Sep 08 Indicant Weekly Stock Market Report

September 28, 2008 Indicant Weekly Stock Market Report

Volume 09, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Will Fake Cash Flow Help the Bull?

Cash flow as a percentage of shareholder equity is a predominant measure of stock price valuations. Companies with low debt and increasing revenues with acceptable profit margins will enjoy higher stock prices, over the long run, than a company whose cash receipts predominantly services debt. Dell Computer stock rose thousands of percent in the 1990’s due to minimal debt and extreme cash inflows from operations. Dell collected monies from most customers before spending money on inventory items. That tactic eliminated the need for debt. No stock in the history of the stock market rose as far and as fast as Dell did in the 1990’s.

On the other hand, General Motors is burdened with tremendous debt. Its stock price is now below where it was in the 1950’s. Most of GM’s cash receipts from sales occur long after buying the inventory items to produce an automobile. To pay for operations, GM uses debt. When they finally collect monies from customer related services, a significant portion of that cash is returned to the debtors. That is why GM stock price goes down from a financial perspective. From a management perspective, the story about GM’s failures for the last forty years is too long for this article.

In essence, a company with a high net worth enjoys higher stock prices. Companies requiring high debt do not enjoy high stock prices because their cash is predominantly servicing debt.

The difference between assets and liabilities is the company’s worth. The idea here is that assets is a bigger number than the liabilities. During the past several years, many banks revalued their assets by writing them up. “Write up” is a formal accounting term. It means that an asset already owned by the organization is worth more than what was initially paid. For example, a machine purchased for $10,000 can be revalued to $12,000 if it is believed someone would pay $12,000 for it. When the market is believed to be willing to pay $12,000 for that machine, accountants can simply revalue it to $12,000. That means they will write-up the asset by $2,000. It takes less than 20-calories of energy to do this. There was no increase in cash flow. It was just pencil pushing. However, the net worth of the company increased by $2,000. The company also enjoyed an increase in profits by $2,000. This is usually reported in the extraordinary income section on the income statement. Increasing net worth without related cash flow will nudge a stock price higher, but rest assured the slope is much more lethargic than one driven by actual cash receipts.

During the past several years, politicians have promoted home ownership. In essence, they wanted more people to own homes much faster than capitalistic methods were providing them. This nonsensical political behavior accelerated the demand for homes along a path far exceeding natural market forces. This was a phony demand and outside the natural cycle of capitalism. This phony demand elevated home prices since the capacity to build homes was finite.

The calories required to build a single home exceeds billions. The calories required to force lending institutions to loan monies to hundreds of thousands of people was minimal; whatever it takes to write nonsensical documents and make a few phone calls. I will guess less than 10,000-calories. So, in mathematical terms, 10,000-calories expended by government generated billions upon billions of calories to build houses. Anytime you see minimal input generate a high output, natural forces will return that gap back to equilibrium.

If it takes billions of calories to build just one house and only 10,000-calories to cause hundreds of thousands of people to move into homes they could not afford does not only produce economic hardship. It produces profound psychological pain to hundreds of thousands of people. The people losing their homes are returning to equilibrium. The hundreds of homebuilders who expended millions upon millions of calories honing their skills and craftsmanship to build nice homes are now no longer needed. They are losing their businesses. The hundreds of thousands of people who chose the path to the construction industry to accommodate this fake demand created by politicians are losing their jobs because the supply of houses now far exceeds demand. If the politicians had not created this fake demand all the people who were hurt by this governmental meddling, may not have chosen the path they are now being punished for choosing.

Meddling with normal capitalistic capacity expansion is wrong. Tampering with capacity in any form will always produce asynchronous results. Capacity always eventually adjusts to demand. When the demand segment is fake, which is what the government did, the capacity that expanded to accommodate that fake demand becomes fake itself. In other words, the billions upon billions of hard, honest working peoples’ calories were expended to build houses. As a result of meddling by the government, capacity now far outstrips demand for houses. Skills and craftsmanship that took years to develop are no longer needed. Those folks now must start over learning a new skill.

When the demand is less than supply (capacity), prices drop. When the fake demand segment was being created by government, prices rose in accordance with the simple laws of supply and demand. The government expended only a few thousand calories with their low effort methods. The capitalists expended trillions of calories responding to the increased demand for houses. Anytime input energy is minimal to the desired output of supply, unnatural forces will manifest. This is because the input was unnatural. When the input is only a few calories against a required output of billions upon billions of calories, rest assured the resulting imbalances will be brought back to equilibrium.

Many of you are familiar with the laws of conservation. That is, “energy can neither be created nor destroyed.” So, when a politician expends minimal calories resulting in a massive output of billions upon billions of calories, the laws of physics will plow right back to the input and adjust it to equalize to the resultant output. Converting the calories gap to dollars is believed to be around $700,000,000,000 (seven-hundred billion U.S. dollars).

The opposite of an asset write up is a write down, which is another formal accounting term. Sarbanes Oxley requires that assets reflect current market valuations. Valuing any asset without actually selling it is tricky. For the most part such endeavors are fiction. Until the asset is sold, the valuation is a mere human opinion. When a typical human values an asset that is not sold, the assessment of that value is a reflection of opinion and more often than not is biased favorably to the one offering that opinion.

After many years of writing up assets on balance sheets, based on the opinions of humans, and who benefitted from their opinions, and therefore biased and fictional, are now being forced to “write down” those same assets. Why? Zero cash flow. The folks the politicians put into houses quit sending in payments. Financial stocks plummeted as cash flow as a percentage of shareholder equity dried up; much like General Motors. Bank stocks never did rise as much as Dell. The banks were simply pencil pushing. That is what they do and adds zero economic value.

In essence, the products (houses) were sold to people who paid zero and thus its “write-down” value is what it is sold for. That is zero. Idiots enjoyed writing up assets and now they are having to write down what they had previously written up. The idiots took a lot of money since their stock prices lethargically rose. The money they took is not related to their calorie burn, which is minimal. Equalization will eventually get to them; if not monetarily, then to their souls.

None of this nonsensical stupid behavior did not add any economic value whatsoever. All it did was feed economic leeches who are pals with the politicians who created this problem and who are fooling you into thinking they are correcting it. They add zero economic value. Rest assured the more they work on it, the worse the economy will become. The stock market went up on this phoniness and rest assured it will find equilibrium to where it would have been without all the fake and phoniness introduced by politicians, government, and a bunch of MBA’s from so-called higher institutions of learning. A plumber threading just one piece of pipe with a 12” pipe wrench added more economic value than all the politicians, bankers, government employees, and MBA’s combined that were involved in mortgages.

Last Friday, JP Morgan stock price moved up by 4.78%. JP Morgan is one of the XLF holdings. XLF is the exchange traded fund for the financial sector. It is also tracked by the Indicant on a daily basis. Most of the bank stocks and related companies surged in price last week.

Most of the larger bank’s balance sheets contain the so-called toxic assets that have been written down to zero. They had to do this based on Sarbanes Oxley principles, whose guidelines were established to stem Enron accounting methods. Many of you recall that the financial reports published by Enron were fictional. Many of you recall that the Indicant has advised many times that most financial reports are fictional. It is impossible to fictionalize cash flow. That is all that counts.

The recent increases in financial related stock prices is the stock market’s anticipation of huge cash inflows to banks and related companies. Unfortunately, the calories expended by the companies who may be recipients from such cash infusions is miniscule. The calories required to provide it approximates about $2500 for each U.S. Citizen. How many calories does it take a “real value producer” to earn $2500? It is more than the combined recipients of the $700,000,000,000. Rest assured the laws of conservation will prevail here as well and the stock market conforms to that law. In the end, all balance sheets must balance from “real value adding effort.”

Real value adding effort is delivered in only three ways; manufacturing, agriculture, and extraction.

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

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

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

The Mid-term Indicant generated one buy signal and four sell signals. There have been 423-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired four weeks ago and the bear is again enjoying “open season.” However, there is an increasing likelihood the heart and soul of bullish seasonality may take effect immediately. Technically, it will most likely be bullish spurt but this one could enjoy some sustainability through Christmas.

In addition to the buy signal, the Mid-term Indicant is signaling hold for only 98 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 156.9%. That annualizes to 54.5%. The Mid-term Indicant has been signaling hold for these 98-stocks and funds for an average of 149.8-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 242-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 20.4% since the Mid-term Indicant signaled sell an average of 25.6-weeks ago.

One year ago, on Sep 28, 2007, the Mid-term Indicant was holding 283-stocks and funds out of the 345 tracked for an average of 113.8-weeks. They were up by an average of 141.3% (annualized at 64.6%). There were 56-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 11.6% since their respective sell signals an average of 24.6-weeks earlier.

The Mid-term Indicant was signaling hold for 308-stocks and funds of the 345-tracked two years ago on Sep 29, 2006. They were up by an average of 105.1% (annualized at 71.8%) since their respective buy signals an average of 76.1-weeks earlier. The Mid-term Indicant was avoiding 35-stocks and funds at that time. They were down an average of 15.5% since their respective sell signals an average of 20.1-weeks earlier.

There were 225-stocks and funds with hold signals on September 30, 2005 since their buy signals an average of 95.5-weeks earlier. They were up by an average of 112.8% (annualized at 61.4%). There were 93-avoided stocks and funds at that time. They were down by an average of 9.4% from their respective sell signals an average of 23.1-weeks earlier.

On Sep 25, 2004, the Mid-term Indicant was signaling hold for 205-stocks and funds out of 296-tracked. They were up by an average of 69.3% (annualized at 64.1%) since their buy signals an average of 56.3-weeks earlier. The Mid-term Indicant was avoiding 90-stocks and funds at that time. They were down by an average of 28.2% since their sell signals an average of 47.0-weeks earlier.

Five years ago, on Sep 27, 2003, there were 219-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 51.8% (annualized at 89.6%) since their respective buy signals an average of 30.0-weeks earlier. There were 16-avoided stocks and funds then. They were down an average of 25.0% since their respective sell signals an average of 30.4-weeks earlier.

On Sep 27, 2002, there were 61-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 17.4%, annualizing at 22.6%. There were 213-avoided stocks and funds then. They were down by an average of 22.6% since their sell signals an average of 9.6-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

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

Even though Quick-term and Short-term configurations are increasingly supporting the heart and soul of bullish seasonality, the Mid-term Indicant may not participate in much buying. Longer-term elements are not bullish even if the heart and soul of bullish seasonality produces exciting bullish configurations.

Click the following link that will take you to the tangential protection charts.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.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 52.9% since its secular low on October 9, 2002. The NASDAQ is up 96.0% and the S&P500 is up 56.2% since then. The small cap index, S&P600, is up 118.8%. None of the major indices are bullishly biased.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding. All Mid-term, Short-term, and Quick-term bullish attributes expired several weeks ago. However, there is an increasing probability the heart and soul of bullish seasonality will configure this year even in the face of sour economic conditions.

The Dow is down 21.3% since its last closing peak on Oct 9, 2007. The NASDAQ is down 23.6% since its last peak on Oct 31, 2007. The S&P600 is down 16.1% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 56.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 20.6% since its similar secular peak on March 23, 2000. The Dow is down by 4.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 16.0% so far this year. The NASDAQ is down 17.7% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

However, there is an increasing likelihood the market is about to move bullishly in concert with the heart and soul of bullish seasonality.

The NASDAQ year-to-date performance was bearish by 40.7% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start within a week or two and possibly next week.

The NASDAQ was down by 37.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 34.7%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 6.2%. It was down by 2.5% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 2.5% on this weekend and up by 11.7% at this time last year.

Do not be surprised at a Quick-term and Short-term bullish cycle in the next few days.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. Most of those recent buys have since received sell signals. The Mid-term Indicant will be passive in generating buy signals even in the face of a Quick-term bull cycle.

For the Mid-term Indicant, which is more tolerant of short-term swings, use a 8% 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 8% 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.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates are all over the map; somewhat nonsensical. CD’s are above 5% while the Fed Rate is less than 1%. Bankrupt banks offering 5% on CD’s is an apparent attempt to get cash infusions, but based on demonstrated incompetence make certain such investments do not exceed $100,000.

