Oct 30, 2011 Indicant Weekly Stock Market Report

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

The Heart and Soul of Bullish Seasonality Is Present

The stock market has enjoyed bullish convergence for four consecutive weeks. That is exceedingly bullish. Normal pre-election year political obstinacy to political incumbents is hurtful to each group, but profoundly bullish for the rest of us. Analogizing, you approach a waiting copperhead along the jungle’s path, while a rattlesnake attacks the copperhead. You fortunately avoid harm and continue merrily along your pathway, while the other two devour each other. Political attacks within political sectors are always bullish. Emptying venom to both extremes along the political sectors, redirects venomous bites away from you. Adding bullish frosting is increasing austerity pressures in Europe and recognition of basic requirements to continue to do so. The oriental countries continue with outstanding gains in productivity, which is the sole source for increases in the quality of life for all.

For the first time since mid-2007, all Dow Utilities are enjoying hold signals. The Dow Utilities never succumbed to bearish pressures during the past few months. Keep in mind, people will pay utility bills ahead of mortgage payments. That is because the utilities are capable of avoiding variable costs by closing the service valves. Utilities have enjoyed cash inflows as opposed to banks, which are holding empty houses with ever decreasing values relative to their overstated asset valuations. Their phony balance sheets cannot fool the capital markets as share prices more commonly reflect cash flow as a percentage of shareholder equity. Snickering is a common response to phony fat assets on balance sheets. Those who create fat phony balance sheet content are products of the U.S. so-called best academic institutions. In the end of all that exists, hype never wins. Only substance does.

Most of the Dow30 stocks require economic growth for healthier cash flow. They are older companies and dilettante infested for the most part. The greatness in those companies from predecessor management teams, however, created profound revenue streams. Those revenue streams still provide cash flows during economic robustness. They are typically encumbered with high fixed cost from a combination of excessive salaries and extensive capital. With that, the primary source to operating income is high volume, derived primarily from bullish economic conditions.

There are only three avoided stocks among the Dow30. You will know the stock market bull is solid when all thirty of these stocks are enjoying hold signals by the Mid-term Indicant. Let’s review those three stocks that remain with avoid signals.

DJIA#01-AA-Alcoa has been in a bearish trend for nearly ten years. That bearishness accelerated in the great bear market of 2008. It was bullish last week, but its Force Vector remains in bearish domains and thus did not qualify for a buy signal. It is down 21.5% since the Mid-term Indicant signaled sell on July 29, 2011. In spite of dilettante management infestations, this stock could enjoy some significant bullish behavior in this mid-term bullish cycle. For those wishing to minimize risk, wait for the buy signal. Those with more risk tolerance should buy on down days; especially if with the capacity to add to positions.

DJIA#06-BAC-Bank of America is down 79.9% since the Mid-term Indicant signaled sell well ahead of the stock market’s meltdown in January 2008. You should notice its Force Vector crossed above Vector Pressure this past week, but price remained below the shorter-cycle blue curve.

You should also notice the Mid-term Indicant did not signal buy when those two attributes qualified in early 2009. There was significant fundamental justification for waiting for this stock to cross above the mid-term yellow curve at that time. It never did even with potential help from the stock market bull in 2009.

For those with a penchant for taking risks, BAC could be bought now. A sustainable bullish cycle should push this stock to MTI Bearish Yellow, which is at $15.57. A current price of $7.35 would yield nice profit during the next few months as long as the stock market remains bullish. The salient point here is, “as long as the stock market remains bullish.” The various Indicant models will keep you posted on that. Supporting this idea of buying BAC is MTI buy signal this weekend for JP Morgan-DJIA#07-JPM. Minimizing risk would wait for a Bank of America buy signal from the Mid-term Indicant.

DJIA#18-HPQ-Hewlett Packard is very close to receiving a buy signal from the Mid-term Indicant. It is just below the shorter cycle blue and green curves. It needs to cross above those two curves to qualify for a buy signal. It is down 22.3% since the Mid-term Indicant sell signal on May 20, 2011. At one time, this was a great company, like most in the Dow30 family.

All solid bull stock markets are associated with hold signals for all of the Dow Utilities and the Dow30 stocks. The Dow Utilities has done its part. Once those three lagging Dow30 stocks conform to this standard, you will know this bull is solid with the potential for lasting through next year’s normally bullish presidential election year, when economic venom is redirected away from wealth creators occurs.

Political discourse in Washington DC and those who wish to get into that area, austerity pressures in Europe, and profound productivity increases from the orient are all converging in support of a stock market bull.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

The NASDAQ’s biggest loser was NAS#78-NIHD. It was down 17.8% during this past week’s dynamic stock market bullish behavior. It is down 31.9% since its recent sell signal on Aug 19, 2011. You should notice its Force Vector remains in bearish domains. The NASDAQ’s biggest gainer was NAS#23-LOGI. It was up 23.4% last week. It is down 26.8% since the Mid-term Indicant signaled sell on April 15, 2011. It is on the verge of receiving a buy signal. Force needs to nudge a bit higher.

The Indicant Select Stocks, of which many are former NAS100 stocks, biggest loser was ISTK#66-MDR. It was down 23.5%. It is down about that amount since the Mid-term Indicant signaled buy two weeks ago. Its Force remains in bullish domains and higher than Pressure. If you did not buy then or stopped out, buying is recommended. If you do, set another stop loss. The biggest gainer in this group of stocks was ISTK#67-NBR. It was up 25.2% last week. It is up by nearly that amount since the Mid-term Indicant sell signal two weeks ago. As you can see, the energy sector is enduring some stock price fluctuations at converging prices. It is on the verge of receiving a buy signal.

The Dow Jones Industrial Average group of stocks biggest loser last week was DJIA#08-PG. It was down 2.3%. It is up 16.3% since the MTI buy signal on Sep 11, 2009. This stock is a lazy one. The biggest gainer was DJIA#06-BAC. It was up 13.8% last week. In spite of last week’s bullishness, it is down 79.9% since the MTI signaled sell on Jan 4, 2008. Bank of America is a dog stock, infested with massive dilettantes, who spend more time with politicians than earning their phony salaries.

DJU#02-ED was the Dow Utility’s biggest loser. It was down 2.9% last week. However, it is up 45.6% since the MTI buy signal in Aug 2009. The biggest utility winner, DJU#05-AES, was up 4.1% last week. It is up that same amount since the MTI buy signal last week.

Mutual funds biggest loser was contrarian MF#22-USPIX. It was down 6.0%. It is down 80.3% since the MTI sell signal in Apr 2009.  The biggest gainer was MF#28-FSAGX and up 11.2% last week. It is down 2.6% since the MTI signaled buy last July. It faltered during gold’s price swoon, but recovered this past week.

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 39 buy signals and one sell signal.  That brings the total number of buy-signals to 102 in the past three weeks.

The Mid-term Indicant is signaling hold for 241 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 59.9%. That annualizes to 42.1%. The Mid-term Indicant has been signaling hold for these 241-stocks and funds for an average of 73.9-weeks.

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

One year ago, on Oct 29, 2010, the Mid-term Indicant was holding 272-stocks and funds out of 339 tracked for an average of 46.3-weeks. They were up by an average of 39.9% (annualized at 44.8%). There were 67-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 42.7% since their respective sell signals an average of 100.3-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 195-stocks and funds of the 317-tracked two years ago on Oct 30, 2009. They were up by an average of 19.8%, annualized at 42.0%, since their respective buy signals an average of 24.6-weeks earlier. The Mid-term Indicant was avoiding 115-stocks and funds at that time. They were down an average of 43.2% since their respective sell signals an average of 85.1-weeks earlier. There were no-buy signals in addition to the 159-buy signals in the prior 14-weeks. There were seven sell signals on this weekend in 2009. The stock market bear originating in late 2007 continued its retreat in defeat at this time in 2009. Of course, in retreat, the stock market bear was accumulating energy for its next attack. It always does that. Bears typically do not last too long. They have a history of undoing years of work by the stock market bull in a matter of just a few weeks.

There were only 13-stocks and funds with hold signals of the 344-tracked by the Mid-term Indicant on Oct 24, 2008 since their buy signals an average of 92.3-weeks earlier. They were up by an average of 160.0% (annualized at 90.1%). There were 325-avoided stocks and funds at that time. They were down by an average of 32.7% from their respective sell signals an average of 21.7-weeks earlier. There were six-sell signals on this weekend in 2008 in addition to the 556-sell signals in the prior 50-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008.

On Oct 26, 2007, the Mid-term Indicant was signaling hold for 286-stocks and funds out of 345-tracked. They were up by an average of 143.2% (annualized at 66.0%) since their buy signals an average of 112.9-weeks earlier. The Mid-term Indicant was avoiding 48-stocks and funds at that time. They were down by an average of 15.1% since their sell signals an average of 28.2-weeks earlier. There was one buy signal and ten sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Oct 27, 2006, there were 311-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 106.0% (annualized at 69.1%) since their respective buy signals an average of 79.7-weeks earlier. There were 33-avoided stocks and funds then. They were down an average of 14.8% since their respective sell signals an average of 23.1-weeks earlier. There were no buy signals and no sell signals on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Oct 28, 2005, there were 216-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 104.2%, annualizing 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 by an average of 10.7% since their sell signals an average of 24.4-weeks earlier. There were no-buy signals and two-sell signals on this weekend in 2005.

There were 243-stocks and funds with hold signals on Oct 29, 2004. They were up by an average of 67.1%, annualizing at 64.8%, since their buy signals 53.8-weeks earlier. The 43-avoided stocks and funds were down an average of 33.3% since their respective sell signals an average of 53.8-weeks earlier. There were ten-buy signals and no sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Oct 31, 2003, there were 261-stocks and funds with a hold signal, enjoying a 54.5% gain since their respective buy signals an average of 30.4-weeks earlier. That annualized at 93.4%. There were only 25-avoided stocks at that time. They were down by an average of 23.9% since their sell signals an average of 31.6-weeks earlier.  The Mid-term Indicant was tracking 266 stocks and funds from 2002 through late 2004. There were 7-buy signals in addition to 382-buy signals in the prior 32-weeks. There were three-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 35-weeks old on this weekend in 2003.

On Nov 1, 2002, there were 211-stocks and funds with hold signals. They were up 16.9% since their buy signals an average of 10.0-weeks earlier, annualizing at 88.4%. There were 38-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 19.1-weeks earlier. The avoided stocks and funds were down 29.6%. There were 42-buy signals in addition to 391-buy signals in the prior 14-weeks.  Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others were reversed with sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were four-sell signals on this weekend in 2002.

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

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

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

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

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

All major indices are configuring with bullish attributes. Several mutual funds and stocks garnished similar configurations the past three weeks. The heart and soul appears to be manifesting.

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

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

Stop Loss Management

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

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 67.9% since its secular weekly low on October 9, 2002. The NASDAQ is up 145.7% and the S&P500 is up 65.4% since then. The small cap index, S&P600, is up 145.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months. Configurations shifted in support of normal pre-election year bullishness the past two weeks.

The NASDAQ is down 45.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 15.9% since its similar secular peak on March 23, 2000. The Dow is up by 4.3% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years.

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

The NASDAQ year-to-date performance was bearish by 28.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001.

The NASDAQ was down by 32.5% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 44.7%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 1.4% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 3.9% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 6.6% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 16.1% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 37.8% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 30.6% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 10.5% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 5.6% this year. The S&P500 is up 2.2% and the NASDAQ is up 3.2%, respectively, this year. Dynamic bullish behavior the past few weeks has moved the stock market back into a more conventional position of bullishness associated with pre-election years.

The Dow is down 13.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 4.3% since its last peak on Oct 31, 2007. The S&P500 is down 17.9% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 17-weeks ago. That was the second time this year such accomplishment was enjoyed. Eclipsing and holding above 2007 cyclical peaks remains elusive.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 20.9% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak three weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 7.2% above that weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak. Even though the NASDAQ100 was bearish last week, it held above that potential point of resistance.

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

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

The Dow is up 86.8% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 115.8% and the S&P500 is up 90.0% since then. The S&P600, Small Cap Index, is up 130.2% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be  underway in spite of recent bull/buy signals, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull.

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

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

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

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

The 3-month T-Bill remains flat and depressed, along with short-term CD’s. They have been yielding zero for the past 12-weeks.

The Euro jumped to Red Bull status 41-weeks ago. It lost that Red Bull status six weeks ago with a continuing sharp drop against the greenback. There has been a mild bullish response the last three weeks, but still not returned to Red Bull status. It was down sharply this past Friday due to yet more bailout packages for Greece and other cultures of the subspecies groups in Europe.

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

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior in four of the past six weeks, it continues trading well above the 2012 yearend forecast curve. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow 12-weeks ago on souring economic news, but rebounded last week. It remains as a Yellow Bear.

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

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status, but it continues resisting that condition with a strong rebound this past week.

Commodity prices, overall, were bearish in nineteen of the last 26-weeks. They were bullish last week based on bailouts in Europe. Souring economic forecasts continue dampening commodities bullish cycle despite recent commentary suggesting otherwise. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply 12-weeks ago on souring economic news, they enjoyed nice bullish bounces ten-weeks ago, but down in five of the past seven weeks. They bounced solidly to the north the past three weeks, but remain as Yellow Bears. They have nestled right up next to declining mid-term bearish yellow curves. It will be interesting if they can shift away from their bearish cycle with high unemployment in the U.S. economy.

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

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 10.3%, annualizing at 9.2% since then. Gold is no longer enduring short-term trouble.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 2.6% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It received a buy signal this weekend after missing 18% opportunity in the last 12-months with most due to rapid bullishness ahead of Force Vector justification to signal buy.

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 this weekend after missing about 20% of opportunity.

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 after missing about 20% of opportunity.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It again signaled buy this weekend after missing about 24% of opportunity.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is up 14.7% since then, annualizing at 294.7%. The slower moving Quick-term Indicant signaled buy on Oct 21, 2011. It is up 6.5% since then, annualizing at 336.9%. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 110.3% since that buy signal, annualizing at 37.8%. 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 was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since that sell signal and its most recent buy signal on Oct 26, 2011. It is up 1.4% since that buy signal, annualizing at 247.7%.

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

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

The Mid-term Indicant is signaling bull for all major indices. They are up by an average of 4.9%, annualizing at 30.7% since their bull signals an average of 8.3-weeks ago. The S&P400 and S&P600 qualified as new bulls this weekend.

The Mid-term Indicant Dow Jones Industrial Average performance is at $31,088,494. That beats buy and hold performance of $1,860,811 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $147,104. That beats buy and hold’s $125,877 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $234,123. That beats buy and hold’s $94,908 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 136.9%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post-election year, 2009, which is the historical standard.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

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

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 322.5% (annualized at 16.1%) since the Long-term Indicant signaled bull 1,043-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report – Summary

Comments from the past few days remain in effect and repeated here. “Oscillating Force Vectors in bullish domains are increasingly supportive of bullish stock market behavior.” Quick-term bullish unanimity was attained with last Thursday’s explosive stock market bullishness, as all of the non-contrarian QTI Yellow Bears expired.

As stated this past Wednesday, relaxation, however, remains inappropriate but any paranoia behavior should be expelled from your demeanor. Vector Pressures remain in bearish domains for four non-contrarian ETF’s. Until that attribute is zero, bullish unanimity remains absent along the short-term cycle.

In spite of all that, the heart and soul of bullish seasonality appears ready to assume its annual habit of dominating.

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

Index Report Card Summary

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

The Near-term Indicant is signaling bull for all of the major non-contrarian indices. They are up by an average of 4.0% since the NTI bull signals an average of 1.0-weeks ago. That annualizes at 203.8%. The Near-term Indicant is signaling bear only for contrarian VIX. It is down 16.2% since its bear signal 0.6-weeks ago.

