old story. There is very little volume. However, that is apparently not discouraging to the bull. The bull is raging its wrath on the possibility for hundreds of fired politicians in spite of the low volume.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 6.7% since their buy signals an average of 5.2-weeks ago. This annualizes at 66.4%.

The NTI is avoiding three-ETF’s. They are down by an average of 15.4% since their sell signals an average of 3.6-weeks ago. They are contrarians, QID, VXX, and TLT.

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 10.6% since their buy signals an average of 12.4-weeks ago. This annualizes at 44.3%.

The Quick-term Indicant is avoiding 2-ETF’s. QID and VXX. They are down by an average of 51.3% since their sell signals an average of 41.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase, supporting bull. Twenty-eight ETF’s are Red Bulls, mitigating dynamic bearish threats. NTI Bullish Blue remains aggressively bullish.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 8.8%, annualizing at 105.9%, since then. This ETF is now enjoying Red Bull status, mitigating sustainable bearish threats.

ETF#11-Gold and Precious Metals is up 65.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 35.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $113.06 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 13.9% since the Near-term buy signal, annualizing at 74.5%. Force Vector remains deep inside bullish domains, offering the gold bear little short-term chance to dominate.

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

ETF#14-TLT-Long Government received a buy signal from Quick-term Indicant models on Apr 27, 2010. It is up 13.2% since those buy signals, annualizing at 27.9%. It is unlikely this fund will remain bullish concurrent with stock market bullishness. Its contrarian nature suggests it should shift bearishly as long as the stock market remains bullish.

The Near-term Indicant signaled sell yesterday, as its price fell below NTI Green with Force moving south in bearish domains. It is down 1.2% since then.

The Quick-term Indicant will not signal sell until price interacts with yellow.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 16.9% since then. Its Force Vector shifted back into bearish domains last Tuesday, highlighting QID’s exhaustion mentioned several days ago. Force is now less than pressure and not offering the short-bull much inspiration.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 28.1% since then. Its Force Vector appears near a potential bottom, but Pressure is low. That is not inspirational to the VIX and VXX bull.

Major ETF Events

Oct 15, 2010-Fri-Big board volume was up significantly. This supports continuation of the Short-term Bull cycle.

Oct 14, 2010-Thu-TLT received a sell signal today.

Oct 13, 2010-Wed-Gold set yet another record. It is skyrocketing and will probably do so for years in U.S. dollar terms. The economic damage caused by politicians will remain for several more years and this is friendly to those holding gold.

Oct 12, 2010-Tue-Most Force Vectors dipped south but from solid positions in bullish domains. It pending bearish cycle from those positions are non-threatening to hold positions. Any bearishness above NTI Blue and QTI Red should be viewed as healthy, allowing the bull to take a bit of a rest for future battles with the bear.

Oct 11, 2010-Mon-Contrarian QID, VXX, and TLT force is less than pressure and all in bearish domains. That adds bullish support for the stock market and bearish support for contrarian ETF’s.

Oct 8, 2010-Fri-All contrarians were contrarian on today’s bullish behavior. That suggests bullish normalcy. This does not bode well for continued holding of TLT and similar such securities.

Current Strategy-Short-term Indicant- Oct 15, 2010-Fri-Volume increased significantly supporting the Short-term bull cycle. Oct 14, 2010-Thu-Volume is creeping up as more “followers” are entering the market. There is plenty of room for more and thus very bullish. Oct 13, 2010-Wed-Yesterdays Force reduction inspired the bull, offering more evidence of bullish longevity and strength. Oct 12, 2010-Tue-Dipping Force may induce some bearishness, but consider that healthy for the current short-term bull’s longevity. Oct 11, 2010-Mon-Holding is safe.

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

Five of the six last weeks enjoyed bullish convergence/divergence. Even though shy of the desired configuration of four consecutive weeks of bullish convergence, the stock market remains strongly bullish.

Indicant Conclusion

As stated the past few weeks, the encroaching mid-term election year stock market bullishness appears to be present. Bullish anticipations enjoy thorough technical support. The Indicant Volume Indicator bottomed two weeks ago, suggesting volume will increase in coming weeks. Increased volume the past few days is enhancing near-perfect conditions for a sustainable bullish cycle.

As stated the past 54-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena, coupled with low interest rates, continue in support of the bull. Inflation has not yet threatened the bull.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/17/2010

Oct 10, 2010 Indicant Weekly Stock Market Report

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

Spreading Wealth = Spreading Poverty

Some pundits are critical of spreading wealth, while others promote it. Both groups are wrong. Spreading wealth from political interferences does not occur. Historical events demonstrate that poverty is spread by taking from some and giving to others. That leads to a reduction of wealth and consequently creates an expansion of poverty.

California has several people with retirement pensions approaching $500,000. Those retirees produce nothing. In fact, those retirees produced nothing during their entire public careers. Politicians take money from tax payers and give it to public work unions. Of course, politicians do this for vote-getting purposes. California is technically bankrupt. If status quo prevails over the next several years, poverty will increase.

Another less recent example of this occurred after the Bolshevik Revolution in Russia. Three generations after that revolution, everyone lived in poverty except for the Russian equivalents of Nancy Pelosi, Barack Obama, the United States Hockey Team, college professors, and other Olympic athletes who won medals.

Russians and other inhabitants of the former U.S.S.R. lived in equal poverty except for those established elites, who lived a life of luxury. Long lines manifested for simple items, such as bread and vodka. The misery led to longer lines for vodka, where the populace would drown their sorrows in the spirits.

