September 28, 2003 Indicant.Net Weekly Update

Volume 09, Issue 4 ISSN 1526 6516 © The Indicant Stock Market Report

 Time to Take Some Profits

After recent impressive gains, it is time to take some profits. You will notice some sell signals were generated this past week for triple digit gainers in addition to the normal selling pressures from marginal performers. Some of them are listed, as follows, in profit descending order. The below table is easier to read on the web site.

Notice that several of the above stocks were bought almost a year ago when the current bull market began. Although the bull is tiring, it is a bona fide bull market.

The market has not delivered any significant correction since the March 2003 Quick-term Bull. That, in addition to the final few days of bearish seasonality, influenced the high number of sell signals. There are other reasons for the sell signals that you will see later in this report. The biggest is that October has a history of delivering severe market action. There is no need to have a triple digit gainer wash up to a zero gain. It is better to take some profits now and buy again in bullish seasonal periods later this year.

Weekly Buy/Sell Summary

The Mid-term Indicant generated three buy signals and fifty-eight sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. As stated last week, it would not be surprising to see a major market correction between now and the end of October. We will keep you posted on that.

There are few buy signals, but the message is the same as the past several weeks. Do not aggressively buy at this time. E.g., buy one-hundred shares if you want to buy two-hundred shares. You will later see one of the buy signals was for ProFunds Ultra Short. Be conservative with that fund if you elect to buy. The presidential pre-election year bullish phenomenon increases the likelihood of stifling pleasurable performance.

In addition to the sell signals, the Mid-term Indicant is avoiding sixteen stocks and funds of the 296 tracked by the Indicant. The avoided stocks and funds are down an average of 25.2% since the Mid-term Indicant signaled sell an average of 30.4 weeks ago. Seven weeks ago, the avoided stocks were down 11.0% from their respective sell signals since an average of 15.0 weeks earlier.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 213 stocks and funds. Those stocks and funds were down an average of 22.6% since their respective sell signals an average of 9.6 weeks earlier. There were 100 sell signals one week earlier on September 20, 2002. As stated last week, bearish seasonality has a higher probability of infecting other bullish phenomena at this time of year.

In addition to the buy signals, the Indicant is signaling hold for 219 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 51.8%. That annualizes to 89.6%, which is down from 124.1% sixteen weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 219 stocks and funds for an average of 30.0 weeks.

The stocks/funds with hold signals contrast from one year ago when the Indicant was signaling hold for only sixty-one stocks and funds out of the 296 being tracked. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 20.0 weeks. They were up 17.4% (annualized at 45.3%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002. The market was nearing its secular bottom at this time one year ago and some of the new buy signals for the ensuing bull leg were beginning to occur. The market took one more dip before finding bottom, as predicted for the mid-term election year phenomenon.

This past week, many of the sell signals were due to the stock falling below the green curve. Some of the stocks with Mid-term Indicant sell signals were triple-digit gainers. Notice the Mid-term Indicant continues signaling hold for most of the stocks still above the green curve even though several of them took a hefty dip last week.

This paragraph is a repeat from the past several weeks. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish year on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5%. Bearish seasonality continues to attempt its influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves a few weeks ago. Some of them continue finding comfort above their bullish red curves, while others have not. It has been over three years since most of them enjoyed that lofty position. The Mid-term Indicant suggests that stocks that have not breeched their respective red curves or have yet to increase to that level are the most vulnerable in the event of a major market correction.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

Last weeks report mentioned some powerful stock price movements in the fuel cell sector. Millenium Cell retracted last week, but it is still up 61.0% since the Mid-term Indicant signaled buy on August 16, 2003. These stocks have been bouncy along the bottom for quite some time, but their recent price movements have been above the norm. Millenium found discomfort above its long-term blue curve, but the stocks price movement should not be influenced that much by the overall market’s direction. The stock has been relatively flat during recent bullish behavior by the stock market.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#30

NASDAQ100 Stock #33, Applied Micro, continues to express bearish behavior. It is down 14.9% since the Mid-term Indicant signaled sell on September 13, 2003. You will notice that stock never breeched its bullish red curve. It is one of those marginal performers most vulnerable during market corrections.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS06.htm#33

Conversely, NAS100 Stock #35, Symnatech, is exploding. It is up 90.0% since the Mid-term Indicant signaled buy just over a year ago. Even though the stock moved down last week, it is still a safe stock to hold. Most stocks where the price is greater than the red price are safe from dramatic dips in prices with respect to a longer-term perspective.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS06.htm#35

As mentioned earlier in this report, the Mid-term Indicant signaled sell for several stocks. One of them was NAS100 #84, Vitesse Semicon. The Mid-term Indicant signaled buy on November 2, 2002 at $1.975. The Mid-term Indicant signaled sell this past weekend at $6.24 for a 215.9% gain, less commission. The stock price is below the green curve. That with the weakening market biased the sell signal. If the stock was higher than its long-term blue price, then the Mid-term Indicant would have signaled hold. Although this stock performed well during the hold period, it is a weak stock. Continuing to hold for the long-term is okay, but make certain the fundamentals support that. Technically, the Indicant suggests selling and re-buying after we get through the remaining few weeks of bearish seasonality even if you buy at a higher price.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS14.htm#84

The Mid-term Indicant signaled sell for Indicant Select Stock #22, Retek. It was bought on December 28, 2002 at $2.63. The Mid-term Indicant signaled sell at $6.52 for a 147.9% gain, less commission. This stock was also below the green curve. As you can see from the chart, this stock has been weak even it increased 147.9% during the hold period. This stock never breeched its red curve. These sort of stocks slide to the south at a faster rate and sometimes very deep when the market weakens. If you bought this stock in a retirement account, such as a Keogh, IRA, etc., the capital gains is less of an issue than watching the entire gain get wiped out in a few short weeks.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S04.htm##22

The Mid-term Indicant signaled sell for Indicant Select Stock #17, Broadvision. It was bought at $2.21 on October 25, 2002 and sold at $5.01 for a nice 126.7% gain. Again, this stock is also weak, albeit a high performer since about a year ago. This stock also never breeched its bullish red curve and is now below the green curve. The overall weakening market along with the green curve attribute influenced the sell signal.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S03.htm##17

BEA System, NAS100 #57, is similar to the above recently sold stocks. It is up 94.2% since the Mid-term Indicant signaled buy on October 11, 2002 at $6.13. The selling price was $11.906 this past weekend. The attributes you can see from the charts suggest weakness in the event the market turns bearish. It is better to take some profits now, even if you have to buy later at a higher price.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS10.htm#57

Most of the stocks receiving sell signals this past weekend are because of their respective prices falling below the green curve, while also below the red and blue curves. There is no need to continue holding these weaker stocks with a weakening and tiring bull.

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

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

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

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

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The Quick-term Indicant signaled bear this past weekend. Although, the market is still above the Quick-term Bearish Yellow Curve, several attributes suggests an increasing probability of bearish behavior. Those attributes, described later, along with less than five weeks of bearish seasonality remaining, biased the Quick-term Indicant to signal bear. The last bear signal was a bit premature and this one may be as well. During periods of bearish seasonality, the QT Indicant is more aggressive in signaling bear. However, as long as the indexes are above their respective yellow curves, the market has a higher probability of gentle declines. Once the indexes fall below yellow, there is no resistance left to prevent catastrophic collapses. Make certain your stop losses are up to date.

Force Vectors continue to oscillate with short up and down waves, but last week, they configured a higher degree of robust behavior in a southerly direction. Most of the Indexes Force Vectors are now in bearish domains. Vector Pressure is still positive (bullish), but angling toward bearish domains. Remember, Force Vectors and Vector Pressure are eight dimensional and cannot be plotted.

Normally, when the indexes are above an increasing bearish yellow and Vector Pressure residing in bullish domains, the Quick-term Indicant would not signal bear. However, there are only four weeks, plus a few days, remaining for bearish seasonality to unfold. That coupled with the volatile history of October prompted the Quick-term Indicant to signal bear that complements the high number of sell signals and a profit taking strategy.

None of the eight major indexes are red bulls. Overall, the eight indexes are below the bullish red curve by an average of 3.8%, which contrast with them being above the red bull curve by 1.6% just last week.

The eight major indexes are above the bearish yellow curve by only 0.4%, which is down significant from last weeks 6.5%. As stated last week, it would not be surprising to see the markets drift back to yellow. That is exactly what happened. If the market does not increase next week, it will most likely fall below yellow. In that event, the threat to continue a declining motion increases significantly.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The indexes drifted back to the yellow curve on an increasing Indicant Volume Indicator. That supports additional bearish prognosis. Again, it will be interesting to see how the market performs on and around the bearish yellow curve. We will keep our eye on that this coming week and keep you posted.