Keep in mind that 5% will not better inflation, based on recent developments. Oil prices are not declining as the U.S. economy can weaken, while other economies can continue to grow. The printing presses will propel more dollars into the economy and thus weaken its purchasing power. Socialistic methods always weaken. That weakening will add to longer lines for goods and services with increasing prices.

Once the euphoria of the socialistic methods are complete, rest assured the bear market will return and with some gusto. This is not technical. This is fundamental, which is never wrong.

This bear has teeth, is hungry, and is nowhere near expiration.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 232.7% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 30.8%. It moved to the north in 60 of the past 107-weeks – a little over one-half the time. It has been bullish in 31 of the last 58-weeks. This fund has been bullish in 16 of the last 33-weeks. It has been aggressively bearish in seven of the past 11-weeks. It was significantly bearish last week. Notice the weekly bearish expressions have exceeded the weekly bullish expressions in recent weeks.

Fidelity Gold, Fund #28 is down 12.7% since the Midterm Indicant signaled sell on August 1, 2008. It is simply not performing and weakening economies are depressing demand for all commodities. It was up mildly last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 254.9% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 41.1%. This fund has been bullish in 13 of the last 31-weeks. It has been bearish in ten of the past 13-weeks. It was significantly bearish last week.

Vanguard Energy #18, VGENX, is up 190.5% (annualized at 34.3%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 159.7% (annualized at 32.7%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 131.3% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 25.3%.

Energy related funds were bearish last week, following a bullish spurt in the prior week. They have endured significant bearishness in nine of the last eleven 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. However, keep in mind OPEC can very quickly reverse this trend. They have done it before and remain capable of doing it again. So far, they are quiet.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 4.5% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 20 of the past 35-weeks and in 11 of the past 15-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It is up 13.3% since then. It gained 81.4% from its August 3, 2005 buy signal until the recent sell signal. Its annualized gain amounted to 26.0%. This fund has been bullish in 38 of the past 56-weeks. It has been bullish in 19 of the last 32-weeks. It has been bearish in five of the past 11-weeks. It was up profoundly last week based on the element of fear. The Quick-term and Short-term Indicant may signal buy once its overheated configurations cool off.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are down an average of 2.5%. Do not be surprised at bull signals in the next week or two, as the heart and soul of bullish seasonality begins to unfold.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,320,247

That beats buy and hold performance of $1,695,288 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $118,843 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $75,705 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2042.4%, 49.5%, and 183.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the 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 approximately 2,000% covering the past 100+ years.

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.

Note from April 5, 2008: Enron will be removed from Indicant tracking later this year. It was removed from the Dow Utility Index several years ago. It is now a penny stock, but the Indicant kept tracking it at the request of members. Its low cost nature is not friendly to Mid-term Indicant assessment due to small price changes and corresponding large percentage impact. The Mid-term Indicant is not designed for penny stocks. Although recovery is always possible, this stock has become too busy to track. This position will be re-accessed based on member feedback as the year progresses.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for ProFunds Ultra Short on January 18, 2008. It was down 32.3% since the Mid-term Indicant signaled sell on September 15, 2006 until the buy signal on January 18, 2008. Historical norms of market cyclicality suggested the next buying opportunity for this fund should not occur until 2009.

The Mid-term Indicant signaled buy for this fund on September 12, 2008. It is up 1.0% since that buy signal, annualizing at 53.2%. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

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 284.9% (annualized at 16.8%) since the Long-term Indicant signaled bull 882-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. 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: One of thirty. Limited bullish protection at this point.

Quick-term Yellow Bears/Threats: Twenty-two of thirty. Supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 15.1%. Bull has no influence, but configuring to voice its presence in the face of a major bear market. In other words, configurations support bullish spurt behavior.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 15.1% with continued bearish support. Do not be surprised at a shift to bullishness, but it will be awhile before this attribute confirms any bullish support.

Short-term Indicant: Breakdown contact density is high in support of the bear, but this should incite the bull to make a statement.

Short-term Indicant: Relative breakdown position is solidly in support of the bear with single digit expressions to breakdown.

Force Vectors: They are now in equilibrium. Do not be surprised at volatile expressions over the next few days. Socialism, communism, management stupidity, dilettantes overseeing other dilettantes, paper pushing bureaucrats, non-value adding tribalism barking from Washington DC, etc. will not produce the smoothness of capitalistic cycles. Expect wild variations. This will be good for those who like to trade options, but real investors will be turned off. That, in the long-run, is bearish even if a bullish spurt unfolds.

Vector Pressure: A minority of five in bullish domains, offering bearish support, but also angering the bull.

STI Tangential Support: None; therefore, bearish. Reverse tangential constructions offer high probability the bear will respond violently to any bullish spurt that may form. However, such as response would not be surprising at the time of the presidential inauguration.

Reverse Tangential Support: Being constructed fostering a very high probability of bearish sustainability, but a bullish spurt is required to complete the valuations of where the next bearish cycle will occur.

Immediate Tactics: Holding non-contrarian funds is not safe, but the trader will enjoy bullish spurt participation.

Current Short-term/Quick-term Bias: Bearish bias was born on September 5, 2008. There is a high likelihood it will be replaced with bullish bias in the next few days.

Overall Market Status: The Quick-term cycle is vulnerable to bullish responses in the face of a mid-term bear market.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness supported bear while the newly configuring lethargy will not be as supportive of the bullish spurt which could unfold in the next few days.

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

To view the STI-Tangential Protection for ten major indices, click here.

The following is a discussion of each of the ten major indices’ configurations. We will continue doing this until we finalize the tour and complete documentation of bull/bear signaling. The model, which removes all economic, corporate, and other fundamental influences, in addition to normal seasonality, has been thoroughly tested and validated. Documentation is a different matter and it will be completed in a few weeks.

DJIA

You should notice the Force Vector. It moved bullishly and today shifted south. This configuration is neutral at this point. It is configuring with significant potential for hitch and post. That means it could zoom northward quickly, fostering bullish behavior on a near-term basis. If government disappoints market, it is equally configured to shift south fostering bearish behavior. Regardless, any bullish behavior will be a bullish spurt. Reverse tangential lines suggests 2009-post election year will be classically bearish. Although too soon to tell, do not be surprised at 2010 being equally bearish but finding a market bottom.

DJ Composites

Vector Pressure is nearing deep bearish domains. Even with significant market bearishness the past several months, this has been a rallying point for the bull to respond. This lends support for the hitch and post configuration mentioned above, which supports some degree of bullishness on a near-term basis. In other words, the markets are not anticipated to be disappointed by government. However, government has very little to do with increasing the quality of life. That rests entirely with true capitalists, which excludes the CEO of General Electric. Such dilettantes love abilities to buy off politicians as opposed to the hard working efforts of true capitalists.

DJ Transports

This index will move inversely to the price of oil as long as the economy maintains a sense of stability. If recession deepens, then this index will most likely parallel earnings of transport members of the index. Some will be more competitive than others, but the aggregate of their performance will dictate this index’s directional intensity.

DJ Utilities

No differences. As stated the past few days, a solid bear remains dominant. This index is configuring for additional bearish behavior on a mid-term basis. This index, which was the strongest from 2002-2007 is now the weakest and is configuring for strong and sustainable bearish behavior. It will be interesting to see if this index is a participant in bullish spurt behavior. If not, an early interpretation would be a severe and deep recession.

NASDAQ

As stated two weeks ago, a solid bear is dominating. Bullish Force Vectors matured and as you can see, they have shifted back to the south. However, its Vector Pressure is also nearing deep bearish domains, which is a common response point for the bull. Keep in mind though that this is also configured with reverse tangential lines, which suggest any bullishness will be a mere spurt.

NASDAQ100

September 3, 2008-Wednesday’s collapse of the bullish red curve proved ominous. Force Vector fell into deep bearish domains, offering bearish encouragement. The NASDAQ100 did not wait until 2009 to fall below the reverse tangential line. That does not mean that 2009 will not be bearish. It just means the last configuration of bearish obviation has now been applied and there are plenty of opportunities to form new ones. In other words, this bear market is configuring with support for bearish sustainability in spite of recent governmental intervention.

Vector Pressure is now inside deep bearish domains, which bodes well for the bear. Pauses and fluttering are typical in this position, but the cyclical bear remains in tact.

S&P500

There is no change from Friday, September 5, 2008. The baby bull was incapable of fending off declining Vector Pressure. This remains configured in favor of the bear. Vector Pressure is nearly inside deep bearish domains, fostering a significant chance of near-term bullishness. However, that is a trader’s configuration. The long-term investor, who has already sold should continue stock market avoidance. This bear is nowhere near expiration.

S&P100

There is no change from September 5, 2008. September 4, 2008’s disfigurement of the bull, like the other indices suffering from bearish onslaught, suggests sustainable bearish behavior. Upon completion of the next bullish cycle, which most likely would be a mere quick-term spurt, additional bearishness is expected due to the construction of reverse tangential line.

S&P400

There is no change from September 5, 2008. The bull was too weak to respond. This suggests increasing bearish influences. Vector Pressure remains inside bearish domains and nearing deep bearish domains. It will be interesting to see how this index, which is one of the most bearish resistant ones, will respond. Unfortunately, it also is enduring reverse tangential bearish support. However, its bearish Force Vector is maturing. That facilitates near-term bullishness, but keep in mind the bear market will remain in force.

S&P600

The red bull curve collapsed with Monday’s deep bearish expression, fulfilling last Friday’s projection of an immediate collapse. This index along with several other small cap indices is not configured with the same degree of bearishness. You will notice its Force Vector is setting right on top of bullish Vector Pressure. This is where the predominance of true capitalists reside. Do not be surprised at this index providing the strongest bullish spurt. It is configuring to support the least in terms of bearish depth on the next bearish cycle.

NYSE

This index is configured solidly in support of the bear. Its Force Vector crossed deep into bullish domains. As stated yesterday, its hot Force Vector should induce a bearish response. This index was indeed bearish on Friday, but configuring along with the other major indices to support a near-term bullish spurt.

VIX

As stated the past several days, this index is now configuring in support of a bearish stock market. As stated on September 17, it is too hot to continue in that support. Do not be surprised at some more bullish behavior on a near-term basis (bearish for this index). You saw that Thursday and Friday week before last. It needs to cool-off more and thus supportive of bullish market behavior on a near-term basis.

There are no attributes with bullish support other than minor suggestions of bullish spurt behavior.

The Short-term Indicant signaled bear last Thursday on the collapse of the bullish red curves. The Dow is down 0.4% and the NASDAQ is down 3.4% since then.

As stated on Friday, September 19, 2008, you saw non-economic, socialistic bullish behavior on Thursday and Friday. Rest assured the bear will not expire with socialistic causes. More of the same will eventually generate a complete collapse in the capital market system. Risk taking requires failure and the failing require punishment. When failure is removed, there can be no winners without the losers. In other words, everyone becomes equally poor.

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

After several days of robust expressions supporting the bear, the NYSE and NASDAQ Indicant Volume Indicators are shifting lethargically. The recently expiring robustness paralleled dynamic bearish behavior, fostering the bear’s directional intensity. This remains obviation of bearish support on a longer cyclical basis. However, volume is cooling; most likely due to limitations on short-selling and recognition by many that socialism is expanding, which always dampens enthusiasm in capital markets.

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

There were four buy signals and no sell signals. The SQI is signaling hold for three-ETF’s. They are up by an average of 20.1% (annualized at 10.5%) since their respective buy signals an average of 98.2-weeks ago. The SQI is avoiding 24-ETF’s at this time. They are down by an average of 5.5% since their sell signals an average of 6.6-weeks ago.

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 nine 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 four buy signals and no sell signals. The Short-term Indicant is signaling hold for three-ETF’s. They are up an average of 236.0% (annualized 123.2%) since the STI signaled, buy, an average of 98.5-weeks ago. There are 24-ETF’s with avoid signals. They are down by an average of 5.6% since their sell signals an average of 6.6-weeks ago.