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

Indicant Volume Indicators  

Both major indices remain in high interest domains, but moving lethargically. That lethargic behavior coincides with bullish stock market behavior the past two weeks, suggesting  bullish spurt attributes. Prior cyclical robustness coincides with bearish aggression, supporting bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle and that remains absent. In spite of limited volume support, however, too many attributes along the short-term cycle support continuation of this recent bullish behavior. Additionally, robust volume on Oct 27, 2011 coincided with dynamic bullish aggression. All of this is bullish. If the IVI cycles shift into robustness, then bullish sustainability should be expected.

Oct 28-Fri-Mediocre volume on flat behavior is meaningless. Yesterday’s comment remains prominent.

Oct 27-Thu-Solid volume aggression supports continuing bullishness.

Oct 26-Wed-Slightly above average volume on bullish behavior offers a bit more support for continuing bullishness.

Oct 25-Tue-Low volume on bearish behavior, although somewhat aggressive, is not a scary proposition to recent buy/bull signals.

Oct 24-Mon-Low volume again on mild bullishness. Volume increases is desired for obviating bullish directional intensity.

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 6.1% since their buy signals an average of 1.8-weeks ago, annualizing at 175.0%.

The NTI is avoiding three-ETF’s. They are all contrarians. They are down by an average of 4.4% since their near-term sell signals an average of 1.1-weeks ago.

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

The Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an average of 7.6% since their buy signals an average of 6.6-weeks ago. This annualizes at 59.9%.

The Quick-term Indicant is avoiding three-ETFs. They are down by an average of 3.5% since the QTI sell signals an average of 1.0-weeks ago. These avoided funds are also contrarians.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled buy on Oct 21, 2011. It is up 6.5% since then, annualizing at 336.9%. The Near-term Indicant signaled buy on Oct 10, 2011. It is up 14.7% since that buy signal, annualizing at 294.7%. As stated the past few days, its Force Vector is behaving bullishly with some mild oscillations in bullish domains. It is above QTI bearish yellow. All of this is bullish.

ETF#11-Gold and Precious Metals  is up 110.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 37.8%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $148.02 and still rising. Relaxation remains in order, despite recent bearish aggression, since your buy price approximates $80.65 versus today’s closing price of $169.62. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled buy yesterday on Oct 26, 2011, as Force catapulted itself into bullish domains and above Pressure. Fundamentally, with inflation on the horizon and cheapening U.S. currencies with more and more paper money flowing into the hands of incompetence and laziness, gold should continue to rise. It is up 1.4%, annualizing at 247.4%.

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

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

ETF#14-TLT-Long Government received a sell signal from the Near-term Indicant on Oct 24, 2011. It is down 1.6% since then. As stated since then, its Force shifted south, disfiguring its bullish cycle. The Quick-term Indicant signaled sell this past Thursday well ahead of the normal interaction with the QTI bearish yellow curve. As long as the stock market is configured bullishly, this ETF is anticipated to fall to QTI bearish yellow in this bearish cycle. This forecast is unofficial as the Indicant does not forecast. However, as long as Force remains below Pressure and inside bearish domains, there is nowhere else for this fund to go. The current price is $111.46 and QTI Yellow is $98.98. QTI will continue increasing, but at a decreasing rate of increase. A drop of about $8.00 per share before Christmas would not be surprising. Keep in mind, if Force moves into bullish domains and above Pressure, this forecast is to be ignored. The Greeks and Europeans can upset this rather quickly.

ETF#31-QID received a sell signal on Oct 10, 2011 from both the Near-term and Quick-term Indicant as Force fell into bearish domains. It is down 11.0% since then.

The Quick-term and Near-term Indicant signaled sell this past Wednesday, Oct 27, 2011, for ETF#32-VXX. It is was about up 18.0% since the QTI’s prior buy signal in early August, annualizing at about 85.0%.  It was up over 70.0% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at over 280% since then. Force is plummeting. It is down 0.5% since that sell signal.

Major ETF Events

Oct 28-Fri-Flat market behavior was a good opportunity for buying. Continue doing so on bearish days as most attributes remain solidly bullish.

Oct 27-Thu-Solil bullish behavior moved remaining bearishly configured ETF’s to buys, as Force crossed into bullish domains along with other solid attributes. Bullish unanimity has now been achieved along the near-term cycle.

Oct 26-Wed-Mixed-bullish behavior highlights a confused stock market. Quite a few contrasting elements remain pervasive.

Oct 25-Tue-Stock market bearishness did not disfigure current bullish attributes along the short-term cycle.

Oct 24-Mon-Force Vectors continue fluttering in bullish domains, offering bullish support. Keep in mind, bullish unanimity remains absent.

Current Strategy-Short-term Indicant-Oct 28, 2011-Most, not all, short-term attributes continue favoring a bullish stock market, but keep in mind, Yellow Bears were annihilated with bullish aggression. Continue buying on bearish days.

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence for four consecutive weeks. That is solidly bullish and consistent with originations of the heart and soul of bullish seasonality.

Indicant Conclusion

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

Political stalemate and austerity against nonsensical waste in Europe should encourage the stock market 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

10/30/2011

Oct 23, 2011 Indicant Weekly Stock Market Report

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

A Troubled Bull or a Choppy Bear

The Mid-term Indicant signaled bull for six major indices. Two indices were already with bull signals with the Dow Utilities being the oldest bull. It did not succumb to bearish aggression in the latest onslaught from this past August. The NASDAQ100 received a bull signal the week before last and it was down last week. NAS100 mid-term cyclical attributes held firmly in favor of its bull signal in spite of its bearish behavior last week.

However, two major indices retained bear signals, adding a mild source of concern. The S&P400 and S&P600 did not earn new bull signals. The S&P400 did not cross above its shorter cycle blue curve. As you can see from the chart, the blue curve is rising, but the mid-caps did not have enough muster to eclipse it last week. Until it does, there will be no bull signal. While looking at the chart, you should notice a few attributes. The shorter-term cyclical trend is bearish with the green curve moving south. Gazing on the top of the chart, you should notice Vector Pressure (the shallow moving gold curve) is moving bearishly. It is in bearish domains. As you can see, Force Vector is bullishly mature, threatening a reversal in favor of the stock market bear. The small cap index is similarly configured.

For the second consecutive week, the Mid-term Indicant generated a healthy number of buy-signals. This week’s buy signals included some mutual funds for the first time in several weeks. Last week’s report highlighted buy-signals for stocks without any mutual funds. These recent buy-signals were the first in several weeks.

Weighted into the model is the annual heart and soul of bullish seasonality, which usually starts anywhere from late September to early November. This is due, primarily, to political influences. Congress starts the process of distancing themselves from the president within the same party. That is occurring now. The minority party gains more traction with directed criticisms toward the incumbent president. All of this political discourse is typically bullish. Two-hundred plus years of these phenomena offers inarguable evidence of its accuracy.

Of course, from time to time there are unfavorable variances to this expectation. This could be one of those years due to an increasing influence from international events. The death of Muammar Gaddafi in Libya did not trigger any bearish reaction. In essence, the stock market found favor in anticipation of increased petro flows from Libya. The strategic view is that increasing supplies will dampen prices, which is somewhat of a real economic stimulant, as opposed to those phony ones delivered by politicians.

Interestingly and contrasting with anticipated reductions in oil prices, ETF#03-XLE-Energy has been exceedingly bullish the past several days along the short-term cycle. It crossed above the Quick-term Bearish Yellow curve this past week, triggering a quick-term buy signal on Friday. The Near-term Indicant signaled buy a bit earlier on Oct 10, 2011. It is up 7.7%, annualized at 251.4% since that buy signal. Some cooling off would not be surprising. Strategically, however, its bullishness along the near-term cycle conflicts with the preceding paragraph. In other words, declining oil prices should induce bearishness for energy related securities. In essence, the stock market bull is a bit confused with a discombobulating configuration between technical and fundamental attributes. And there is a big difference between cooling-off and outright bearishness. The trick is in identifying which is which. This mystery should be resolved in a few weeks as both technical and fundamental attributes synchronize.

MF#40-Fidelity’s Energy Services fund has skyrocketed since falling below the mid-term bearish yellow curve. It is up 16.5% since the Mid-term Indicant signaled sell on Sep 30, 2011. Most related energy sector funds have performed similarly the past few weeks. The Mid-term Indicant has not yet signaled buy for these energy related funds due to technical limitations on buying justifications along the mid-term cycle. MF#39-Fidelity Energy has likewise skyrocketed since falling below MTI-Yellow. Its Force Vector, although moving solidly to the north, remains in bearish domains. Any fund similarly configured will not receive a buy signal until that sectors stock market Force justifies it. In other words, it must earn its way into bullish domains. Nearly all of the energy sectors are configured similarly, highlighting current conflicts between technical attributes and fundamental outlooks.

All but one of the Dow Utility’s components is enjoying hold signals. Click this sentence to view these stocks. The lone utility bear is DJU#13-EXC-Duke Energy. As you can see, it has been trading in a narrow and passive bullish range for several months. It has been unable to garnish enough energy to configure a more explosive bullish display. Its MTI Bullish Red and MTI Bearish Yellow continue with bearish trends and with that, one should avoid fighting the trend.

Interestingly, the Dow Utilities immunity to bearish behavior this past year is fundamentally related to CD’s. The Wall Street Journal has not quoted CD prices for several weeks. Senior investors are not finding CD’s as a worthy investment because inflation wipes out the earned interest within days of buying them. That is one reason why utilities have enjoyed immunity from bearish ambition.

Utilities continued smattering of stock market bearish ambition is one reason for the bear’s choppy behavior and related overall stock market volatility. Money flows into any sector of the capital markets prevents the bear from complete domination based on the simple laws of supply and demand. Economic fundamentals on the other hand are not that encouraging to the stock market bull. CD’s and other fixed interest income securities do not offer an alternative to dividend paying instruments. The 2008 bear market depressed utility stocks low enough to garnish dividend yields far exceeding that of CD’s and related investments. As long as the Dow Utilities maintains a bullish configuration, the stock market bear cannot find sustainability and depth. All of this is mentioned to help you monitor the last potential buying opportunity in the Dow Utilities family. You can exercise this option when the Mid-term Indicant signals buy for DJU#13-EXC.

Buying stocks for dividend purposes is not without risks. Any group of dilettantes can adjust them unfavorably not to mention capital erosion in a solid bear market. However, if the economy rocks along even passively, such risks are minimized. You may want to study the management to assess how much potential dilettante influence may exist. People always induce problematic concerns. A corporation may be a single legal entity, but rest assured it is merely an organization of people with a significant bias toward competence or incompetence.

The new bull and buy signals are technically sound. However, overall, there is an absence of bullish unanimity, which is desired by those who like to buy, hold, relax, and enjoy long bullish cycles and trends. Such conditions do not exist. So, psychologically, maintain an action oriented demeanor in the event a head fake is in play. Here are a few examples of those sectors that are disallowing the desired bullish unanimity along the mid-term cycle.

As earlier stated, the energy sector remains with attributes that suggest they may not be capable of participating in a stock market bull. Since the energy sector can be contrarian to bull markets with solid bearish expressions, bullish attributes in this sector are not required for desired bullish unanimity.

NAS#15-LIFE-This healthcare stock remains without solid bullish attributes. It should until the baby boomers die. The downside is finding enough customers capable of paying their bills. Political activism into capital markets has elevated that new risk to such companies.

NAS#17-MRVL-This technology company was solidly bearish this past Friday, while the stock market was solidly bullish. This sector’s bullishness is required for bullish unanimity. It is down since the MTI buy signal. Buying more is okay but with a tight stop loss. Rebuying if you stopped out is recommended since it is down while retaining an MTI hold signal. However, if the stock market turns bearish, these weaker stocks get punished first and more deeply. That is why a tight stop loss should be established.

NAS#23-LOGI-This Switzerland-based company is too diverse to identify a specific sector, but it mainly has served the transport industry. It may be one of those who has lost its soul with too much diversification. Its chart is very interesting. It moved solidly north for several years including the early 2000’s. In late 2007, it fell below MTI bearish yellow with a loud thud and has been moving in a general bearish direction since then.

ISTK#92-HSGI-This high technology stock in the healthcare sector has one of the fanciest names among all stocks. It is Human Gnome, which offers a personal touch. Its purpose could come in handy if humans discontinue their purpose of procreation. Unfortunately, there is a big difference between ideas and ability. This stock is down over 90% since its peak just ahead of the dot.com bubble in early 2000. It has a unique configuration that supported bullish unanimity in the 2009 bull leg. It is now a solid yellow bear. Of particular concern is its Force Vector. After rising gallantly for a few weeks, it shifted back to the south last week. Doing that during overall stock market bullishness is an argument against desired bullish unanimity.

DJIA#18-HPQ-Hewlett Packard is supposedly one of the bluest of the blue chips as a member of the lofty Dow30 stocks. It is an old company with a household name to it. Therefore, it is a prime candidate for dilettante and corporate leech attraction. As you can see from its chart, it is also a solid yellow bear. Its Force Vector is bullishly mature and just crossed into bullish domains. That is a meaningless activity for a Yellow Bear stock. It is jaundiced. All trends, both long, mid, and short are moving bearishly. This so-called tech stock needs significant GDP growth to perform to offset internal leeching behavior. That differential is apparently absent and thus not supporting desired bullish unanimity.

There are several other stocks and funds in other sectors with configurations similar to those described above that are not supportive of desired bullish unanimity. All sustainable bulls enforce bullish unanimity. This new bull has not yet done that. Until that happens, maintain an action-oriented demeanor. Politicians, although at odds at one another right now, which is normally bullish, have done profound damage to economic normalcy since Y2K. With that, a secular bear market may be underway. New politicians may undo their prior damage and the stock market is very capable of anticipating that. With that, a secular bear could be avoided. If the Pelosi and Reed types of politicians retain influence, rest assured a secular bear will continue since the stock market’s prior peak coincides with their rise to the top of the political circles.

This foments what some would claim as insensitive. The problem with reality is its complete exclusion to compassion and other wasteful political oratory. Here is the logic and arguing against it would only expose one’s stupidity. Taking money from the productive and giving it to the non-productive does one and only one thing. It depresses the economy. The stock market bear is delighted with that sort of nonsensical behavior.

The good news is, there is no bearish unanimity, which is equally required for sustainable and deep bear markets. Right now, we have a troubled bull that has induced a choppy bear, as opposed to enduring a dynamic bear.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

NAS#72-STX was the NAS100’s biggest gainer. It was up 30.7% last week. Its Force Vector plowed into bullish domains triggering a buy signal. This old technology company does endure some issues with trend, but a buy signal nonetheless.

The NAS100 biggest loser was NAS#17-MRVL. It was down 12.3% last week. This stock endures conflicting trend data, but avoided yellow bear status last week with this profound bearish behavior during bull market behavior. It is down 12.3% since the Mid-term Indicant signaled, buy, last weekend.

ISTK#51-EP was this groups biggest gainer. It was up 27.6% last week. It is up 141.7% since the Mid-term Indicant signaled buy two years ago. This groups biggest loser was ITSK#38-ENER. It was down 13.3%. It is down 98.7% since the Mid-term Indicant signaled sell in Oct 2008. You should notice that sell signal occurred at a time with this stock displaying years of a bullish trend. Some would have speculated that this stock was just cooling off at that time, but as you can see, it was doing more than just cooling off.

DJIA#29-TRV was the Dow30’s biggest gainer. It was up 11.9%. It is up 51.7% since the MTI buy signal in March 2009. DJIA#22-IBM was the Dow30’s biggest loser. It was down 4.7%, which is not too bad. It is up 54.4% since the MTI buy signal in July 2009.

DJU#11-WMB was the Dow Utilities biggest gainer. It was up 10.4%, which is significant for this staid group of stocks. It is up 52.9% since the MTI buy signal one year ago. There were no losers last week in this group of stocks. The weakest member among the utilities was DJU#13-EXC. It was up 0.2%. This clearly illustrates how the weaker stocks underperform while the stronger stocks outperform even during the mature stages of bullish cycles. That runs contrary to the thinking of many who tend to buy the most beaten down stocks. One should wonder why they are beaten down before buying. Answering that question may prevent disappointment. At any rate, this stock is down 28.0% since the MTI sell signal way back in Oct 2008.