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bear this past week on September 25, 2003 for the Dow and the NASDAQ. Currently, the two major indexes are down by an average of 0.9% since their respective bear signals. The Dow is down 0.3%. The NASDAQ is down 1.4% since the Short-term Bear signal.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20DJIA1995-2002.htm

A link to the NASDAQ’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20NAS1995-2002.htm

Perspectives

The major indexes have backed off from the breakout curves the past few days, although still close enough for continuing contact. You will notice the S&P600 leg bull leg to the north is about the same in length as the prior dynamic bull leg. The S&P600 Index has not yet risen to 2002 highs, which occurred in April 2002. The same is true for the Dow and the NASDAQ100. It is interesting that the market found a secular bottom in 2002, as predicted, and so far this year they have yet to match the 2002 highs with this years high performing bull market.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

As stated last week, the Quick-term Volatility Index was forming a slight bias supporting bullish behavior. The QT Volatility Index crossed above bullish red this past week. It did the same in early August and then quickly retreated while the market continued to zoom north. If the QT Volatility Index continues to move north, the overall stock market will move to the south on the charts. You will later see, the Mid-term Volatility Index has enjoyed a dramatic increase since the Mid-term Indicant signaled bull two weeks ago.

Divergence versus Convergence

Nearly all sectors are now moving in a bearish direction, except gold and precious metals. As stated last week, not all sectors can move in a bullish direction over a long period.

Economic Outlook

Not much changed the past three weeks.

The U.S. Dollar continues to be cyclically weak. After rebounding for a few weeks, it is now weakening again. That will not help the stock market, as this will influence a perception of upward pressure on interest rates. Click the following link to view the dollars’ positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices for the raw materials. The higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

http://www.indicant.net/Members/Updates/Economic/E03.htm

Interest rates are remaining at historically low levels. The three-month T-Bill continues to inch upward, along with CD’s. The Freddie Mac and Fannie Mae mortgage rates reversed their northward movement last week with a drop in rates.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-eight weeks ago, it was up 66.1% since that buy signal. Sixty-one weeks ago, it closed up 12.0% since that buy signal. Fifty-two weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 79.1%, which is significantly higher than 47.1% reported ten weeks ago. The current annualized growth rate is 43.2%, which is up from 28.8% reported ten weeks ago. Last week, it was down, paralleling the overall stock market.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-six weeks ago since the MTI buy signal in April 2001. Fifty-nine weeks ago, it closed up 30.1%. Last week it closed up 92.3%, which is higher than the 75.9% reported seven weeks ago. The current annualized growth rate since the April 13, 2001 buy signal is 37.1%, which is higher than 23.1% reported ten weeks ago. It lost a couple of percentage points last week.

As stated in the past you can monitor the above two funds and the options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

Twenty-two weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 32.7%, which is up significantly from 18.8% reported nine weeks ago. The annualized growth rate is 80.2%, which is more than the 50.7% reported ten weeks ago, but lower than 142.5% reported fourteen weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Mid-term Indicant Positions - Major U.S. Market Indices

The Mid-term Indicant signaled new bear for two of the eight major indexes. The two culprits are the S&P500 and S&P100 Indexes, which is home to the highest number of dilettante managers and voodoo bookkeepers.

However, six of the major indexes continue as bulls. They are up an average of 11.9% for an annualized gain of 31.1% since the MTI Bull signals an average of 19.8 weeks ago. The annualized growth rate is down slightly from 47.9% reported fourteen weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA is up 9.3% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 26.1% since the March 22, 2003 MTI Bull signal. That annualizes to 96.9%, which is up from 80.9% reported nine weeks ago.

If the new bears hold up through next week, this report will include their performance. More new bears are expected next week, but should return to bull status in early November when bullish seasonality returns.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There were no new bull signals and three new bear signals. The International community continues maintaining a bullish posture, but showing some signs of weariness, along with the U.S. stock market.

Eighteen of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 65.7% since the Mid-term Indicant signaled bull an average of 48.4 weeks ago for an annualized gain of 70.5%, which is down from 72.9% reported fourteen weeks ago.

In addition to the sell signals, the lone bear market, China – SSEC, is down 5.8% since the Mid-term Indicant signaled bear 9.0 weeks ago. Its decline is very gradual, but the direction is consistently to the south at this time.

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

September 21, 2003 Indicant.Net Weekly Update

Volume 09, Issue 3 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bull or Bear? – Chapter 5 – One More Month

The market continues to impress. There is little difference the underlying configurations since last week’s report. The only concern right now is the upcoming month of October. October contains Halloween and a history of major market surprises. Trick or treat is the October mantra for the market. So far, the Quick-term attributes do not favor any tricks; nor do they favor tremendous treats. However, your hold positions are very safe right now and have already produced some hefty treats.

The Quick-term configurations remain biased toward movement to the bearish yellow curve. As stated last week, the market can breech the bearish yellow curve without decreasing that much since bearish yellow continues to increase.

Many of last week’s sell signals reversed with buy signals this week. Those laggard stocks are bouncy as they lack commitment to bearish or bullish tendencies. As you can see, though, over 80% of the stocks and funds tracked by the Indicant have been, and currently are, fully committed to expressing bullish behavior.

Twenty-three of the NASDAQ100 stocks have increased by more than 100% since the Mid-term Indicant signaled buy. That is up from twenty-one since last week. Sixty of them are up over 30% since their respective buy signals. That is up from fifty-five from last week.

Sixteen of the seventy-four Indicant Select Stocks are up more than 100% since the Mid-term Indicant signaled buy. That is up from fourteen from last week. Three of the Dow Utility Stocks are up by triple digit amounts since their respective buy signals. The utility sector has been extremely bullish and at several times was the highest performing sector since this bull was born last October.

As you can see, more and more stocks continue to elevate themselves into the elite group of triple digit gainers since the bull market began in October 2002.

Mutual Funds will be a little slower in delivering triple digit gains. As is always the case, the higher the risk; the higher the potential reward and the higher the potential catastrophe. Solid mutual funds minimize risk and thus reward. However, twenty-seven of the seventy-six funds tracked by the Indicant are up by over 30% since their respective buy signals. It is interesting that the two highest performing funds are inflation/fear oriented. Bull markets and the bullish nature of these funds seldom coexist. As long as this bull continues to manifest itself, the fear/inflation funds should depress in price. However, as you will later see, those fear/inflation related funds continue to move north along with this bull market.

Weekly Buy/Sell Summary

The Mid-term Indicant generated six buy signals and three sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. It would not be surprising to see a major market correction between now and the end of October. We will keep you posted on that.

Do not aggressively buy at this time is repeated here. E.g., buy one-hundred shares if you want to buy two-hundred shares. Although the Quick-term Indicant is now signaling bull with the Indicant Volume Indicator continuing to express early robust behavior, bearish seasonality has five weeks remaining to deliver its damage. Again, the Quick-term Indicant will keep you posted on that.

In addition to the sell signals, the Mid-term Indicant is avoiding only 16 stocks and funds of the 296 tracked by the Indicant. The avoided stocks and funds are down an average of 23.2% since the Mid-term Indicant signaled sell an average of 31.4 weeks ago. Six weeks ago, the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 119 stocks and funds. Those stocks and funds were down an average of 30.4% since their respective sell signals 14.3 weeks earlier. Bearish seasonality expects to influence an infection to the other bullish phenomena. This is the time of year with the greatest probability of bearish and volatile behavior. That is why it is recommended to be passive in buying while at the same time being comfortable with your hold positions.

In addition to the buy signals, the Indicant is signaling hold for 271 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 53.8%. That annualizes to 101.7%, which is down from 124.1% fifteen weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 271 stocks and funds for an average of 27.5 weeks.

The stocks/funds with hold signals contrast from one year ago when the Indicant was signaling hold for only seventy-four stocks and funds out of the 296 being tracked. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 27.5 weeks. They were up 13.9% (annualized at 40.0%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002. The market was nearing its secular bottom at this time one year ago and some of the new buy signals for the ensuing bull leg were beginning to occur.