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 four buy signals and no sell signals. The Quick-term Indicant is signaling hold for two-ETF’s. They are up by an average of 3.7% (annualized at 61.3%) since the QTI signaled buy an average of 3.1-weeks ago. The Quick-term Indicant is avoiding 25-ETF’s. They are down by an average of 3.7% since their sell signals an average of 5.1-weeks ago.

Current Strategy – September 22, 2008 – As stated on Friday, September 12, do not be surprised at bearish aggression. Although bullish spurts will occur from time to time, the bear is configuring for significant sustainability at this time. The depth is unknown, but a bear is a bear. As previously stated, investing behavior should be consistent with that of bear market tactics. Most of the major indices have formed a double yellow hump, which suggests a very high probability of a significantly lengthy bear market. Reverse tangential lines are being constructed and once the configuration is complete, the market will fall lower than the tangential demarcation at some future point. That is why this bear will be sustainable; most likely well into 2009.

September 23, 2008 – There is little difference from yesterday. The Quick-term Indicant will attempt to participate in bullish spurts, while the Short-term Indicant will not. Government meddling in short-sells is distorting the Indicant Volume Indicator. This will dampen obviations of directional intensity until it adjusts for that interference. The duration of this adjustment is not known as it must vacillate through a few bull/bear cycles.

September 24, 2008 – There remains little difference from the last two days. The bear remains dominant. Most Vector Pressure is cycling south. Force Vectors are positioning to reverse that cycle. Failure will unleash the bear. Success may encourage a bullish spurt; but no long lasting bullish cycle. Reverse tangential lines are forming which suggests additional bearish cycles are to follow.

September 25, 2008 – Mid-term bearishness remains in tact. The results of governmental meddling will be unknown for quite some time. If the credit markets are frozen, as indicated, rest assured earnings will plummet. Keep in mind, profit and loss, is non-linear to revenue.

September 26, 2008 – The Quick-term Indicant signaled buy for four ETF’s. These four ETF’s are above bearish yellow and primed for a bullish spurt. The Short-term and Consolidated models also signaled buy for those four ETF’s. We are nearing the heart and soul of bullish seasonality and a 12-week bullish spurt would not be surprising. Congress will be in recess in a few days, which is also bullish for the stock market. The other ETF’s will most likely not receive buy signals until they get a little closer to their bearish yellow curves. The Quick-term Indicant did not signal sell for QID. Set your stop losses around $50. It will probably sell early next week. Since you bought at around $47-48, you should be okay. The Indicant will probably signal sell for this ETF next week. Its Force Vector fell below Vector Pressure on Friday, but still resides in deep bullish domains. However, do not be surprised at QID falling to the low 40’s during October-November. Keep in mind, the bear market is nowhere nearing expiration, but a bullish spurt of significant duration could be unfolding. Keep in mind these comments are for traders, as opposed to long-term investors (post 1991). 1991-long-term investors remain in healthy condition.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-two of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 5.5%. This attribute supports the bear.

One of the 30-ETF’s is above its bullish red curve. It is non-contrarian ETF#25 and one of the ones receiving a buy signal today. This should provide some protection against bearish dynamics. All thirty ETF average positions are below bullish red by an average of 9.6%. which is non-bullish.

The QTI differential is bearish by 15.1%. This is the seventy-sixth consecutive trading day of a bearish reading.

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.

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 22.9%. Double digit variances from breakout contact for 185-consecutive trading-days has been non-bullish.

One of the thirty ETF’s is contacting its breakdown line. Contact in 34-of the last 69-trading days supported bearishness. This was losing bearish influence a few weeks ago during the last bullish spurt, but now contact density is no longer relaxing. Contact in 17 of the last 32-trading days and in seven of the past 14-days is incentive for the bear to continue dominance. However, do not be surprised at a seasonal bullish spurt lasting through Christmas and starting in a week or two.

The average distance between the price and breakdown is a mere 8.8%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 37 of the last 64-trading days. Double digits provide non-bearish relief. After the phony bullish spurt induced with governmental meddling, it should be noted this is again a single digit expression and thus is supportive of the bear. However, it may move back to double digits in the next week or two fostering support for a nice bullish spurt for those of you who enjoying trading.

The breakout/breakdown differential is bearish by 14.2%. This attribute is supporting bearish ambition.

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 in bullish domains. This is no longer a bullish majority and thus non-supportive of the bull. They are precariously positioning to energize the bear, but a hitch and post configuration is possible, supporting bullish spurt potential.

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 four put option buy signals after Friday’s close. There have been 12-put option buy signals and three call option buy signal in the past ten trading days. These put options buy signal conflict with the buy signals on Friday, but a bullish bounce on Monday, followed by a bearish expression on Tuesday would be perfect. Keep in mind, this works, directionally 79% of the time. The magnitude is sometimes disappointing. If you elect to buy the ETF’s, related put options can be somewhat protective over volatile behavior, which is common during the early phases of any cyclical shift in directional intensity.

Five of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear. This is retaining bearish configurations. Do not be surprised, though at decreasing bearish support in the next few weeks.

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

A solid new bearish bias shift was born on June 11, 2008. It expired on August 1, 2008. The current bias is bearish and it originated on September 5, 2008. However, do not be surprised at a shift to bullish bias in the next few days that may last through Christmas.

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

The Quick-term and Short-term Indicant tracks ETF#31, QID, which is the ETF cousin to ProFunds Ultra Short. It is excluded from overall ETF statistics because it is purely contrarian. It is designed to move bullishly during bear markets and bearishly during bull markets. This exclusion is required for convergent/divergent monitoring.

The Indicant signaled buy for QID on September 5, 2008. It is up 8.4% since that buy signal, annualizing at 143.9%. As earlier stated set your stop loss at $51. The Indicant will probably signal sell early next week.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 8.0% since the Quick-term Indicant sell signal on July 24, 2008. It is a yellow bear with a bearishly directed Force Vector. Vector Pressure remains in bearish domains.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is up 7.6% since that sell signal. This fund continues to relax. Vector Pressure crossed into bullish domains, but a few more days before signaling buy is appropriate. It simply needs to cool off.

ETF#14-Long Government received a buy signal on September 4, 2008. It is down 1.1% since that buy signal, but Vector Pressure is forcing the hold signal. This hold signal is based on fundamentals, but if it crosses below yellow, it will receive a bear signal.

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

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Market forces resumed control last week as socialistic paths were delayed in their attempt to provide economic buoyancy. The market delivered complete bearish convergence. Normally, that would be bearish. However, the heart and soul of bullish seasonality should configure in the next week or two if not early next week.

Indicant Conclusion

Some ETF’s maintained non-bearish configurations this past week. This is a common attribute in the early stages of a bullish cycle. It is likely this bullish cycle could be sustainable through Christmas based on the heart and soul of bullish seasonality. However, keep in mind the post election year is the most bearish and economic fundamentals are in full support of this historical standard.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/28/08

September 21, 2008 Indicant Weekly Stock Market Report

Volume 09, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

Principles versus Analytical Rationalization

The long-term prospect for capital markets is non-bullish. Risk and reward are inversely related. Governmental meddling is introducing profound minimizations of risk and thus a reduced potential for reward.

Bean counters do not create wealth. Their job is to report numbers. Unfortunately, they have been increasingly attempting to be a participant in wealth creation. That, of course, is impossible, and a direct contributor to the problem. As stated many times in this report, wealth is created in only three ways; agriculture, manufacturing, and extraction. If one is not picking corn, making a car, or drilling for oil or extracting aluminum, they are not a participant in wealth creation. Writing this report does not create wealth. If printed on paper, the paper mill providing the paper, created the wealth.

Politicians and government bureaucrats do not create wealth. They detract from it. Unfortunately for the capital market system, this particular group of people have become more involved in the capital markets. This is because the populace is whining about their 401K’s. That is tyranny by the majority. When the majority becomes weak, the underlying socio-economic system will eventually collapse. The decision makers in government are not incurring any personal risk and by default, their decisions are always inadequate to the support of wealth creation.

Hollywood folks from the land of fiction do not create wealth, even though many of them are rich. Four dollar gas does not bother them. So, they banter around with their “land of fiction” influence and it is amazingly ridiculous that one would put a microphone near the stupidity that flows from their barking mouths, which is more fiction than fact by the nature of their work.

For several years, bean counters have been elevating asset values on their balance sheets. Their pencil pushing did not create real economic wealth. Unfortunately, though, this propelled the stock market higher, as reported earnings escalated. The capital markets eventually detect the phoniness of the dilettantes and very efficiently and quickly adjust to “mark-down” the prior “mark-ups” by the phony. Capital markets reward what is real and punish what is phony.

People earning $30,000 to $40,000 annual salaries are in the majority and their political leaders facilitated the phoniness of their owning $200,000 homes. This nonsensical behavior was detected the capital markets and appropriately unleashed bearish punishment. Now, those guilty of setting up that phoniness are becoming more involved in the capital markets and that is non-bullish. The capital markets should be limited to those that actually create wealth. When non-wealth creators intrude, the capital market systems will collapse. Keep in mind the dilettantes on Wall Street, for the most part, are products of the same academia of politicians. They all learned the same nonsensical sources of the deteriorating academia. Professors do not create wealth.

The Dow is up 293.4% since November 1991. It has never been up that much during a comparable number of months/years in the past. A 1991 investor should be delighted to have that sort of return during that period. That annualizes at 17.3%, which exceeds the stock markets average by nearly two-fold in the last 100-plus years. It exceeds an average performance of nearly all other investment instruments.

As the stock market plummeted the past several months, the political establishment is taking action that supports tyranny by the majority. The government is creating monopoly money. The dollar will get closer to having no value than where it pathetically now exists. All world currencies will follow the same path, as the stupidity does not appear limited to the U.S. Federal Government. Real capital infusion will slow, as the reward for such investments will be dampened. That will slow real wealth creation. That is non-bullish.

The non-substantive emotionalism that drove the markets significantly higher last Thursday and Friday will eventually be replaced by the recognition where real wealth is created. That is non-bullish.

However, there will be periods of capitalistic optimism. That will be influential on the capital markets and the Indicant will signal bull/buy. However, as long as socialistic and communistic behaviors by governments accelerate, do not be surprised with the laziness of the bull cycles.

It is possible for bean counters, politicians, actors, professors, and others that do not create wealth to analyze and conclude that their methods are destructive? Will this be a learned lesson or will the spiral of deceit and corruption continue? An objective analysis with proper conclusions is required, as most do not appreciate the concept of simple principles. The current projection of non-bullishness is based in principle, only. Is it possible that a detailed analysis of what went wrong will support the principles? In this increasingly noisy world, where fake people bark into microphones and confuse the populace, who are not the principally informed and actually believe the fiction from Hollywood and Washington DC, will most likely contribute to their own decreasing quality of life. If that is the case, then it is appropriate the consequences of stupidity not be avoided. A ten-year depression, although painful, is much better than a complete collapse of a system that has worked for hundreds of years with favorable trends for all. There is one simple fact; when non-wealth creators grow in number and influence, rest assured economic systems will shift to the south. That will increase the problem beyond simple economics.

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

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

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

The Mid-term Indicant generated no buy signals and eleven sell signals. There have been 419-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired three weeks ago and the bear is again enjoying “open season.”

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 102 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 147.8%. That annualizes to 58.2%. The Mid-term Indicant has been signaling hold for these 102-stocks and funds for an average of 147.8-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 232-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 14.4% since the Mid-term Indicant signaled sell an average of 26.4-weeks ago.

One year ago, on Sep 21, 2007, the Mid-term Indicant was holding 253-stocks and funds out of the 345 tracked for an average of 125.6-weeks. They were up by an average of 156.4% (annualized at 64.7%). There were 62-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 9.2% since their respective sell signals an average of 23.0-weeks earlier.

The Mid-term Indicant was signaling hold for 307-stocks and funds of the 345-tracked two years ago on Sep 22, 2006. They were up by an average of 96.8% (annualized at 66.9%) since their respective buy signals an average of 75.3-weeks earlier. The Mid-term Indicant was avoiding 37-stocks and funds at that time. They were down an average of 15.1% since their respective sell signals an average of 19.6-weeks earlier.