The tracked mutual funds biggest gainer was MF#48-FSPCX. It was up 5.6% last week. As you can see, mutual funds enjoy or if you prefer, endure significantly less volatility than stocks. This fund’s Force Vector penetrated bullish domains with solid bullish support from other mid-term attributes. This group’s biggest loser was MF#28-FSAGX. It was down 6.7% last week. This fund relates to gold and other precious metals. This fund is down 12.4% since the MTI signaled this past July. The reason there is no sell signal is due to Force remaining in bullish domains. As you can see its cycle is mature. Gold has been a bit bearish the past several weeks along the short-term cycle. The Near-term Indicant is currently avoiding GLD. It would not be surprising if this Fidelity Fund endured a sell signal next week. Anticipating that can be studied through ETF#11-GLD, which is updated in 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 31 buy signals and no-sell signals.  That brings the total number of buy-signals to 63 in the past two weeks.

The Mid-term Indicant is signaling hold for 211 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 59.5%. That annualizes to 36.9%. The Mid-term Indicant has been signaling hold for these 211-stocks and funds for an average of 83.9-weeks.

The Mid-term Indicant is avoiding 93-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 24.5% since the Mid-term Indicant signaled sell an average of 75.8-weeks ago.

One year ago, on Oct 22, 2010, the Mid-term Indicant was holding 272-stocks and funds out of 339 tracked for an average of 45.3-weeks. They were up by an average of 39.1% (annualized at 44.9%). There were 67-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 42.9% since their respective sell signals an average of 99.3-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 202-stocks and funds of the 333-tracked two years ago on Oct 23, 2009. They were up by an average of 23.9%, annualized at 55.5%, since their respective buy signals an average of 22.4-weeks earlier. The Mid-term Indicant was avoiding 114-stocks and funds at that time. They were down an average of 40.6% since their respective sell signals an average of 84.1-weeks earlier. There were no-buy signals in addition to the 159-buy signals in the prior 13-weeks. There was one sell signal on this weekend in 2009. The stock market bear originating in late 2007 was retreating in defeat by this time in 2009. Of course, in retreat, the stock market bear was accumulating energy for its next attack. It always does that. Bears typically do not last too long. They have a history of undoing years of work by the stock market bull in a matter of just a few weeks.

There were only 19-stocks and funds with hold signals of the 345-tracked by the Mid-term Indicant on Oct 10, 2008 since their buy signals an average of 87.8-weeks earlier. They were up by an average of 136.9% (annualized at 81.1%). There were 326-avoided stocks and funds at that time. They were down by an average of 27.3% from their respective sell signals an average of 20.8-weeks earlier. There were no-sell signals on this weekend in 2008 in addition to the 556-sell signals in the prior 49-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008.

On Oct 19, 2007, the Mid-term Indicant was signaling hold for 296-stocks and funds out of 345-tracked. They were up by an average of 133.8% (annualized at 62.5%) since their buy signals an average of 110.8-weeks earlier. The Mid-term Indicant was avoiding 42-stocks and funds at that time. They were down by an average of 17.7% since their sell signals an average of 32.5-weeks earlier. There were no-buy signals and one sell signal on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Oct 20, 2006, there were 311-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 105.3% (annualized at 69.6%) since their respective buy signals an average of 78.7-weeks earlier. There were 32-avoided stocks and funds then. They were down an average of 16.4% since their respective sell signals an average of 23.1-weeks earlier. There were no buy signals and one-sell signal on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Oct 21, 2005, there were 218-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 103.0%, annualizing 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 by an average of 11.3% since their sell signals an average of 24.0-weeks earlier. There were no-buy signals and two-sell signals on this weekend in 2005.

There were 239-stocks and funds with hold signals on Oct 22, 2004. They were up by an average of 64.7%, annualizing at 63.0%, since their buy signals 53.4-weeks earlier. The 49-avoided stocks and funds were down an average of 33.0% since their respective sell signals an average of 52.3-weeks earlier. There were four-buy signals and four-sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Oct 24, 2003, there were 261-stocks and funds with a hold signal, enjoying a 50.6% gain since their respective buy signals an average of 31.6-weeks earlier. That annualized at 89.5%. There were only 22-avoided stocks at that time. They were down by an average of 23.8% since their sell signals an average of 31.6-weeks earlier.  The Mid-term Indicant was tracking 266 stocks and funds from 2002 through late 2004. There were 3-buy signals in addition to 379-buy signals in the prior 31-weeks. There were ten-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 34-weeks old on this weekend in 2003.

On Oct 25, 2002, there were 178-stocks and funds with hold signals. They were up 19.1% since their buy signals an average of 15.2-weeks earlier, annualizing at 65.3%. There were 75-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 17.5-weeks earlier. The avoided stocks and funds were down 34.0%. There were 37-buy signals in addition to 354-buy signals in the prior 13-weeks.  Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others were reversed with sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were five-sell signals on this weekend in 2002.

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

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

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

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

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

All but two of the major indices are configuring with bullish attributes. Several mutual funds and stocks garnished similar configurations this weekend. Missing is the desired unanimity for bullish sustainability. Until attributes begin shaping this desired feature, be prepared for reversing these recent buy signals. Keep in mind, though, the bear is nowhere near with support from bearish unanimity. Some patients may be required in the face of continuing volatility.

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 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 5% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 62.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 136.7% and the S&P500 is up 59.4% since then. The small cap index, S&P600, is up 130.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months. Configurations again shifted in support of normal pre-election year bullishness last week.

The NASDAQ is down 47.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 18.9% since its similar secular peak on March 23, 2000. The Dow is up by 0.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish the last eleven years.

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

The NASDAQ year-to-date performance was bearish by 32.3% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001.

The NASDAQ was down by 32.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 45.3%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 2.5% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 4.3% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 6.2% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 12.8% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 36.0 on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 36.4% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 8.4% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 2.0% this year. The S&P500 is down 1.5% and the NASDAQ is down 0.6%, respectively, this year. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939. Dynamic bullish behavior the past few weeks has moved the stock market back into a more conventional position of bullishness associated with pre-election years.

The Dow is down 16.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 7.8% since its last peak on Oct 31, 2007. The S&P500 is down 20.9% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C., which solidified in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 16-weeks ago. That was the second time this year such accomplishment was enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression in six of the past ten weeks clearly demonstrate repulsions to bettering 2007 peak prices.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 23.5% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

The NASDAQ100 catapulted above its 2007 peak two weeks ago along the Mid-term cycle. It is the only major index conquering that configuration. It is now 4.3% above its weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak. Even though the NASDAQ100 was bearish last week, it held above that potential point of resistance.

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

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

The Dow is up 80.4% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 107.9% and the S&P500 is up 83.0% since then. The S&P600, Small Cap Index, is up 116.2% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be  underway, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull.

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

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish. The short-term and mid-term cycles are increasingly supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue 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. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is one reason why the historical record demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA. Also, unfortunately, the paper currency basis of worldwide economies is under threat as the culmination of OPM disease by politicians may be approaching the “critical dimension.”

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

The Euro jumped to Red Bull status 40-weeks ago. It lost that Red Bull status five weeks ago with a continuing sharp drop against the greenback. There has been a mild bullish response the last two weeks, but still not returned to Red Bull status.

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

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

Commodity prices continue falling from their recent record highs due to souring economic forecast. None are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status, but it continues resisting that condition.

Commodity prices, overall, were bearish in nineteen of the last 25-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply eleven weeks ago on souring economic news, they enjoyed a nice bullish bounce nine weeks ago, but down in five of the past seven weeks. They bounced north the past two weeks, but remain as Yellow Bears.

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

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is down 0.1% since then. As stated last week, it is on the verge of receiving a sell signal, as gold is in a bit of short-term trouble.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 12.4% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It again endured a sell signal on Sep 23, 2011. It is up 16.0% since then, but its Force Vector remains in bearish domains.

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 sell on Sep 30, 2011. It is up 16.5% since then, but not yet qualifying for a 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 on Sep 23, 2011. It is up 15.4% since then and also not qualified for buying at this time.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It is up 18.1% since then, but retaining bearish attributes.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is up 7.7% since then, annualizing at 251.4%. The slower moving Quick-term Indicant signaled buy on Friday. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 97.8% since that buy signal, annualizing at 33.7%. 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 was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It is down 0.2% since that sell signal, displaying resilience against the bear’s ambition.

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

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

The DJU had been the lone-bull for several weeks. It is up 15.7% since its bull signal 57.0-weeks ago, annualizing at 14.4%. The NAS100 received a bull signal on Oct 10, 2011. It is down 1.5% since then.

The remaining major indices with bear signals are up by an average of 1.4% since their bear signals on Aug 5, 2011. They are the S&P400 and S&P600.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,796,560 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $121,290 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,610. That beats buy and hold’s $91,451 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,570.7%, 16.9%, and 136.9%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post-election year, 2009.

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 79.7% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund. This fund is configured, bullishly, but heavily weighted to avoid during pre-election years

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 307.9% (annualized at 15.4%) since the Long-term Indicant signaled bull 1,042-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Stock market bullishness in three of the past four days remains configured as a bullish spurt and without potential for sustainability at this time. Some Force Vectors are moving north, but consuming significant bullish energy in doing so.

Do not snooze, though. The heart and soul of bullish seasonality is nearing. Stock market Force will need to support before it can manifest. Most continue residing in bearish domains. Some moved higher than Pressure today, but without breadth. Too many remain with strong bearish configurations.

Short-term Indicant Stock Market Report – Summary

Force Vector slowed their bearish direction and many more started oscillating in bullish domains. Therefore, more bull/buy signals were triggered. Keep in mind, bullish unanimity remains absent and thus one should remain vigilant until configurations shift in support of being relaxed while the bull has its way.

Last Thursday’s comments remain appropriate and those two paragraphs are repeated below.

Force continues moving south. That continues offering bearish support. However, there are some minor oscillations in non-contrarian Force Vectors. For example, ETF#03-XLE’s Force Vector is resisting a bearish slope. However, it is a contrarian ETF. That is, it can be bullish in a bear stock market. This is especially true during heightened inflation.

On the other hand, ETF#20-EEM’s Force is moving aggressively to the south in valiant support of the stock market bear. This is a non-contrarian fund, but an international one. In essence, the stock market is not supporting an idea of international economic robustness. On the contrary, the stock market is currently displaying a pathetic outlook.

In spite of some remaining strongly configured bearish attributes, there were several buy signals. Keep in mind, bullish unanimity is required for bullish sustainability. In other words, those obstinate configurations supporting bullish behavior need to expire for a continuation of bullish stock market behavior.

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

Index Report Card Summary

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

Force is oscillating in bullish domains. With dynamic bearishness and heightened volatility, none of the major indices fell below NTI Blue for an extended period. Therefore, new bull signals were triggered.

The Near-term Indicant has been signaling bull for contrarian VIX for 12.2-weeks. It is up 36.5%, annualizing at 151.9%. The NTI signaled bull for the DJU this past Thursday. It is up 1.7% since then.

The Near-term Indicant is no longer signaling bear for any of the major indices. If VIX falls below NTI Green next week, it will receive a bear signal.

The Quick-term Indicant signaled ten new bulls and no new bears for the same reason the Near-term Indicant did.

The Quick-term Indicant is signaling bull for contrarian VIX. Its performance is the same as the Near-term Indicant levels.

The Quick-term Indicant is no longer signaling any bears.

Indicant Volume Indicators  

Both major indices remain in high interest domains, but moving lethargically. That lethargic behavior coincides with bullish stock market behavior the past two weeks, suggesting  bullish spurt attributes. Prior cyclical robustness coincides with bearish aggression, supporting bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle and that remains absent. In spite of limited volume support, however, too many attributes along the short-term cycle support continuation of this recent bullish behavior.

Oct 21-Fri-Volume was a bit above recent averages on bullish aggression. This new bull may originate on as a low volume one, which has occurred in the past.

Oct 20-Thu-Volume correlated with a “do nothing different.” Indecisiveness remains dominant and bearish bias accompanies that.

Oct 19-Wed-Low volume on behavior is pretty much uninformative, but is what it is. There is no need for impatience in search for what does not exist.

Oct 18-Tue-Volume increased on bullish aggression, suggesting heightened interest in the heart and soul of bullish seasonality.

Oct 17-Mon-Mediocre volume on bearish aggression is not adding bearish stimulation, but the short-term bear cycle remains in tact.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 17-ETF’s. They are up by an average of 7.8% since their buy signals an average of 2.7-weeks ago, annualizing at 148.8%.

The NTI is avoiding seven-ETF’s. They are down by an average of 4.2% since their near-term sell signals an average of 5.5-weeks ago.

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

The Quick-term Indicant is signaling hold for 12-ETF’s. They are up by an average of 13.8% since their buy signals an average of 16.0-weeks ago. This annualizes at 44.7%.

The Quick-term Indicant is avoiding 13-ETF’s. They are down by an average of 5.7% since the QTI sell signals an average of 10.2-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled buy on Friday after the close. The Near-term Indicant signaled buy on Oct 10, 2011. It is up 7.7% since that buy signal, annualizing at 251.4%. Its Force Vector is behaving bullishly with some mild oscillation in bullish domains. It is above QTI bearish yellow.

ETF#11-Gold and Precious Metals  is up 97.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.7%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $147.53 and still rising. Relaxation remains in order, despite recent bearish aggression, since your buy price approximates $80.65 versus today’s closing price of $159.52. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled sell on Sep 23, 2011. It is down 0.2% since then. Force’s collapse deep into bearish domains remains ominous. Force is again moving south and fell into bearish domains this past Thursday. It would not be surprising to see an interaction with QTI Yellow in this bearish Near-term cycle.

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

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

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from the Quick-term Indicant model. It is up 15.5% since that buy signal, annualizing at 66.6%. The Near-term Indicant signaled buy on Sep 2, 2011. It is up 0.6% since then, annualizing at 4.0%. Notice its Force is enjoying a bullish cycle. Its interaction with pressure will be interesting. That should occur within the next three trading days.

ETF#31-QID received a sell signal this past Monday from both the Near-term and Quick-term Indicant as Force fell into bearish domains. It is down 5.4% since then.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 25.9% since then, annualizing at 126.0%.  It is up 83.7% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 354.4%. It interacted with Green on Mar 14, 2011, but its Force Vector deserves monitoring with its newly forming bullish cycle. It continues moving in a bullish direction, but consuming significant energy from the short-bull.

Major ETF Events

Oct 21-Fri-Short-term attributes favored a continuation of a short-term bull. Do not be surprised at some bearishness the next week or two. That should enhance buying opportunities. Keep in mind, this is without volume and in the face of a bearish trend.

Oct 20-Thu-A few non-contrarian Force Vectors are oscillating in bullish domains, offering the stock market bull some hope for its resumption of dominance.

Oct 19-Wed-Non-contrarian Force continues declining, offering some support for the stock market bull.

Oct 18-Tue-Volume was up with solid bullishness. If Force starts vacillating in bullish domains, the heart and soul of bullish seasonality should start.

Oct 17-Mon-Strong bearish behavior was expected, but short-term configurations indicate the heart and soul of bullish seasonality could manifest within a week or two.

Current Strategy-Short-term Indicant-Oct 21, 2011-Force Vectors continue moving south for some ETF’s and major indices. That remains a bit supportive of the stock market bear. Relatively tight stop losses remain appropriate and especially so on new buy signals. Contrarian Force Vectors shifted back to north and that will remain a threat to the stock market bull until such time, they shift back to the south.

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence for three consecutive weeks. A bullish stock market next week will lend support for the normal heart and soul of bullish seasonality and with some gusto.

Indicant Conclusion

The NASDAQ100 again toppled its 2007 peak two weeks ago along the Mid-term cycle. This is the third time in the past year this has occurred. Each time it retreated. The other major indices still remain below the 2007 levels. Although it held above that level last week, the NAS100 was bearish last week. That suggests continuing discomfort.

Before believing in the stock market bull, the NAS100 needs to hold above its 2007 peak. Keep in mind that the other major indices must attain and surpass those levels. They moved in that direction by garnishing bull signals this weekend by the Mid-term Indicant. Two major indices, however, remain with bear signals.