This paragraph is a repeat from the past several weeks. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish year on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5%. Bearish seasonality continues to attempt its influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves a few weeks ago. More and more of them are now finding comfort above their bullish red curves. It has been over three years since most of them enjoyed that lofty position. There will be more about that later in this report.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

Dow #3, Johnson and Johnson, was riding yellow and rebounded solidly to the north two weeks ago. It fell back to the south last week. That was enough to signal sell again. Stocks with this sort of behavior can be frustrating. Many people have difficulty accepting a mistake in buying and continue to hold when the stock nosedives to the south. Do not fall prey to that. Making money is the purpose of investing or trading the market. Sure, sometimes you sell a stock and then watch its meteoric rise to the north. So, when you buy the next time, you think that will happen again. It may or may not. Never hold a stock on yellow, unless otherwise specified by the Indicant. Although it can rebound, the stock has a higher probability of nose-diving in that condition. The Indicant recommended that you buy passively in last week’s buy signal. Now, the suggestion is aggressively selling the stock. Look at the chart. When you compare to other stocks, you can see the configuration of Johnson and Johnson with bearish attributes.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

What is going on in Fuel Cell Technology? Those stocks have been flat and frustratingly bouncy for quite some time. But this past week showed some robust price behavior. Indicant Select Stock #30, Millenium Cell is up 119.3% since the Mid-term Indicant signaled buy on August 16, 2003. That stock exploded north last week all the way through the bullish red curve and the long-term blue curve. That stock has not been above its bullish red since it was an IPO in late 2000. The following is quoted from press releases.

“Millennium Cell's Hydrogen On Demand system is a recyclable, clean-burning energy source that can be used with fuel cells and gas and diesel turbine engines. When used with a fuel cell, the only emission is water vapor. A liquid fuel, it is compatible with existing infrastructure for liquid petroleum fuels, produces about the same amount of energy per gallon as that of gasoline, and is completely safe to produce, store and transport. Millennium Cell's Hydrogen on Demand system generates hydrogen from sodium borohydride, which is derived from sodium borate, commonly known as borax. Dissolved in water and passed through a proprietary catalyst chamber, the sodium borohydride releases a perfect stream of pure hydrogen -- on demand -- to power a fuel cell or an internal combustion engine. The fuel's byproduct is water and borax. “

The fuel cell stocks have been trading on the low-end of their secular patterns for quite some time with several buy and sell signals. This is the first robust stock price movement for the first time in quite some time. Look at the chart on the below link.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#30

Another fuel cell company is Indicant Select Stock #32, Hydrogenic. It is a Canadian based company and is very well managed. The management is a “no-non-sense” type and will be competitive as this newly forming industry unfolds. Companies such as this are OPEC’s worse fears. One may wonder if the technological advances in the West are part of the reason for the East’s hatred of those in the West. Can you imagine $3/barrell oil? Can you imagine paying less than twenty-five cents for a gallon of gas? Middle easterners do not want to see that unfold. Neither does Exxon, Halliburton, or most of Texas. However, reality exerts itself and will eventually over-power the desires of those left behind.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S06.htm#32

Another fuel cell company, Indicant Select #33, Proton Energy, is not faring as well. The management seems to be a little over-paid for the size company they are. The stock could rebound, though, on the recent successes of Millenium.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S06.htm#33

Indicant Stock #26, Nortel, is the highest performing stock. It is up 631.7% since the Mid-term Indicant signaled buy on Oct 18, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#26

The second highest performing stock is N100 #41, Amazon. It is now up 568.3% since the Nov. 1991 buy signal.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#41

NAS100 #45, Imclone is up 465.5% since the Mid-term Indicant signaled buy on October 25, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS08.htm#45

NAS100 #57, BEA Systems, is priced above its bullish red curve for the first time since late 2000. It is up 127.4% since the Mid-term Indicant signaled buy on October 11, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS10.htm#57

Several stocks are similar to BEA Systems. NAS100 #54, LM Erricson, is up 120.3% since the Mid-term Indicant signaled buy on April 19, 2003. Its price is barely above bullish red, while it remains below the long-term blue curve. When and if it crosses the long-term blue curve, its bullish stature will be confirmed.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS09.htm#54

NAS100 #52, Panamsat, is having some difficulty. It is down 7.1% since the Mid-term Indicant signaled sell on August 9, 2003. It approached its bullish red curve a few weeks ago and then retreated. As you can see from the chart, it has not been above bullish red since early 2000. Stocks such as this are the weaker ones. The Mid-term Indicant signaled buy for this stock on March 22, 2003 at $14.97 and then signaled sell on August 9, 2003 at $16.04 for a mere 7.1% gain less commissions. Stocks such as this one are difficult to make you money, but as the economy improves, it may join the list of triple digit gainers. Remember, never hold a stock or fund that is on yellow unless the Mid-term Indicant specifies otherwise. Stocks trading on the low-end of their secular movement offer the greatest risk and reward.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS09.htm#52

NAS100 #30, Cisco Systems, is now above its bullish red curve and the long-term blue curve for the first time since 2000. It is up 56.9% since the Mid-term Indicant signaled buy on March 15, 2003. As you can see, this stock expressed no timidity when it crossed above both the bullish red curve and the long-term blue curve. This stock has strong fundamentals and appears technically positioned to enjoy long-term gains. The company is very well managed.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS05.htm#30

NAS100 #39, Medimunne, is having difficulty finding comfort above its red curve and its blue curve. This stock is a member of the volatile and recently weak health-care sector. The Mid-term Indicant continues to signal hold even though the stock is down 4.4% since the buy signal. Stocks that are down with hold signals are sometimes excellent buying opportunities, but at this time of year and in the face of October, be conservative if you elect to buy.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#39

A recent example of a stock that was down after the Mid-term Indicant signaled buy is NAS100 # 75, Nvidia. It was down 5% on August 30, 2003 after the buy signal a week earlier. It is now up 8.7% since the Mid-term Indicant signaled buy on March 23, 2003. If you bought on August 30, you would be up 13.7%. You can see this stock did not find comfort above its bullish red curve. It is behaving with no commitment one way or the other. Be conservative in your buying at this time of year. Expect increased volatility in the next few weeks.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS13.htm#75

NAS100 #49, Atmel, is above red but slightly below its long-term blue curve. You can see the price struggling a little around the bullish red curve. This is the first time this stock has been above the bullish red in over three years. It is up 151.7% since the Mid-term Indicant signaled buy on March 15, 2003.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS09.htm#49

Warren Buffet’s prior held stock, Indicant Select Stock #6, Level 3 Communications, continues to move south. It is down 9.5% since the Mid-term Indicant signaled sell on July 19, 2003. As you can see, its bullish red curve is below its long-term blue curve. That is an extremely weak. Although it can rebound, the Mid-term Indicant continues to signal avoid.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S01.htm##6

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

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

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

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

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The Quick-term Bull is up 1.7% since the Quick-term Indicant signaled bull on September 6, 2003. That annualizes to 47.0%. The Quick-term Indicant seldom signals bull in September. The fortitude of the overall bull market is extraordinarily strong.

Force Vectors have been oscillating with short up and down waves. They are just above the neutral zone in bullish domains. The quick oscillating cycles reveal the market is not committed for a burst in one direction or the other. There is a slight bias in favor of bearish behavior even though most of the attributes reside in bullish domains. Vector Pressure remains positioned slightly into bullish domains. As stated last week, the market lacks a QT commitment in one direction or the other.

All eight major indexes are red bulls. Overall, the eight indexes are above the bullish red curve by an average of 1.6%. That suggests your more mature holdings are safe. The recent buys are at the most risk.

The eight major indexes are above the bearish yellow curve by 6.5%. It would not be surprising to see the markets drift back to yellow. The market does not have to fall by 6.5% for a retreat to bearish yellow since the bearish yellow is increasing. It would be healthy for the bull to retreat to yellow with a slight lateral to southeasterly movement on the charts.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator continues to demonstrate early stages of robust behavior. If the market moves down on rapidly increasing volume, sell your marginal holdings (E.g., winners with less than a 30% gain since your buy signal).

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are up by an average of 8.8% (annualized at 81.2%) since their respective bull signals. The Dow is up 4.6% (annualized at 43.4%). The NASDAQ is up 13.0% (annualized at 124.5%). It would be surprising if this Short-term Bull lasted through September due to bearish seasonality. However, with only one week remaining this bull has expressed surprising fortitude during this period of bearish seasonality.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20DJIA1995-2002.htm

A link to the NASDAQ’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20NAS1995-2002.htm

Perspectives

The major indexes continue to engage the breakout curves. That is a clear indication the great bear market from March 2000 through October 2002 has now ended. One can expect bullish behavior through most of 2004 based on the presidential pre-election year phenomenon. The second best year of historical market performance on the presidential election year cycle is the election year.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Volatility Index reversed course last week and weakened again. This index has been depressed for quite some time and is configured at a bottom. It has been on the bottom for several weeks now and looks as if it completely drowned. However, it still has life and will eventually rebound. Its Force Vector crossed back into bearish domains late last week is also expressing those quick oscillating movements, but with a slight bias that supports bullish behavior. The Mid-term Indicant continues to signal Bull for the Volatility Index because of the Quick-term bias. Remember, the Volatility Index runs inversely to the overall stock market. The stock market will express bearish behavior on the Volatility Index’s bullish cycle

Divergence versus Convergence

Nearly all sectors are moving in a bullish direction. The energy sector is the only sector with bearish direction and position, but its constituents are mixed. Even precious metals is expressing strong bullish behavior with the general stock market. That configuration cannot exist in the long-term, as there is a conflict in driving principles.

