September 2007 Indicant Weekly Stock Market Reports

September 30, 2007 Indicant Weekly Stock Market Report

Volume 09, Issue 05 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Heart and Soul of Bullish Seasonality

Unless something stupid occurs in the next few months, expect stock market bullishness. Stupidity can occur at any time, ranging from international or domestic loan defaults to corporate cheating. Stupidity does not care about stock market tradition.

The heart and soul of bullish seasonality occurs every year from late summer through January. Sometimes it does not start until late autumn. Last year it began on August 15. This year, it began on September 17.

During presidential post election years, which is typically bearish, the heart and soul of bullish seasonality is usually mild and, quite often, short-lived. We do not have to worry about that until 2009.

The presidential pre-election year, which is now underway, typically provides bullishness that is more robust on the four-year cycle. So, do not be surprised at stock market bullishness for the next few months.

Economic fundamentals are supporting this bullish prognosis. Interest rates are plummeting south. That fosters stock market bullishness. Friendly economic policies generally accompany the presidential pre-election year and the election year.

Once the election is over, watch out. Newly elected politicians are smug in their glory and chumming around with policy makers. Shortly after the election, they start working on the next political/economic election cycle. Incumbents are not usually elected when economic hardship occurs on Election Day. Economic hardship just after the elections are irrelevant to the political cycle.

To ensure increased probability of success, policies are adjusted to speed up the bear so that it does not coincide with the next election. Recessions/bear markets are popular during post-election years, due in part, to this political relationship. Incumbents know that recessions and bears are inevitable. So, why allow for random arrival patterns for recessions and bears? Political incumbents do what they can to force the inevitable to now, rather than later. The now is just after elections. All political incumbents desire economic robustness on Election Day.

With all that, those of you desiring bullish behavior should find joy through 2008. Those of you desiring bearish behavior should find patience for the next five to six quarters.

As earlier stated, sometimes stupidity wreaks outside the normal stupidity tolerance bands. So, keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

Although there were no sell signals, the Mid-term Indicant is avoiding 56-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 11.6% since the Mid-term Indicant signaled sell an average of 24.6-weeks ago.

There were only 35-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 15.5% since their respective sell signals an average of 20.1-weeks earlier.

Two years ago, on Sep 30, 2005, the Mid-term Indicant was avoiding 93-stocks and funds that were down an average of 9.4% since their respective sell signals an average of 23.1-weeks earlier. Three years ago on Oct 1, 2004 there were 50-avoided stocks and funds. They were down by an average of 32.4% from their respective sell signals an average of 52.4-weeks earlier. On Sep 27, 2003, the Mid-term Indicant was avoiding only 16-stocks and funds out of 296-tracked at that time. They were down by an average of 25.0% since their sell signals an average of 30.4-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Sep 27, 2002, there were 213-avoided stocks and funds. They were down an average of 22.6% since their respective sell signals an average of 9.6-weeks earlier.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 283 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 141.3%. That annualizes to 64.6%. The Mid-term Indicant has been signaling hold for these 283-stocks and funds for an average of 113.8-weeks.

One year ago, on Sep 29, 2006, the Mid-term Indicant was holding 308-stocks and funds out of the 345 tracked for an average of 76.1-weeks. Those 308-stocks and funds were up by an average of 105.1% (annualized at 71.8%). The Mid-term Indicant was signaling hold for 222-stocks and funds of the 320-tracked two years ago on Sep 30, 2005. They were up by an average of 112.8% (annualized at 61.4%) since their respective buy signals an average of 95.5-weeks earlier. There were 204-stocks and funds with hold signals on Oct 1, 2004 since their buy signals an average of 57.4-weeks earlier. They were up by an average of 73.6% (annualized at 66.6%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Sep 27, 2003, the Mid-term Indicant was signaling hold for 219-stocks and funds out of 296-tracked. They were up by an average of 51.8% (annualized at 89.6%) since their buy signals an average of 30.0-weeks earlier. Five years ago, on Sep 27, 2002, there were 61-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 17.4% (annualized at 45.3%) since their respective buy signals an average of 20.0-weeks earlier.

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

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 90.7% since its secular low on October 9, 2002. The NASDAQ is up 142.5% and the S&P500 is up 96.6%. The small cap index, S&P600, is up 148.0%. The underlying bull that originated on October 9, 2002 remains solid.