Political stalemate and austerity against nonsensical waste in Europe should encourage the stock market 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

10/23/2011

Oct 16, 2011 Indicant Weekly Stock Market Report

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

The Absence of Stock Market’s Directional Intensity

There were several buy signals this weekend for stocks for the first time in several weeks. Many stocks moved north by double digits last week. Their Force Vectors climbed into bullish domains. They climbed above MTI Yellow and the shorter cycle blue curve. Technically, one could not find any arguments for not buying.

However, there were no buy signals for Mutual Funds. They do not share the same bullish attributes as those stocks receiving buy signals. The stocks with less bearish configurations garnished bullish configurations this past week. However, the weaker stocks did not. Mutual funds hold a combination of strong and weak stocks. Their weaker holdings prevented mutual funds from developing bullish configurations.

Major indices, such as the Dow Jones Industrial Average, are inflicted with the same problem. Weaker components to those indices prevented Mid-term Indicant bull signals this weekend. In essence, last week’s profound bullish behavior was a divergent one. Bullish convergence correlates with strong and sustainable bullish cycles. That convergence remains absent, as only one major index received a bull signal to join the lonely Dow Utilities, which has been immune to bearish dynamics the past several weeks. Also, the Dow Utilities has been an extraordinary lazy bull in this cycle.

The Dow Utilities resistance to recent bearish behavior suggested the bear could not muster enough to completely dominate the stock market. In essence, the Dow Utilities prevented bearish convergence and thus far has prevented the stock market bear from dominating. Keep in mind, these references relate to the mid-term cycle, as opposed to the more short-term cycles, which are expressed in the daily stock market report.

So, the jury is still out regarding stock market directional intensity in spite of nearing the historical standards of stock market bullishness about this time of year. This is commonly referred to as the heart and soul of bullish seasonality.

The NASDAQ100 index received a bull signal this weekend, yet again. This index has been fluttering with extraordinary wild fluctuations the past several weeks. This volatility is unprecedented. Unfortunately, this volatility is occurring around its MTI Red Bull curve and thus one reason for the high frequent signaling between bull and bear along the mid-term cycle. Extraordinary volatility at these levels correlates as a precursor to significant bear markets. This is not forecasting the same on the immediate horizon. This is merely stating a common theme from historical records.

The Dow Utilities continue to ignore bearish tendencies. Interestingly, it has not been an invigorating bull since the beginning of the bull cycle from April 2009. As you can see, its Force Vector is in bullish domains and it is a solid Red Bull. Clicking this sentence will display the table of the Dow Utility components. As you can see, most of them have been with “hold” signals for over a year. They do not move north that much, but continue expressing immunity to bearish stock market behavior.

Other than the NASDAQ100 and Dow Utilities indices configured with bullish attributes along the mid-term cycle, the remaining major indices remain configured with bearish attributes. This is somewhat surprising with last week’s profound bullish behavior. For example, the DJIA continues enduring bearish attributes. Last week’s solid bullish behavior pushed it above the shorter cycle blue curve, but Force Vectors remain, pathetically, in bearish domains. Click this sentence to view its chart. There will be no bull signal until stock market force crosses into bullish domains.

The Dow Transports are similarly configured. It is a major element in the Dow Theory forecast, which recently signaled bear. The Dow30 blue chip and transport configurations are similar to the other extreme of stocks. For example, the small caps, as reflected by the S&P600, endure the exact same attributes. Click this sentence to view its chart. Its Force Vector is climbing to the north like most of the rest, but still remains in bearish domains. This is why new bull signals did not occur with the exception of the wildly swinging NASDAQ100 Index

There is an old saying most of you have heard before. That is, “do not fight the trend.” This particular attribute has been increasingly significant, as the major indices have retreated every time they challenged their prior peaks in 2007. That “difficulty” suggests the southerly trend will be difficult to reverse.

Clicking this sentence will take you to a single page of Mutual Funds. Take a close look at all of them. You will notice all have been bullish since April 2009. You will notice all have recently become prey to bearish pressures. None has come close to their 2007 peak prices. All of their Vector Pressures have been trending south and now into bearish domains. Most of the MTI Red Bull curves are inflecting well below their prior peaks. Their shorter cycle blue and green curves are moving south. All of that is a bearish trend and keep in mind the old saying about not fighting the trend.

The above group of funds is international related, for the most part. The question is, can the U.S. economy perform with the rest of the world underperforming? Even if the answer is yes, can U.S. corporate earnings grow with lackluster international economies?

There were no buy signals for mutual funds for the mid-term cycle this weekend. All those  avoid signals are configured similarly to these international related funds. Here is what we are waiting for before signaling buy for funds. Their Force Vectors must climb above Vector Pressure and prices must move above the shorter-cycle blue curves or the Mid-term Yellow curve if they are Yellow Bears. Maybe that will happen next week. If not, then continue to avoid.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

The NAS100’s biggest gainer was NAS#43-JOYG. It was up 15.9% last week. It is up 112.0% since the MTI buy signal in July 2009. NAS#57-FSLR was down 5.9% last week. It was the NAS100’s biggest loser. It is down 46.7% since the Mid-term Indicant signaled sell on Aug 5, 2011.

ISTK#69-PDS was up 19.9% last week. It crossed above MTI Yellow, triggering a buy signal. It was the Select Stocks biggest gainer. ISTK#18-EK was down 10.8% last week, as this group’s biggest loser last week. It is down 94.7% since the Mid-term Indicant sell signal in November 2007. As stated several times before, this company of over one-hundred years, most of which was embodied with greatness, endures the final phase of dilettante leeching.

DJIA#17-CAT was up 11.3% last week and the DJIA’s biggest gainer. It is up 76.0% since the Mid-term Indicant buy signal in August 2009. DJIA#08-PG was up 1.9% last week. None of the Dow30 stocks were down, but this stock was up the least. It is up 16.6% since the MTI buy signal in Sep 2009.

DJU#11-WMB was up 9.4% last week. It is up 38.5% since the MTI buy signal one year ago.  DJU#07-PCG was down 1.4% last week, as this sectors biggest loser last week. It is up only 5.3% since the MTI buy signal in July 2009.

MF#09-SSGRX was up 15.6% last week. It is up 13.8% since the MTI sell signal a few weeks ago. Depressed Force Vectors is the primary reason there was no buy signal in spite of last week’s solid bullish behavior. MF#22-USPIX was down 14.3% last week. This is purely a contrarian fund. It is down 79.7% since the Mid-term Indicant sell signal in April 2009. Attributes no longer suggest a buying opportunity at this time, as Force Vectors continue diving deeper into bearish domains.

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 32 buy signals and no-sell signals. The total number of sell signals of 101-since Aug 5, 2011 has finally expired. That is an unusual high number of sell signals for the normally bullish pre-election year. These buy signals may be the first among many if the heart and soul of bullish seasonality manifests this year. Historical standards favor that, but it has not yet occurred.

The Mid-term Indicant is signaling hold for 179 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 61.9%. That annualizes to 39.6%. The Mid-term Indicant has been signaling hold for these 179-stocks and funds for an average of 93.3-weeks. These statistics will change next weekend due to the high number of buy signals this weekend.

The Mid-term Indicant is avoiding 124-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 16.9% since the Mid-term Indicant signaled sell an average of 54.2-weeks ago.

One year ago, on Oct 15, 2010, the Mid-term Indicant was holding 266-stocks and funds out of 333 tracked for an average of 45.1-weeks. They were up by an average of 39.7% (annualized at 45.8%). There were 67-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 42.4% since their respective sell signals an average of 98.3-weeks earlier one year ago. There were no buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 195-stocks and funds of the 333-tracked two years ago on Oct 16, 2009. They were up by an average of 24.1%, annualized at 56.4%, since their respective buy signals an average of 22.2-weeks earlier. The Mid-term Indicant was avoiding 114-stocks and funds at that time. They were down an average of 39.5% since their respective sell signals an average of 83.1-weeks earlier. There were eight-buy signals in addition to the 151-buy signals in the prior 12-weeks. There were no sell signals on this weekend in 2009. The stock market bear originating in late 2007 was retreating in defeat by this time in 2009. Of course, in retreat, the stock market bear was accumulating energy for its next attack. It always does that. Bears typically do not last too long. They have a history of undoing years of work by the stock market bull in a matter of just a few weeks.

There were only 19-stocks and funds with hold signals of the 345-tracked by the Mid-term Indicant on Oct 10, 2008 since their buy signals an average of 87.0-weeks earlier. They were up by an average of 137.5% (annualized at 82.2%). There were 295-avoided stocks and funds at that time. They were down by an average of 33.9% from their respective sell signals an average of 22.2-weeks earlier. There were 31-sell signals on this weekend in 2008 in addition to the 525-sell signals in the prior 48-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008.

On Oct 12, 2007, the Mid-term Indicant was signaling hold for 295-stocks and funds out of 345-tracked. They were up by an average of 142.8% (annualized at 67.3%) since their buy signals an average of 110.3-weeks earlier. The Mid-term Indicant was avoiding 41-stocks and funds at that time. They were down by an average of 14.6% since their sell signals an average of 32.1-weeks earlier. There were eight-buy signals and one sell signal on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Oct 13, 2006, there were 311-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 106.2% (annualized at 71.0%) since their respective buy signals an average of 77.7-weeks earlier. There were 32-avoided stocks and funds then. They were down an average of 16.1% since their respective sell signals an average of 22.3-weeks earlier. There was one-buy signal and one-sell signal on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Oct 14, 2005, there were 218-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 103.2%, annualizing 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 by an average of 12.0% since their sell signals an average of 24.0-weeks earlier. There were two-buy signals and three sell signals on this weekend in 2005.

There were 240-stocks and funds with hold signals on Oct 15, 2004. They were up by an average of 63.7%, annualizing at 63.5%, since their buy signals 52.2-weeks earlier. The 52-avoided stocks and funds were down an average of 33.1% since their respective sell signals an average of 51.5-weeks earlier. There were three-buy signals and one-sell signal on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Oct 17, 2003, there were 266-stocks and funds with a hold signal, enjoying a 51.8% gain since their respective buy signals an average of 31.7-weeks earlier. That annualized at 95.4%. There were only 19-avoided stocks at that time. They were down by an average of 23.3% since their sell signals an average of 31.7-weeks earlier.  The Mid-term Indicant was tracking 266 stocks and funds from 2002 through late 2004. There were 5-buy signals in addition to 374-buy signals in the prior 30-weeks. There were six-sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 33-weeks old on this weekend in 2003.

On Oct 18, 2002, there were 76-stocks and funds with hold signals. They were up 25.8% since their buy signals an average of 21.5-weeks earlier, annualizing at 62.5%. There were 109-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 15.8-weeks earlier. The avoided stocks and funds were down 31.4%. There were 107-buy signals in addition to 247-buy signals in the prior 12-weeks.  Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others were reversed with sell signals before the conclusion of calendar year 2002 and in early 2003. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were three-sell signals on this weekend in 2002.

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

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

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

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

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

The Dow Utilities remains resistant to bearish influences along the mid-term cycle. As long as Utilities continues with bullish attributes, the stock market bear cannot dominate for long periods. The NASDAQ100 again received a bull signal this weekend.

As stated the past two weeks, there are ample reasons to be guarded on potential bearish aggression at this time. Keep your eye on Utilities. Strong bearish behavior among utilities will offer the bear significant incentive to expand its ambition to dominate.

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 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 5% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 59.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 139.5% and the S&P500 is up 57.7% since then. The small cap index, S&P600, is up 129.9% 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. Unfortunately, configurations are no longer in support of normal pre-election year bullishness. This may change, but still holding true.

The NASDAQ is down 47.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 19.8% since its similar secular peak on March 23, 2000. The Dow is down by 0.7% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

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

The NASDAQ year-to-date performance was bearish by 31.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness. The heart and soul of bullish seasonality manifested at this time of year in spite of dynamic bearishness in 2001.

The NASDAQ was down by 37.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years.

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

It was down 5.1% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 6.9% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 16.1% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

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

It was up 37.7% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 7.3% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is up 0.6% this year. The S&P500 is down 2.1% and the NASDAQ is up 0.6%, respectively, this year. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939. Last week’s dynamic bullish behavior has moved the stock market back into a more conventional position of bullishness associated with pre-election years.

The Dow is down 17.8% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 6.7% since its last peak on Oct 31, 2007. The S&P500 is down 21.8% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C. It was maximized in early 2007.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 15-weeks ago. That was the second time this year such accomplishment was enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression in six of the past nine weeks clearly demonstrate repulsions to bettering 2007 peak prices.

However, the NASDAQ100 Index crossed above its Oct 31, 2007 high five weeks ago, but again did not find comfort in doing so with dynamic bearishness in two of the last four weeks. It, along with other major indices similar behavior, retreated below those 2007 peaks.

Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 24.0% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

Again, however, the NASDAQ catapulted above its 2007 peak this weekend along the Mid-term cycle. It is the only major index with that configuration. It is now 5.7% above its weekly closing peak on Oct 31, 2007. It will be interesting to see if it can hold above its 2007 peak.

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

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

The Dow is up 77.9% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 110.3% and the S&P500 is up 81.0% since then. The S&P600, Small Cap Index, is up 115.9% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle may now be  underway, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular. Both of those conditions persist and favorable to the stock market bull.

The bull cycle, originating in March 2009, is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes a while for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past several weeks with heightened political chatter. Also, the socialistic Europe continues to threaten the capital markets in spite of last week’s stock market bull.

Political behavior is favoring the stock market bull in the long-run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue 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. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is why the historical record clearly demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA. Also, unfortunately, the paper currency basis of worldwide economies is under threat as the culmination of OPM disease by politicians may be approaching the “critical dimension.”

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

The Euro jumped to Red Bull status 39-weeks ago. It lost that Red Bull status four weeks ago with a continuing sharp drop against the greenback. There was a mild bullish response last week, but still not returned to Red Bull status.

The Canadian dollar also weakened severely in three of the past four weeks, while the Japanese Yen remains strong and held its strengthening cycle this past week. The CA$ moved in the neutral zone (between Red and Yellow) seven weeks ago. It is now above Red (bearish for the CA$), which threatens its cycle of strengthening.  The Japanese yen remains extraordinarily strong.

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

Commodity prices continue falling from their recent record highs due to souring economic forecast. None are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status.

Commodity prices, overall, were bearish in eighteen of the last 24-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply ten weeks ago on souring economic news, they enjoyed a nice bullish bounce eight weeks ago, but down in five of the past six weeks. The bounced north last week.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months, depending on economic activity. High unemployment will continue to contribute to non-inflationary tendencies. The CPI is increasing, mildly, though, but the combined absolute value of interest rates and inflation or deflation remains relatively safe at this time.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is down 4.1% since then. As stated last week, it is on the verge of receiving a sell signal.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 6.2% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It again endured a sell signal on Sep 23, 2011. It is up 13.4% since then, but its Force Vector remains in bearish domains.

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 sell on Sep 30, 2011. It is up 19.4% since then, but not yet qualifying for a 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 on Sep 23, 2011. It is up 13.8% since then and also not qualified for buying at this time.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It is up 15.8% since then, but retaining bearish attributes.

The Near-term signaled buy for ETF#03 – Energy and Natural Resources on Oct 10, 2011. It is up 4.6% since then, annualizing at 415.6%. The slower moving Quick-term Indicant signaled sell on Sep 2, 2011. It is up 0.6% since then. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 102.6% since that buy signal, annualizing at 35.6%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It is up 2.3% since that sell signal, displaying resilience against the bear’s ambition.

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

There was one new bull signal and no new bear signals.

The DJU had been the lone-bull. It is up 12.2% since its bull signal 56.0-weeks ago, annualizing at 12.2%.

The remaining major indices with bear signals are up by an average of 1.9% since their bear signals on Aug 5, 2011. The NAS100 received a bull signal this weekend.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,771,284 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $119,951 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,610. That beats buy and hold’s $92,505 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,594.3%, 18.2%, and 134.2%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post-election year, 2009.