Economic Outlook

Not much changed the past three weeks.

The U.S. Dollar continues to be cyclically weak, but rebounding slightly against world currencies. A continuing rebound in the current economic environment favors bullish sentiment. As stated last week, any erosion in the greenback will accelerate an interest in increasing interest rates. The market will not like that. For those of you, who like bull markets, root for a stronger dollar. Of course, the presidential pre-election year phenomenon will also influence that sort of behavior. Click the following link to view the dollars positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices for the raw materials. The higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

http://www.indicant.net/Members/Updates/Economic/E03.htm

Interest rates are remaining at historically low levels. The three-month T-Bill continues to inch upward, along with CD’s. The Freddie Mac and Fannie Mae mortgage rates reversed their northward movement last week with a drop in rates.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-seven weeks ago, it was up 66.1% since that buy signal. Sixty weeks ago, it closed up 12.0% since that buy signal. Fifty-one weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 85.5%, which is significantly higher than 47.1% reported nine weeks ago. The current annualized growth rate is 47.2%, which is up from 28.8% reported nine weeks ago. Last week, it was up slightly.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-five weeks ago since the MTI buy signal in April 2001. Fifty-eight weeks ago, it closed up 30.1%. Last week it closed up 94.8%, which is higher than the 75.9% reported six weeks ago. The current annualized growth rate since the April 13, 2001 buy signal is 38.2%, which is higher than 23.1% nine weeks ago. It gained a couple of percentage points last week.

As stated in the past you can monitor the above two funds and the options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

Twenty-one weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 41.2%, which is up significantly from 18.8% reported eight weeks ago. The annualized growth rate is 105.9%, which more than doubles the 50.7% reported nine weeks ago, but lower than 142.5% reported thirteen weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

The Quick-term Gold Options Index is a solid red bull right now. Its Force Vector and Vector Pressure suggest it should move laterally in the next few days.

Mid-term Indicant Positions - Major U.S. Market Indices

All eight major indexes are Mid-term Bull markets. They are up an average of 13.5% for an annualized gain of 45.9% since the MTI Bull signals an average of 15.3 weeks ago. The annualized growth rate is down slightly from 47.9% reported thirteen weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums. The market has not actually drifted to the southeast, but has barely kept ahead of time and thus the little change in the annualized growth rate.

The DJIA is up 13.2% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 34.1% since the March 22, 2003 MTI Bull signal. That annualizes to 126.6%, which is up from 80.9% reported eight weeks ago.

None of the eight major indices is now bears. We have been expecting a reversal sometimes in September. It appears this will not be the case, but do not be surprised at increased volatility in the next few weeks. So far, the presidential pre-election year phenomenon has been overruling normal seasonality.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture. 

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 59.5% since the Mid-term Indicant signaled bull an average of 44.0 weeks ago for an annualized gain of 70.3%, which is down from 72.9% reported thirteen weeks ago. The International Mid-term Bulls are outperforming the U.S. Mid-term Bulls as the hungrier are outperforming the haves.

The lone bear market, China – SSEC, is down 5.8% since the Mid-term Indicant signaled bear 7.0 weeks ago.

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

September 14, 2003 Indicant.Net Weekly Update

Volume 09, Issue 2 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bull or Bear? – Chapter 4 and Marginal Performing Stocks/Funds.

The market continues to express bullish behavior. Not much changed since last week, but do not be surprised if the bull relaxes in the next few days and weeks. This bull has been raging since last March. It is a little winded.

The Mid-term Indicant signaled New Bull for the Volatility Index and New Bear for the Oil Well Services Index. That is somewhat of a conflict as it is more common on a secular basis for both these indexes to parallel one another. Another conflict was the Pharmaceutical Index also receiving a New Bull signal. It is unlikely the Volatility Index and the Pharmaceutical Index will yield simultaneity in growth.

Even though the Indicant is signaling hold for over 95% of the stocks and funds it tracks, the six buy signals and six sell signals highlights the fact that the market is at an inflection point. Last week, it was suggested the market would pull back to its Quick-term Red curve. That is exactly what it did. Now, there is an increasing likelihood the market will bias its direction to the upward moving Quick-term bearish yellow curve. Right now, the eight major indexes are well above the bearish yellow curve. It is possible for the market to drive to the bearish yellow curve without decreasing that much since the bearish yellow is increasing. The current Quick-term configurations suggest that scenario.

Twenty-one of the NASDAQ100 stocks have increased by more than 100% since the Mid-term Indicant signaled buy. Over half are up more than 30% since the Mid-term Indicant signaled buy. The remaining forty-five stocks are up by less than 30%. Those stocks with hold signals are marginal performers. They will decrease the most with a market correction to the south. The stronger stocks will stabilize or take minor dips.

Fourteen of the seventy-four Indicant Select Stocks are up more than 100% since the Mid-term Indicant signaled buy. Many of the Indicant Select Stocks are former NASDAQ100 stocks. They tend to outperform the NASDAQ100 stocks. Once a company moves into the elite group, celebrations unfold. Management succumbs to lack of focus in their daily affairs. Performance drops off as management is liquored with success. That is human nature. There are a few exceptions, but for the most part, the market can cool because of that alone. That is why the S&P600 Index enjoyed a significant bull market last year. Those folks just keep on working hard.

The current bull market must cool off. October is a very threatening time of year. It is the most volatile month. It is where markets typically find cyclical bottoms. The Quick-term Indicant will keep you posted on that. The concern is not necessarily about selling as it is in not buying. The most critical time in investing in stocks and funds is just after you buy it.

This bull market began last October, where the prior secular bear market ended. The Quick-term Indicant is revealing more and more of a market that lacks commitment. The good news is that there is no committed direction to the south. The bad news is that this bull is tiring. The Quick-term attributes will definitely be more revealing in the days ahead. As long as the signals are mixed, expect steady state behavior. You will be notified once the Quick-term attributes reveal more commitments one way or the other. If the Quick-term Indicant signals bear, you should quickly unload your marginal performers - those stocks that are up less than 30% since their respective buy signals.

Mutual Funds are not nearly as volatile as stocks. Any fund that is up less than 10% is marginal. Consider your exit costs and recognize the market should resume its bullish direction in 2004 even though there may be a correction in the next few weeks. Right now, fifty-four of the seventy-six funds are up more than 10% since the Mid-term Indicant signaled buy. Most of those buy signals occurred in March 2003. The first set of buy signals occurred last October, but the worse December since 1931 prompted a huge number of sell signals earlier this year. The funds continued to move north for most of this year. Now, they are resting somewhat along with the bull market.

There will be more about this in the Quick-term Indicant section and the Mid-term Index Options later in this report.

Weekly Summary

The Mid-term Indicant generated six buy signals and six sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. It would not be surprising to see a major market correction between now and the end of October. We will keep you posted on that.

Do not aggressively buy at this time is repeated here. E.g., buy one-hundred shares if you want to buy two- hundred shares. Although the Quick-term Indicant is now signaling bull with the Indicant Volume Indicator expressing early robust behavior, bearish seasonality has six weeks remaining to deliver its damage.

In addition to the sell signals, the Mid-term Indicant is avoiding only 16 stocks and funds of the 296 tracked by the Indicant. The avoided stocks and funds are down an average of 22.7% since the Mid-term Indicant signaled sell an average of 31.1 weeks ago. Five weeks ago, the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier. The primary reason for the lower level performance of the avoided stocks is Enron. It was sold in February 2001. Enron is more influential on the performance statistics with very few avoided stocks, which is the current situation.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 101 stocks and funds. Those stocks and funds were down an average of 32.0% since their respective sell signals 16.9 weeks earlier. Bearish seasonality will eventually infect other bullish phenomena. This is the time of year with the greatest probability of bearish and volatile behavior.

In addition to the buy signals, the Indicant is signaling hold for 268 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 51.4%. That annualizes to 96.9%, which is down from 124.1% fourteen weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 268 stocks and funds for an average of 27.6 weeks.

The stocks/funds with hold signals contrast from one year ago when the Indicant was signaling hold for 101 stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 10.6 weeks. They were up 8.0% (annualized at 39.3%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002. The market was nearing its secular bottom at this time one year ago and some of the new buy signals for the ensuing bull leg were beginning to occur.