Some of those elites from time to time would utter some thoughts contrary to Stalin’s desires. Those with errant thoughts from Stalin’s perspectives were kidnapped from their homes late in the evening and never seen again.

Spreading poverty leads to narrowed leadership. Those egomaniacs who lead in such conditions enjoy unlimited power. Their enhanced living pleasure directly expands poverty and misery to those they lead.

Imagine you getting sick. None of the government bureaucrats who will provide guidelines for your care would know you. However, rest assured one of their relatives, who they cared for would get priority over you.

People are just people. Their position or status in life does not change that. Those confined to the normal curve distributions of intelligence, morals, and love, have the same biases. The two extreme points of normal distribution are interesting.

The left side of the normal distribution curve consists of moron, idiots, and other less intelligent people. They are irrelevant along the political spectrum. Most normal people do not mind taking care of them by virtue of tax payments.

The far right side of the normal distribution curve is where Albert Einstein, most medical doctors, top engineers, etc, reside. They are highly intelligent. Arranging the normal distribution curve based on ego, most politicians are on the far right of the normal distribution curve. They have a knack for orating and pontificating. So does Jimmy Swaggert. There is little difference between politicians and Jimmy Swaggert. They simply want to control as many people as they can. The more they can control, the better they feel and the more power they get to express.

There is large number of people, who listen to politicians and Jimmy Swaggert. Politicians and evangelists work very hard to increase the numbers of those who will listen. The larger the number, the better those egomaniacs feel. Furthermore, the listeners become poorer while the quality of life for the pontificator is enhanced. There is a constant universal equilibrium in place and the only source of inequality is through the wealth creation from manufacturing, agriculture, and extraction. That inequality leads to wealth. When wealth is not being created, the existing wealth gravitates to the established elite while the masses enjoy less. Thus, poverty expands.

That is spreading poverty; not wealth. The pontificator accumulates the existing wealth, which depreciates. It eventually leads to massive poverty.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated 20-buy signals and no sell signals.

There were several changes to the NASDAQ100 components, in addition to the other indices. Several stocks were abandoned, as they were no longer traded or who endured five or more years of pitiful negative trends.

The Mid-term Indicant is signaling hold for 246 of the 340-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 41.0%. That annualizes to 45.9%. The Mid-term Indicant has been signaling hold for these 246-stocks and funds for an average of 46.5-weeks.

The Mid-term Indicant is avoiding 72-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 36.5% since the Mid-term Indicant signaled sell an average of 89.4-weeks ago.

One year ago, on Oct 9, 2009, the Mid-term Indicant was holding 188-stocks and funds out of 333 tracked for an average of 21.7-weeks. They were up by an average of 23.5% (annualized at 56.2%). There were 122-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 38.9% since their respective sell signals an average of 80.2-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for only 19-stocks and funds of the 345-tracked two years ago on Oct 10, 2008. They were up by an average of 137.5% (annualized at 82.2%) since their respective buy signals an average of 87.0-weeks earlier. The Mid-term Indicant was avoiding 295-stocks and funds at that time. They were down an average of 33.9% since their respective sell signals an average of 22.2-weeks earlier.

There were 289-stocks and funds with hold signals on Oct 5, 2007 since their buy signals an average of 111.7-weeks earlier. They were up by an average of 140.3% (annualized at 65.3%). There were 49-avoided stocks and funds at that time. They were down by an average of 12.6% from their respective sell signals an average of 28.5-weeks earlier.

On Oct 6, 2006, the Mid-term Indicant was signaling hold for 310-stocks and funds out of 345-tracked. They were up by an average of 105.8% (annualized at 56.8%) since their buy signals an average of 76.9-weeks earlier. The Mid-term Indicant was avoiding 33-stocks and funds at that time. They were down by an average of 12.6% since their sell signals an average of 21.2-weeks earlier.

Five years ago, on Oct 7, 2005, there were 221-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 105.8% (annualized at 56.8%) since their respective buy signals an average of 96.8-weeks earlier. There were 96-avoided stocks and funds then. They were down an average of 10.8% since their respective sell signals an average of 23.2-weeks earlier.

On Oct 8, 2004, there were 240-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 64.3%, annualizing 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 by an average of 32.6% since their sell signals an average of 51.1-weeks earlier. There were nine buy signals ahead of the pre-election year’s bullish phenomenon in addition to the 41-buy signals in the prior week.

There were 263-stocks and funds with hold signals on Oct 10, 2003. They were up by an average of 52.9%, annualizing at 98.7%, since their buy signals 27.9-weeks earlier. The 24-avoided stocks and funds were down an average of 22.5% since their respective sell signals an average of 31.0-weeks earlier.

On Oct 11, 2002, there were 52-stocks and funds with a hold signal, enjoying a 25.2% gain since their respective buy signals an average of 24.8-weeks earlier. That annualized at 52.8%. There were 212-avoided stocks at that time. They were down by an average of 25.6% since their sell signals an average of 11.3-weeks earlier.

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

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

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

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

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

The Mid-term and Short-term Indicant continue with strong support for the bull. The mid-term election year appears to be gaining traction toward stock market bullishness.

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

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

Stop Loss Management

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 51.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 115.6% and the S&P500 is up 50.0% since then. The small cap index, S&P600, is up 115.3% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 52.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 23.7% since its similar secular peak on March 23, 2000. The Dow is down by 6.1% 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.

The NASDAQ year-to-date performance was bearish by 35.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 42.1% 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 NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 41.8%. 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.

In 2006, the NASDAQ was up 4.3% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 15.4% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 34.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 34.7% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 11.5% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 22.3% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 16.0% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 19.4% 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.