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 79.7% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund. This fund is configured, bullishly, but heavily weighted to avoid during pre-election years

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 302.3% (annualized at 15.1%) since the Long-term Indicant signaled bull 1,041-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Stock market bullishness in three of the past four days remains configured as a bullish spurt and without potential for sustainability at this time. Some Force Vectors are moving north, but consuming significant bullish energy in doing so.

Do not snooze, though. The heart and soul of bullish seasonality is nearing. Stock market Force will need to support before it can manifest. Most continue residing in bearish domains. Some moved higher than Pressure today, but without breadth. Too many remain with strong bearish configurations.

Short-term Indicant Stock Market Report - Summary

As state since last Tuesday, “Force Vectors are at or very near cyclical highs. The last three such cycles triggered bearish responses. If this recent history repeats, the bear will retain dominance. If this projected impending decline in Force does not inspire the stock market bear, then the heart and soul of bullish seasonality can manifest. The mid-term cycle, however, will need to also configure in support of such bullish behavior.”

You will see in the weekly report this weekend that the Mid-term Indicant is not yet supporting the notion of sustainable bullishness.

The VIX and VXX fell below NTI Green this past Thursday. The VIX’s NTI bullish blue curve collapsed also this past Thursday. Its response to that will be interesting. Current configurations support a bullish response (a bearish stock market). Their respective Vector Pressures remain in bullish domains. That combination commonly triggers a stock market selloff. If they fall prey to bearish influence (stock market bullishness), the heart and soul of bullish seasonality should manifest.

The absence of volume support for recent bullishness offers elemental suspicions of recent bullish behavior. Configurations support stock market bearishness on the immediate horizon. If the bull overcomes this, a sustainable short-term bull cycle should manifest.

This past Thursday’s daily report made the following statement:” … the Mid-term Force Vectors will likely cross into bullish domains this weekend, if bearish behavior does not manifest. That would trigger quite a few buy signals this weekend.” Please read next paragraph.

Amazingly, with profound bullish behavior this week, Force Vectors did not cross Pressure and/or into bullish domains with the exception of the NAS100, which is behaving congruently to an electrocardiogram’s expression of cardiac arrest minutes before stoppage. That adds to suspicions regarding the substance and sustainability of bullish behavior at this time. Force did move north and with record bullishly biased volatility, bullish stock market Force’s remain without support.

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

Index Report Card Summary

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

As stated last Wednesday, there are few reasons why there are no bull signals. 1) No volume support. 2) Force Vectors nearing or at cyclical peaks. They are ready for a fall. 3) Negative Vector Pressure. 4) VIX contacted NTI Green on Thursday and fell well below on Friday, defying high probabilities of a solid bounce to the north. Its reaction to that will be very interesting and that interest level must be resumed next Monday.

The Near-term Indicant has been signaling bull only for contrarian VIX for 11.3-weeks. It is up 22.9%, annualizing at 105.5%.

Anti-recessionary fundamentals have reduced the fear element, but volatility remains high and with that, risks remain high.

The Near-term Indicant is signaling bear for the eleven major non-contrarian indices. They are up by an average of 4.2% since their bear signals an average of 4.0-weeks ago.

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

The Quick-term Indicant is signaling bull for contrarian VIX. Its performance is the same as the Near-term Indicant levels.

The Quick-term Indicant is signaling bear for all eleven non-contrarian indices. They are up by an average of 2.9% since their bear signals an average of 5.9-weeks ago.

Indicant Volume Indicators  

Both major indices are robustly in high interest domains. That cyclical robustness coincides with bearish aggression, supporting bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle.

Oct 14-Fri-Mediocre volume on significant bullishness should be viewed with suspicion.

Oct 13-Thu-Light volume on a non-eventful day is not inspirational to either bull or bear.

Oct 12-Wed-Again, very little volume support for bullish behavior. Remains configured with a high probability of a mere bullish spurt.

Oct 11-Tue-Again, low volume, identifying a bullish spurt at this point.

Oct 10-Mon-Very low volume on aggressive bullish behavior is not supportive of sustaining that bullish behavior.

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 17-ETF’s. They are up by an average of 6.3% since their buy signals an average of 1.7-weeks ago, annualizing at 191.2%.

The NTI is avoiding 15-ETF’s. They are down by an average of 0.4% since their near-term sell signals an average of 5.0-weeks ago.

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

The Quick-term Indicant is signaling hold for 12-ETF’s. They are up by an average of 13.0% since their buy signals an average of 15.0-weeks ago. This annualizes at 44.8%.

The Quick-term Indicant is avoiding 20-ETF’s. They are down by an average of 3.6% since the QTI sell signals an average of 8.4-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Quick-term Indicant signaled sell on Sep 2, 2011. It is up 0.6% since that sell signal. Force crossed above Pressure this past Monday and into bullish domains. Consequently, the Near-term Indicant signaled buy. It is up 4.6% since that buy signal, annualizing at 415.6%. Keep a tight stop loss if you bought. Its Force Vector is at cyclical peak and poised to shift south.

ETF#11-Gold and Precious Metals  is up 102.6% since the QTI signaled buy on December 11, 2008. Annualized growth is at 35.6%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $147.04 and still rising. Relaxation remains in order, despite recent bearish aggression, since your buy price approximates $80.65 versus today’s closing price of $163.40. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled sell on Sep 23, 2011. It is up 2.3% since then. Force’s collapse deep into bearish domains remains ominous, despite its reversal back to the north the past several days. This bullish cycle is very mature. As stated this past Monday, bearishness on the immediate horizon along the near-term cycle would not be surprising. (It has been bouncy since most of this past week. Its price is having difficulty crossing above NTI Green).

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

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

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from the Quick-term Indicant model. It is up 16.4% since that buy signal, annualizing at 76.5%. The Near-term Indicant signaled buy on Sep 2, 2011. It is up 1.3% since then, annualizing at 11.0%. Its Force Vector is bearishly mature with positive Pressure, suggesting its non-bearishness on the immediate horizon.

ETF#31-QID received a sell signal this past Monday from both the Near-term and Quick-term Indicant as Force fell into bearish domains. It is down 7.8% since then. Its Pressure is low and threatens a potential rebound. However, Force cycle is bearishly mature, offering potential for a bullish bounce, which implies QQQ bearishness.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 16.3% since then, annualizing at 87.7%.  It is up 69.7% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 321.8%. It will not receive a sell signal until price interacts with NTI Green. Its mature Force Vector, coupled with very high Vector Pressure configures potential for a solid bullish bounce.

Major ETF Events

Oct 14-Fri-Same as yesterday in spite of Friday’s strong bullish behavior.

Oct13-Thu-Configurations indicate bearish behavior on the immediate horizon with a 87% probability. Defying those odds favors a continuation of recent bullishness.

Oct 12-Wed-Non-contrarian Force Vectors remain at cyclical highs, while VIX, VXX, and QID are at cyclical lows. If a very high probability of solid stock market bearish expressions in the next day or two does not manifest, the bull will be inspired. Solid bearish behavior is expected, though.

Oct 11-Tue-Most Force Vectors are at cyclical highs. This has triggered bearish responses on the last three cycles. If this recent history repeats, the heart and soul of bullish seasonality will be delayed. If not, then the probability of manifestation is high.

Oct 10-Mon-Several Force Vectors crossed above Pressure and into bullish domains. Prices also crossed above NTI Bullish Blue curve. By default, buy signals had to be generated. Keep in mind the Mid-term cycle remains bearish.

Current Strategy-Short-term Indicant-Oct 14, 2011-Force Vectors are bullishly mature with low Pressure. Relatively tight stop losses remain appropriate. Contrarian Force Vectors are at cyclical minimums, suggesting non-bullishness with a high probability of bearish behavior on the immediate horizon.

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence for two consecutive weeks. A bullish stock market next week will lend support for the normal heart and soul of bullish seasonality.

Indicant Conclusion

The NASDAQ100 again toppled its 2007 peak this past week along the Mid-term cycle. This is the third time in the past year this has occurred. Each time it retreated. The other major indices still remain below the 2007 levels.

Before believing in the stock market bull, the NAS100 needs to hold above its 2007 peak. Keep in mind that the other major indices must attain and surpass those levels.

Keep your eye on Force Vectors, which were increasing. As stated last week, they are vacillating in bearish domains, which is ominous, except the NASDAQ100 and DJU. If the other indices emulate the performance of the NAS100 and DJU, the heart and soul of bullish seasonality should manifest. If not, the stock market bear will continue to pester.

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

10/16/2011

Oct 9, 2011 Indicant Weekly Stock Market Report

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

Ominous Force Vectors and Socialistic Threats to Capital Markets

Just as the iron curtain fell several years ago, European socialism is now in its final days of comfortable coercion from the productive. Mathematically, socialism cannot last forever. Its model works against the laws of nature. All living things struggle to survive and even thrive. Removing that struggle is the purpose of socialism. That threatens humanity. Along the way to the expiration of socialism, it is painful for the weakening species. The spiral south can last several years, but the associated bear markets do not wait. With immediacy, the capital markets express dynamic bearishness at the lunacy.

Socialism is the Hegelian Dialectic of two opposing extremes; capitalism and singular leadership. Singular leadership is impressive. That means that only a handful of people convinces or forces the masses to do what they say. Those masses are weak for allowing that, but history lessons clearly demonstrate this process has repeated through several generations. The problem of the newborn is their tabula rasa; all newborn are confined to naivety.

Communism, dictatorships, and monarchies form this singular leadership. Singular leadership does not work. The leader’s brain mass is no bigger than each member of the masses. Therefore, sub optimization is maximized by virtue of this limited biomass.

Unfortunately, history demonstrates that democracies also do not work. It is inflicted with the same problem as those who allow singular leadership to manifest. The masses learn to vote themselves benefits. Politicians learn to use the word, give, to get the votes to rule over the ever-weakening masses. Tribalism manifests from this phenomenon. All tribes have a chief and history shows that all tribes lose. That is because they have a chief with a mere three-pound brain. The tribal members fall prey to those who do not follow a chief. There are some among us, who desire strongly to be a chief. Unfortunately, there are many who need a chief. The protestors on Wall Street, supported by democratic politicians are tribe members. They are a classic example of the weakness of tribalism. Rather than being productive, they destroy the property of others and cause injury to police officers and others. They are weak and in the end, they either feed their chief or perish just as tribalistic Germany in the 1940’s. All large groups who follow a few never win. The laws of nature disallow their victory.

Republics have a better chance, but success is constrained by the potential of shoddy republic leadership. It does not take too long for incompetent leadership to destroy what they lead. On a narrower scale, you see that all the time in corporate America. On the political front, you are witnessing firsthand the cumulative effects of this sort of shoddiness over several decades in Europe. The capital markets cannot perform, as this parasitical process always destroys its host.

Eventually, members of the masses in one way or the other, aim their arrows at the leader, as they grow tired of delivering their reindeer to the door of their leader. That is rare, but it has also happened in the past with the most recent in 1989 with the expulsion and execution of Romania’s chief, Nicolae Ceausescu. The masses in this case decided to keep their own reindeer, as opposed to feeding their chief.

Greece, Italy, and Spain are the current culprits. Their accumulation of lazy masses has exceeded the productive capacity of the non-lazy. The masses in this case, want the reindeer killed by others. Therefore, a worse form will most likely replace the conclusion of those governments.

Social media and pot smoking, law-breaking liberals are trying to spread those revolts on behalf of laziness to the U.S. Their destruction near Wall Street is certainly not bullish. They do not even know where the culprits are. They live in DC and the Hamptons. Along the way of all this nonsensical noise, the capital markets will reflect the reduction in productivity and potential market size. That is bearish.

Look at the Dow Jones Industrial Average Mid-term Indicant chart by clicking this sentence. Start at the top of the chart. You will notice that the Force Vector has paused after rising from deep inside bearish domains. It is the more demonstrative curve, colored gray. That vacillating configuration in bearish domains is not necessarily bearish, but it is certainly non-bullish. You should also notice the shorter-term curves (blue and green) are peeling off to the southeast and price is below both of them. That is solidly bearish along the mid-term cycle. The good news is that the Dow remains above the Mid-term Bearish Yellow curve, which offers a floor to dynamic bearish behavior. A drop to the MTI Bearish Yellow curve, though, can be unsettling.

Interestingly, nearly all of the major indices are similarly configured. You can view all of the charts from this web page, but clicking this sentence. You may need to scroll down to view the table. Once you click on one chart, use your back arrow on the browser to investigate other indices.

For those of you who did not view the Dow Utilities chart, it can be viewed by clicking this sentence. You will notice it is solidly bullish. It is a Red Bull and its Force Vector is in bullish domains. Many of you recall how this particular index resisted the stock market’s bearish ambition in late 2008 before its eventual submission to bearish ambition. As stated earlier in this report, the Short-term Indicant is signaling bear for this particular index, while the Mid-term Indicant continues signaling bull. Therefore, it has potential for a sudden drop. If that happens, the bear will dominate. However, as long as it resists bearish ambition, the stock market bear will have trouble adding depth and breadth.

The Mid-term Indicant will signal bull when the major indices cross above their Blue Curves and Force crosses above Pressure, regardless of what occurs in Europe or rioting crazies on Wall Street in New York.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

NAS100#85-ILMN was down 33.6% last week. This was the NASDAQ100’s biggest loser last week. Most of that loss occurred late Friday afternoon. This triggered a sell signal. This highlights the importance of maintaining stop losses on stocks. The company disappointed with revenue projections after enjoying several years of bullish trends.

NAS100#100-YHOO was 17.5%, as the NASDAQ’s largest gainer last week. Yahoo again appears to be targeted by Microsoft. It is up 3.9% since the Mid-term Indicant signaled sell last June.

ISTK#18-EK was up 78.2% last week. Eastman Kodak has been mentioned several times in this section of the weekly report. As you can it is a dog of a stock and not worthy of buying. Dilettantes have leeched it to near-expiration. It is down 94.1% since the Mid-term Indicant sell signal in Nov 2007.

ISTK#94-VTSS.PK was down 20.0% last week, which is nothing new. This stock once traded above $1,000/share. It closed last Friday at $2.36. It is down 95.3% since the Mid-term Indicant’s sell signal at $50.20 over five years ago in Apr 2006.

DJIA#18-HPQ was up 10.8% last week. Even with that, it is down 30.9% since the Mid-term Indicant sell signal on May 20, 2011.

DJIA#06-BAC was down -3.6% last week. Bank of America is truly a dog of a company and extraordinarily dilettante infested. It is down 83.9% since the Mid-term Indicant signaled sell nearly four years ago in Jan 2008. Continue avoided this stock.

The Dow Utilities continue resisting ambition by the stock market bear. Volatility among these stocks remains minimal. In spite of that, though, DJU#10-PEG was the most bearish last week with a 3.1% drop. It is up 1.4% since the Mid-term Indicant signaled buy one year ago. At least it pays a nice dividend. Utilities biggest gainer was equally unimpressive. DJU#05-AES was up 2.7%. It is down 1.6% since the Mid-term Indicant signaled sell on Aug 11, 2011 as it crossed below its bearish yellow curve.

MF#22-USPIX was this group’s biggest loser with a 6.2% price decline. This fund is a contrarian that has been tracked by the Indicant for years. It is down 76.3% since the Mid-term Indicant signaled sell on Apr 3, 2009. This is a classical pre-election year avoided fund, but continues offering bullish appeal.

MF#40-FSESX was Mutual Fund’s biggest gainer last week. It was up 6.4% and up that same amount since the Mid-term Indicant signaled, sell, last week.

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

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

The Mid-term Indicant generated no buy signals and one-sell signal. This brings the total number of sell signals to 101-since Aug 5, 2011. That is an unusual high number of sell signals for the normally bullish pre-election year. This is due to the movement toward communism by politicians, which is inconsistent with normal political behavior during pre-election years, where wealth building use to be a surefire way to get votes for reelection. Unfortunately, a near majority of Americans has their hands-out, as the half-life of a once great country has passed. Also, threatening is the eventual downfall of Europe’s socialism.