There were 225-stocks and funds with hold signals on September 23, 2005 since their buy signals an average of 92.6-weeks earlier. They were up by an average of 104.5% (annualized at 58.7%). There were 86-avoided stocks and funds at that time. They were down by an average of 10.3% from their respective sell signals an average of 23.3-weeks earlier.

On Sep 18, 2004, the Mid-term Indicant was signaling hold for 186-stocks and funds out of 296-tracked. They were up by an average of 78.2% (annualized at 68.2%) since their buy signals an average of 59.6-weeks earlier. The Mid-term Indicant was avoiding 84-stocks and funds at that time. They were down by an average of 27.3% since their sell signals an average of 46.9-weeks earlier.

Five years ago, on Sep 20, 2003, there were 271-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 53.8% (annualized at 101.7%) since their respective buy signals an average of 27.5-weeks earlier. There were 16-avoided stocks and funds then. They were down an average of 23.2% since their respective sell signals an average of 31.4-weeks earlier.

On Sep 20, 2002, there were 119-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 13.9%, annualizing at 40.0%. There were 119-avoided stocks and funds then. They were down by an average of 30.4% since their sell signals an average of 14.3-weeks earlier.

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

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

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

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

In spite of profound governmental interference with the capital markets last week, Quick-term, Short-term, and Mid-term Indicant configurations remain in support of the bear. The birth of a new bull will be detectable once the bullish red curve moves north. Do not be surprised at the absence of non-bullish behavior next week. Last Thursday’s and Friday’s profound bullishness was nonsensical.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 56.3% since its secular low on October 9, 2002. The NASDAQ is up 104.1% and the S&P500 is up 61.6% since then. The small cap index, S&P600, is up 132.7%. None of the major indices are bullishly biased.

The Dow is down 19.6% since its last closing peak on Oct 9, 2007. The NASDAQ is down 20.5% since its last peak on Oct 31, 2007. The S&P600 is down 10.7% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 55.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 17.8% since its similar secular peak on March 23, 2000. The Dow is down by 2.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 14.1% so far this year. The NASDAQ is down 14.3% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle, ending fourteen weeks ago, had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. You saw that for about eight weeks until eight weeks ago. The expected reversal to bullish bias on a short-term basis formed. The question of bullish sustainability has now been answered. The six-week bullish cycle turned out to be yet another bullish spurt. It is completely expired and the bear remains dominant in spite of governmental interference.

The NASDAQ year-to-date performance was bearish by 38.2% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start in two to four weeks from now.

The NASDAQ was down by 37.6% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 42.7%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 4.7%. It was down by 1.4% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 0.8% on this weekend and up by 10.4% at this time last year.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. Most of those recent buys have since received sell signals.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates were extremely volatile throughout this past week as monopoly money is being inserted into the capital markets. Protection for idiots persists. This is anti-capitalism. The cry-babies regarding 401K’s deterioration are being placated by the failing democracy; tyranny by the majority. Lying politicians, who only detract from economic wealth, are exacerbating the economic problem. Rest assured that socialism will continue downgrading 401K’s.

This bear has teeth, is hungry, and is nowhere near expiration.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 260.5% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 34.5%. It moved to the north in 60 of the past 106-weeks – a little over one-half the time. It has been bullish in 31 of the last 57-weeks. This fund has been bullish in 16 of the last 32-weeks. It has been aggressively bearish in six of the past ten weeks. It was bullish last week. Notice the weekly bearish expressions have exceeded the weekly bullish expressions in recent weeks.

Fidelity Gold, Fund #28 is down 13.2% since the Midterm Indicant signaled sell on August 1, 2008. It is simply not performing and weakening economies are depressing demand for all commodities. It was up sharply last week.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 281.3% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 45.5%. This fund has been bullish in 13 of the last 30-weeks. It has been bearish in nine of the past 12-weeks. It was up moderately last week.

Vanguard Energy #18, VGENX, is up 202.7% (annualized at 36.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 182.1% (annualized at 37.5%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 148.2% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 28.7%.

Energy related funds were again bullish last week after enduring significant bearishness in eight of the last ten weeks.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 2.8% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 19 of the past 34-weeks and in 10 of the past 14-weeks. This ETF remains configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It is down 1.2% since then. It gained 81.4% from its August 3, 2005 buy signal until the recent sell signal. Its annualized gain amounted to 26.0%. This fund has been bullish in 37 of the past 55-weeks. It has been bullish in 18 of the last 31-weeks. It has been bearish in five of the past 10-weeks.

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

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

The Mid-term Indicant signaled bear for the ten major indices on September 5, 2008. They are up an average of 1.8%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,320,247

That beats buy and hold performance of $1,732,609 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $122,938 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $78,845 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,996.3%, 44.5%, and 182.0%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

Click here for 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 293.4% (annualized at 17.3%) since the Long-term Indicant signaled bull 881-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. 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: Five of thirty. Minimal bullish support.

Quick-term Yellow Bears/Threats: Twenty of thirty. Supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 8.6%. Bull has no influence.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 6.8% with continued bearish support.

Short-term Indicant: Breakdown contact density is very high in support of the bear.

Short-term Indicant: Relative breakdown position is providing bearish relief with double digit expression.

Force Vectors: Majority are directionally supporting bear.

Vector Pressure: Seven in bullish domains, offering bearish support.

STI Tangential Support: None; therefore, bearish.

Immediate Tactics: Holding non-contrarian funds is not safe.

Current Quick-term Bias: July 31, 2008 bullish bias expired on September 5, 2008.

Overall Market Status: The Quick-term cycle is vulnerable to bearish influences.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Robustness is supporting bear in spite of unnatural bullish behavior on Thursday and Friday.

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

To view the STI-Tangential Protection for ten major indices, click here.

DJIA

There are no changes from Friday, September 5. The collapse of the bullish red curve on Thursday, September 4 disfigured the newly forming bullish cycle. That lends support to a resumption of dominance by the bear. The short-term investor should behave in a manner consistent with bearish dominance. The market cannot mount a bullish drive with current configurations. That does not mean continued bearishness. It means there is minimal probability of sustainable bullish behavior.

Although governmental intervention has falsely elevated the Dow a considerable amount the past two days, you will notice the configurations remain bearishly biased. The markets are emotionally based right now. They are not moving north based on capitalistic performance. Socialistic approaches will eventually provide the bear enough fuel to last many years. A zero Dow is possible with this sort of behavior on the part of government.

DJ Composites

The bear continues to dominate, regardless of dynamic bullish expressions the past two days.

DJ Transports

This index has not been as bearishly participative as the others due to its contrarian relationship to oil prices. It has plenty of configurable room to express more bearish behavior. It has configured to resume bearish behavior in the next few months or possibly into 2009.

DJ Utilities

Solid bear now dominating market. As stated yesterday, do not be surprised at utilities driving bullishly to bearish yellow before collapsing again. As stated last week, this should happen quickly. As you noticed with dynamic bearish expressions on Tuesday and Wednesday, the bear continues dominating. Thursday and Friday bullish behavior did not expire bearish configurations. This index is configuring for additional bearish behavior on a mid-term basis.

NASDAQ

As stated one week ago, a solid bear is dominating. Force Vector appears at bottom of its cycle. As stated last Wednesday, do not be surprised at bullish expressions. That occurred on Thursday and Friday. There is an increasing probability of bullish spurt behavior, which suggests the cyclical bear remains dominant.

NASDAQ100

September 3, 2008-Wednesday’s collapse of the bullish red curve proved ominous. Force Vector fell into deep bearish domains, offering bearish encouragement. The NASDAQ100 did not wait until 2009 to fall below the reverse tangential line. That does not mean that 2009 will not be bearish. It just means the last configuration of bearish obviation has now been applied and there are plenty of opportunities to form new ones. In other words, this bear market is configuring with support for sustainability in spite of recent governmental intervention.

Vector Pressure is now inside deep bearish domains, which bodes well for the bear. Pauses and fluttering are typical in this position, but the cyclical bear remains in tact.

S&P500

There is no change from Friday, September 5, 2008. The baby bull was incapable of fending off declining Vector Pressure. This remains configured in favor of the bear.

S&P100

There is no change from September 5, 2008. September 4, 2008’s disfigurement of the bull, like the other indices suffering from bearish onslaught, suggests sustainable bearish behavior.

S&P400

There is no change from September 5, 2008. The bull was too weak to respond. This suggests increasing bearish influences. Vector Pressure remains inside bearish domains, which will extend the breadth of the bear.

S&P600

The red bull curve collapsed with Monday’s deep bearish expression, fulfilling last Friday’s projection of an immediate collapse. Although this index is the strongest in terms of bullish support, it remains configured in support of the bear.

NYSE

This index is configured solidly in support of the bear.

VIX

This index has run its course in support of a bullish stock market. It is now configuring in support of a bearish stock market. As stated last Wednesday, it is too hot to continue in that support. Do not be surprised at some more bullish behavior on a near-term basis (bearish for this index). You saw that on Thursday and Friday.

There are no attributes with bullish support other than minor suggestions of bullish spurt behavior.

The Short-term Indicant signaled bear last Thursday on the collapse of the bullish red curves. The Dow is up 1.8% and the NASDAQ is up 0.7% since then.

As stated on Tuesday, September 9, Monday’s bullish expression was emotionally based. That form of emotion is a mere burst of energy and never sustainable and usually accompanied with the irrational. The bear is now dominant and any bullish expressions should be viewed as mere spurts. You saw non-economic, socialistic bullish behavior on Thursday and Friday. Rest assured the bear will not expire with socialistic causes. More of the same will eventually generate a complete collapse in the capital market system. Risk taking requires failure and the failing require punishment. When failure is removed, there can be no winners without the losers. In other words, everyone becomes equally poor.

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

The NYSE and NASDAQ Indicant Volume Indicators are robust expressions. That is paralleling dynamic bearish behavior. This is now an obviation of bearish support. As stated on Monday, September 8, 2008 after dynamic bullish gains from an emotionally charged response, the market is expected to wipe out Monday’s gains, plus more bearishness within the next two to four weeks, if not sooner.

Do not be fooled by such nonsensical emotionally-based behavior. As long as bureaucrats, government appointees, members of OPEC’s unearned wealthy, and other members of the parasitical elite are dominating the news of the market, rest assured the bull will remain absent. Such people are non substantive to capital markets. They add no economic value. The capital markets fundamentally require added economic value.

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

There were no buy signals and no sell signals. The SQI is signaling hold for three-ETF’s. They are up by an average of 22.4% (annualized at 11.8%) since their respective buy signals an average of 97.2-weeks ago. The SQI is avoiding 28-ETF’s at this time. They are down by an average of 0.6% since their sell signals an average of 5.0-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. The Short-term Indicant is signaling hold for three-ETF’s. They are up an average of 247.3% (annualized 130.5%) since the STI signaled, buy, an average of 97.5-weeks ago. There are 28-ETF’s with avoid signals. They are down by an average of 0.6% since their sell signals an average of 5.0-weeks ago.

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. The Quick-term Indicant is signaling hold for two-ETF’s. They are up by an average of 0.6% (annualized at 16.0%) since the QTI signaled buy an average of 2.1-weeks ago. The Quick-term Indicant is avoiding 29-ETF’s. They are down by an average of 0.8% since their sell signals an average of 3.7-weeks ago.

Current Strategy – September 15, 2008 – As stated last Friday, do not be surprised at bearish aggression next week. Although bullish spurts will occur from time to time, the bear is configuring for significant sustainability at this time. The depth is unknown, but a bear is a bear. As previously stated, investing behavior should be consistent with that of bear market tactics.

September 16, 2008 – Bailout loans continue to cover-up incompetence from the incompetent. That is bearish, but emotionalism can propel bullish spurts. Wait for the Short-term and Quick-term Indicant to confirm substantive potential for bullish sustainability.

September 17, 2008 – All major indices are setting on their breakdown lines. There is no natural floor. Until a bullish expression holds throughout a complete trading day, avoid buying. This bear market is nowhere nearing completion. Reverse tangential lines are yet to be drawn, pending the next bullish spurt. There is a 97% probability the next bullish cycle will be a mere spurt only to be followed by more bearish behavior.