The Dow is up 68.1% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 89.3% and the S&P500 is up 72.2% since then. The S&P600, Small Cap Index, is up 102.2% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant are no longer suggesting impending bearishness. The bull is gaining traction at this time.

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.

Dynamics continue shifting in favor of robust international economic growth; especially that of Asia. Europe will lag with its old money socialism and lazy hazy unionism. The U.S. remains a crapshoot, but biased in favor of very slow growth under the threat of redistributing wealth. There is no difference between a tyrannical king confiscating assets than elected leaders in a democracy doing the same. The results are never friendly to overall prosperity, limited only to those who take. Many do not understand that the oppressed are equally guilty to that of the oppressor. The tea party movement is counter attacking the spreading of poverty. Calling it spreading the wealth is a misnomer.

Gold’s optimistic forecast continues at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot. Do not be surprised at $2,000/oz by 2014. At the same webpage, you will notice oil is less stable. As stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. The high end forecast, though, projects $120/bbl by 2012.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index has shot straight north since early 2009. Well, not exactly straight. It has inclined along at 72-degree slope, or about 18-degrees shy of straight up. It is a Red Bull. Its high-end forecast for 2012 is not yet a believer in the 72-degree slope. The CRB Bridge Futures, on the other hand, is waffling around its depressed and declining Red Curve. Even though, it is a Red Bull. It is certainly not projecting inflationary threats with all forecasts heading southeast. Again, you may have to scroll down to see the chart.

Mortgage rates resumed their bearish cycle the past several days. They all remain Yellow Bears with continuing statistically depressed projections.

The consumer price index and producer price index continue to be relatively stable.

Although always under threat by any incumbent politician, the current political spectrum is favorable to the bull. Since the founding fathers, there have been very few good politicians. Those wandering three-pound brains that penetrate the halls of U.S. public buildings are mostly empty of substance, compared to the founding fathers. As long as the U.S. sticks to those principles contained in the U.S. Constitution, the stock market bull will enjoy more victories than defeats. There needs to be significant repeals of recent legislation and the Federal Government needs significant downsizing, where inefficiencies are maximized.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 29.8% since then, annualizing at 26.9%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 8.7%, annualized at 149.7%, since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 8.1%, annualized at 138.7%, since the most recent buy signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled buy this weekend for this fund after holding flat since last February’s sell signal.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 7.3% since then, annualizing at 113.6%. It was up 242.4% (annualized at 44.8%) since the 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 63.2% since that buy signal, annualizing at 34.2%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 12.1% since that buy signal, annualizing at 72.9%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

All then major indices are up by an average of 12.9% since their bull signals an average of 26.6-weeks ago. That annualizes at 25.2%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,866,004. That beats buy and hold performance of $1,674,499 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $137,698. That beats buy and hold’s $114,130 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $205,448. That beats buy and hold’s $83,284 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

You will notice quite a few changes in the NASDAQ100 components. Former components were moved to the Indicant select stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 280.2% (annualized at 14.7%) since the Long-term Indicant signaled bull 988-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Bearish behavior above the near-term bullishly sloping blue curve is non-threatening. Force remains in bullish domains and most above pressure, adding more reason for a relaxed posture toward the short-term bull. All major indices and ETF’s remain above bullish blue. Also, 29-Red Bulls mitigate bearish ambition.

Politicians and federal bureaucrats have grown fond of the word, stimulus. One can suspect the elite “economic overhead” folks are stimulated every time they get to say the word, stimulus. It makes them feel like they are contributing in spite of their economic liabilities. The bull is delightfully anticipating their firings in a few weeks.

Mixed market behavior on lackluster to negative news continues suggesting the short-term bull is “politically” induced. The bull has a long history of finding pleasure when incumbent politicians are shaking in shame.

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

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

The eleven existing bulls are up 4.1% since the NTI signaled bull an average of 3.8-weeks ago. That annualizes to 56.5%.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is down 4.7% since that bear signal. The VIX became a Yellow Bear this past Tuesday, stressing support for the short-term stock market bull cycle and bearishness to non-bullishness for VIX.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant. There is one bear signal (VIX).

Short-term Market Summary

A pullback to NTI Bullish Blue Curve would not be surprising. Bearish behavior above or around the NTI Bullish Blue Curve is non-threatening to the short-term bull cycle. This bull appears intent on avoiding interaction with the NTI Bullish Blue curve. However, do not consider such an interaction as threatening to this bull. It continues expressing tenacity at destroying the bear.

As stated last Tuesday, this bull appears real. It may be enjoying there is no Congressional budget. Politicians are ashamed it would approach a 3-trillion dollar deficit. Finally, those congressional rascals found a boiling point. They are in trouble and with that, the stock market is not!

-Tangential Protection – None!

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.

Indicant Volume Indicators

Both volume indicators appear to have bottomed. Their embryonic curves are rising. This configuration bodes well for increased dynamic stock market behavior. Currently, that favors the bull with the salient term, “currently.”

Oct 7, 2010-Thu-Same as yesterday. Notice, however, the Indicant Volume Indicators continue moving northward. So far, that supports the short-term bull.

Oct 6, 2010-Wed-Light volume on mixed stock market behavior is no argument to the short-term bull cycle.

Oct 5, 2010-Tue-Volume was healthy on today’s bullish aggression. This offers substantial support for the bull.

Oct 4, 2010-Mon-Relatively mild volume on mild bearishness is not threatening to short-term bull cycle.

Oct 1, 2010-Fri-Volume continues edging up on mild bearishness.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 5.9% since their buy signals an average of 4.9-weeks ago. This annualizes at 63.1%.