The Mid-term Indicant is signaling hold for 179 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 61.3%. That annualizes to 34.5%. The Mid-term Indicant has been signaling hold for these 179-stocks and funds for an average of 92.3-weeks.

The Mid-term Indicant is avoiding 155-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 15.6% since the Mid-term Indicant signaled sell an average of 48.6-weeks ago.

One year ago, on Oct 8, 2010, the Mid-term Indicant was holding 246-stocks and funds out of 333 tracked for an average of 46.5-weeks. They were up by an average of 41.0% (annualized at 45.9%). There were 72-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 36.5% since their respective sell signals an average of 89.4-weeks earlier one year ago. There were 20-buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 188-stocks and funds of the 333-tracked two years ago on Oct 9, 2009. They were up by an average of 23.5%, annualized at 56.2%, since their respective buy signals an average of 21.7-weeks earlier. The Mid-term Indicant was avoiding 122-stocks and funds at that time. They were down an average of 38.9% since their respective sell signals an average of 80.2-weeks earlier. There were seven-buy signals in addition to the 144-buy signals in the prior eleven-weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 50-stocks and funds with hold signals on Oct 3, 2008 since their buy signals an average of 117.7-weeks earlier. They were up by an average of 137.0% (annualized at 60.5%). There were 246-avoided stocks and funds at that time. They were down by an average of 23.8% from their respective sell signals an average of 26.3-weeks earlier. There were 49-sell signals on this weekend in 2008 in addition to the 466-sell signals in the prior 47-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There were no buy signals on this weekend in 2008.

On Oct 5, 2007, the Mid-term Indicant was signaling hold for 289-stocks and funds out of 345-tracked. They were up by an average of 140.3% (annualized at 65.3%) since their buy signals an average of 111.7-weeks earlier. The Mid-term Indicant was avoiding 49-stocks and funds at that time. They were down by an average of 12.6% since their sell signals an average of 28.5-weeks earlier. There were seven-buy signals and no sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Oct 6, 2006, there were 310-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 100.5% (annualized at 68.0%) since their respective buy signals an average of 76.9-weeks earlier. There were 33-avoided stocks and funds then. They were down an average of 16.5% since their respective sell signals an average of 21.2-weeks earlier. There were two-buy signals and no sell signals on this weekend in 2006. The bull was solid, for the most, part in 2006.

On Oct 7, 2005, there were 221-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 105.8%, annualizing 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 by an average of 10.8% since their sell signals an average of 23.2-weeks earlier. There were no buy signals and three sell signals on this weekend in 2005.

There were 240-stocks and funds with hold signals on Oct 8, 2004. They were up by an average of 64.3%, annualizing at 65.3%, since their buy signals 51.2-weeks earlier. The 50-avoided stocks and funds were down an average of 32.6% since their respective sell signals an average of 51.1-weeks earlier. There was one-buy signal and five-sell signals on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Oct 10, 2003, there were 263-stocks and funds with a hold signal, enjoying a 52.9% gain since their respective buy signals an average of 27.9-weeks earlier. That annualized at 98.7%. There were only 24-avoided stocks at that time. They were down by an average of 22.5% since their sell signals an average of 27.9-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 9-buy signals in addition to 365-buy signals in the prior 29-weeks. There were no sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 32-weeks old on this weekend in 2003.

On Oct 11, 2002, there were 52-stocks and funds with hold signals. They were up 25.2% since their buy signals an average of 24.8-weeks earlier, annualizing at 52.8%. There were 212-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 11.3-weeks earlier. The avoided stocks and funds were down 25.6%. There were 27-buy signals in addition to 220-buy signals in the prior eleven-weeks.  Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while others were reversed with sell signals before the conclusion of calendar year 2002. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were four-sell signals on this weekend.

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

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

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

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

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

The Dow Utilities remains resistant to bearish influences along the mid-term cycle. As long as Utilities continues with bullish attributes, the stock market bear cannot dominate for long periods. Keep in mind, though, the Short-term Indicant is signaling bear for this index. With that, there is potential for a deep bearish drop. Mid-term Indicant Force Vectors are vacillating in bearish domains. That is ominous and threatens the birth of the heart and soul of bullish seasonality. This is starkly different from what was reported last week.

As stated last week, there are ample reasons to be guarded on potential bearish aggression at this time. Keep your eye on Utilities. Strong bearish behavior will offer the bear significant incentive to expand its ambition to dominate.

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 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 5% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 52.7% since its secular weekly low on October 9, 2002. The NASDAQ is up 122.5% and the S&P500 is up 48.8% since then. The small cap index, S&P600, is up 113.1% 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. Unfortunately, configurations are no longer in support of normal pre-election year bullishness. This is starkly different from prior commentary.

The NASDAQ is down 50.9% since its last weekly secular peak on March 9, 2000. The S&P500 is down 24.4% since its similar secular peak on March 23, 2000. The Dow is down by 5.3% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

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

The NASDAQ year-to-date performance was bearish by 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 42.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 42.9%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 2.7% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 3.9% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 4.3% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 15.1% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 33.8% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 33.8% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 5.0% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 4.1% this year. The S&P500 and NASDAQ are down 8.1% and 6.5%, respectively. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939. Keep in mind FDR and Mussolini were pals ahead of WWII. FDR needed a good war to work out of his ridiculous policies that drove the Dirty-30’s. We need to wonder who the current administration is pals with.

The Dow is down 21.6% 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&P500 is down 26.2% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 14-weeks ago. That was the second time this year such accomplishment was enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression in six of the past nine weeks clearly demonstrate repulsions to bettering 2007 peak prices.

However, the NASDAQ100 Index crossed above its Oct 31, 2007 high four weeks ago, but again did not find comfort in doing so with dynamic bearishness in two of the last three weeks. It, along with other major indices similar behavior, retreated below those 2007 peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 28.3% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

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

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

The Dow is up 69.6% 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 70.8% since then. The S&P600, Small Cap Index, is up 100.1% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle is now underway, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular.

The bull cycle, originating in March 2009, is believed to be the classical mid-term election year bullish starting point ahead of the presidential pre-election year, which is now underway. The pre-election year is the most bullish along the four-year cycle. In essence, the firing of incumbent politicians in the U.S. generally arouses the bull. It takes a while for the newly elected to follow their paths of corruption and learn the ease of spending other people’s money. The stock market bull takes advantage during such phenomena. The stock market bull recognized this potential in August 2010 and major congressional employee turnover manifested in November 2010. The bull discontinued expressing its delight in that the past several weeks with heightened political chatter. Also, the socialistic Europe threatens the capital markets.

Political behavior is favoring the stock market bull in the long run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue 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. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is why the historical record clearly demonstrates stock market bullishness from the mid-term election year through the election year. Fortunately, U.S. politicians are losing influence on the shrinking world stage. Unfortunately, foreign politicians are made of the same DNA.

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

The Euro jumped to Red Bull status 38-weeks ago. It lost that Red Bull status three weeks ago with a continuing sharp drop against the greenback.

The Canadian dollar also weakened severely the past three weeks, while the Japanese Yen remained strong and continued strengthening this past week. The CA$ moved in the neutral zone (between Red and Yellow) six weeks ago. It is now above Red (bearish for the CA$), which threatens its cycle of strengthening.  The Japanese yen remains extraordinarily strong.

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

Commodity prices continue falling from their recent record highs due to souring economic forecast. None are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status.

Commodity prices, overall, were bearish in eighteen of the last 23-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply nine weeks ago on souring economic news, they enjoyed a nice bullish bounce seven weeks ago, but down the past five weeks and aggressively so.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months, depending on economic activity. High unemployment will continue to contribute to non-inflationary tendencies.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is down 4.2% since then. It is on the verge of receiving a sell signal.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 11.5% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It again endured a sell signal on Sep 23, 2011. It is up 3.3% since then.

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 sell on Sep 30, 2011. It is up 6.4% since then.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell on Sep 23, 2011. It is down 1.6% since then.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell on Sep 30, 2011. It is up 4.4% since then.

The Quick-term and Near-term signaled sell for ETF#03 – Energy and Natural Resources on Sep 2, 2011. It is down 8.0% since those sell signals. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 97.4% since that buy signal, annualizing at 34.0%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%.  The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It is down 0.4% since that sell signal.

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

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

The DJU is the lone-bull. It is up 10.3% since its bull signal 55.0-weeks ago, annualizing at 9.7%.

The remaining major indices with bear signals are down by an average of 3.5% since their bear signals on Aug 5, 2011 with the exception of the NAS100. Its bear signal was triggered on Sep 30, 2011.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,689,201 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $113,181 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,610. That beats buy and hold’s $85,969 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,676.9%, 25.2%, and 152.0%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post-election year, 2009.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks  

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short  on April 3, 2009. It is down 76.3% since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund. This fund is configured, bullishly, but heavily weighted to avoid during pre-election years. The Short-term Indicant signaled buy this on Sep 30, 2011 for its cousin, QID.

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 283.6% (annualized at 14.2%) since the Long-term Indicant signaled bull 1,040-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Stock market bullishness in three of the past four days remains configured as a bullish spurt and without potential for sustainability at this time. Some Force Vectors are moving north, but consuming significant bullish energy in doing so.

Do not snooze, though. The heart and soul of bullish seasonality is nearing. Stock market Force will need to support before it can manifest. Most continue residing in bearish domains. Some moved higher than Pressure today, but without breadth. Too many remain with strong bearish configurations.

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

Index Report Card Summary

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

The Near-term Indicant is signaling bull only for contrarian VIX. It is up 57.5%, annualizing at 290.8%.

The Near-term Indicant is signaling bear for the eleven major non-contrarian indices. They are down by an average of 1.8% since their bear signals an average of 3.0-weeks ago.

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

The Quick-term Indicant is signaling bull for contrarian VIX. Its performance is the same as the Near-term Indicant levels.

The Quick-term Indicant is signaling bear for all eleven non-contrarian indices. They are down by an average of 3.1% since their bear signals an average of 4.9-weeks ago.

Indicant Volume Indicators  

Both major indices are robustly in high interest domains. That cyclical robustness coincides with bearish aggression, supporting bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle.

Oct 7-Fri-Mild volume on mild bearishness does nothing to shift from bearish bias.

Oct 6-Thu-Again light volume on bullish behavior based on European politicians playing paper games.

Oct 5-Wed-Light volume on bullish behavior does not support shift from bearish bias to bullish bias.

Oct 4-Tue-Very high volume on significant intraday volatility with a solid bullish close offers added support for the heart and soul of bullish seasonality. Keep in mind, though, that Force Vector behavior is more influential than volume, alone. Also keep in mind that recent volume increases remain highly correlated to stock market bearishness.

Oct 3-Mon-Aggressive volume on dynamic stock market bearishness continues in support of the short-term bear cycle.

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 four-ETF’s; mainly contrarians. They are up by an average of 28.3% since their buy signals an average of 5.0-weeks ago, annualizing at 292.2%.

The NTI is avoiding 28-ETF’s. They are down by an average of 3.0% since their near-term sell signals an average of 3.5-weeks ago.

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

The Quick-term Indicant is signaling hold for five-ETF’s. They are up by an average of 31.1% since their buy signals an average of 34.6-weeks ago. This annualizes at 46.7%.

The Quick-term Indicant is avoiding 27-ETF’s. They are down by an average of 6.0% since the QTI sell signals an average of 6.0-weeks ago.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled sell on Sep 2, 2011. It is down 8.0% since those sell signals. It is a Green and Yellow Bear. It is struggling to escape that level of weakness. Its Force Vector shifted back to the north earlier this week, but still residing in bearish domains and below Pressure.

ETF#11-Gold and Precious Metals  is up 97.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.0%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $146.57 and still rising. Relaxation remains in order, despite recent bearish aggression, since your buy price approximates $80.65 versus today’s closing price of $159.18. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled sell on Sep 23, 2011. It is down 0.4% since then. Force’s collapse deep into bearish domains remains ominous, despite its reversal back to the north the past five days.

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

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

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from the Quick-term Indicant model. It is up 20.8% since that buy signal, annualizing at 106.7%. The Near-term Indicant signaled buy on Sep 2, 2011. It is up 5.1% since then, annualizing at 52.4%.

ETF#31-QID received a buy signal by the Near-term Indicant on Sep 23, 2011. It is down 0.9% since that buy signal. The Quick-term Indicant signaled buy on Sep 30, 2011 since its price crossed above QTI Yellow. It is down 6.5% since then.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 44.4% since then, annualizing at 266.4%.  It is up 110.7% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 561.1%. This ETN will be abandoned once the stock market stabilizes, as its tracking to VIX is unreliable. However, current performance levels suggest some difficulty in its abandonment.

Major ETF Events

Oct 7-Fri-Several ETF’s and some major indices enjoyed Force exceeding Pressure. Normally, that would trigger bull/buy signals, but all remains in bearish domains. Also, breadth is missing and thus the bear remains inspired.

Oct 6-Thu-Three consecutive bullish days at this point remains configured as a mere bullish spurt. Two ETF’s crossed above Pressure, but all the others remain in pitiful position.

Oct 5-Wed-A few non-contrarian ETF’s crossed above NTI Blue, NTI Green, and QTI Yellow. However, Force Vectors remain in bearish domains in continued support of the stock market bear.

Oct 4-Tue-Strong bullish behavior late in the trading session was coupled by aggressive volume on significant intraday volatility. Most Force Vectors remain in bearish domains and thus the stock market bull remains without much support.

Oct 3-Mon-More QTI Yellow Bears developed today. There is now no floor to discourage the stock market bear at this time.

Current Strategy-Short-term Indicant-Oct 7, 2011-Chaotic divergence concluded with the stock market bear now exerting its influence in spite of stock market bullish behavior in three of past four days.

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence last week, which was the third such week in the past nine weeks. Unfortunately, mid-term cyclical attributes suggest last week’s bullish behavior is a mere bullish spurt. Do not anticipate the heart and soul of bullish seasonality.

Indicant Conclusion

The stock market continues demonstrating an inability to exceed 2007 peak levels. After passing above 2007’s peak three weeks ago, the NAS100 again shied away from those levels. Last week’s stock market bullish behavior means nothing. Technically, the question remains, “are corporations in better position for growth now than then?” The obvious answer is “no.” The current economic environment is not going to foment revenue increases. Corporate profitability is a function of cost cutting and work force reductions. The stock market bull desires revenue increases that couple to bottom line increases.

The good news, though, is that none of the major indices are Yellow Bears, but the weakest index, S&P100, is nearing that level. Just as the 2009-2011 was a “suspicious” bull, the current bear market can be viewed with some suspicion until such time all the major indices are Yellow Bears.

Rising interest rates and/or inflationary threats may manifest in coming weeks/months. The stock market bear will not wait for those manifestations. Corporate profits will take a back seat to those two threats if they indeed manifest. Also, a financial collapse in Europe will trigger stock market bearishness.

Keep your eye on Force Vectors, which were increasing. They are now vacillating in bearish domains, which is ominous.

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

10/09/2011

Oct 2, 2011 Indicant Weekly Stock Market Report

Volume 10, Issue 01 ISSN 1526 6516 © The Indicant Stock Market Report

Again, No Buy Signals

Bearish behavior last week, for the most part, reflects capital market’s propensity to reflect reality. Greece, U.S. politicians, and European politicians continue interfering with capital markets. The capital markets cannot be fooled over the long cycle. Wealth creation is delivered from one and only one group of people; capitalists. Politicians have absolutely nothing to do with it. On the contrary, politicians are destructive to it, regardless of country or societal culture.

Creating wealth is objective. The constituents driving corporate profits, which lead to wealth creation, are measurable. The main one is cash flow as a percentage of shareholder equity. Some report false profits every now and then. After a period, the question is asked by the capital markets, “where is the cash?” Even voodoo bookkeeping, such as that practiced by Enron, is eventually detected by the capital markets. Cheaters, liars, dilettantes, politicians, and their related socialistic interjections into the capital markets always influence bearish stock market behavior. Such interference always contributes to recessionary economic activity.