This paragraph is a repeat from the past several weeks. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish year on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5%. Bearish seasonality continues to attempt its influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves. There is a retreat in process, but the bullish behavior since March 2003 continues to express obstinacy. The battle is like a seesaw right now. Bearish seasonality should eventually overpower the presidential pre-election year bullish influences, but it will be short lived. Prior to now, such a correction was believed to be mild. The longer there is no correction, the less mild it will be. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

Dow #3, Johnson and Johnson, was riding yellow and rebounded solidly to the north last week. That move was solid enough for the Mid-term Indicant to signal buy. If you elect to buy, then buy passively.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

Indicant Select Stock #74, Varco, is riding yellow to the south. The Mid-term Indicant continues to avoid this stock. The configuration of this stock is inconsistent with solid bull market behavior. Convergent movement in direction supports solid bull market behavior. We enjoyed that configuration last October and again last March. Right now, we are not enjoying such predictable market behavior. The Mid-term Indicant signaled bear for the Oil Well Services Index. Varco is in that group of stocks. That group is fading with a few exceptions. Halliburton is one such exception.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S13.htm#74

Indicant Stock #26, Nortel, is the highest performing stock. It is up 547.6% since the Mid-term Indicant signaled buy on Oct 18, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#26

The second highest performing stock is N100 #41, Amazon. It is now up 541.6% since the Nov. 1991 buy signal.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#41

Surprisingly, NAS100 #45, Imclone is up 469.0% since the Mid-term Indicant signaled buy on October 25, 2002. If Martha Stewart bought that stock after she dumped her shares, she could afford even more legal help.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS08.htm#45

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

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

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

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

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The Quick-term Bull is down 0.3% since the Quick-term Indicant signaled bull on September 6, 2003.

Force Vectors are oscillating with short up and down waves. They are just above the neutral zone in bullish domains. The quick oscillating cycles reveal the market is not committed. There is a slight bias in favor of bearish behavior. That bias was again introduced with last Friday’s close. The biasness attributes have been expressing nervous behavior the past few weeks. Nervousness is defined as repeatedly and quickly changing bias.

Vector Pressure remains positioned slightly into bullish domains. As stated last week, the market lacks commitment in one direction or the other.

Seven of the eight major indexes are red bulls. Overall, the eight indexes are above the bullish red curve by an average of 0.5%. That suggests your more mature holdings are safe. The recent buys are at the most risk. As stated last week, it would not be surprising to see the market drift back to the red curve this coming week. That is exactly what happened.

The eight major indexes are above the bearish yellow curve by 5.7%. It would not be surprising to see the markets drift back to yellow. A gentle lateral movement to the southeast is preferred. The Quick-term attributes currently support that right now.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator continues to demonstrate early stages of robust behavior. If the market moves down on rapidly increasing volume, sell your marginal holdings (E.g., winners with less than a 30% gain since your buy signal).

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are up by an average of 6.4% (annualized at 59.4%) since their respective bull signals. The Dow is up 2.8% (annualized at 30.5%). The NASDAQ is up 10.0% (annualized at 113.6%). It would be surprising if this Short-term Bull lasted through September due to bearish seasonality.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20DJIA1995-2002.htm

A link to the NASDAQ’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20NAS1995-2002.htm

Perspectives

The major indexes continue to engage the breakout curves. That is a clear indication the great bear market from March 2000 through October 2002 has now ended. One can expect bullish behavior through most of 2004 based on the presidential pre-election year phenomenon. The second best year of historical market performance on the presidential election year cycle is the election year.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Volatility Index reversed course late last week and is configuring early signs of bullish behavior. Its Force Vector crossed into bullish domains after the close last Friday. This prompted the Mid-term Indicant to signal bull for the Volatility Index. Remember, the Volatility Index runs inversely to the overall stock market. The stock market will express bearish behavior on the Volatility Index’s bullish cycle.

Divergence versus Convergence

Last week, it was stated Pharmaceuticals were primed for a Quick-term spurt to the north. That was the strongest sector last week. Last week, it was stated Energy’s recent bullish Quick-term cycle appears to be softening. That sector continued to weaken last week. Market divergence patterns are forming right now. There is nothing on the horizon to reveal convergence synergies. That is another attribute of a tiring bull market.

Economic Outlook

Not much changed the past two weeks.

The U.S. Dollar continues to be cyclically weak, but rebounding slightly against world currencies. A continuing rebound in the current economic environment favors bullish sentiment. As stated last week, any erosion in the greenback will accelerate an interest in increasing interest rates. The market will not like that. For those of you, who like bull markets, root for a stronger dollar. Of course, the presidential pre-election year phenomenon will also influence that sort of behavior. Click the following link to view the dollars positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices for the raw materials. The higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

http://www.indicant.net/Members/Updates/Economic/E03.htm

Interest rates are remaining at historically low levels. The three-month T-Bill continues to inch upward, along with CD’s. The Freddie Mac and Fannie Mae mortgage rates reversed their northward movement last week with a drop in rates.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-six weeks ago, it was up 66.1% since that buy signal. Fifty-nine weeks ago, it closed up 12.0% since that buy signal. Fifty weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 83.6%, which is significantly higher than 47.1% reported eight weeks ago. The current annualized growth rate is 46.7%, which is up from 28.8% reported eight weeks ago. Last week, it was down slightly.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-four weeks ago since the MTI buy signal in April 2001. Fifty-seven weeks ago, it closed up 30.1%. Last week it closed up 88.4%, which is higher than the 75.9% reported four weeks ago. The current annualized growth rate since the April 13, 2001 buy signal is 36.0%, which is higher than 23.1% eight weeks ago. It lost a couple of percentage points last week.

As stated in the past you can monitor the above two funds and the options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

Twenty weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 36.7%, which is up significantly from 18.8% reported seven weeks ago. The annualized growth rate is 99.3%, which nearly doubles the 50.7% reported eight weeks ago, but lower than 142.5% reported twelve weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

The Quick-term Gold Options Index is a solid red bull right now. Its Force Vector and Vector Pressure suggest it should move laterally in the next few days.

Mid-term Indicant Positions - Major U.S. Market Indices

All eight major indexes are now Mid-term Bull markets. They are up an average of 11.2% for an annualized gain of 40.8% since the MTI Bull signals an average of 14.3 weeks ago. The annualized growth rate is down slightly from 47.9% reported twelve weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA is up 11.1% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 30.5% since the March 22, 2003 MTI Bull signal. That annualizes to 113.4%, which is up from 80.9% reported seven weeks ago.

None of the eight major indices is now bears. Expect a reversal sometimes in September. So far, the presidential pre-election year phenomenon has been overruling normal seasonality.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 57.8% since the Mid-term Indicant signaled bull an average of 43.0 weeks ago for an annualized gain of 69.9%, which is down from 72.9% reported twelve weeks ago. The International Mid-term Bulls are outperforming the U.S. Mid-term Bulls as the hungrier are outperforming the haves.

The lone bear market, China – SSEC, is down 4.6% since the Mid-term Indicant signaled bear 7.0 weeks ago.

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

September 7, 2003 Indicant.Net Weekly Update

Volume 09, Issue 1 ISSN 1526 6516 © The Indicant Stock Market Report

Dear Indicant Members:

This Week’s Report

Bull or Bear? – Chapter 3

The Indicant Volume Indicator aborted its lethargic cycle late last week. Interestingly, that abortion occurred on both an increasing market and a decreasing market. Since the configuration of all eight major indexes has red bull attributes, the Quick-term Indicant signaled bull. Now, the Quick-term, Short-term, Mid-term, and Long-term Indicant models are congruent with all signaling bull. The market is definitely bullish. At issue is the next seven weeks. That is the amount of time remaining for Bearish Seasonality and heightened market volatility. There will be more about the Quick-term Indicant later in this report.

The Dow is up 12% since April 30, 2003, which was the last day of Bullish Seasonality. Bearish Seasonality occurs from May 1 – Oct 31 each year. Since 1950, the Dow has increased by more than 12% during Bearish Seasonality (May 1 – Oct 30) only twice. That phenomenon occurred in 1980 and 1982 when supply side economics became popular. Remember that a $10,000 investment since 1950 would be worth $8,295 if invested only during the May 1 – Oct 31 (Bearish Seasonality period). That contrasts with the $457,103 portfolio value if invested in the Nov 1 – Apr 30 period (Bullish Seasonality).

There are only seven weeks of Bearish Seasonality remaining this year. As you can see, the market’s behavior this year has been extraordinary. The presidential pre-election year phenomenon has influenced this profound bullish behavior. It sounds like mysticism, but the numbers speak for themselves.

The Dow is up 14% so far this year. As you can see, most of that increase occurred during Bearish Seasonality with 12% increasing since April 30, 2003. The NASDAQ is up a whopping 39% for the year. None of the major indexes have attained their 2002 highs. The S&P600 has to rise only 4% to hit its 2002 high. The NASDAQ100 is the most depressed since its 2002 high. It must rise another 23%. Interestingly, the NASDAQ Composite must rise only 11% to hit its 2002 high.