The NASDAQ is down 46.5% since its last weekly secular peak on March 9, 2000. The S&P500 is flat since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one. The Dow is up 18.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming in the new peak area. The NASDAQ needs to climb another 86.9% to achieve a new record high.

The Dow is up 11.5% so far this year. The S&P500 is up 7.6% and the NASDAQ up 11.8%. At this time last year, the Dow was up 9.3%, with the S&P500 up 7.3% and the NASDAQ up 2.9%. The major indices are ahead of last year’s performance; mostly from bullish behavior the past two weeks.

With the exception of 2003, the last presidential pre-election year, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 39.3%. It was down 38.5% through this week of 2002. It recovered with a gain of 34.2% by this weekend of 2003. It was again down 6.7% in 2004 on this weekend as a product of the meandering bear. At this time of year in 2005, it was down slightly by 2.8% due to the same meandering bear from 2004. Last year at this time, it was again up slightly by 2.9%. This year, it is up 11.8%. As you can see, it is depressed this year from the last presidential pre-election year of 2003.

As you can see, the only years the NASDAQ has been up at this time of year has been the presidential pre-election years (2003 and 2007).

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 18.0% on this weekend in 2001. In 2002, it was down by 23.2%, but with less severity than the NASDAQ’s 38.5% drop in 2002. In the last presidential election year of 2003, the NASDAQ’s 42.7% rise delivered more excitement than the Dow’s humble 11.6% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 3.6% as the market neared deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 2.9%. On this weekend, the Dow was up 9.3% in 2006, which conflicted with historical standards and seasonal normalcy. However, the Indicant stated the bullish bias shift on August 15, 2006 obsoleted historical standards. As previously stated, so far this year the Dow is up 11.5%, which is the second most bullish year-to-date performance this century.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 10.1%, while the NASDAQ is up 9.6% and the S&P500 is up by 6.2%. Even with recent bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality in late January of this year. This is a testament to the strength of the bull.

Where is the market headed for the remainder of this year? Deep bearish seasonality expired two weeks ago. The heart and soul of bullish seasonality started early this year.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Use a 10% trailing stop loss or the yellow or green values you will find on the tables for your longer-term hold positions. If your stock or fund is above the bearish yellow curve and below the green curve, set your stop loss equal to the greater of the yellow curve and the trailing stop loss. If your stock or fund is above the green curve, set your stop loss at no less the value of the green curve or 10% trailing, whichever is greater. If your stock or fund is above the red curve and you bought at the Mid-term Buy signal, you should use the 10% trailing stop loss.

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

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

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

Stock and Fund Update

Click the following link to see sorted performance of stocks and funds with hold/avoid signals. In the past, they were included 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. The below table is public information and not updated on a frequent basis.

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

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates continue to plummet. As stated last week, the stock market bull will enjoy that for the time being. Keep in mind, the stock market will keep its eye on inflationary threats during the euphoria of declining interest rates. Right now, those threats appear tame. However, the stock market will react quickly at the first indication of a sustainable threat. For the time being, enjoy the bull.

Commodity prices continue to rise, as they have been doing for several years. Although threatening, the bull is ignoring for the time being. When those rising prices penetrate the Consumer Price Index to unacceptable levels, rest assured the bear will take over, regardless of interest rate direction or position. Right now, interest rates and inflation are within the acceptable band limits.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 395.5% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 60.4%. It moved to the north in 35 of the past 51-weeks. This fund has been solidly bullish the last six weeks.

Fidelity Gold, Fund #28, is up 15.5% since its buy signal on September 7, 2007. It is annualized at 285.5% since that buy signal. This fund was solidly bullish last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 310.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 59.8%.

Vanguard Energy #18, VGENX, is up 244.8% (annualized at 53.8%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 232.7% (annualized at 60.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 189.5% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 45.4%.

These energy related funds were mildly bearish last week following five consecutive bullish weeks.

Investors in these funds are supporting a 1970’s type of market with high inflation and high oil prices. As long as capitalism remains in vogue around the globe and alternative sources of energy continue to lag exponentially increasing demand, a long-term perspective on holding strategy is appropriate.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 68.8% since then. It is annualized at 31.5%. This ETF has been bearish in nine of the past twenty weeks. It has been bullish the past five weeks.