The stock market’s bullish cycle in 2009 through mid-2011 anticipated economic recovery from recessionary behavior in 2008. That recovery occurred, for the most part, until this year. Economic data continues to be unimpressive. The stock market will go down when its prior anticipation of economic robustness proves to be in error. It constantly adjusts to what it anticipates and what actually occurs.

The world economy is simply not expanding. That, alone, will disappoint the stock market. The U.S. economy cannot expand. Too many politicians believe they can influence the economy. They talk about creating jobs. Politicians have never created jobs. Political behavior is biased toward the expansion of economic leeches. As stated many times in this report, the only positive economic contribution by politicians is to undo their prior damage. For example, if contemporary politicians illegalized all FDR policies from the dirty thirties next week, one could project a Dow moving up by over 1,000-points next week and continue to skyrocket past 30,000 within a couple of years. Unemployment would drop to less than 4% and the standard of living would correspondingly skyrocket.

Unfortunately, lawmakers will not illegalize most of the executive branch’s departments, such as the FDA, EPA, etc. The reason they will not do this is that it would directly diminish their importance. All that is perception. Politicians are economically irrelevant. When economic leeches command themselves to be important and with nearly 50% of the voting public believing their pontifications, rest assured, the stock market will not be bullish.

Politicians in Europe continue creating monopoly money. Their currencies have been nose-diving, because of their nonsensical behavior. Inflation in Europe is mounting and starting to threaten there. When people are enjoying unearned income in massive amounts, paper currencies lose their value. In essence, universal law could claim, leeches always wind up killing their host. In this case, Greece and other countries are obviously killing their hosts.

Greece has been pestering the capital markets for well over a year now. The underlying elements to this problem are rapidly expanding to all corners of the world. The problem could be solved by eliminating all pension payments to former and retired government employees. One, who works for any government for their entire working careers, deserves nothing. They never participated in wealth creation. Abandoning payments to those will force them to go to work. By doing so, economic activity will pick up.

High fixed costs corporations require high volume to absorb those fixed costs. High volume can result from outstanding salesmanship or creative product development, such as Apple. Unfortunately, those sort of organizations, alone, cannot propel economic robustness. There are simply not that many of them. Contemporary politicians are not supportive of entrepreneurialism and thus one reason why the numbers of companies, such as Apple, are shrinking. Apple accumulated over $70-billion in cash all without any government help. It is up 5,177.8% since the Mid-term Indicant signaled buy on May 2, 2003. No politician contributed to that. Politicians contributed to Solyndra. It is now bankrupt. If politicians look at it, touch it, invest in it with public funds, talk about it, rest assured, it will fail. That is true for those “too big to fail.” Protecting such companies brings down the whole house.

Warren Buffet has been hobnobbing among the political establishment. He has been expressing political opinions favoring socialism. He and his organization has now become contaminated by simply looping into “political solutions.” His stock is down, considerably, and will continue to decline until he abandons this nonsensical behavior and return to focusing on his holding’s wealth creation. Unfortunately, that contamination is hard to wipe off.

Companies, such as Alcoa, have high fixed costs. It needs economic robustness to garnish increased sales volume. There is no economic robustness at this time. As you can see from the chart, its stock price continues falling. Alcoa’s FY2010 revenue was below that of FY2008. Its cash flow continues to shrink. It is down 35.0% since the Mid-term Indicant signaled sell this past July. Take another look at the chart. As you can see, it enjoyed a steady bullish trend prior to the stock market collapse of 2008. It rebounded, concurrently, with the stock market bull in 2009. However, as you can see, it has started a renewed deep bearish cycle. Alcoa, alone, can describe overall economic behavior, both current and anticipated. Right now, that is configured very bearishly.

The major indices remain bearish in this normally bullish pre-election year. As stated in the September 11, 2011 Weekly Stock Market Report, the last bearish presidential election year occurred in 1939.

Threatening the economy is extraordinarily high political chitchat about the economy. The more they talk about it, the worse it gets. Their chitchat scares capitalists. Scarring capitalists is bearish. This was discussed in the September 4, 2011 Weekly Stock Market Report. Politicians continue elevating their economic orations. That means they may do more to help the economy. They cannot help the economy. On the contrary, the more politicians try to help the economy, the worse it will get.

With all that, the Mid-term Indicant, again, could not generate any buy signals.

The heart and soul of bullish seasonality is statistically due to start in two to three weeks. If the capital markets detect political impotence in economic destruction, it should manifest. Latent cash must be put to work. It tends to erode in value while idle. This is true for investors and corporations. With that, the heart and soul of bullish seasonality can manifest. When it does, the Indicant will signal buy for those stocks and funds that will participate. Force Vectors are rising. Their interaction with Vector Pressure will be interesting over the next few weeks.

Keep your eye on the daily stock market report.

Whipsawed – Review of Wild Swings Last Week

NAS100#18-WYNN was the NASDAQ100’s biggest loser last week. It was down 17.0% and down 30.4% from its all-time high. However, it is up by 96.1% since the Mid-term Indicant signaled buy in Aug 2009. As you can see, it recently lost Red Bull status, but its Pressure remains high. Its declining Force Vector is mildly discerning. NAS100#83-SHLD was the biggest gainer in this group closing up by 9.5% last week. It is down 70.0% from its all-time high. Although it was bullish last week, the Mid-term Indicant has been avoiding since its sell signal on Aug 5, 2011. It is down 14.1% since then. It is a Yellow Bear and with declining Vector Pressure. It is configured with significant bearish attributes at this time.

ISTK#18-EK was down a whopping 67.2% last week and down 99.7% from its all-time high. Furthermore, it is down 96.7% since the Mid-term Indicant signaled sell in November 2007. This company attracted ultimate dilettantes for decades and their leeching is nearing its conclusion as they have nearly killed their host. This is a classic case of an absolute necessity of monitoring management. This stock is a Yellow Bear and has been trending bearishly for over a decade. ISTK#39-ELN was up by 9.5% last week, although down 82.9% from its all-time high. It is up 11.5% since the Mid-term Indicant sell signal this past August. This stock has been trending bearishly since the Y2K fallout in 2001. It is configured with several bullish attributes, such as positive Pressure. The primary reasons for not signaling buy is its recent volatility and jittery stock market. This stock, however, has performed well in past bear markets. As you can see, though, from its chart, its corrections are fast and nasty.

DJIA#01-AA was down 5.0% last week. It is down 79.8% from its all-time weekly high. It is down 35.0% since the Mid-term Indicant’s sell signal this past July. Its configurations are pathetic and therefore solidly bearish. Alcoa needs economic robustness to perform, as volume is required for high fixed costs operations. DJIA#27-MRK was up 5.3% this past week. It is down 64.3% from its all-time high. It is up 3.1% since the MTI sell signal last August. It is a Yellow Bear with declining Vector Pressure. It remains with pathetic configurations in spite of its bullish behavior last week.

DJU##11-WMB was down 2.7%. It is down 59.7% from its all time high. It is up 23.4% since the Mid-term Indicant’s buy signal one year ago. This stock has been troubled for the past several weeks, but Mid-term Indicant cannot signal sell until it falls below its bearish yellow curve. DJU#14-CNP was the Dow Utilities biggest gainer last week. It was up 3.4%. It is down, however, by 58.7% from its all-time high. It is up 51.6% since the MTI buy signal two years ago. It is a solid Red Bull and strong configurations favoring bullish behavior.

MF#22-USPIX was up 5.9% while it should be noted as being down 99.5% from its all-time high. This fund is down 74.7% since the Mid-term Indicant signaled sell in April 2009. The normally bullish presidential pre-election year is weighted in the signaling of this fund. That is why the Mid-term Indicant continues avoiding it. MF#38-FSELX was down 5.9% last week. Of those mutual funds tracked by the Mid-term Indicant, it was the biggest loser last week. It is down 61.0% from its all-time high. It is up 19.0% since the MTI buy signal in July 2009. The Mid-term Indicant will not signal sell until its price falls below its MTI Bearish Yellow curve.

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 nine-sell signals. This brings the total number of sell signals to 100-since Aug 5, 2011. That is an unusual high number of sell signals for the normally bullish pre-election year. This is due to the movement toward communism by politicians, which is inconsistent with normal political behavior during pre-election years, where wealth building use to be a surefire way to get votes for reelection. Unfortunately, a near majority of Americans has their hands-out, as the half-life of a once great country has passed.

The Mid-term Indicant is signaling hold for 180 of the 339-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 58.3%. That annualizes to 33.3%. The Mid-term Indicant has been signaling hold for these 180-stocks and funds for an average of 91.1-weeks.

The Mid-term Indicant is avoiding 146-stocks and funds of 339-tracked by the Indicant. The avoided stocks and funds are down an average of 18.5% since the Mid-term Indicant signaled sell an average of 47.9-weeks ago.

One year ago, on Oct 1, 2010, the Mid-term Indicant was holding 228-stocks and funds out of 333 tracked for an average of 49.0-weeks. They were up by an average of 37.6% (annualized at 39.9%). There were 85-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 41.5% since their respective sell signals an average of 95.2-weeks earlier one year ago. There were three-buy signals and no sell signals on this weekend last year.

The Mid-term Indicant was signaling hold for 188-stocks and funds of the 333-tracked two years ago on Oct 2, 2009. They were up by an average of 18.4%, annualized at 46.2%, since their respective buy signals an average of 20.7-weeks earlier. The Mid-term Indicant was avoiding 129-stocks and funds at that time. They were down an average of 40.7% since their respective sell signals an average of 78.6-weeks earlier. There were no buy signals in addition to the 144-buy signals in the prior ten weeks. There were no sell signals on this weekend in 2009. The stock market bear continued losing dominance at this time in 2009 along the mid-term cycle.

There were 98-stocks and funds with hold signals on Sep 26, 2008 since their buy signals an average of 149.8-weeks earlier. They were up by an average of 156.9% (annualized at 54.5%). There were 242-avoided stocks and funds at that time. They were down by an average of 20.4% from their respective sell signals an average of 25.6-weeks earlier. There was one-sell signal on this weekend in 2008, adding to the 466-sell signals in the prior 46-weeks, as the bear market was now maturing at this point in 2008, but still incomplete in its final destruction. There was one buy signal on this weekend in 2008.

On Sep 22, 2007, the Mid-term Indicant was signaling hold for 283-stocks and funds out of 345-tracked. They were up by an average of 141.3% (annualized at 64.6%) since their buy signals an average of 113.8-weeks earlier. The Mid-term Indicant was avoiding 56-stocks and funds at that time. They were down by an average of 11.6% since their sell signals an average of 24.6-weeks earlier. There were six-buy signals and no sell signals on this weekend in 2007. The Mid-term bull cycle was beginning to struggle at this time in 2007, as the democratic congress was implementing their “take from the productive and give to the non-productive” policies.

Five years ago, on Sep 29, 2006, there were 308-hold signals for stocks and funds out of the 345 tracked by the Mid-term Indicant at that time. They were up an average of 105.1% (annualized at 71.8%) since their respective buy signals an average of 76.1-weeks earlier. There were 35-avoided stocks and funds then. They were down an average of 15.5% since their respective sell signals an average of 20.1-weeks earlier. There were two-buy signals and no sell signals on this weekend in 2006. The bull was solid for the most part in 2006.

On Sep 30, 2005, there were 222-stocks and funds with hold signals from the listing of 320-tracked by the Mid-term Indicant at that time. They were up an average of 112.8%, annualizing 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 by an average of 9.4% since their sell signals an average of 23.1-weeks earlier. There were two buy signals and three sell signals on this weekend in 2005.

There were 204-stocks and funds with hold signals on Oct 1, 2004. They were up by an average of 73.6%, annualizing at 66.6%, since their buy signals 57.4-weeks earlier. The 50-avoided stocks and funds were down an average of 32.4% since their respective sell signals an average of 52.4-weeks earlier. There were 41-buy signals and one sell signal on this weekend in 2004. The 2004-meandering bear market that pestered throughout most of 2004 was giving way to the heart and soul of bullish seasonality at this time in 2004.

On Oct 3, 2003, there were 219-stocks and funds with a hold signal, enjoying a 58.5% gain since their respective buy signals an average of 31.0-weeks earlier. That annualized at 98.0%. There were only 30-avoided stocks at that time. They were down by an average of 20.9% since their sell signals an average of 29.7-weeks earlier.  The Mid-term Indicant was tracking 296 stocks and funds from 2002 through late 2004. There were 44-buy signals in addition to 321-buy signals in the prior 28-weeks. There were three sell signals on this weekend in 2003, as the stock market concluded its classical late summer sell-off. The 2003 bull market was 31-weeks old on this weekend in 2003.

On Oct 4, 2002, there were 54-stocks and funds with hold signals. They were up 20.2% since their buy signals an average of 21.6-weeks earlier, annualizing at 48.6%. There were 226-stocks and funds avoided since the Mid-term Indicant signaled sell an average of 10.1-weeks earlier. The avoided stocks and funds were down 24.7%. There were two buy signals in addition to 218-buy signals in the prior ten weeks.  Although the stock market bear remained in effect, it was beginning to display weakness. Some of the Aug buy signals retained hold signals through late 2007 and early 2008, while several others were reversed with sell signals before the conclusion of calendar year 2002. Energy related buy signals in Aug 2002, however, held strongly through the December 2002-record-bear and lasted until late 2008. There were 13-sell signals on this weekend.

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

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

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

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

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

The NASDAQ100 succumbed to bearish influences this past week.

The Dow Utilities remains resistant to bearish influences. As long as Utilities continues with bullish attributes, the stock market bear cannot dominate for long periods. Utilities continued resistance to bearish ambition suggests the heart and soul of bullish seasonality will be normal this year. This usually occurs in late September or early October. So, it is getting close. The heart and soul of bullish seasonality is not quite ready to dominate, but rising Force Vectors offer some mild hope it will sooner rather than later.

As stated last week, there are ample reasons to be guarded on potential bearish aggression at this time. Keep your eye on Utilities. Strong bearish behavior will offer the bear significant incentive to expand its ambition to dominate.

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 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. Stop losses shortly after buying are the trickiest. Right after buying, set the stop loss at the lesser value of 5% or green curve values, depending on your personal preferences. Those stop losses are visible to floor traders and subject to a bit of unfairness to you and to their benefit.

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 49.8% since its secular weekly low on October 9, 2002. The NASDAQ is up 116.8% and the S&P500 is up 45.7% since then. The small cap index, S&P600, is up 108.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months. Historical standards and political climate support continued bullishness during 2011 in spite of recent bearishness and souring economic news. However, as stated last week, recent bearish behavior may not have yet ended this year. The overall market endured its largest drop since Oct 2008 two weeks ago.

The NASDAQ is down 52.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 25.9% since its similar secular peak on March 23, 2000. The Dow is down by 6.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025. One should note that buy and hold so far this century is a loser, as the stock market has been flat to bearish for the last eleven years.

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

The NASDAQ year-to-date performance was bearish by 39.3% 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 39.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with historical standards of finding bottoms during mid-term election years.

The NASDAQ YTD 2003 performance was up 33.8%. It finished up by 50.0% in 2003, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 5.3% from that year’s meandering bear market, but finished up by 8.6%. This was congruent with election year bullishness, although shy of magnitude standards. 

It was down 1.1% on this weekend in 2005’s post-election year, which was consistent with historical standards of losses and/or minimal gains during post election years. This was an excellent year, based on post-election year historical standards of bearishness. Many of you recall that 2004 and 2005 were meandering bear markets.

In 2006, the NASDAQ was up by 2.4% on this weekend. It finished up in 2006 by 9.5%, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 11.8% at this time in 2007, finishing that year up by 9.8%, which was consistent with pre-election year bullishness. The stock market peaked in 2007 from the 2003 bull leg after democrats took control of Congress in early 2007. George W. went along with them as opposed to repelling them. That accelerated the bear and added depth to its decline.