Will the markets attain their 2002 highs in 2003? Who knows and who cares. The Indicant only cares about market direction. Forecasting magnitude is impossible. When one does that successfully, chalk it up to luck. When one engages in the act of luck, they eventually fall victim to bad luck.

Interestingly, the S&P600 (Small Caps) and S&P400 (Mid Caps) are within 4% and 5% of their all time highs. Even though 2002 was a bear market, the Small Caps and Mid Caps were bullish. Those who have some or all of their own money in their respective enterprises typically manage those companies. They have not yet developed slumbering bureaucracies or ego driven behaviors. Such companies do not have time for cronyism and lazy-hazy management behavior.

The S&P100 and S&P500 must rise 50% and 62%, respectively, to achieve their all time highs. That is not going to happen this year or next. The residual effects of voodoo bookkeeping and dilettante management will continue to produce an adverse impact on the larger companies where dilettantes tend to gravitate. Large Caps tend to fall prey to cronyism and bureaucratic blundering. They also are into academic credentialism whereby their hirelings tend to take it easy because they have already proven how smart they are by making good grades in the finest institutions. It is too bad many professors convey the false merits of socialism on their students. That indirectly hurts your stock prices. Watch your management team. Adverse behavior can change quickly.

The NASDAQ and NASDAQ100, however, must increase the most to achieve their all time highs. The NASDAQ needs to increase 172% and the NASDAQ100 must climb 245% to return to their all time highs. The demise of the NASDAQ100 this century cannot be attributed to cronyism, dilettante management, voodoo bookkeeping, and academic credentialism. The problem with the NASDAQ and NASDAQ100 is that their all time highs were phony.

Remember the three primary groups that deliver economic wealth. They are manufacturing, extraction, and agriculture. Without those three elements, there is no economy. Some of the NASDAQ100 companies participate indirectly in the wealth producing economies, but most of their participation is minor. Also, much of the NASDAQ’s rise in stock prices was attributable to the Y2K fears at the end of the last century. That is gone and so is the easy money the NASDAQ companies got from their continual marketing of the catastrophic failures of Y2K that never happened. They were appropriately punished on the open markets for their false marketing. But, who can blame them. Some sold out at NASDAQ = 5,000. Greed is good, but one’s successful achievement of greedy pursuits comes at the expense of another. Thus, the Indicant was invented.

The blue chips, the Dow30, and the Dow Composites are middle of the road. They must increase by 23% and 24% respectively to reach their respective all time highs. That is very possible before the 2004 elections. It is unlikely the NASDAQ and NASDAQ100 will return to their all time highs before the end of this decade. However, the S&P400 (mid caps) and S&P600 (small caps) will attain their all time highs before the end of the year.

The blue chips survive and even prosper by their ability to manage their portfolios. The blue chip companies have outstanding management processes. Unfortunately, all of them will eventually evaporate. None of the current Dow stocks will be in business one-hundred years from now. Some of you reading this will be around at that time. That possibility exists with the biotechnology group and overzealous birth control practices. The death rate must decline as the birth rate has already declined. The world’s population will be in decline for the first time since the beginning of this planet around 2050. Most economic models and business processes depend on an increasing population. We will start monitoring that closely around the year 2030.

The Indicant is probably ahead of its time. It has an upward limit on membership. Continuing growth would jeopardize the integrity of its models through the phenomenon of commonality. It is amazing how many companies mass market their stock market secrets. Hmmm! Once successfully mass marketed and no longer a secret, those models will not work. It happens all the time. You will never buy an Indicant model on a CD. You will always have to go to its Web site and log on.

The majority of trader types must lose for the market to work. The winners must be a minority. That is why over 80% of day traders lose all their money. Think for a second. If you figured out the stock market, why would you feel compelled to share that secret with millions of other people? They are your competitors. Why show your competitor how you win? One’s former success meets failure with the attainment of critical mass.

Not surprisingly, the two indexes that have climbed the most this year are the most depressed from their all time highs. The NASDAQ and NASDAQ 100 are up 39% and 38% this year, but must climb 172% and 245% to return to their all time highs. The Dow30 and Dow Composites are up 14% and 15% this year and must climb another 23% and 24% to reach their all time highs. That is obviously very possible.

The dilettante driven S&P500 and S&P100are up 16% and 15% this year and must increase 50% and 62% to get to their all time highs.

The S&P400 and S&P600 are up 22% and 26% this year and only need to rise another 5% and 4% to catch their all time highs, which occurred in last year’s bear market. Some of these relationships are management-driven while others are industry driven. The technology sector is very reminiscent of the petroleum industry of the 1980’s. All things can only improve or grow at a steady rate. Rapid declines typically follow rapid improvement. The eventual decline from a steady growth rate is shallower than the explosive growth/bust cycles.

As stated last week, the most bearish month of the year is September. Since 1950, the Dow lost 2,821.27 points in the month of September. The Dow was up only nineteen times in September. It was down thirty-four times. It is the worse month of the year. The Quick-term Indicant’s signaling of Bull could be the shortest Quick-term Bull on record. It may last only one day. The indexes are going to return to their red curves in the next few days. The Quick-term Indicant will be reviewing that behavior along with the relative positions of the Force Vectors and Vector Pressure. There will be more about that later in this report.

Last week, many of the Quick-term attributes were neutral. A few weeks ago, they were neutral to slightly bearish. This past week revealed a slight slant toward bullish behavior. The Quick-term Indicant will be quick to signal bear at this time of year. There will be more about that later in this report.

Weekly Summary

The Mid-term Indicant generated ten buy signals and four sell signals for stocks and funds. As stated the past few weeks, it is not the time for aggressive buying. It would not be surprising to see a major market correction between now and the end of October. We will keep you posted on that. October is a month of maximum volatility and tends to be the month to lay in a low blow to euphoric market behavior.

Do not aggressively buy at this time is repeated here. E.g., but one-hundred shares if you want to buy two hundred shares. Although the Quick-term Indicant is now signaling bull with the Indicant Volume Indicator expressing early robust behavior, bearish seasonality has seven weeks remaining to deliver its damage.

In addition to the sell signals, the Mid-term Indicant is avoiding only 18 stocks and funds. The avoided stocks and funds are down an average of 8.0% since the Mid-term Indicant signaled sell an average of 13.5 weeks ago. Four weeks ago, the avoided stocks were down 11.0% from their respective sell signals an average of 15.0 weeks earlier. As you can see the market’s rebound to the north has caused some of the avoided stocks to move up.

The avoided stocks and funds contrast with one year ago when the Indicant was avoiding 75 stocks and funds. Those stocks and funds were down an average of 41.5% since their respective sell signals 21.7 weeks earlier. Bearish seasonality will eventually infect other bullish phenomena. This is the time of year with the greatest probability of bearish and volatile behavior.

In addition to the buy signals, the Indicant is signaling hold for 264 of the 296 stocks and funds currently tracked by the Indicant. The stocks and funds with hold signals are up an average of 51.6%. That annualizes to 96.9%, which is down from 124.1% thirteen weeks ago, but up from 50.2% reported on February 15, 2003. The Mid-term Indicant has been signaling hold for these 264 stocks and funds for an average of 27.7 weeks. The stocks/funds with hold signals contrast from one year ago when the Indicant was signaling hold for 188 stocks and funds. At that time, the Mid-term Indicant was holding those stocks and funds for an average of 8.7 weeks. They were up 5.8% (annualized at 35.1%). Many of those stocks and funds continued to climb in the face of a severe bear market in 2002. The market was nearing its secular bottom at this time one year ago and some of the new buy signals for the ensuing bull leg were beginning to occur.

This paragraph is a repeat from the past several weeks because some of you get distracted with summer time activities. We want to make certain you understand this. The mid-term election year phenomenon found the market bottom, right on cue in 2002. The pre-election year phenomenon, which is the most bullish years on the presidential election cycle, will regain influence a few weeks from now. The following link will take you to charts that explain this phenomenon, which is currently underway and for you to enjoy. It is in a “members only” section. This paragraph will be repeated throughout this year.

http://www.indicant.net/Members/Updates/History-Seasonal/HS0100.htm

Make certain you read the entire page on the above link. You will see there are exceptions. So far, this year does not appear to be an exception. If it becomes an exception, the Quick-term Indicant and the other Indicant models will let you know. Right now, the Quick-term and Short-term Indicant is signaling bear, but that can change quickly since this is a presidential pre-election year.