September 18, 2008 – Today’s bullish behavior was another emotionally based rally. The government does not earn money; they waste it. The government is the primary culprit in this problem. So, when the culprit is the savior, rest assured, as long as money is rotating from one dilettante’s pocket to another dilettante’s pocket, the bull will remain absent.

September 19, 2008 – Configurations remain in support of the bear. Signaling buy with recent bullish spurt behavior would only be followed with sell signals, based on current configurations. The heart and soul of bullish seasonality is nearing and indeed may have started with bullish behavior last Thursday and Friday. However, short-term and quick-term attributes are not yet configured with bullish support. Regardless of the absence of economic fundamentals, a bullish spurt of some sustainability can manifest, but the Short-term and Quick-term Indicant are not yet configured to support that. On the contrary, configurations remain in support of the bear.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 2.2%. This attribute supports the bear.

Five of the 30-ETF’s are above their bullish red curves. All thirty ETF average positions are below bullish red by an average of 8.6%. which is non-bullish.

The QTI differential is bearish by 8.6%. This is the seventy-first consecutive trading day of a bearish reading.

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

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 19.9%. Double digit variances from breakout contact for 180-consecutive trading-days has been non-bullish.

None of the thirty ETF’s are contacting their breakdown lines. Contact in 32-of the last 64-trading days supported bearishness. This was losing bearish influence a few weeks ago during the last bullish spurt, but now contact density is no longer relaxing. Contact in 15 of the last 27-trading days and in five of the past nine days is incentive for the bear to continue dominance.

The average distance between the price and breakdown is a mere 13.2%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 32 of the last 59-trading days. Double digits provide non-bearish relief. Single digits persisted until Friday’s dynamic bullish expression.

The breakout/breakdown differential is bearish by 6.8%. This attribute is supporting bearish ambition.

ETF Force Vector Configurations

Four Force Vectors are in bullish domains. This is no longer a bullish majority and thus non-supportive of the bull.

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 was one call option buy signals after Friday’s close. There have been four put option buy signals in the past five trading days and today’s call option.

The market is not configured friendly for call option plays at this time.

Seven of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear.

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.

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008. It expired on August 1, 2008 with bullish bias. The current bias is bearish and it originated on September 5, 2008.

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

The Indicant signaled buy for QID on September 5, 2008. It is up 2.9% since that buy signal, annualizing at 75.0%.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 3.2% since the Quick-term Indicant sell signal on July 24, 2008. It is a yellow bear and a maturing bullish Force Vector.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is up 6.8% since this recent sell signal. As stated the past few days, this configuration remains bearish.

ETF#14-Long Government received a buy signal on September 4, 2008. It is down 1.6% since that buy signal.

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

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Capitalistic forces did not influence stock market behavior last week. This attribute is convoluted with socialistic meddling by the government.

Indicant Conclusion

Zero attributes support the bull at this time. All Quick-term and Short-term attributes support the bear. However, the bear lacks synergy, which offers potential for a solid period of the heart and soul of bullish seasonality in a few weeks. This is being reassessed due to the unprecedented intrusion on the capital markets by the government.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/21/08

September 14, 2008 Indicant Weekly Stock Market Report

Volume 09, Issue 02 ISSN 1526 6516 © The Indicant Stock Market Report

This Week’s Report

The Nature of Bear Cycles

Bear cycles usually have less breadth than bull cycles. Bull cycles typically move up on the charts with minimal volatility. Bear cycles on the other hand typically have very few days of sharp drops exceeding 3%. This usually results in a peak to trough magnitude of over 10% in a very few days. Such behavior is not smooth and the drop is sudden.

Current configurations suggest an increased probability of deep and sharp bearish expressions. This is a common attribute during deep bearish seasonality, which is now underway. Such deep drops only last a few days. Once the bottom is found, sharp bullish expressions occur with some pretty wild volatility. Once the market becomes comfortable with its new position, it then will find a cycle or trend to support.

It would not be surprising for the market to fall sharply in the next week or two. This is due to the normal deep bearish seasonality behavior and current configurations. Such behavior is not mathematically predictable. It is entirely a probabilistic observation, based on normal seasonality and current configurations. Political hype is also contributing to this enhanced probability of bearish expressions on a near-term basis.

The market was significantly bearish two weeks ago. An emotionally based bullish expression occurred with governmental intervention into the failings of Fannie Mae and Freddy Mac followed that bearish behavior. Those two institutions did not manifest through capitalistic evolution. Therefore, their failure was inevitable. Those with a political bent, who have never taken the risk of a capitalist, created Fannie Mae and Freddie Mac. They create stupidity and then with fake heroics save and perpetuate their stupidity. These political contaminants penetrate the capital markets and thus the bears flourish. It takes awhile for capitalists to recover and return a predominance of value to the markets with interference from the non-productive political types. Such folks never use their own money. Thus no risk; thus no economic value.

The emotionally based rally on Monday, September 8, 2008 had no substance. The daily stock market report advised you this was phony. As stated in the Monday daily stock market report, those fake bullish gains would be wiped out with immediate bearish behavior. By the end of the week, Monday’s phony gains were wiped out, plus some. The reasoning behind that was the phoniness of political influence on capital markets. There should be absolutely zero influence from government on capital markets. Such interference prolongs and worsens any economic issues confronting capitalism.

Most politicians do not understand capacity. All existence is bounded by its capacity. For example there are very few human beings smart enough and have the inclination to become a medical doctor. Politicians promote healthcare for all. If successful, all that will happen is longer lines waiting on the finite capacity of medical doctors. Before Medicare, the relationship between patient and doctor was simple, workable, and with few problems.

As Medicare expanded with its phony influence in the capital structure between patient and doctor, political meddling increased. Now the relationship is pitiful and the politicians are barking louder. An individual who decides to become a medical doctor or nurse does more toward providing healthcare than all politicians combined. One individual with substantive interaction with a patient outperforms thousands of those who just bark about it.

Capitalists do a good job balancing capacity to the demand for it. However, capacity is relatively fixed, expanding behind increasing demand for it. From time to time, the demand falls below the capacity. That is natural. Freddie Mac and Fannie Mae created a false demand against capacity. The adjustment to equalize the capacity of houses and the demand for them is now more violent than when left alone to the capitalist.

The capital markets view such governmental interference as nonsensical. After all, where is the profit from such political meddling? Rest assure, there is no profit. There will only be deeper losses. Due to the nonsensical nature of government meddling and phony organizations, such as OPEC, the markets cannot perform at balancing capacity to demand. Capitalists are more efficient at this than any other institution. Interfering with this causes sudden and deep drops in the capital markets.

This, coupled with deep bearish seasonality and current configurations, suggest the risk is high to be aggressively long in the stock market. The mess created by government, politicians, and OPEC-like organizations has expanded the potential for a long lasting bear market. That is the reason for the increasing number of sell signals the past few weeks.

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

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

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

The Mid-term Indicant generated one buy signal and forty-seven sell signals. There have been 408-sell signals since October 26, 2007. Tangential protection did not manifest in the bull cycle that expired two weeks ago and the bear is again enjoying “open season.”

In addition to the buy signal, the Mid-term Indicant is signaling hold for only 112 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 149.4%. That annualizes to 56.2%. The Mid-term Indicant has been signaling hold for these 112-stocks and funds for an average of 138.2-weeks.

In addition to the sell signals, the Mid-term Indicant is avoiding 185-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 21.6% since the Mid-term Indicant signaled sell an average of 30.0-weeks ago.

One year ago, on Sep 14, 2007, the Mid-term Indicant was holding 251-stocks and funds out of the 345 tracked for an average of 125.0-weeks. They were up by an average of 149.1% (annualized at 61.8%). There were 91-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 5.5% since their respective sell signals an average of 17.0-weeks earlier.

The Mid-term Indicant was signaling hold for 261-stocks and funds of the 345-tracked two years ago on Sep 15, 2006. They were up by an average of 112.5% (annualized at 69.8%) since their respective buy signals an average of 83/0-weeks earlier. The Mid-term Indicant was avoiding 85-stocks and funds at that time. They were down an average of 14.5% since their respective sell signals an average of 19.0-weeks earlier.

There were 225-stocks and funds with hold signals on September 16, 2005 since their buy signals an average of 90.4-weeks earlier. They were up by an average of 105.8% (annualized at 60.8%). There were 85-avoided stocks and funds at that time. They were down by an average of 9.0% from their respective sell signals an average of 22.6-weeks earlier.

On Sep 11, 2004, the Mid-term Indicant was signaling hold for 187-stocks and funds out of 296-tracked. They were up by an average of 75.7% (annualized at 67.2%) since their buy signals an average of 58.6-weeks earlier. The Mid-term Indicant was avoiding 104-stocks and funds at that time. They were down by an average of 26.2% since their sell signals an average of 45.6-weeks earlier.

Five years ago, on Sep 13, 2003, there were 268-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 51.4% (annualized at 96.9%) since their respective buy signals an average of 27.6-weeks earlier. There were 16-avoided stocks and funds then. They were down an average of 22/7% since their respective sell signals an average of 31.1-weeks earlier.

On Sep 13, 2002, there were 171-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 8.0%, annualizing at 39.3%. There were 101-avoided stocks and funds then. They were down by an average of 32.0% since their sell signals an average of 16.9-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

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

The market remains configured in support of the bear. However, several stocks and funds are not participative with bearish ambition. This suggests the bear could be mild in depth and duration. Bear’s behave differently. They position themselves very quickly. Meandering bears do exist, such as the one from 2004 through July 2006. Such bears, though, are rare. You will know when this bear is tiring at the next red bull movement in the Short-term Indicant.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 56.8% since its secular low on October 9, 2002. The NASDAQ is up 103.0% and the S&P500 is up 61.4% since then. The small cap index, S&P600, is up 123.2%. None of the major indices are bullishly biased.

The Dow is down 19.4% since its last closing peak on Oct 9, 2007. The NASDAQ is down 20.9% since its last peak on Oct 31, 2007. The S&P600 is down 14.4% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 55.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 18.1% since its similar secular peak on March 23, 2000. The Dow is down by 2.6% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 13.9% so far this year. The NASDAQ is down 14.7% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle, ending thirteen weeks ago, had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. You saw that for about eight weeks until seven weeks ago. The expected reversal to bullish bias on a short-term basis formed. The question of bullish sustainability has now been answered. The six-week bullish cycle turned out to be yet another bullish spurt. It is completely expired and the bear is now dominant.

The NASDAQ year-to-date performance was bearish by 31.4% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 21.1%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start in three to five weeks from now.

The NASDAQ was down by 34.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 38.9%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 5.4%. It was up by 0.3% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was up 0.5% on this weekend and up by 7.3% at this time last year.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 10% due to increasing bearish influences for the longer-term holdings. Most of those recent buys have since received sell signals.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates remain with bullish bias for the stock market. Commodities continue shifting in favor of a bullish stock market. Configurations are shaping similar to the 1990’s with declining commodities, low interest rates, and rising productivity.

As stated last week, the problem right now is corporate earnings. They are softened by virtue of under-absorption of burden and overhead. The fat salaries paid to under-performing executives require high sales volume to generate profits. Sales are soft, which occurs in a recessionary environment. Therefore, the cost of goods and services on a per unit basis is higher, unless the fat salaries are reduced. They are not. Workforce reductions are implemented, which lowers production and selling capacity. That leads to a further reduction in corporate profits.

If the recession is deep enough, some of the over-paid incompetent executives are also fired. As companies shrivel in size, retention of competent talent becomes more prevalent than during growth cycles.

The stock market will smell the end of the recession about six to nine months before it happens. Do not wait for your neighbor to get a job before buying stocks again. By then the market will probably be up by double-digit amounts.

The U.S. Dollar continues strengthening against most world currencies. The exception is the Japanese Yen. That bodes well for N.A. automobile manufacturers, which should help their related economies.