The NASDAQ was down by 21.5% on this weekend in 2008. It finished 2008 down by 40.5%. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

It was up 34.6% on this weekend in 2009 and finishing that year up by 43.9%. Keep in mind, the extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The NASDAQ was up 4.4% on this weekend last year. It finished 2010 up by 16.9%, which was consistent with mid-term election year bullishness; especially in the second half of such years.

The Dow is down 5.7% this year. The S&P500 and NASDAQ are down 10.0% and 9.0%, respectively. This contrasts, sharply, with historical standards. The last bearish pre-election year was in 1939. Keep in mind FDR and Mussolini were pals ahead of WWII. FDR needed a good war to work out of his ridiculous policies that drove the Dirty-30’s. We need to wonder who the current administration is pals with.

The Dow is down 23.0% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 15.5% since its last peak on Oct 31, 2007. The S&P500 is down 27.7% since its Oct 9, 2007 peak. This coincides with political coziness in Washington D.C.

Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices. As you can see, the stock market continues to struggle beyond where it was prior to the great bear market of 2007-2008. In spite of that, though, a few indices have eclipsed pre-crash highs, as noted by the S&P600 13-weeks ago. That was the second time this year such accomplishment has been enjoyed. However, comfort by capital markets eclipsing 2007 cyclical peaks remains elusive. Bearish aggression in six of the past eight weeks clearly demonstrate repulsions to bettering 2007 peak prices. However, the NASDAQ100 Index crossed above its Oct 31, 2007 high three weeks ago, but again did not find comfort in doing so with dynamic bearishness that past two weeks. It is now down 4.5% from that peak.

The NAS100 topped its pre-crash highs of 2007/8 several weeks ago.  It, along with other major indices similar behavior, retreated below those peaks. Several indices have never challenged those peak prices. The weakest index, S&P100, continues lagging. It is down by 29.7% since its Oct 9, 2007 weekly closing peak and nearing Yellow Bear status. As you can see from recent stock market behavior, suspicions about the 2009-2011 bull leg had merit. The reason for those suspicions was near maximal incongruence between political leadership and the underlying principles of capital markets. The Dec 12, 2010 Indicant Weekly Stock Market Report discussed this phenomenon.

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

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with a short-term view, 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. If prices fall below reverse tangential projections, new pivot points will be defined.

The Dow is up 66.7% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 90.4% and the S&P500 is up 67.2% since then. The S&P600, Small Cap Index, is up 95.5% since March 9, 2009. That March 2009-current bull leg was/is indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. Such a successor bear cycle is now underway, although not expected to continue as Washington DC has a propensity to stalemate during presidential pre-election years. This is especially true when the president is unpopular.

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

Political behavior is favoring the stock market bull in the long run with pressure to reduce government waste. Anticipating that is bullish, even though the short-term and mid-term cycles are not supportive of the bull at this time. A potential of defaults by Greece and other European countries, promoting and catering to laziness, add to threats to the stock market bull. The Standard and Poor’s downgrade of the U.S. credit rating adds new threats to the stock market bull. On the contrary, though, Spain has legislated balanced budget requirements, which supports the idea of a bullish theme. The problem is how plastic political agreements are.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

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

As promised by Bernanke in late 2008, the discount rate (and prime) rate continue 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. Bernanke continues with his promise of more of the same for through 2012. Policy settings typically remain fixed during the second half of a president’s term. That stability is why the historical record clearly demonstrates stock market bullishness from the mid-term election year through the election year.

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

The Euro jumped to Red Bull status 37-weeks ago. It lost that Red Bull status two weeks ago with a continuing sharp drop against the greenback.

The Canadian dollar also weakened severely the past two weeks, while the Japanese Yen remained strong and continued strengthening this past week. The CA$ moved in the neutral zone (between Red and Yellow) five weeks ago. It is now above Red (bearish for the CA$), which threatens its cycle of strengthening.  The Japanese yen remains extraordinarily strong.

Gold’s optimistic forecast remains at $1600/oz by 2012. As you can see, it is tracking above its high-end forecasted value and it remains a Red Bull. Despite solid bearish behavior the past two weeks, it continues trading well above the 2012 yearend forecast at above $1800/oz. The $2,000/oz.-forecast by 2014 remains challenged, based on political dynamics. For example, reduced government spending should strengthen paper currencies and with that, the price of gold would decrease. So far, this thesis remains weak. It may take a few more years before this political influence manifests. Statistical bullishness remains intact along the mid-term cycle. At the same webpage, you will notice oil is less stable with a mild, but with deepening bearish bias. It fell below yellow nine weeks ago on souring economic news. It remains as a Yellow Bear.

Commodity prices continue falling from their recent record highs due to souring economic forecast. None are Red Bulls. Their potential contribution to inflationary pressures remains absent, as most are now Yellow Bears.

Scrolling down a bit on the aforementioned webpage, the CRB Bridge Futures fell prey to bearish economic pressures the past few weeks. It is approaching Yellow Bear status.

Commodity prices, overall, were bearish in seventeen of the last 22-weeks. Souring economic forecasts continue dampening commodities bullish cycle. Current configurations are no longer expecting a bullish surge. Their recent bearish aggression reflects a strengthening U.S. dollar and souring economic conditions.

Mortgage rates are moving bearishly. They did not find comfort at their first Red Curve interaction since late 2008 on Feb 11, 2011. After falling sharply eight weeks ago on souring economic news, they enjoyed a nice bullish bounce six weeks ago, but down the past four weeks and aggressively so.

The consumer price index and producer price index continue to be relatively stable. That should change in the next few months, depending on economic activity. High unemployment will continue to contribute to non-inflationary tendencies.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is down 8.5% since then. It is on the verge of receiving a sell signal.

Fidelity Gold, Fund #28 received an MTI buy signal on Jul 22, 2011. It is down 11.6% since that buy signal. If Force falls into bearish domains, it will receive a sell signal.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It again endured a sell signal on Sep 23, 2011. It is down 0.2% since then. Peak oil must be a dead issue for the time being.

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 sell this weekend.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell on Sep 23, 2011. It is down 4.2% since then.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010 and was basically flat until the Mid-term Indicant signaled sell this weekend.

The Quick-term and Near-term signaled sell for ETF#03 – Energy and Natural Resources on Sep 2, 2011. It is down 11.6% since those sell signals. It was up 242.4% (annualized at 44.8%) since the Quick-term buy signal on March 26, 2003 until the September 2008 sell signal. It was up over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15, 2010 and the Quick-term sell signal on Aug 8, 2011.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 96.0% 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 was up by 12.0% since that buy signal, annualizing at 28.0% at the time of the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9, 2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up about 10% until the NTI signaled sell on Sep 23, 2011. It is down 1.1% since that sell signal.

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

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

The DJU is the lone-bull. It is up 10.8% since its bull signal 54.0-weeks ago, annualizing at 10.4%.

The remaining major indices with bear signals are down by an average of 5.8% since their bear signals on Aug 5, 2011 with nearly all of that bearish performance occurring the past two weeks.

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,060. That beats buy and hold performance of $1,660,335 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $141,743. That beats buy and hold’s $110,826 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $216,610. That beats buy and hold’s $83,572 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,707.8%, 27.9%, and 155.6%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. The stock market did not succumb to the bear during the post-election year, 2009.

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 74.7% since then.

Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the stock market bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal, which approximates the normal time to buy this fund. This fund is configured, bullishly, but heavily weighted to avoid during pre-election years. The Short-term Indicant signaled buy this weekend for its cousin, QID.

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 277.0% (annualized at 13.9%) since the Long-term Indicant signaled bull 1,039-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

The following theme will be repeated until stock market configurations obsolete it and despite potential boredom of repeating it.

Chaotic divergence reflects aggressively configured short-term attributes favoring both bull and bear. Here are a few examples. ETF#13-EWH-Hongkong endures Force in bearish domains with negative Pressure. It is a QTI Yellow Bear and NTI Green Bear. Currently, there is no floor to bearish ambition and underlying forces and pressure is weak. It is down 16.1% since short-term sell signals on Sep 2, 2011. ETF#01-QQQ, on the other hand, still has bullish attributes; albeit under attack and nearing collapse. It is down 1.2% since then and on the verge of acquiescing to the stock market bear.

These conditions also describe the absence of bullish or bearish unanimity, which is required for cyclical magnitude and breadth. Until this changes, it is what it is. Recent stock market behavior suggests dissipation of this divergent behavior and increasing probabilities of bearish convergence.

Stock market behavior this past Thursday highlights the divergent behavior. The Dow was solidly bullish, while the NASDAQ100 was solidly bearish. That is bearish divergence, since most underlying indices remain as QTI Yellow Bears. The concern is the potential displacing of bearish divergence to bearish convergence. The Dow30 was actually bullish this past week in spite of Friday’s bearish aggression, while most of the other major indices were solidly bearish last week.

The stock market is without any noticeable desired directional intensity. It is configured to be entirely reactionary to news and whatever rumors that can be successfully orchestrated. Avoiding is an appropriate tactic.

As stated this past Wednesday, “noticeable, though, are a few Force Vectors creeping northward, offering the stock market bull some hope.” They need to cross above Pressure and into bullish domains before renewed interest in bullish behavior. Friday’s bearish aggression should not be interpreted as a final transformation to bearish unanimity as rising Force Vectors offer potential resistance to that. Early next week will be interesting.

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

Index Report Card Summary

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

The Near-term Indicant is signaling bull only for contrarian VIX. It is up 86.9%, annualizing at 486.9%.

The Near-term Indicant is signaling bear for the eleven major non-contrarian indices. They are down by an average of 3.9% since their bear signals an average of 2.0-weeks ago.

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

The Quick-term Indicant is signaling bull for one major non-contrarian index, NAS100, including contrarian VIX. Collectively, they are up 41.6% since their bull signals an average of 6.9-weeks ago. This annualizes at 312.0%.

The Quick-term Indicant is signaling bear for ten non-contrarian indices. They are down by an average of 5.8% since their bear signals an average of 4.3-weeks ago.

The NAS100 continues with bull signal. It is not yet a QTI Yellow Bear. The DJU is also not a Yellow Bear, but with a bear signal along the short-term cycle. As stated this week, “bearish unanimity remains absent and with that a dynamic long-lasting bear cannot manifest.” Keep in mind, though, those two indices are the only ones offering argument to bearish desires. The NAS100 NTI Blue curve collapsed on Friday, but its Force Vector is arguing against bearish ambition. NAS100 Force behavior will be very interesting next week.

Indicant Volume Indicators  

Both major indices are robustly in high interest domains. That cyclical robustness coincides with bearish aggression, supporting bearish bias. Sustainable bullish behavior requires robustness in conjunction with bullish attributes along the short-term cycle.

Sep 30-Fri-Moderate to aggressive volume, coupled to bearish aggression, remains inspirational to the stock market bear.

Sep 29-Thu-Aggressive volume on mixed stock market behavior supports no change in bias.

Sep 28-Wed-Moderate volume on bearish aggression is a meaningless relationship. Therefore, bearish bias prevails. We need to see some drama here and it remains absent.

Sep 27-Tue-Volume was more aggressive today on second consecutive day of solid bullishness, but still shy of recent magnitude supporting bear.

Sep 26-Mon-Moderate volume of solid bullish expressions suggests trader reaction, as opposed to substantive continuations of bullishness at this time.

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 seven-ETF’s. They are up by an average of 18.4% since their buy signals an average of 3.7-weeks ago, annualizing at 259.7%. The reason performance is high is due to a mild mix of non-contrarian and contrarian ETF’s, where contrarians, such as VXX, remain extraordinarily bullish.

The NTI is avoiding 25-ETF’s. They are down by an average of 6.1% since their near-term sell signals an average of 2.9-weeks ago.

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

The Quick-term Indicant is signaling hold for 7-ETF’s. They are up by an average of 23.7% since their buy signals an average of 25.4-weeks ago. This annualizes at 48.5%.

The Quick-term Indicant is avoiding 24-ETF’s. They are down by an average of 9.6% since the QTI sell signals an average of 5.7-weeks ago.

Contrarian Funds

ETF#03-Natural Resources.  The Near-term and Quick-term Indicant signaled sell on Sep 2, 2011. It is down 11.6% since those sell signals. It is a Green and Yellow Bear. It is struggling to escape that level of weakness. Its Force Vector is rising, offering some mild bullish hope along the short-term cycle.

ETF#11-Gold and Precious Metals  is up 96.0% 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 $146.07 and still rising. Relaxation remains in order, despite recent bearish aggression, since your buy price approximates $80.65 versus today’s closing price of $158.06. The Quick-term Indicant will not signal sell until interaction with QTI Yellow Curve.

The Near-term Indicant signaled sell on Sep 23, 2011. It is down 1.1% since then. Force’s collapse deep into bearish domains remains ominous, despite its reversal back to the north on Friday.

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

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

ETF#14-TLT-Long Government received a buy signal on Fri, Jul 29, 2011 from the Quick-term Indicant model. It is up 23.4% since that buy signal, annualizing at 133.5%. The Near-term Indicant signaled buy on Sep 2, 2011. It is up 7.4% since then, annualizing at 94.7%.

ETF#31-QID received a buy signal by the Near-term Indicant on Sep 23, 2011. It is up 6.0% since that buy signal, annualizing at 309.8%. The Quick-term Indicant signaled buy on Friday since its price crossed above QTI Yellow. Of concern is its declining Force Vector.

The Quick-term signaled buy for ETF#32-VXX on Aug 8, 2011. It is up 53.5% since then, annualizing at 363.1%.  It is up 123.9% since the Near-term Indicant signaled buy on Jul 28, 2011, annualizing at 696.8%. This ETN will be abandoned once the stock market stabilizes, as its tracking to VIX is unreliable. However, current performance levels suggest some difficulty in its abandonment.

Major ETF Events

Sep 30-Fri-There were none as strong bearish behavior was consistent with bear/avoid signals.

Sep 29-Thu-The Dow was solidly bullish, while the NASDAQ was nearly as solidly bearish. This bearish divergence still favors the stock market bear. Most Force Vectors are again pointing north and threatening bearish dominance.

Sep 28-Wed-Again no major events as the stock market was aggressively bearish. Noticeable, though, are maturing Force Vector cycles and a few are moving back to the north, offering the stock market bull some hope.

Sep 27-Tue-No major events. Two consecutive days of bullish behavior means nothing with negative Force and bearish stock market Pressure with significant divergence. States of wonderment are no different from tabula rasa.

Sep 26-Mon-No major events.

Current Strategy-Short-term Indicant-Sep 27, 2011-Chaotic divergence is being maintained with some ETF’s with solid bearish configurations, while others are with solid bullish configurations along the short-term cycle. This is not the time to be an aggressive buyer. The stock market is currently reactionary and without purpose.

Reverse Tangential Projections

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when. The stock market is now in the heart and soul of bullish seasonality. The bear will have difficulty manifesting with the shifting political cycles.

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed bullish convergence in only two of the past eight weeks. That interrupted four consecutive weeks of combined bearish convergence/divergence, which is a solid bearish configuration. Bearish convergence has occurred the past two weeks. Two more consecutive weeks of that behavior will threaten the heart and soul of bullish seasonality.

Indicant Conclusion

The stock market continues demonstrating an inability to exceed 2007 peak levels. After passing above 2007’s peak two weeks ago, the NAS100 again shied away from those levels with solid bearish behavior in each of the past two weeks. Technically, the question remains, “are corporations in better position for growth now than then?” The obvious answer is “no.” The current economic environment is not going to foment revenue increases. Corporate profitability is a function of cost cutting and work force reductions. The stock market bull desires revenue increases that couple to bottom line increases.

The good news, though, is that none of the major indices are Yellow Bears, but the weakest index, S&P100, is nearing that level. Just as the 2009-2011 was a “suspicious” bull, the current bear market can be viewed with some suspicion until such time all the major indices are Yellow Bears.

Rising interest rates and/or inflationary threats may manifest in coming weeks/months. The stock market bear will not wait for those manifestations. Corporate profits will take a back seat to those two threats if they indeed manifest.

Keep your eye on Force Vectors, which are increasing. If they pass above Pressure and hold there, the heart and soul of bullish seasonality should manifest.

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

10/02/2011

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