The NTI is avoiding two-ETF’s. They are down by an average of 17.0% since their sell signals an average of 4.4-weeks ago. They are contrarians, QID and VXX.

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 9.6% since their buy signals an average of 11.4-weeks ago. This annualizes at 43.6%.

The Quick-term Indicant is avoiding 2-ETF’s. QID and VXX. They are down by an average of 47.7% since their sell signals an average of 40.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase, supporting bull. Twenty-nine ETF’s are Red Bulls, mitigating dynamic bearish threats. NTI Bullish Blue remains aggressively bullish.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 7.3%, annualizing at 113.6%, since then. Force bounced north off pressure and no longer lazy. This ETF is now enjoying Red Bull status, mitigating sustainable bearish threats.

ETF#11-Gold and Precious Metals is up 63.2% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $112.38 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 12.1% since the Near-term buy signal, annualizing at 72.9%. Force Vector is now rising, exciting the bull even more.

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 16.2% since those buy signals, annualizing at 35.6%. It is unlikely this fund will remain bullish concurrent with stock market bullishness. Its contrarian nature suggests it should shift bearishly as long as the stock market remains bullish. Key attributes to monitor is Force Vector. It fell below Vector Pressure last Tuesday, but it remains in bullish domains. Green is flat. It is resisting the “safety bear.”

The next sell signal is tentatively established at the NTI Green curve, which is valued at $100.97.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 10.8% since then. Its Force Vector shifted back into bearish domains last Tuesday, highlighting QID’s exhaustion mentioned several days ago.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 23.2% since then. Its Force Vector continues dropping from its near engagement with bullish domains, dampening bearish hope for the stock market. It fell below pressure on Friday.

Major ETF Events

Oct 8, 2010-Fri-All contrarians were contrarian on today’s bullish behavior. That suggests bullish normalcy. This does not bode well for continued holding of TLT and similar such securities.

Oct 7, 2010-Thu-Currency exchange rates punished gold. Rest assured gold remains bullish as long as its NTI Bullish Blue Curve continues rising.

Oct 6, 2010-Wed-QQQQ is encountering difficulty breaking above its previous cyclical high. It is the only ETF tracked that has approached that peak. Also, VXX Force shied away from penetrating bullish domains. That supports a stock market bull.

Oct 5, 2010-Tue-QID, VIX, and VXX Force Vectors fell below pressure on today’s stock market bullish aggression. Also, volume was healthy on today’s bullish aggression. That bodes well for the bull.

Oct 4, 2010-Mon-QID, VIX, and VXX Force Vectors crossed into bullish domains. All, however, are enduring negative pressure and thus no bull/buy signals.

Current Strategy-Short-term Indicant- Oct 7, 2010-Thu-Same as last Monday, as volume was solid earlier this week, but has since expressed passivity. Oct 6, 2010-Wed-Same as last Monday; need more volume. Oct 5-Tue-Volume is increasingly supporting bullish bias. Oct 4-Mon-Although shy of volume support, configurations supporting bull continue to strengthen. Prices falling below NTI Blue will be a good spot to buy more, as long as pressure remains positive. (This is the same as all of last week).

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

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on Aug 12, 2010. It is up 2.0% since then. The Quick-term Indicant signaled sell on Aug 20, 2010. It is up 4.5% since the QTI sell signal. It moved above yellow one week ago, but Pressure remains in bearish domains. Force moved into bullish domains also one week ago, threatening the avoid signal. Negative pressure and a titling Force Vector to the south justify continued avoidance.

ETF#11-Gold and Precious Metals is up 50.9% since the QTI signaled buy on December 11, 2008. Annualized growth is at 28.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $110.24 and still rising. The QTI buy signal was at $80.65. That stop loss will generate over 20%-gain, but a sell signal is no where near execution.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 3.7% since the Near-term buy signal, annualizing at 41.5%. Force continues hovering in bullish domains with positive (bullish) pressure, supporting its bullishness.

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

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 13.7% since those buy signals, annualizing at 36.2%. All attributes remain bullishly configured. Its bearishly mature Force Vector favors yet more bullishness for this fund, which should correlate with stock market bearishness. TLT may contact Green. If it does, buy call options. It is primed to enjoy a significant bounce in the next few days.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#31-QID on Aug 20, 2010. It is down 7.8% since that buy signal. Its Force Vector fell into bearish domains several days ago. The hold signal is no longer solid. Positive pressure and a bearishly mature Force Vector justify continued holding. Force is at a cyclical minimum and trying to shift back to the north.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 7.5% since then. As stated last Friday, its Force Vector is bearishly mature, suggesting a bullish response for this fund on the immediate horizon. Negative Pressure suggests risks remain too high for signaling buy. Its bearishly mature Force Vector is somewhat appealing, but better to not buy with negative pressure.

Major ETF Events

Sep 10, 2010-Fri-Most Force Vectors shifted south. If they waffle inside bullish domains, bearish bias evaporates and bull/buy signals will occur.

Sep 9, 2010-Thu-Several Force Vectors appear to be passing their recent cyclical pinnacle. Their impending downturn is of special interest. If they pass quickly back into bearish domains, the bear will expand its dominance. This cycle should be completed next week.

Sep 8, 2010-Wed-Most non-contrarian Force Vectors are at cyclical maximums and contrarians are at cyclical minimums. This does not bode well for the bull.

Sep 7, 2010-Tue-VIX moved back above Yellow. As stated last Friday, this suggests a continuing absence of bullish robustness.