Stop Loss Management

Maintain tight stop losses of 5%. Bearish seasonality continues to attempt its influence on the market’s direction. Many of the stocks and funds did not find comfort above their respective red curves. There is a retreat in process, but the bullish behavior since March 2003 continues to express obstinacy. The battle is like a seesaw right now. Bearish seasonality should eventually overpower the presidential pre-election year bullish influences, but it will be short lived. Prior to now, such a correction was believed to be mild. The longer there is no correction, the less mild it will be. It is just as important to contact your broker and enter stop losses as it is in buying and selling.

As stated last week, summer time doldrums are becoming dominant. Bullish obstinacy continues to counter summer time doldrums. Will it be a nasty correction to the south or subtle lateral movements with a general drift to the southeast? There is an increasing likelihood of a sharp drop sometime between now and October 31. There is no danger of that in the next few days as the Force Vectors are in bullish domains, although weakening somewhat.

Use either a 5% trailing stop loss or the yellow or green values you will find on the tables. If your stock or fund is above the yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 5% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 5% trailing stop loss. If you are up by triple digit amounts and enjoy your ownership of the stock or fund, then use a 15% trailing stop loss or the slow moving blue curve price. If you really enjoy holding the stock, keep a close eye on the management. Dilettante managers have a way of worming into the business. Watch closely for cronyism and lazy-hazy management dialog. Keep your eye on lavish spending. Those types are more interested in burning your money for their pleasures, as opposed to making you money.

In a few instances, you will see a hold signal for a stock or fund that is down from its buy signal or below one of the above conditions for selling. If you are more of a trader than an investor, feel free to buy stocks and funds in those “bearish” conditions. They are configured for a possible rebound, while at the same time, it is important to set the stop losses mentioned in this report. The magnitude of any bull legs is not as strong during bearish seasonal periods, which began on May 1, 2003. However, the phenomenon of the bullishness inherent in presidential pre-election years is currently over-powering bearish seasonality. At least that was the case last week, which conflicts with the current configurations of the Quick-term Indicant. The battle rages on.

Based on the time of year and the current configurations of the Quick-term Indicant, now is not a good time for aggressive buying. If you elect to buy at this time, make certain you establish the prescribed stop losses when you place your order.

Comments about Stocks and Funds

It is interesting that many of the recent sell signals were quickly followed with buy signals. This phenomenon occurred right in the heart of bearish seasonality. Many stocks are configured with inflection point attributes. That means they lack a current commitment in one direction or the other, but will eventually take one or the other.

NASDAQ100, #27, Express Scripts is one such stock. It is on yellow, which is usually a good reason for selling. However, this stock is above the long term blue. During bull markets, it is advisable to hold stocks that are above their long-term blue curves. There is an increased probability that you will get to enjoy a long-term capital gain. As always, the market is never friendly to management stupidity, regardless of the underlying trend to the market. Each company stands alone.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS05.htm#27

NASDAQ100, #39, Medimmune is having difficulty remaining above any of the trend curves. It found discomfort above the bullish red and could not hold above the bearish yellow. Consequently, it got a sell signal with a 35.6% profit, less commission expense.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#39

A few weeks after September 11, 2001, the Quick-term Indicant signaled bull on October 4, 2001. The Mid-term Indicant generated several buy signals during October and November 2001. Most of those buy signals were followed with sell signals during early 2002. However, one of the stocks with a late 2001 buy signal has done very well. NAS100 #41 Amazon is up 553.4% since its November 1, 2001 buy signal. That was about the time Amazon reported its first profit. Many other stocks received buy signals in late 2001, as well. Most of them received sell signals shortly thereafter. Amazon continued to rise even during the great bear leg of 2002. The greed part of you suggests that you wish you had put your entire life’s savings into Amazon in late 2001. Greed is a good thing, but remember that all things in moderation will eventually prevail. Try your best to avoid investing more than 10% of your investment resources into a single stock. Management stupidity can be introduced at any moment. Also, Wall Street can manipulate at will. There is no such thing as a sure thing.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS07.htm#41

NAS100 #35, Symnatech is exploding to the north. That companies’ products detect computer viruses and worms. That stock is up 82.2% since the Mid-term Indicant signaled “buy” exactly one year ago. It was one of those early buy signals that preempted the current bull market. That stock is behaving exactly as we like them to. It came off the blue curve and moved passively to the north. For those of you who invested in it have a great opportunity to enjoy a long-term capital gain. The recently exploding stock price supports that prognosis of a nice long-term capital gain.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS06.htm#35

Speaking of worms, the Mid-term Indicant has been understating performance on NAS100, #50, eBay for a few weeks now. You will notice that last week, the Mid-term Indicant stated the stock was down since its Oct 11, 2002 buy signal. It is actually up 87.7%. A worm prevented the Indicant from capturing the stock split that occurred earlier this year. The chart was fine, but the statistics were wrong.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS09.htm#50

NAS100, #61, Biogen is down slightly since the recent buy signal. As you can see, the stocks trend is south, even though yellow suggests a recent cyclical movement to the north. It is in the Healthcare Sector in the Biotechnology and Drugs Industry. The Biotech group is bullish while pharmaceuticals are bearish. The more a company has to deal with the FDA, the less likely they can enjoy robust growth. It is amusing how analysts’ opinions are 3.1 this week and last week with 1.0 being a strong buy and 5.0 being a strong sell. While there was no analysts’ opinions for Symnatech last week or this week and that stock exploded north. It is a wonder why analysts even exist. They serve absolutely no purpose. That is another reason why the Indicant was invented. Many will make 100 predictions. Half will be wrong and half will be right. They will take the half that was right and retroactively tell you how smart they were. They will tend to ignore the their wrong half. The Indicant tells the whole story and even keeps a visual record of its past advice.

The link to the Biogen chart is below. If you buy, make certain you mentally prepare for a quick sell signal. However, the Biotechnology sector is now in its own period of bullish seasonality and the stock may hold for a long period.

http://www.indicant.net/Members/Updates/MTI-Stks-NAS100/NS11.htm#61

Indicant Select Stock #26, Nortel, is up 550.8% since the Mid-term Indicant signaled buy on October 11, 2002. It will be interesting to see how this stock behaves as it is now above the bullish red curve for the first time since the NASDAQ bubble. You will notice the chart is logarithmic since the stock traded near $100 per share in the bubble years. The Mid-term Indicant signaled buy at $0.63 last October. It is now over $4.00 a share. Will the stock find discomfort above the bullish red curve? The stock should move with an increasing likelihood to its long-term blue curve before finding discomfort. Expect some volatility though in the next few weeks. However, notice the movement has been solid and robust.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S05.htm#26

Indicant Select Stock #11, Ariba, moved above green last week. Consequently, the Mid-term Indicant signaled buy. As you can see from the chart, that stock has struggled maintaining a consistent pattern. Passive buying would be appropriate for that stock and at this time of year.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S02.htm##11

Indicant Select Stock #43, Corning, has also moved above its red curve for the first time in years. The stock is still below its long-term blue curve. They have a great product with significant long-term potential in fiber optics. The problem is that they are a big company with big company pitfalls. However, the stock is up 265.0% since the Mid-term Indicant signaled buy on November 8, 2002.

http://www.indicant.net/Members/Updates/MTI-Stks-Indicant%20Sel/S08.htm#43

Dow #3, Johnson and Johnson, has attributes consistent with a tiring bull. It is a good company, but also a big company. Even though the stock could rebound, you can see it would be a high risk buy at this time. It is better not to fight the trend at this time of year. The stock is down 2.0% since the Mid-term Indicant signaled sell on June 28. You will notice there was a slight rebound last week but lacks the desired robustness for a solid move to the north.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#3

Dow # 6, General Motors, is not a stock we often discuss. The company is huge and has been losing market share steadily for the past twenty years. It epitomizes big company issues with bureaucracy and a lack of focus on improving process. GM is sort of like GE. Rather than improving their manufacturing processes, they are getting out of the manufacturing business. That will help profits in the short-term. General Motors will continue to get more and more parts from Japanese producers in its effort to survive.

GM’s stock is up 18.3% since the Mid-term Indicant signaled buy on March 22, 2003. The company is still huge and can make money with money, unlike most other companies. They will continue joint ventures with foreign auto producers to relearn what they forgot – that is how to build a good automobile. They have been improving quite a bit but still lag in quality.

The stock has had trouble in the recent past when breeching the bullish red curve. It is exactly one dollar below the red curve and a buck plus change below its long-term blue curve. Let’s see what happens this time.

http://www.indicant.net/Members/Updates/MTI-Stks-DJIA/DS01.htm#6

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, we included them in this email message but now display them on the website. This is available to the public while the specific buy and sell transactions are limited to members only.

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

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

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

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

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

All update information is on a single page in the web site. Click the below link to that page. You will need your login ID.

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

Quick-term and Short-term Indicant Update

The Quick-term Indicant signaled Bull. It will most likely be short-lived. Bearish seasonality is expected to gain influence.