The SQI signaled buy for ETF#03 – Energy and Natural Resources on March 26, 2003. It is up 248.6% (annualized at 54.3%). This fund mildly bearish last week.

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

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

All ten major indices are bulls. They are up by an average of 31.8% since the Mid-term Indicant signaled bull an average of 115-weeks ago. That annualizes to 14.4%.

The Mid-term Indicant Dow Jones Industrial Average performance is now at $42,093,194.

That beats buy and hold performance of $2,124,047 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $197,125. That beats buy and hold’s $149,549 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $226,037. That beats buy and hold’s $93,672 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,881.7%, 31.8%, and 141.3%, respectively, for these indices as of this past week.

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

Click here to go to the current Mid-term Indicant assessment of the ten major indices.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant continues avoiding ProFunds Ultra Short. It is down 36.2% since the Mid-term Indicant signaled sell on September 15, 2006. Historical norms of market cyclicality suggest the next buying opportunity for this fund may not occur until 2009.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 380.0% (annualized at 23.8%) since the Long-term Indicant signaled bull 830-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, and inflation have not been strong enough to signal bear since that bull signal. A link to the Long-term Indicant is below:

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

Quick/Short-term Indicant Stock Market Report - Summary

Quick-term Red Bulls: Eighteen of thirty; bullish bias holding and improving

Quick-term Yellow Bears: Three; non-bearish support continues and improving

Quick-term Non-Bearishness: Non-bearish support is improving.

Short-term Non-Bearishness: Continues supporting non-bearish behavior. The July-August bearish threat expired on Monday, September 17, 2007.

Force Vectors: Configurations are increasingly supporting bullish bias.

Vector Pressure: Twenty-eight in bullish domains, highlighting near unanimous support for bullish bias.

Long-term Hold Positions: Safe.

Immediate Tactics: Aggressively buy on buy signals.

Current Quick-term Bias: Bullish.

Overall (Long-term) Market Status: Bullish bias prevailing and strengthening.

Profit Potential from Naked Options: Volatility is declining, dampening option profit potential. However, dynamic sell-offs (bearish spurts) will offer periodic call option opportunities over the next few months.

Volume: Configurations are supporting bullish bias.

Comment from September 17, 2007

Configurations are shifting away from bearish support………….

Observation on September 18, 2007. The Dow’s 335-point gain today (9/18/07) is not jittery behavior. It is not a bullish spurt. It reflects the beginning of the heart and soul of bullish seasonality. Enjoy!

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

The Dow and NASDAQ are up 1.1% and 1.9%, respectively, since the Short-term Indicant signaled bull on September 18, 2007. The heart and soul of bullish seasonality should be predominant for several months.

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

Both Indicant Volume Indicator’s are aborting the attempted robustness. Friday’s mild volume on mild bearishness supports the continuation of the bullish bias. Recent high volume, coupled with aggressive bullishness supports a continuation of bullish bias.

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

There were no buy signal and no sell signals. Although there were no buy signals, the SQI is signaling hold for 30-ETF’s. They are up by an average of 76.3% (annualized at 35.9%) since their respective buy signals an average of 109.3-weeks ago. The SQI is not avoiding any ETF’s at this time.

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

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Short-term Indicant is signaling hold for 30-ETF’s. They are up an average of 77.6% (annualized 37.6%) since the STI signaled, buy, an average of 106.2-weeks ago. There are no avoid signals.

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

Quick-term Report Card, Status, and Charts

There were no buy signals and no sell signals. Although there were no buy signals, the Quick-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 17.0% (annualized at 31.4%) since the QTI signaled buy an average of 27.9-weeks ago. The Quick-term Indicant is not avoiding any ETF’s at this time.

The Quick-term Indicant is yet more active with buy and sell signals.

Conflicts Between the Short-term and Quick-term Indicants

There are no conflicts, whereby the Short-term Indicant and the Quick-term Indicant are in disagreement between hold and avoid status. This complete harmony of directional intensity continues supporting the Quick-term bullish bias shift since August 15, 2006.

Quick-term Indicant Bull/Bear Health Report

Only three of the 30-ETF’s are below their bearish yellow curves. The average relative position of all thirty ETF’s is above bearish yellow by 10.0%. This attribute is providing solid non-bearish support.