Sep 3, 2010-Fri-The VIX Index fell below QTI Yellow today. During mild bullishness and flat markets, the VIX usually bounces to the north. It seldom stays below bearish yellow for lengthy periods unless a robust bull market exists. That is not the case at this point. Although not an event, low volume on this day should be the last of seasonally depressed volume. Volume should increase significantly next week. It will be interesting to observe this increased volume with stock market behavior.

Current Strategy-Short-term Indicant- Sep 10-Fri-Same! Sep 8, 2010-Wed-Same! Sep 7, 2010-Tue-Cash is good. Shorting is better, but with more risk. As long as QID and similar ETF’s Vector Pressure remains in bullish domains, the stock market will not allow the bull to dominate.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The desired bullish convergence/divergence for four consecutive weeks did not occur. However, four of the five last weeks enjoyed bullish convergence/divergence. Even though shy of the desired configuration, that remains strongly bullish.

Indicant Conclusion

The encroaching mid-term election year stock market bullishness appears to be present. Bullish anticipations enjoy thorough technical support with the exception of volume. Low volume offers potential against traditional stock market bullishness. However, the Indicant Volume Indicator has bottomed, suggesting volume will increase in coming weeks. If that is accompanied with bullish to non-bearish behavior, the traditional mid-term election year bull should dominate. Current configurations support that prognosis.

As stated the past 53-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Political phenomena, coupled with low interest rates, continue in support of the bull. Inflation has not yet threatened the bull.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/10/2010

Oct 3, 2010 Indicant Weekly Stock Market Report

The Mid-term Election Year – Part 3

What is occurring now is not new. It has endured the past 200-years, plus. It is common behavior consistent with any democracy. The idea of democracy is to elect their leaders. Shortly after being elected, the newly elected egomaniacs propel their non-value adding “social justice” programs. That is always bearish and tends to depress the quality of life for all citizens.

Politicians do not manufacture, extract, or manifest agricultural products. Therefore, they do not create wealth. On the contrary, they subsist by using monies provided by manufacturing, agriculture, and extraction. Without those three economic sectors, there is no economy. In essence, political behavior reduces economic wealth, taking only from those who create wealth.

The stock market is well aware of the shenanigans introduced by newly elected politicians. A $10,000 investment only during presidential post election years since 1832 would have a paltry balance of only $10,343. Prior to last year’s 18.31% bull market, the balance was less than $10,000. The bull market of 2009 was accentuated with the worse presidential election-year bear market in 2008, since Woodrow Wilson’s 1920-bear market. Woodrow Wilson, by the way, was as bad as FDR and possibly worse.

By the time newly elected politicians engage the mid-term election year, they learn they are mere mortals; nothing special. Their popularity typically starts declining. Their non-value adding activities shortly after their elections inflict economic damage. That damage is detected about two years after their election. The stock market senses their loss in verve and power and unleashes bullish behavior.

Their political power base weakens as their non-value adding activities crystallize before the populace. The harsh reality of their omissions to economic favorability becomes obvious, as politicians tend to placate the lazy and dumb. The more lazy and dumb that exists, the more votes they can get.

It is much easier to harvest dumb and lazy and that is the rub against democracies. That is the primary reason democracies have always collapsed. For every Bill Gates, Michael Dell, Steve Jobs, there are hundreds in the ACORN types populating the planet. You see have seen those types throwing their temper tantrums in the European riots. Politicians placate those types. They do this taking more from the entrepreneurial types and those who engage in manufacturing, agriculture, and extraction and giving that theft to the lazy, pouting, dumb ones.

Politicians subtract from economic favorability. This eventually leads to the punishment of incumbent politicians. Many are not re-elected during the mid-term election year. The stock market bull offers a long history of elation with the departing political incumbents. That did not happen during FDR’s terms, which contributed to an extended recession (The Great Depression) and World War II.

The newly arriving politicians in the pre-election year introduce significant inefficiencies in the halls of Congress. These political inefficiencies are economically favorable. This slows their abilities to inflict economic damage. This is why the most bullish year is the pre-election year. That same 1832 investment of $10,000 only in presidential pre-election years grew to $302,066 as of the end of 2007. Chalk that up to Congressional inefficiencies.

This profound pre-election stock market bullish behavior typically starts during the mid-term election year. Polls continue suggesting congressional incumbents will not be elected in large numbers in this mid-term election year. That bodes well for the stock market bull. This particular lame duck Congress is now out of session, working on their political campaigns. That is bullish!

There could be one caveat to this bullish commentary. This Congress appears to support increasing the federal income tax on all U.S. citizens. The worldwide and especially the Asian economy, where unions are sparse, may not be adversely affected. Rest assured a tax increase will dampen economic growth in the U.S.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated 3-buy signals and no sell signals.

The Mid-term Indicant is signaling hold for 228 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 37.6%. That annualizes to 39.9%. The Mid-term Indicant has been signaling hold for these 228-stocks and funds for an average of 49.0-weeks.

The Mid-term Indicant is avoiding 85-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 37.6% since the Mid-term Indicant signaled sell an average of 95.2-weeks ago.

One year ago, on Oct 2, 2009, the Mid-term Indicant was holding 188-stocks and funds out of 333 tracked for an average of 20.7-weeks. They were up by an average of 18.4% (annualized at 46.2%). There were 129-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 40.7% since their respective sell signals an average of 78.6-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 50-stocks and funds of the 345-tracked two years ago on Oct 3, 2008. They were up by an average of 137.0% (annualized at 60.5%) since their respective buy signals an average of 117.7-weeks earlier. The Mid-term Indicant was avoiding 246-stocks and funds at that time. They were down an average of 23.8% since their respective sell signals an average of 26.3-weeks earlier.