Force Vectors were wavering with a slight edge to support a gentle bear a few weeks ago, but rebounded with the explosive bounce off the bearish yellow curve. Vector Pressure remained in bullish domains with the exception of the NASDAQ and NASDAQ100. Force Vectors are again heading south, but from a lofty position. Rather than getting a mild bearish move, the market continued with its bullish fervor.

Vector Pressure escaped neutrality a few weeks ago. It is now nestled slightly into bullish domains. However, each cyclical movement since August 5 has been at a lower level than the prior cyclical movement. This clearly indicates a tiring Bull, although the Mid-term Bull cycles are solid. Last week, there was a mix in configurations with more supporting bullish behavior but highlighting a lack of commitment by the market. Great gains can be followed by great losses for a zero net effect.

All eight major indexes are red bulls. Overall, the eight indexes are above the bullish red curve by 2.0%. That suggests your more mature holdings are safe. The recent buys are at the most risk. It would not be surprising to see the market drift back to the red curve this coming week.

To view the Quick-term Indicant charts, please click the following hyperlink:

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

The Indicant Volume Indicator appears to have discontinued its lethargic pattern. That has occurred on conflicting market movements. Volume was up on an up day and a down day late last week. If the market moves down on rapidly increasing volume, you will be notified to sell your marginal holdings (E.g., winners less than 30%).

To view the Indicant Volume Indicator, please click the following hyperlink.

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

The Short-term Indicant signaled bull on August 11, 2003 for the Dow and the next day, August 12, 2003, it signaled bull for the NASDAQ. Currently, the two major indexes are up by an average of 6.6% (annualized at 91.7%) since their respective bull signals. The Dow is up 3.1% (annualized at 43.6%). The NASDAQ is up 10.1% (annualized at 148.2%). It would be surprising if this Short-term Bull lasted through September due to bearish seasonality.

To view the Short-term Indicant charts, please click the following hyperlink:

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

A link to the Dow’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20DJIA1995-2002.htm

A link to the NASDAQ’s Short-term Indicant table is as follows:

http://www.indicant.net/Non-Members/ST%20Tour/ST-Table%20NAS1995-2002.htm

Perspectives

The major indexes continue to engage the breakout curves. That is a clear indication the great bear market from March 2000 through October 2002 has now ended. One can expect bullish behavior through most of 2004 based on the presidential pre-election year phenomenon.

To view the Perspective Charts (Quick-term Indicant, please click the following.

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

The Quick-term Volatility Index continues to languish with bearish attributes. As long as those attributes remain with bearish characteristics, expect the general market to continue with bullish behavior.

Divergence versus Convergence

Last week, pharmaceuticals were extremely bearish. Now, they are primed for a Quick-term spurt to the north. Energy’s recent bullish Quick-term cycle appears to be softening. Oil field service stocks appear to be heading south on a Quick-term basis, but their Force Vectors are still bullish. Banks have been weak for the past few weeks, but positioned for a bounce. Biotech is now getting stronger and will most likely parallel seasonal bullishness with the pharmaceuticals. Cyclicals never weakened since the Quick-term Bull signal last March, while Consumer Products did cycle south slightly but appearing to be at a Quick-term bottom. Internet stocks bounced off their yellow curves and have been moving aggressively to the north the past few weeks. The high tech sector found its Quick-term cyclical bottom at the same time utilities did.

All in all there is little divergence now. That provides for an overall bullish tint to the stock market. Some cooling is expected though, but no crashes yet in sight.

Economic Outlook

Not much changed since last week. This section says the same thing. The idea is not to entertain you, but to inform.

The U.S. Dollar continues to be cyclically weak, but rebounding slightly against world currencies. A continuing rebound in the current economic environment favors bullish sentiment. As stated last week, any erosion in the greenback will accelerate an interest in increasing interest rates. The market will not like that. For those of you, who like bull markets, root for a stronger dollar. Of course, the presidential pre-election year phenomenon will also influence that sort of behavior. Click the following link to view the dollars positions.

http://www.indicant.net/Members/Updates/Economic/E01.htm

As you can see from the charts from the below link, commodities also continue to remain cyclically related to higher inflation. Continuing productivity growth is offsetting these higher prices for the raw materials. The higher prices will attract more capacity to garnish natural resources. That increased supply chain capacity will eventually keep prices in check.

http://www.indicant.net/Members/Updates/Economic/E03.htm

Interest rates are remaining at historically low levels. However, the three-month T-Bill has been inching upward, along with CD’s. Keep your eyes on that.

http://www.indicant.net/Members/Updates/Economic/E07.htm

All economic data is at the following link:

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

Fear Metrics: Economics and Terrorism

The Indicant signaled buy for Fidelity American Gold (FSAGX) - #28 on December 7, 2001. Sixty-five weeks ago, it was up 66.1% since that buy signal. Fifty-eight weeks ago, it closed up 12.0% since that buy signal. Forty-nine weeks ago, it closed up 42.9% since the MTI buy signal of December 7, 2001. Last week it closed up 83.4%, which is significantly higher than 47.1% reported seven weeks ago. The current annualized growth rate is 47.0%, which is up from 28.8% reported seven weeks ago.

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 75.2% sixty-three weeks ago since the MTI buy signal in April 2001. Fifty-six weeks ago, it closed up 30.1%. Last week it closed up 90.7%, which is higher the 75.9% reported three weeks ago. The current annualized growth rate since the April 13, 2001 buy signal is 37.3%, which is higher than 23.1% seven weeks ago.

As stated in the past you can monitor the above two funds and the options index to help you gauge fear related investments. These two funds require “avoid” signals for the market to embark upon a meaningful and lasting bull leg.

Links to both of the above funds are as follows:

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF05.htm#28

http://www.indicant.net/Members/Updates/MTI-Mutual%20Funds/MF04.htm#19

Nineteen weeks ago, the Gold and Silver Index fell below the long-term blue curve. As is typical, it bounced back above that curve the following week, forcing the Mid-term Indicant’s New Bull signal. Since the Mid-term Bull signal of May 3, 2003, this index is up 38.3%, which is up significant from 18.8% reported six weeks ago. The annualized growth rate is 109.5%, which more than doubles the 50.7% reported seven weeks ago, but lower than 142.5% reported eleven weeks ago. It should tumble if terrorism and inflationary threats subside. It, along with the stock market, will also tumble in the improbable event of deflation.

http://www.indicant.net/Members/Updates/MTI-Mkts-Index%20Options/I05.htm#25

Mid-term Indicant Positions - Major U.S. Market Indices

All eight major indexes are now Mid-term Bull markets.

In addition to the bull signals, six indexes are bulls. They are up an average of 13.3% for an annualized gain of 44.4%, since the MTI Bull signals an average of 13.3 weeks ago. The annualized growth rate is down slightly from 47.9% reported eleven weeks ago, which is when the Indicant advised of the beginning of the gentle drift to the southeast due to summer time doldrums.

The DJIA is up 11.5% since the MTI Bull signal on March 22, 2003 The NASDAQ Composite is the strongest Mid-term Bull. It is up 30.8% since the March 22, 2003 MTI Bull signal. That annualizes to 114.2%, which is up from 80.9% reported six weeks ago.

None of the eight major indices is now bears, but expect a reversal sometimes in September.

To view Mid-term Indicant charts for U.S. Market Indices, please click the following link.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20MTI-Mkts-US.htm

Mid-term Indicant Positions - International Markets

There were no new bull signals and no new bear signals. The International community continues maintaining a bullish posture.

Twenty-one of the twenty-two foreign indexes tracked by the Indicant remain as Mid-term Bulls. They are up an average of 56.5% since the Mid-term Indicant signaled bull an average of 42.0 weeks ago for an annualized gain of 70.0%, which is down from 72.9% reported eleven weeks ago. The International Mid-term Bulls are outperforming the U.S. Mid-term Bulls as the hungrier are outperforming the haves.

The lone bear market, China – SSEC, is down 3.1% since the Mid-term Indicant signaled bear 6.0 weeks ago, but up 0.7% from last week.

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

©All material contained in this Web site is copyright protected. Any redistribution of any information in this Web site is expressly prohibited unless written authorization is granted by the publisher  of Indicant.Net.

Additional Hyperlinks - Just click on any of the below to get where you want to go.

Become a Member | DJIA History Since 1900 | Back Issues | Mutual Fund Listing | Contact Us | Historical Performance Metric | Performance Summary for Stocks and Funds | Current Performance Report Card | Sector Funds That Did Well in Bear Market of 2000-2001 | ETF Tour| Option Stalking |Stocks | Ezine | Stocks in Spotlight | Indicant Volume Indicator | Perspectives | Seasonality

- **** -    -*****-