This is shaping up for an outstanding money making opportunity. There are more capitalists than ever before working hard at value added activities around the world. That is shaping up for explosive stock prices around the globe. The only discerning point is the depth and breadth of the worldwide recession now underway.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 255.3% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 33.9%. It moved to the north in 59 of the past 105-weeks – a little over one-half the time. It has been bullish in 30 of the last 56-weeks. This fund has been bullish in 15 of the last 31-weeks. It has been aggressively bearish in six of the past nine weeks. It was flat last week. Notice the weekly bearish expressions have exceeded the weekly bullish expressions in recent weeks.

Fidelity Gold, Fund #28 is down 24.8% since the Midterm Indicant signaled sell on August 1, 2008. It is simply not performing and weakening economies are depressing demand for all commodities. It was down sharply the past two weeks, following two weeks of mild bullishness.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 274.5% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 44.5%. This fund has been bullish in 12 of the last 29-weeks. It has been bearish in nine of the past 11-weeks. It was again down sharply last week.

Vanguard Energy #18, VGENX, is up 195.0% (annualized at 35.3%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 175.1% (annualized at 36.2%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 140.6% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 27.3%.

Energy related funds were again bearish last week after enduring significant bearishness in eight of the last nine weeks.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 1.2% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 18 of the past 33-weeks and in nine of the past 13-weeks. This ETF is configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled sell for the GLD-ETF#11 on September 8, 2008. It gained 81.4% from its August 3, 2005 buy signal until the recent sell signal. It’s annualized gain amounted to 26.0%. This fund has been bullish in 37 of the past 55-weeks. It has been bullish in 18 of the last 30-weeks. It has been bearish in four of the past nine weeks.

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

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

The Mid-term Indicant signaled bear for the ten major indices last weekend. They were up slightly last week for an average gain of 1.3%.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,320,247

That beats buy and hold performance of $1,737,713 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $122,607 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $78,407 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1,990.1%, 44.9%, and 183.6%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled buy for this fund this weekend. Do not be surprised at a quick sell signal once the heart and soul of bullish seasonality begins in a few weeks.

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 294.6% (annualized at 17.4%) since the Long-term Indicant signaled bull 880-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. 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: Two of thirty. None are contrarian; zero bullish support.

Quick-term Yellow Bears/Threats: Twenty-one of thirty. Supporting bear.

Quick-term Non-Bearishness: QTI differential is bearish 11.6%. Bull has no influence.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 12.1% with continued bearish support.

Force Vectors: Majority are directionally supporting bear.

Vector Pressure: Ten in bullish domains, offering bearish support.

STI Tangential Support: None; therefore, bearish and with threat of dynamic bearishness.

Immediate Tactics: Holding is no longer safe.

Current Quick-term Bias: July 31, 2008 bullish bias expired on September 5, 2008.

Overall Market Status: The Quick-term cycle is vulnerable to bearish influences.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Embryonic robustness is supporting bear.

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

To view the STI-Tangential Protection for ten major indices, click here.

DJIA

There are no changes from last Friday. The collapse of the bullish red curve on Thursday, September 4 disfigured the newly forming bullish cycle. That lends support to a resumption of dominance by the bear. The Force Vector has not crossed below the lower band tolerance line, N, lending a small glimmer of hope for a bullish response.

However, Force Vector is moving north, favoring near-term bullishness. As previously stated, though, the short-term investor should behave in a manner consistent with bearish dominance.

The blue chips are putting up a gallant effort to expel bearish influences, but configurations suggest the underlying anemic bull cycle should expire in the next day or two.

DJ Composites

The bear is now solidly dominating. This index is a yellow bear, Vector Pressure is in bearish domains, and Force Vector is contained in deep bearish domains.

DJ Transports

Force Vectors crossed above the lower band, N, last Thursday, suggesting near term bullishness, but do not be fooled. Configurations remain in support of the bear.

DJ Utilities

Solid bear now dominating market. Do not be surprised at utilities driving to bearish yellow before collapsing again. This should happen quickly.

NASDAQ

As stated last Wednesday, a solid bear is dominating. Force Vector appears at bottom of its cycle. Do not be surprised at bullish expressions. If they occur, consider them as bullish spurts to be followed by even more dynamic bearish expressions.

NASDAQ100

Vector Pressure is now inside deep bearish domains, which bodes well for the bear.

S&P500

There is no change from Friday, September 5, 2008. The baby bull was incapable of fending off declining Vector Pressure. This is also configuring in favor of the bear.

S&P100

There is no change from September 5, 2008. September 4, 2008’s disfigurement of the bull, like the other indices suffering from bearish onslaught, suggests sustainable bearish behavior.

S&P400

There is no change from September 5, 2008. The bull was too weak to respond. This suggests increasing bearish influences. Vector Pressure is now, as of September 11, inside bearish domains, which will extend the breadth of the bear.

S&P600

Contrary to the S&P400, most of the bullish movement had been above bullish red. However, behavior the past two weeks, for the most part, has been below red. As stated on Friday, August 29, 2008, bearish behavior with rising Force Vector was inconsistent with expectations and threatens the bull. The configuration no longer remains strong. However, significant bearish behavior would be required to disfigure its bullish cycle. The bull has not yet been disfigured, but getting close to doing so. It should disfigure early next week.

NYSE

This index is configured solidly in support of the bear.

VIX

This index has run its course in support of a bullish stock market. It is now configuring in support of a bearish stock market.

Other than the S&P600-Small Cap Index, there is little remaining in support of the bull. Although full bearish support is not yet mature, the recent bullish cycle was a mere bullish spurt. Five of the twelve indices are above bullish red, but those red cycles are not yet forming in support of the bull. Five of the twelve indices are yellow bears. Eleven of twelve Vector Pressures are bearish. The bullish one is VIX, which is inverse to market directional intensity.

The Short-term Indicant signaled bear last Thursday on the collapse of the bullish red curves. The Dow is up 2.1% and the NASDAQ is up 0.1% since then.

As stated last Tuesday, Monday’s bullish expression was emotionally based. The form of emotion is a mere burst of energy and never sustainable and usually accompanied with the irrational. Rest assured the bear is now dominant and any bullish expressions should be viewed as mere spurts.

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

The NYSE and NASDAQ Indicant Volume Indicators are in an embryonic phase of robust expressions. That is paralleling dynamic bearish behavior. This is approaching an obviation of bearish support. As stated on Monday, September 8, 2008 after dynamic bullish gains from an emotionally charged response, the market is expected to wipe out Monday’s gains, plus more bearishness within the next two to four weeks, if not sooner. Do not be fooled by such nonsensical emotionally-based behavior. As long as bureaucrats, government appointees, members of OPEC’s unearned wealthy, and other members of the parasitical elite are dominating the news of the market, rest assured the bull will remain absent. Such people are non substantive to capital markets. They add no economic value and the capital markets fundamentally require added economic value.

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

There were no buy signals and no-sell signals. The SQI is signaling hold for four-ETF’s. They are up by an average of 21.4% (annualized at 14.9%) since their respective buy signals an average of 73.7-weeks ago. The SQI is avoiding 27-ETF’s at this time. They are down by an average of 2.1% since their sell signals an average of 4.2-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There were no buy signals and no sell signals. The Short-term Indicant is signaling hold for four-ETF’s. They are up an average of 187.8% (annualized 130.7%) since the STI signaled, buy, an average of 73.9-weeks ago. There are 27-ETF’s with avoid signals. They are down by an average of 2.1% since their sell signals an average of 4.2-weeks ago.

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. The Quick-term Indicant is signaling hold for three-ETF’s. They are up by an average of 1.3% (annualized at 24.8%) since the QTI signaled buy an average of 2.8-weeks ago. The Quick-term Indicant is avoiding 28-ETF’s. They are down by an average of 2.2% since their sell signals an average of 2.8-weeks ago.

Current Strategy – September 8, 2008 – Today’s bullish was not supported by fundamentals. Shifting money from one pocket to another by the Treasury Department is wrong. Failing private institutions should be allowed to fail. It is the failure that fosters future strength. A fake institution of fake private undertones, such as Freddie Mac and Fannie Mae, allowed the swelling of phony assets that impregnated other related institutions created the fake wealth. Today’s bullishness was fake and emotionally based. The bear remains in tact.

September 9. 2008 – The bear is gaining momentum. Expect bearish sustainability. As long as the governments are meddling with capital markets, the bull will not participate. Any bullish expression should be considered as a spurt only to be followed by more bearish behavior. You are witnessing communistic behavior by political dilettantes. Failure from time to time is required for success to be earned. All phony attempts to minimize failure has vestiges of FDR’s 10-year depression.

September 10, 2008 – Bullish spurt today. Configurations suggest the longest spurt period will not exceed two weeks. The threat of dynamic bearish behavior is high. Do not be fooled at many days like today and some like last Monday. The bear will attack quickly and violently, taking big bites out of the bull.

September 11, 2008 – Force Vectors are supporting bullish behavior, but the market should follow with bearish expressions by magnitudes exceeding those of bullish spurt behavior.

September 12, 2008 – The rising Force Vectors are mature. Do not be surprised at bearish aggression next week.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-one of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 3.7%. This attribute supports the bear.

Two of the ETF’s are above their bullish red curves. All thirty ETF average positions are below bullish red by an average of 7.8%. which is non-bullish.

The QTI differential is bearish by 11.6%. This is the sixty-sixth consecutive trading day of a bearish reading.

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

None of the thirty ETF’s are contacting their breakout lines. This is non-bullish.

The average distance from breakout contact is 20.7%. Double digit variances from breakout contact for 175-consecutive trading-days has been non-bullish. This attribute is no longer shifting toward bullish support.

None of the thirty ETF’s is contacting its breakdown line. Contact in 29-of the last 59-trading days supported bearishness. This was losing bearish influence, but now contact density is no longer relaxing. Contact in 12 of the last 22-trading days. Contact in two of the past four days is incentive for the bear to continue dominance.

The average distance between the price and breakdown is a mere 8.6%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 28 of the last 54-trading days. Double digits provide non-bearish relief.

The breakout/breakdown differential is bearish by 12.1%. This attribute is supporting bearish ambition.

ETF Force Vector Configurations

Eight Force Vectors are in bullish domains. This is no longer a bullish majority and thus non-supportive of the bull.

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. There have been 77-option buy signals in the past 21-trading days; 41-calls and 36-puts.

Ten of the thirty ETF Vector Pressures are in bullish domains. This is minority support for the bull and majority support for the bear.

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.

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008. It expired on August 1, 2008 with bullish bias. The current bias is bearish and it originated on September 5, 2008.

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

The Indicant signaled buy for QID on September 5, 2008. It is down 0.4% since that buy signal.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 6.4% since the Quick-term Indicant sell signal on July 24, 2008.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is down 6.2% since this recent sell signal. This ETF’s configurations are very bearish at this time.

ETF#14-Long Government received a buy signal on September 4, 2008. It is down 0.6% since that buy signal.

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

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Bullish divergence last week interrupted two consecutive weeks of bearish convergence. Energy was down while most other sectors were bullish. Bearish bias, though, continues on a short-term basis.

Indicant Conclusion

As stated the past seven weeks, the bear completed its process of inflicting its influence on all pertinent sectors. A nesting place in support of the bear occurred at that time, but it was not final. The problem is that the bottoms in the various sectors did not occur at the same time, suggesting the prior short-term bull cycle was not sustainable on a mid-term basis. As it turned out, the bullish cycle was a short spurt. It had some early gusto, but expired two weeks ago.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/14/08

September 7, 2008 Indicant Weekly Stock Market Report

This Week’s Report

Tricky Fundamentals Lead to Tricky Technical's

Just as the newly forming bull market did not garnish synergistic behavior, the newly forming bear is equally absent of that desirous attribute. Last Wednesday’s NASDAQ100 red bull collapse was the first obviating step that the July 31, 2008 Quick-term and Short-term bullish bias was not configuring with a bull of thoroughbred stature.

Although the bull was obviously weak in its early stages of development, the primary attribute one must consider is its synergistic movement. For example, the June/July bear cycle lacked early synergy. Many of you recall, Utilities continued with a bullish configuration while the bear punished other indices. That bear lacked synergy. Consequently, that particular short-term bear cycle was a bearish spurt.