Nineteen of the ETF’s are above their respective bullish red curves, which is supportive of the bullish bias. All thirty ETF average positions are 1,8% above the bullish red curves. This supports bullish bias.

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

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

One of the thirty ETF’s is contacting its breakout line. As stated the past several months, the high concentration of breakout-contact since August 2006 was solidly bullish. Contact in eighteen of the last nineteen trading days supports bullish bias.

The average distance from breakout contact is a mere 3.7%. This remains in support of the quick-term bullish bias.

None of the ETF’s are contacting breakdown lines, providing non-bearish support.

The average distance from the price and breakdown is a solid 22.7%. This configuration provides non-bearish support, which has been the case since March 2003.

ETF Force Vector Configurations

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

Eight Force Vectors are moving bullishly, supporting bullish bias.

This bull is strong and resisting bearish expressions. Consider any bearish expressions as mere spurts in the face of underlying bullish bias, which will offer more buying and call-option opportunities.

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

ETF Force Vectors/Vector Pressure Crossings/Option Signals

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

Click this sentence for Vector Pressure Option Signals. There were no option buy signals after Friday’s close.

Twenty-eight ETF Vector Pressures remain in bullish domains, which is up by sixteen since September 7 and increasingly supportive of bullish bias. This attribute approached bearish support in July and August. Just as it neared full bearish support during that period, the bull exerted its influence. The bull is again dominant even though there is a profit-taking threat on the near-term horizon.

As stated the past few weeks, this attribute held position, solidified, and allowed the bull to re-exert its influence.

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

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

Quick-term and Short-term Indicant Summary

The shift from bearish bias to bullish bias started on Tuesday, August 15, 2006 after maintaining a bearish bias from early February 2006 until August 15, 2006.

Message from Monday, September 17, 2007. The market is configuring nicely in support of the impending heart and soul of bullish seasonality.

Message from September 17, 2007. It is recommended to avoid writing covered call options due to increased probability of quick-term and short-term bullishness. Modified on September 24, 2007. Vector Pressure is again positive (bullish) and not configured favorably for writing covered call options.

The Quick-term Bull remains in tact.

ProFunds Ultra Short mutual fund moves inversely to the QQQQ by exponential amounts. The Consolidated Indicant model is not avoiding QQQQ, which does not support holding contrarian fund, ProFunds Ultra Short.

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

Quick-term ETF Options

Quick-term Indicant for ETF’s

Short-term Indicant for ETF’s

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

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

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

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Divergence versus Convergence

The various markets enjoyed bullish divergence after two consecutive weeks of bullish convergence. Nearly all sectors moved bullishly while the energy sector endured mild bearishness. That suggests the bull is nowhere near expiration.

Indicant Conclusion

All Quick-term, Short-term, Mid-term, and Long-term Indicant attributes are configuring in strong support for the bull. Force Vectors are mature. Do not be surprised at some profit-taking. Any bearish expression will be a mere spurt in the face of the underlying bull. Such spurts will offer short-term buying opportunities.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/30/07

September 23, 2007 Indicant Weekly Stock Market Report

Economic/Political Fundamentals

Hard economic fundamentals will eventually take its toll on the stock market. Historical standards suggest that will occur in 2009. Many big-money investors have already made their move in anticipation of that. This was evident by significant buying of gold and other commodities last week with the Fed’s decision to reduce interest rates by a significant amount. That rate reduction was reactionary, but at parity with political expectations.

Here is the problem. Last week, the Fed biased in favor of economic robustness and, for the time being, ignoring inflationary threats. This is common behavior in presidential pre-election years. Pressure by all political incumbents is great ahead of the elections. The tendency is to pressure policy toward economic robustness ahead of the elections, as incumbents understand their vote potential is related to economic prosperity.

Inflation is economically more subtle than recessions. Incumbent politicians are exceedingly focused on economic well being ahead of the elections. Inflation or deflation is of secondary influence before elections. Of course, inflation/deflation eventually takes its toll on economic well being, but not as abruptly as a hard recession. Political incumbents have a better chance of being re-elected during inflation, as opposed to recessions.

Click the following link to get a sense of what is going on.