There were 283-stocks and funds with hold signals on Sep 28, 2007 since their buy signals an average of 113.8-weeks earlier. They were up by an average of 141.3% (annualized at 64.6%). There were 56-avoided stocks and funds at that time. They were down by an average of 11.6% from their respective sell signals an average of 24.6-weeks earlier.

On Sep 29, 2006, the Mid-term Indicant was signaling hold for 308-stocks and funds out of 345-tracked. They were up by an average of 105.1% (annualized at 71.8%) since their buy signals an average of 76.1-weeks earlier. The Mid-term Indicant was avoiding 56-stocks and funds at that time. They were down by an average of 15.5% since their sell signals an average of 20.1-weeks earlier.

Five years ago, on Sep 30, 2005, there were 222-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 112.8% (annualized at 61.4%) since their respective buy signals an average of 95.5-weeks earlier. There were 93-avoided stocks and funds then. They were down an average of 9.4% since their respective sell signals an average of 23.1-weeks earlier.

On Oct 1, 2004, there were 204-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 73.6%, annualizing 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 by an average of 32.4% since their sell signals an average of 52.4-weeks earlier. There were 41-buy signals ahead of the pre-election year’s bullish phenomenon.

There were 219-stocks and funds with hold signals on Oct 3, 2003. They were up by an average of 58.5%, annualizing at 98.0%, since their buy signals 31.0-weeks earlier. The 30-avoided stocks and funds were down an average of 20.9% since their respective sell signals an average of 29.7-weeks earlier.

On Oct 4, 2002, there were 54-stocks and funds with a hold signal, enjoying a 20.2% gain since their respective buy signals an average of 21.6-weeks earlier. That annualized at 48.6%. There were 226-avoided stocks at that time. They were down by an average of 24.7% since their sell signals an average of 10.1-weeks earlier.

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

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

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

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

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

Too many attributes on a mid-term and short-term basis have shifted in favor of the bull. Consequently, the Mid-term and Short-term Indicant signaled bull for all the major indices. Additionally, buy signals were triggered for several stocks and funds last weekend and again this weekend. Some of the buy signals even reversed sell signals triggered in 2007. The mid-term election year appears to be gaining traction toward stock market bullishness.

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

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

Stop Loss Management

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 48.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 112.8% and the S&P500 is up 47.6% since then. The small cap index, S&P600, is up 110.9% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 53.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 25.0% since its similar secular peak on March 23, 2000. The Dow is down by 7.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If 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 believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments. If that holds true, the bull will not be able to gain traction until a post civil strife period. That is, when the so-called social elite are on the streets, begging for food, which would appropriately reflect their contributions to the quality of life.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue sucking away. You can see that incompetence creeping into every walk of life as more and more assets are no working as well as before.

The NASDAQ year-to-date performance was bearish by 40.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 37.8% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 37.2%. 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 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 1.1% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was up 2.1% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 13.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 22.0% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 30.5% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 8.4% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 23.5% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 17.1% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 19.1% 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.

The Dow is up 65.4% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 86.9% and the S&P500 is up 69.4% since then. The S&P600, Small Cap Index, is up 98.1% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant and Short-term Indicant is no longer suggesting impending bearishness. The bull is gaining traction at this time.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

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.

Commodity price’s quick-term cycle continues to rise. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are approaching Red Bull status. They have now attained Red Bull status, which is economically bullish at this time.

Gold’s optimistic forecast continues at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull to boot. Do not be surprised at $2,000/oz by 2014. At the same webpage, you will notice oil is less stable, but as stated by the Indicant for several months, it is priced where the Kingdom finds comfort at around $80/bbl. The high end forecast, though, projects $120/bbl by 2012.

Scrolling down a bit on the aforementioned webpage, you will find the Reuter’s UK Commodities Index has shot straight north since early 2009. Well, not exactly straight. It has inclined along at 72-degree slope, or about 18-degrees shy of straight up. It is a Red Bull. Its high-end forecast for 2012 is not yet a believer in the 72-degree slope. The CRB Bridge Futures, on the other hand, is waffling around its depressed and declining Red Curve. It is certainly not projecting inflationary threats with all forecasts heading southeast. Again, you may have to scroll down to see the chart.

Mortgage rates have increased the past several days. However, as you can see, they all remain Yellow Bears with continuing statistically depressed projections.

The Japanese Yen had been strengthening until this past week. However, even with Japanese Governmental intervention it remains as a Yellow Bear. Keep in mind, the chart’s expression is per U.S. dollar and thus its Yellow Bear status suggests the Yen is stronger. Interestingly, Japan is somewhat socialistic, but still enjoying the benefits of their great industrial engineer, Shigeo Shingo. This is an interesting dynamic, whereby superior industrial engineering can offer significant abundance to any society in spite of their political structure as long as the political structure does not interfere. The Japanese system tends to help the idea of enhancing productivity, which is the sole contributor to increases in the quality of life.

Scrolling down, you will find the Canadian dollar is trading at a stable rate, while the Euro has escaped its Yellow Bear status and is again a Red Bull. The Canadian dollar, like the Yen, is strengthening as a Yellow Bear. The CA$ tends to parallel oil prices.

The consumer price index and producer price index continue to be relatively stable.

We renewed participation in the current bullish spurt. It may not be just a mere bullish spurt, as the mid-term elections continue to promise an increased likelihood of a stalemated U.S. Government. Furthermore, there are some increasing probabilities of repealing some of the Congressional stupidity that has permeated the capital markets since 2006, when the democrats took control. The media continues relating presidential terms to stock market behavior, when in fact, it is Congress that passes laws and develops budgets. The media is ignorant. Most are encumbered with simple journalism degrees.