The Short-term market configured a bullish spurt on August 1. Most of the major indices participated except one. The NYSE retained its bearish configuration while most of the other indices moved solidly to the north. The NYSE index is considered boring, but it is worthy of observation. It is the broadest index. Its lack of participation identified limited interest in bullish participation. Sustainable bulls always enjoy broad participation within a few weeks of their originating configuration.

The bear market that began nearly one year ago continues to pester those desiring bullish behavior. Volume is now returning to normal and directional intensity will be a bit easier to monitor. Right now, volume behavior supports bearish continuation.

A few non-contrarian ETF’s have not participated in recent bearish behavior. That suggests limited synergy supporting the cause of the bear. However, most of the Quick-term and Short-term attributes are shifting in support of the bear, but without solidarity. Although the absence of solidarity may not indeed impact the current bear’s directional intensity to the south, it suggests mild magnitude at this time.

If Force Vectors drive deep inside bearish domains, brining Vector Pressure along with it, the bear will continue with periodic bullish spurts, such as the one that was born in late July/early August. Such spurts, technically, begin with configurations similar to the thoroughbred type of bullish cycles that last for many months without significant interruptions by the bear. Those similarities sometimes trigger buy signals that are quickly followed by sale signals. However, one clue to always keep in mind is the synergy element; that is broad participation in the early movements of a cyclical shift.

Fundamentals are a little tricky at this time and that is one reason for the technical inconsistencies confronting the stock market. Low interest rates and falling oil prices are generally associated with bull markets. However, the soul to bull markets is increased corporate earnings. The current interpretation of declining oil prices is the perception of worldwide recession. That suggests decreased demand and thus lower utilization of corporate assets. That erodes profit margins.

The U.S. Dollar is not strengthening on its own merit. That strengthening is based on foreign bodies lowering their interest rates. The by-product to that is the weakening of their currencies. Foreign governments are doing this as an economic stimulant due to recessionary threats around the globe. The low interest rates are used to stimulate economic activity, which increases demand. Capacity is relatively high. Stimulant policies should not induce inflation as corporations are forced to keep prices low due to their low utilization of assets. That is one reason for the hesitancy in synergistic support for recent bearish expressions.

High-fixed-cost-under-utilized assets hurt profit margins more than most other business expenses. The primary profit generator of high fixed cost assets is increased sales volume. The cost of product increases exponentially with declining high fixed costs assets. That means losses accelerate at a rate far greater than the declining sales volume at such companies. The Chinese, for the most part, enjoy variable cost assets where the cost can vary with the sales volume. That protects profit margins. So, it is unlikely the Chinese will endure too much recessionary behavior.

Unfortunately, that means there will be ample demand for OPEC oil. The Russians are not helping the inflationary threat from oil. That is one reason why the stock market is bearish right now. It sees a combination of recession and if it turns out to be mild, inflationary threats will resurface.

Another tricky fundamental is the declining prices for other commodities. Real economic wealth is delivered in only three ways; 1) extraction, 2) agriculture, and 3) manufacturing. Paper pushing does not add economic wealth. The bear is excited about the potential reductions in extraction and manufacturing. Agriculture will remain okay because people will keep this demand segment relatively stable since they need to eat. The bear relishes at the possibility of either inflation or deflation. The bull enjoys wealth creation. The bull does not have an appetite for fake wealth. The bear market that started in October 2007 was the bear’s first sniff of fake wealth. Banks do not generate wealth. They are mere transfer agents; intermediaries so to speak. When their fake wealth schemes became clear to the stock market, the bear was mobilized to take over the market. Since then there have been a few bullish spurts.

From time to time, bullish spurts will be stimulated with declining oil prices. To make matters worse for the bull, but at the bear’s delight, there will be little political risk at raising interest rates after the U.S. election. If socialistic agenda are forced upon free societies after the elections, this bear could last for four more years.

So, historical standards are not encouraging to the bull. Next year is the post election year which is the most bearish on record. Money invested only in post election years since 1832 is down. $10,000 invested in the stock market only in post election years since 1832 is less than $8,000. The bear is delighted that economic fundamentals are sour at this time. It sees political forces, who are absolutely incapable of providing solutions for the bull, about to bark out their stupid policies that always exacerbates the bulls’ problems and encourages the bear to gnaw away at the capital markets. Unfortunately, that worsens even more when a majority of the populace believes the political barking.

However, as long as oil prices continue declining and interest rates remain relatively low, there are good chances for a bull market.

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

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

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

The Mid-term Indicant generated no buy signals and eleven sell signals. There have been 361-sell signals since October 26, 2007. Tangential protection did not manifest and the bear is again enjoying “open season.”

Although there were no buy signals, the Mid-term Indicant is signaling hold for only 159 of the 345-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 121.0%. That annualizes to 58.9%. The Mid-term Indicant has been signaling hold for these 159-stocks and funds for an average of 106.8-weeks.

Although there were no sell signals, the Mid-term Indicant is avoiding 175-stocks and funds of the 345- tracked by the Indicant. The avoided stocks and funds are down an average of 20.3% since the Mid-term Indicant signaled sell an average of 31.4-weeks ago.

One year ago, on Sep 07, 2007, the Mid-term Indicant was holding 250-stocks and funds out of the 345 tracked for an average of 125.0-weeks. They were up by an average of 148.4% (annualized at 61.7%). There were 86-avoided stocks and funds at that time. Those avoided stocks and funds were down an average of 6.9% since their respective sell signals an average of 16.9-weeks earlier.

The Mid-term Indicant was signaling hold for 263-stocks and funds of the 345-tracked two years ago on Sep 8, 2006. They were up by an average of 112.9% (annualized at 71.3%) since their respective buy signals an average of 82.4-weeks earlier. The Mid-term Indicant was avoiding 82-stocks and funds at that time. They were down an average of 9.1% since their respective sell signals an average of 24.0-weeks earlier.

There were 225-stocks and funds with hold signals on September 9, 2005 since their buy signals an average of 91.3-weeks earlier. They were up by an average of 109.6% (annualized at 62.5%). There were 87-avoided stocks and funds at that time. They were down by an average of 7.9% from their respective sell signals an average of 21.7-weeks earlier.

On Sep 04, 2004, the Mid-term Indicant was signaling hold for 184-stocks and funds out of 296-tracked. They were up by an average of 75.3% (annualized at 67.1%) since their buy signals an average of 58.3-weeks earlier. The Mid-term Indicant was avoiding 106-stocks and funds at that time. They were down by an average of 27.7% since their sell signals an average of 44.4-weeks earlier.

Five years ago, on Sep 06, 2003, there were 264-hold signals for stocks and funds out of the 296 tracked by the Mid-term Indicant at that time. They were up an average of 51.6% (annualized at 96.9%) since their respective buy signals an average of 27.7-weeks earlier. There were 18-avoided stocks and funds then. They were down an average of 8.0% since their respective sell signals an average of 13.5-weeks earlier.

On Sep 06, 2002, there were 188-stocks and funds with hold signals from the listing of 295-tracked by the Mid-term Indicant at that time. They were up an average of 5.8%, annualizing at 35.1%. There were 75-avoided stocks and funds then. They were down by an average of 41.5% since their sell signals an average of 21.7-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

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

The market is again configuring in support of the bear. However, several stocks and funds are not participative with bearish ambition. This suggests the bear could be mild in depth and duration. Bear’s behave differently. They position themselves very quickly. Meandering bears do exist, such as the one from 2004 through July 2006. Such bears, though, are rare. You will know when this bear is tiring at the next red bull movement in the Short-term Indicant.

Click the following link that will take you to the tangential protection charts.

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

The Quick/Short-term Indicant Stock Market Report

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 54.0% since its secular low on October 9, 2002. The NASDAQ is up 102.5% and the S&P500 is up 59.9% since then. The small cap index, S&P600, is up 121.9%. None of the major indices are bullishly biased.

As stated the past several months, the secular bull that originated on October 9, 2002 no longer remains solid. A secular bear could indeed be unfolding. The bullish attributes have all expired.

The Dow is down 20.5% since its last closing peak on Oct 9, 2007. The NASDAQ is down 21.1% since its last peak on Oct 31, 2007. The S&P600 is down 15.2% since its last closing peak on Jul 19, 2007.

The NASDAQ is down 55.3% since its last weekly secular peak on March 9, 2000. The S&P500 is down 18.7% since its similar secular peak on March 23, 2000. The Dow is down by 4.3% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The Dow is down 15.4% so far this year. The NASDAQ is down 14.9% this year. These conditions are incongruent with historical standards. This year should be bullish, based on those standards. The stock market occasionally delights in violating historical standards. This always happens when such standards gain in popularity. As stated for several years now, the phenomenon of commonality disallows stock market victories by the masses.

The short-term bullish cycle, ending twelve weeks ago, had been lending support to historical standards. As stated several times in prior weekly reports, that bullishness will be challenged during the dog days of summer. You saw that for about eight weeks until six weeks ago. The expected reversal to bullish bias on a short-term basis formed. The question of bullish sustainability has now been answered. The six week bullish cycle turned out to be yet another bullish spurt. It is completely expired and the bear is now dominant.

The NASDAQ year-to-date performance was bearish by 28.8% through this week in 2001. Keep in mind the NASDAQ finished 2001 down by 23.3%. This year had been configuring with 2001 similarity, but there is a mild chance historical standards (bullish) may be developing. Keep in mind, we still have the heart and soul of bullish seasonality approaching, which should start in four to seven weeks from now.

The NASDAQ was down by 35.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ YTD 2003 performance was up by 39.1%. It finished up in that solidly bullish year by 50.0%. It was down on this weekend in 2004 by 7.9%. It was down by 1.6% in 2005. Many of you recall that 2004 and 2005 were meandering bear markets. In 2006, it was flat on this weekend and up by 7.9% at this time last year.

Keep your eye on the daily stock market report.

Stop Loss Management

The Mid-term Indicant recommends a stop loss of 10% due to increasing bearish influences for the longer-term holdings. You should set them higher for any recent non-contrarian buys, such as 5% or enough to protect reasonable gains. A stop loss of 2.5% to 3.5% is recommended for Quick-term and Short-term buy signals for ETF’s five to six weeks ago. Most of those recent buys have since received sell signals.

Economic Conditions – Inflation, Currency, Interest Rates

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

Interest rates remain with bullish bias for the stock market. Commodities are rapidly shifting in favor of a bullish stock market. Configurations are shaping similar to the 1990’s with declining commodities, low interest rates, and rising productivity.

The problem right now is corporate earnings. They are softened by virtue of under-absorption of burden and overhead. The fat salaries paid to under-performing executives requires high sales volume to generate profits. Sales are soft, which occurs in a recessionary environment. Therefore, the cost of goods and services on a per unit basis is higher, unless the fat salaries are reduced. They are not. Workforce reductions are implemented, which lowers production and selling capacity. That leads to a further reduction in corporate profits.

The U.S. Dollar continues strengthening against most world currencies. The exception is the Japanese Yen. That bodes well for N.A. auto mobile manufacturers, which should help their related economies.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 is up 255.3% since the April 13, 2001 buy signal. Its annualized growth since that buy signal is 34.0%. It moved to the north in 59 of the past 104-weeks – a little over one-half the time. It has been bullish in 30 of the last 55-weeks. This fund has been bullish in 15 of the last 30-weeks. It has been aggressively bearish in six of the past eight weeks. It was down sharply last week.

Fidelity Gold, Fund #28 is down 22.3% since the Midterm Indicant signaled sell on August 1, 2008. It is simply not performing and weakening economies are depressing demand for all commodities. It was down sharply last week following two weeks of mild bullishness.

State Street Research Global #9, SSGRX, which is isolated in the energy sector, is up 301.0% since the Mid-term Indicant signaled buy on August 16, 2002. It is annualizing at 49.0%. This fund has been bullish in 12 of the last 28-weeks. It has been bearish in eight of the past 10-weeks.

Vanguard Energy #18, VGENX, is up 195.8% (annualized at 35.6%) since the Mid-term Indicant signaled buy on April 5, 2003. Fidelity Energy Services #40, FSESX, is up 181.1% (annualized at 37.6%) since the Mid-term Indicant signaled buy on December 6, 2003. Fidelity Energy #39, FSENX, is up 145.6% since the Mid-term Indicant signaled buy on August 16, 2003. It is annualized at 28.4%.