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

Scroll down the page. You will notice interest rates are configuring for a bullish stock market. You will also notice commodity prices are configuring in favor of inflation. That will eventually trigger rate hikes and a bearish stock market. The Fed’s policy, if unchanged, will eventually exacerbate the latter (inflation).

The stock market will configure to that of the 1970’s with deep bearish expressions. Based on the political influence, that should occur in 2009. In other words, newly elected politicians are securely employed. Their behavior is biased toward enjoyment of perceived power and grasping for real power. Once elected, politicians discontinue their concerns about economic prosperity, as their focus shifts more to their ego and pork-barrel relationships. The stock market knows this and punishes accordingly.

Stock market bearishness occurs due to increased economic pessimism during post election years. Legislative and executive branches impose their will on the populace that will generate the potential for large voting blocks in the next election. For example, FDR was supportive of unions for one and only one reason; there are more votes from union members than there are from the corporate management members. FDR’s behavior during the 1930’s propelled the stock market lower and extended the bear/depression due to his increased social programs. It was those social programs that elevated power to his egotistical needs.

Economic experimental designs over the following decades have held the politicians in check. It is difficult for contemporary politicians to bias behavior against any large group of voters or potential voters. For example, incumbent politicians are eager to voice opinions toward legalizing millions of illegal aliens. They do this for one and only one reason; the large block of votes that follow.

The stock market is not concerned with 2009’s inflationary threats at this time. Low cost Chinese wages are delivering the same economic impact as high productivity. In other words, inflation is being held in check by lower wage costs. The N.A. economies will continue to endure erosion in the manufacturing industry. That is one of the three primary forces of economic wealth. The other two are extraction and agriculture. Middle Eastern societies are enjoying the economic prosperity of extraction with $80-oil. Agriculture wealth continues to consolidate into the hands of just a few. Many grew food products in the 1930’s. Consequently, hunger pains did not invoke as much damage as it would today. The majority of North American consumers have no idea or even the capacity to prevent starvation without the supply chain to the stores and supermarkets.

The economic well being the North American culture is being threatened. Currently, that is the largest consumer sector on this planet. Once the low cost wage countries become more consumer oriented, wages will rise. Rising wages is a required predecessor to the transformation from producer to consumer. That, along with rising commodity prices, will eventually cascade into an inflationary spiral. The stock market will sniff any early threat of this and react violently.

Remember, the bull expires when inflation, or deflation, or recessions occur. The bull does not coexist with any of those conditions. Adjusting interest rates to fend off those threats has been the practice for the past eighty years or so. That works okay when those threats are mild. However, when those threats manifest to dynamic conclusions, the bear will unleash its terror and inflict the deserved results on many.

Right now though, the market is enjoying the phenomenon of the heart and soul of bullish seasonality during a presidential pre-election year. It is to be enjoyed, as opposed to the longer-term views expressed above. Keep up with the daily stock market report. At some point on any given day, the long-term view manifests into a short-term conclusion.

Weekly Buy/Sell Summary – Stocks and Funds

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

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

Although there were no sell signals, the Mid-term Indicant is avoiding 62-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 9.2% since the Mid-term Indicant signaled sell an average of 23.0-weeks ago.

There were only 37-stocks and funds avoided at this time last year. Those avoided stocks and funds were down an average of 15.1% since their respective sell signals an average of 19.6-weeks earlier.

Two years ago, on Sep 23, 2005, the Mid-term Indicant was avoiding 86-stocks and funds that were down an average of 10.3% since their respective sell signals an average of 23.3-weeks earlier. Three years ago on Sep 24, 2004 there were 90-avoided stocks and funds. They were down by an average of 28.2% from their respective sell signals an average of 47.0-weeks earlier. On Sep 20, 2003, the Mid-term Indicant was avoiding only 16-stocks and funds out of 296-tracked at that time. They were down by an average of 23.2% since their sell signals an average of 31.4-weeks earlier. As you can see, there were very few avoided stocks in the previous presidential election year of 2003. Five years ago on Sep 20, 2002, there were 101-avoided stocks and funds. They were down an average of 30.4% since their respective sell signals an average of 18.1-weeks earlier.

In addition to the buy signals, the Mid-term Indicant is signaling hold for 253 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 156.4%. That annualizes to 64.7%. The Mid-term Indicant has been signaling hold for these 253-stocks and funds for an average of 125.6-weeks.