All prior bearish commentary in this section is being arrested, for the time being, based on the mid-term election phenomenon and political current polling. The current environment is somewhat bullish. That, coupled with capitalistic expansionary practices in Asia, is increasingly bullish. The geographical sectors, as a measure of bullish magnitudes, will be interesting to track in the years ahead.

Although always under threat by any incumbent politician, the current political spectrum is favorable to the bull. Since the founding fathers, there have been very few good politicians. Those wandering three-pound brains that penetrate the halls of U.S. public buildings are mostly empty of substance, compared to the founding fathers. As long as the U.S. sticks to those principles contained in the U.S. Constitution, the stock market bull will enjoy more victories than defeats. There needs to be significant repeals of recent legislation and the Federal Government needs significant downsizing, where inefficiencies are maximized.

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 27.2% since then, annualizing at 24.9%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 6.1%, annualized at 157.9%, since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 6.1%, annualized at 155.7%, since the most recent buy signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 1.9% since that sell signal. Price needs to eclipse yellow and Force Vector needs to improve its behavior before receiving a buy signal.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 4.4% since then, annualizing at 99.2%. It was up 242.4% (annualized at 44.8%) since the 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 59.8% since that buy signal, annualizing at 32.7%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 9.8% since that buy signal, annualizing at 66.6%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

All then major indices are up by an average of 11.1% since their bull signals an average of 22.5-weeks ago. That annualizes at 22.5%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,402,321. That beats buy and hold performance of $1,657,601 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $135,463. That beats buy and hold’s $112,227 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $202,783. That beats buy and hold’s $82,204 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 65.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then and a sell signal quickly ensued. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being

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 274.1% (annualized at 14.4%) since the Long-term Indicant signaled bull 987-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

As stated the past several days, configurations supporting bull remain, but weakening slightly. However, there are no significant threats to the short-term stock market bull. 28-Red Bulls mitigate sustainable bearish threats. The rising NTI Bullish Blue Curve remains aggressive. Prices will eventually fall below NTI Blue. That would be a good position to buy more as long as Pressure remains positive.

With current configurations, such as positive pressure and force inside bullish domains, the bear cannot escape its anemia. The Near-term and Quick-term attributes are enhancing their support for bullish sustainability.

The mid-term election year bullish phenomenon appears to be unfolding. It appears political incumbents who contributed entirely to economic chaos are in trouble. Tossing the scoundrels out of office is bullish even if absent of economic fundamentals in the U.S. Asian economies, on the other hand, should be inspirational to the bull. This is an interesting dynamic without much history due to inclusions of China and India.

The stock market will enjoy bullishness if the world’s inhabitants continue moving to the so-called economic right, where laziness and incompetence will be punished and hard working efforts will be rewarded. Naysayers will be laughed at and that would be exceedingly bullish. Two-billion capitalists have much more power than four billion socialists. The stock market bull would prefer an inversion to that ratio, but it seems to be doing okay with the current reality. Those striking and weak unionized Europeans are threatening the bull a bit, but mildly so. Adding to that threat is congressional abstinence of a tax vote, which by default, will be a tax increase which is derived from Warren G. Harding and FDR economic philosophies. History may repeat as contemporary brains are void of Harding/FDR lunacy.

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

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

The eleven existing bulls are up 2.5% since the NTI signaled bull an average of 2.8-weeks ago. That annualizes to 45.4%.

The Quick-term Indicant signaled bear for contrarian VIX on Sep 16, 2010. It is up 3.2% since that bear signal. The VIX remains committed to not becoming a Yellow Bear, but configurations continue disallowing a bull signal.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant. There is one bear signal (VIX).

Short-term Market Summary

Although a bit shaky and without volume support, there is no ceiling to stop bullish behavior. That suggests excessive risks in not holding. The laterally moving Force Vectors are solidly non-bearish. Pressure continues to increase inside bullish domains, which is bullish. All eleven non-contrarians are Red Bulls, mitigating bearish aggression.

One mild short-term threat to the bull is the VIX’s Force Vector crossing above Vector Pressure one week ago. Adding a bit more concern is the VIX’s Force Vector crossing into bullish domains last six-days ago. However, VIX Force is now declining and thus non-threatening to the stock market bull.

Most of the major indices’ Force remains in bullish domains and above positive pressure, although declining slightly. The bear cannot gain traction with that configuration on a short-term basis. Keep in mind, it can change, but until it does, the bull remains alive. The Indices will fall below NTI Blue and current configurations suggest that as a buying opportunity.

-Tangential Protection – None!

-Reverse Tangential Bearish Detection – This phenomenon will continue to be monitored, but its threat is subsiding for the time being. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. This is being threatened by explosive Asian economies and the classical pre-election presidential year’s stock market bullishness, which starts on January 1, 2011. Those historical bullish cycles typically originate in the mid-term election year, which concludes on December 31, 2010. This historical bullish phenomenon usually starts during the mid-term election year. Configurations suggest this bullish cycle has started and prices will not fall to those reverse tangential projections until a later date. Those sour values will most likely occur once hyper-inflation and/or high interest rates and/or both kick in, which is inevitable, but that could be a few more years from now. So, until then enjoy the bull in spite of its sometimes illogical behavior.

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.

Indicant Volume Indicators

Oct 1, 2010-Fri-Volume continues edging up on mild bearishness.

Sep 30, 2010-Thu-Volume was up mildly on bearish behavior. Some speculate the bull is troubled by congressional abstaining on a tax vote. Keep in mind politicians can only undo their prior damage. This congress expresses reluctance.