One year ago, on Sep 22, 2006, the Mid-term Indicant was holding 307-stocks and funds out of the 345 tracked for an average of 75.3-weeks. Those 307-stocks and funds were up by an average of 96.8% (annualized at 66.9%). The Mid-term Indicant was signaling hold for 225-stocks and funds of the 320-tracked two years ago on Sep 23, 2005. They were up by an average of 104.5% (annualized at 58.7%) since their respective buy signals an average of 92.6-weeks earlier. There were 205-stocks and funds with hold signals on Sep 24, 2004 since their buy signals an average of 56.3-weeks earlier. They were up by an average of 69.3% (annualized at 64.1%).

The Indicant was only tracking 296-stocks and funds in 2002-2003, and early 2004. On Sep 20, 2003, the Mid-term Indicant was signaling hold for 205-stocks and funds out of 296-tracked. They were up by an average of 53.8% (annualized at 101.7%) since their buy signals an average of 31.4-weeks earlier. Five years ago, on Sep 20, 2002, there were 74-hold signals for stocks and funds out of the 295 tracked by the Mid-term Indicant. They were up 13.9% (annualized at 40.4%) since their respective buy signals an average of 18.1-weeks earlier.

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

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

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

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

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 89.7% since its secular low on October 9, 2002. The NASDAQ is up 139.8% and the S&P500 is up 96.4%. The small cap index, S&P600, is up 150.6%. The underlying bull that originated on October 9, 2002 remains solid.

The NASDAQ is down 47.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 0.1% since its similar secular peak on March 23, 2000. The S&P500 recently set a new peak, but the old peak will be tracked until the NASDAQ sets a new one. The Dow is up 17.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. It has expressed no timidity in roaming in the new peak area. The NASDAQ needs to climb another 89.0% to achieve a new record high.

The Dow is up 10.9% so far this year. The S&P500 is up 7.6% and the NASDAQ up 10.6%. At this time last year, the Dow was up 7.6%, with the S&P500 up 5.6% and the NASDAQ up 1.5%. The major indices are ahead of last year’s performance; mostly from last week’s dynamic bullish behavior.

With the exception of 2003, the last presidential pre-election year, and 2006, the major indices are performing better this year than any year this century. The NASDAQ through this week of 2001 was down 42.4%. It was down 37.4% through this week of 2002. It recovered with a gain of 42.7% by this weekend of 2003. It was again down 4.1% in 2004 on this weekend as a product of the meandering bear. At this time of year in 2005, it was down slightly by 3.2% due to the same meandering bear from 2004. Last year at this time, it was again up slightly by 1.5%. This year, it is up 10.6%. As you can see, it is depressed this year from the last presidential pre-election year of 2003.

As you can see, the only years the NASDAQ has been up at this time of year has been the presidential pre-election years (2003 and 2007).

You will notice the Dow endured less volatility than the NASDAQ this century. The Dow was down 23.7% on this weekend in 2001. It was down more on this weekend in 2002 by 20.3%, but with less severity than the NASDAQ’s 37.4% drop in 2002. In the last presidential election year of 2003, the NASDAQ’s 42.7% rise delivered more excitement than the Dow’s humble 15.6% increase. Many of your recall the meandering bear market in 2004 where the Dow was down 2.0% as the market neared deep bearish seasonality. The meandering bear continued through 2005 with the Dow dropping by 3.8%. On this weekend, the Dow was up 7.6% in 2006, which conflicted with historical standards and seasonal normalcy. However, the Indicant stated the bullish bias shift on August 15, 2006 obsoleted historical standards. As previously stated, so far, this year the Dow is up 10.9%, which is the second most bullish year-to-date performance this century.

Since the expiration of the heart and soul of bullish seasonality in late January 2007, the Dow is up 9.5%, while the NASDAQ is up 8.4% and the S&P500 is up by 6.1%. Even with recent bearish behavior, all the major indices are up since the expiration of the heart and soul of bullish seasonality. This is a testament to the strength of the bull.

Where is the market headed for the remainder of this year? Deep bearish seasonality expired last week. The heart and soul of bullish seasonality started early this year.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 8% on recent buys because of the Quick-term Indicant’s bullish bias.

Stock and Fund Update