Sep 29, 2010-Wed-Volume is slowly increasing, but certainly not robust. However, there is nothing in volume challenging the short-term stock market bull cycle.

Sep 28, 2010-Tue-NASDAQ volume was highest since early Aug. Both volume indicators are rising. This currently favors the stock market bull.

Sep 27, 2010-Mon-Again light volume. It is unseasonably light. This offers no threat to the bullish bias.

Sep 24, 2010-Fri-Again passive volume. This volume lag is unusual. However, the NASDAQ Indicant Volume Indicator has bottomed and now rising, supporting bullishness.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 4.0% since their buy signals an average of 3.9-weeks ago. This annualizes at 54.2%.

The NTI is avoiding two-ETF’s. They are down by an average of 11.4% since their sell signals an average of 3.4-weeks ago. They are contrarians, QID and VXX.

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 7.6% since their buy signals an average of 10.4-weeks ago. This annualizes at 38.1%.

The Quick-term Indicant is avoiding 2-ETF’s. QID and VXX. They are down by an average of 45.4% since their sell signals an average of 39.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase. Force is not expressing bearish support by remaining in bullish domains, although shifting south, but non-threatening. Twenty-eight ETF’s are Red Bulls, mitigating dynamic bearish threats. NTI Bullish Blue remains aggressively bullish.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 4.4%, annualizing at 99.2%, since then. Force bounced north off pressure and no longer lazy. This ETF is now enjoying Red Bull status, mitigating sustainable bearish threats.

ETF#11-Gold and Precious Metals is up 59.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 32.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $111.76 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 9.8% since the Near-term buy signal, annualizing at 66.6%. Force refused to fall into bearish domains and now higher than Pressure and moving laterally, suggesting a passive bull, but certainly without bearish threat.

GLD and gold continue setting new highs, offering no mercy to those who attempt to short it.

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 16.2% since those buy signals, annualizing at 37.2%. It is unlikely this fund will remain bullish concurrent with stock market bullishness. Its contrarian nature suggest it should shift bearishly as long as the stock market remains bullish. Key attributes to monitor is Force Vector. It finally mounted pressure several days ago and used a lot of TLT-bullish energy doing so. As you can see from the chart, Force is weakening. This should definitely not be bought, even though the hold signal remains valid, but under sell threat. Interestingly, it is also a Red Bull with a collapsed Bullish Blue curve attempting to repair itself.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 7.8% since then. Although its Force Vector has shifted northward from its cyclical minimum, it lacks ambition in bearish domains. It remains pathetically bearish. It would not be surprising for bearish resumption once Force crosses above “bearish pressure.”

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 15.0% since then. As you can see, its Force Vector has moved bullishly, but too deep in bearish domains to move the price up much. Negative Pressure suggests risks remain too high for signaling buy. Its northerly moving Force Vector is somewhat appealing, but better to not buy with negative pressure.

Major ETF Events

Oct 1, 2010-Fri-None.

Sep 30, 2010-Thu-Contrarian TLT is losing bullish Force.

Sep 29, 2010-Wed-Contrarian TLT’s Force Vector dipped mildly to the south today. Although it is a QTI Red Bull, it may lose that lofty status in a day or two. If so, the Short-term Indicant will signal sell if Force dips into bearish domains.

Sep 28, 2010-Tue-Contrarian TLT was not contrarian, enjoying mild bullish behavior consistent with that of the stock market. Keep your eye on its Force Vector. The next trip south of Pressure will most likely trigger a sell signal.

Sep 27, 2010-Mon-VIX has crisscrossed yellow the past three trading days. VIX Force is in bullish domain, but consumed significant energy in doing so. This is consistent with a resting stock market bull.

Sep 24, 2010-Fri-Today’s stock market bullish direction occurred without price contact with NTI Bullish Blue Curve on several funds and major indices. That suggests this bullish cycle will enjoy sustainability, consistent with the heart and soul of bullish seasonality.

Current Strategy-Short-term Indicant- Oct 1, 2010-Fri-Same. Sep 30, 2010-Thu-Same. Sep 29, 2010-Wed-Same! Sep 28, 2010-Tue-Same. Sep 27-Mon-Although shy of volume support, configurations supporting bull continue to strengthen. Prices falling below NTI Blue will be a good spot to buy more, as long as pressure remains positive.

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

Contrarian Funds

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 3.7% since the Near-term buy signal, annualizing at 41.5%. Force continues hovering in bullish domains with positive (bullish) pressure, supporting its bullishness.

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

Major ETF Events

Sep 10, 2010-Fri-Most Force Vectors shifted south. If they waffle inside bullish domains, bearish bias evaporates and bull/buy signals will occur.

Sep 8, 2010-Wed-Most non-contrarian Force Vectors are at cyclical maximums and contrarians are at cyclical minimums. This does not bode well for the bull.

Sep 7, 2010-Tue-VIX moved back above Yellow. As stated last Friday, this suggests a continuing absence of bullish robustness.

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

Following three consecutive weeks of solid bullish convergence, the stock market endured mild bearish divergence last week. The desired bullish convergence/divergence for four consecutive weeks did not occur.

Indicant Conclusion

As stated the past 52-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The stock market bull continues expressing support for this principle.

Technical attributes have shifted in favor of the bull this past week. Internationally, fundamental success is reinforcing bullish conditions. It is appearing the rest of the world is enjoying its own economic success and no longer dependent on the increasingly socialistic U.S. economy. This interesting dynamic should not be underestimated. The lazy Americans will pay the price for being lazy. The inefficient government employees are dragging down the rest of the economy. All that is bad for the U.S., but the rest of world may no longer care; especially Asia.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

10/03/2010