Energy related funds were solidly bearish last week after enduring significant bearishness in seven of the last eight weeks.. Last week’s bullish behavior was consistent with the long-term bullish trend.

The SQI signaled sell for ETF#03 – Energy and Natural Resources on August 4, 2008. It is down 3.5% since that sell signal. It was up 242.4% (annualized at 44.8%) since its previous buy signal on March 26, 2003. This fund has been bearish in 18 of the past 32-weeks and in nine of the past 12-weeks. This ETF is configured for bearishness on a Short-term basis.

The SQI (Consolidated Short-term and Quick-term Indicant) model signaled buy for the GLD-ETF#11 on August 3, 2005. It is up 81.4% since then. It is annualized at 26.0%. This fund has been bullish in 36 of the past 54-weeks. It has been bullish in 17 of the last 29-weeks. It has been bearish in four of the past eight weeks. The Quick-term Indicant signaled sell on August 12, 2008, but the Short-term Indicant continues to signal hold.

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

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

The Mid-term Indicant signaled bear this weekend for all ten major indices.

Click this sentence to view a summary of their performance.

The Mid-term Indicant Dow Jones Industrial Average performance is at $36,320,247

That beats buy and hold performance of $1,707,129 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $177,643. That beats buy and hold’s $121,688 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $222,363. That beats buy and hold’s $78,221 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 2,027.6%, 46.0%, and 184.3%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

This fund is up 5.3% since the Mid-term Indicant signaled sell on August 1, 2008. The Mid-term Indicant will most likely not signal buy for this fund until the heart and soul of bullish seasonality expires.

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 287.6% (annualized at 17.9%) since the Long-term Indicant signaled bull 879-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal. 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: one of thirty. It is contrarian. There is no bullish support.

Quick-term Yellow Bears/Threats: Twenty-three of thirty. Again mixed without obviating bullish desires.

Quick-term Non-Bearishness: QTI differential is bearish 13.8%. Bull now has no influence.

Short-term Non-Bearishness: Breakout/breakdown differential is bearish 14.4% with continued bearish support. The trend remains in favor of the bull, but cyclically being challenged and increasing probability of replacing short bullish trend with longer bearish trend.

Force Vectors: Majority are directionally supporting bear.

Vector Pressure: Thirteen in bullish domains; now offering bearish support.

STI Tangential Support: The Dow Transports newly forming tangential protection was breached today and thus zero bullish protection exists.

Immediate Tactics: Holding is no longer safe.

Current Quick-term Bias: July 31, 2008 bullish bias expired. There is now a new bearish bias.

Overall Market Status: The Quick-term cycle is vulnerable to bearish influences.

Profit Potential from Naked Options: Enhanced as volatility is significant and expected.

Volume: Embryonic robustness is supporting bear. Vacationers obviously returned with increased volume and put in their sell orders. There is some increased GMO (“get me out”).

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

To view the STI-Tangential Protection for ten major indices, click here.

DJIA

The collapse of the bullish red curve on Thursday disfigured the newly forming bullish cycle. That lends support to a resumption of dominance by the bear. The Force Vector has not crossed below the lower band tolerance line, N, lending a small glimmer of hope for a bullish response. Force Vector is pointing south, which offers an equal opportunity for bearish dominance. The short-term investor should behave in a manner consistent with bearish dominance.

DJ Composites

Technically, the newly forming bull cycle, although disfigured, has not yet been replaced by the bear. Prognosis holds that the bear will shortly resume expansive dominance, but that obviation will not occur until Force Vector crosses below the lower tolerance band.

DJ Transports

This index is forming tangential protection. Unfortunately, on Friday, it breached this nearly completed tangential protection. Adding deeper wounds to the bull, the bullish red curve collapsed on Friday. This index was among the last holdouts supporting bullish ambition. This disfigurement to the bullish cycle, coupled with declining energy costs, suggests significant economic concerns. Obviations of this relationship will increase upon completion of deep bearish seasonality, which has several more weeks before expiring.

DJ Utilities

As stated on Thursday, August 28, 2008, strong bullish configurations should invoke a bearish response. The bear indeed responded last Friday, Tuesday, Wednesday and Thursday. This bearish response was deeper than anticipated. The bear was violent in its complete disfigurement of the newly forming bullish cycle. As stated last Thursday, this index is a bear without even one attribute favoring the bull. It is a yellow bear with Force Vector penetrating deep bearish domains. Vector Pressure will succumb to bearish influences, which was the last attribute favoring the bull.

NASDAQ

The red bull curve collapsed on Thursday. This is now configuring with bearish attributes. Vector Pressure will succumb to bearish influences. If Vector Pressure crosses deeply inside bearish domains, do not be surprised if the heart and soul of bullish seasonality does not enjoy application later this year.

NASDAQ100

Wednesday’s collapse of the bullish red curve proved ominous. Force Vector fell into deep bearish domains, offering bearish encouragement. As you can see, the NASDAQ100 did not wait until 2009 to fall below the reverse tangential line. That does not mean that 2009 will not be bearish. It just means the last configuration of bearish obviation has now been applied and there are plenty of opportunities to form new ones. In other words, this bear market is configuring with support for sustainability.

S&P500

As stated last Thursday, the baby bull was incapable of offering bullish response to declining Vector Pressure. This is also configuring in favor of the bear.

S&P100

Thursday’s disfigurement of the bull, like the other indices suffering from bearish onslaught, suggests sustainable bearish behavior.

S&P400

The bull was too weak to respond. This suggests increasing bearish influences. Vector Pressure is nearing fall into bearish domains, which will extend the breadth of the bear.

S&P600

As stated yesterday, contrary to the S&P400, most of the movement has been above bullish red. However, behavior the past two weeks, for the most part, has been below red. As stated on Friday, September 1, 2008, bearish behavior with rising Force Vector was inconsistent with expectations and threatens the bull. The configuration no longer remains strong. However, significant bearish behavior would be required to disfigure its bullish cycle. The bull has not yet been disfigured, but getting close to doing so.

NYSE

So much for a bullish baseline. It evaporated with Thursday’s dynamic bearish behavior. It is under the bear’s authoritarian rule.

VIX

This index has run its course in support of a bullish stock market. It is now configuring in support of a bearish stock market.

Other than the S&P600-Small Cap Index and Dow Transports, there is little remaining in support of the bull. Although full bearish support is not yet mature, the recent bullish cycle appears to have been a mere bullish spurt.

The Short-term Indicant signaled bear last Thursday on the collapse of the bullish red curves. The Dow is up 0.3% and the NASDAQ is down 0.1% since then.

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

The NYSE and NASDAQ Indicant Volume Indicators are in an embryonic phase of robust expressions. That is paralleling dynamic bearish behavior. This is approaching an obviation of bearish support.

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

There was one buy signal and seven-sell signals. The SQI is signaling hold for five-ETF’s. They are up by an average of 31.5% (annualized at 17.7%) since their respective buy signals an average of 91.4-weeks ago. The SQI is avoiding 18-ETF’s at this time. They are down by an average of 4.6% since their sell signals an average of 4.9-weeks ago.

Short-term Indicant Report Card, Status, and Charts

There was one buy signals and seven-sell signals. The Short-term Indicant is signaling hold for five-ETF’s. They are up an average of 168.9% (annualized 94.6%) since the STI signaled, buy, an average of 91.8-weeks ago. There are 18-ETF’s with avoid signals. They are down by an average of 4.7% since their sell signals an average of 4.9-weeks ago.

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 was one buy signal and eight-sell signals. The Quick-term Indicant is signaling hold for three-ETF’s. They are up by an average of 1.3% (annualized at 19.2%) since the QTI signaled buy an average of 3.5-weeks ago. The Quick-term Indicant is avoiding 19-ETF’s. They are down by an average of 4.5% since their sell signals an average of 2.7-weeks ago.

Current Strategy – September 2, 2008 – There is limited obviations of market’s directional intensity. Configurations are mixed, but still holding a bullish bias. Patience will be key if the current bullish cycle becomes disfigured with a new bearish cycle. Stop losses should be tighter at this point, say 2.5% to 3.5% for recent buys.

September 3, 2008 – There is not much too much difference from yesterday. The NASDAQ100 red bull collapse is discerning. However, QQQQ is resting on its bearish yellow curve and Vector Pressure remains positive. That should invite the bull to demonstrate a response to the bear’s recent exertions. Keep in mind there is no synergy driving directional intensity.

September 4, 2008 – More of the major indices endured red bull collapses. That support bearish ambition. There are only two still offering bullish hope, but they appear weak. The bull lacked synergy. The same is true for recent bearish assertions. Directional intensity is biasing in favor of the bear.

September 5, 2008 – Nearly all attributes are suggesting the newly forming bear cycle will have some breadth. However, recent bearishness is consistent with seasonal standards. That is, deep bearish seasonality is a partial influence on recent bearish behavior. The technical configurations, though, are in full support of the bear, regardless of seasonal standards.

Quick-term Indicant Bull/Bear Health Report

Click the above heading to view the charts.

Twenty-three of the 30-ETF’s are below their respective bearish yellow curves. The average relative position of all thirty ETF’s is below bearish yellow by 4.9%. This is again increasing in support of the bear.

Only one of the ETF’s is above its bullish red curve. This attribute is now solidly non-bullish. All thirty ETF average positions are below bullish red by an average of 8.9%. which is non-bullish. Keep in mind, just one non-contrarian bull prevents complete bearish dominance. None of the red bulls are non-contrarian.

The QTI differential is bearish by 13.8%. This is the sixty-first consecutive trading day of a bearish reading. Prior bearish weakening is no longer present.

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

Four of the thirty ETF’s are contacting their breakout lines. This is not non-bullish, which contrasts with recent reports.

The average distance from breakout contact is 21.4%. Double digit variances from breakout contact for 170-consecutive trading-days has been non-bullish. This attribute is no longer shifting toward bullish support. The baby bull did not respond to bearish ambition.

Four of the thirty ETF’s are contacting their breakdown lines. Contact in 27-of the last 54-trading days supported bearishness. This was losing bearish influence, but now contact density is no longer relaxing. Contact in 10 of the last 17-trading days. This is also highlighting the absence of sectored synergy.

The average distance between the price and breakdown is 7.1%. After providing non-bearish support since March 2003 with double digit readings, this has been a single digit expression (bearish) in 24 of the last 50-trading days. Double digits provide non-bearish relief. A single digit reading should invoke a bullish response, which has been a consistent theme for the past several weeks. That did not occur last Wednesday, Thursday, or Friday, which is a disappointment to those desiring bullish behavior.

The breakout/breakdown differential is bearish by 14.3%. This attribute is supporting bearish ambition. Again, the bull did not have the capacity to respond to bearish ambition.

ETF Force Vector Configurations

Six Force Vectors are in bullish domains. This is no longer a bullish majority and thus non-supportive of the bull.

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 was one put option buy signal after Friday’s close. There have been 72-option buy signals in the past 20-trading days; 39-calls and 33-puts.

Thirteen of the thirty ETF Vector Pressures are in bullish domains. This is also minority support of the bull, which is now favoring the bear.

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.

Quick-term and Short-term Indicant Summary

A solid new bearish bias shift was born on June 11, 2008. It expired on August 1, 2008 with bullish bias. Today, September 5, 2008 a new bearish bias was born.

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

The Indicant signaled buy for QID today, September 5, 2008. This fund moved north and paused. It then eclipsed red bullish curve, defying a very low probability of doing that as of last Monday. The collapsing NASDAQ100 bullish red curve last Wednesday setup propulsive activity to the north. Force Vector and Vector Pressure are configuring support for this bullish movement. If you buy this ETF, please set tight stop losses and it moves inversely and exponentially to the NAS100 index. It would not be surprising to find this fund to have a short breadth to its bullish cycle. However, sudden dynamic movements to the north would equally not be surprising in the next few days and weeks.

Other Contrarian Funds

ETF#03-Natural Resources - This ETF is down 7.1% since the Quick-term Indicant sell signal on July 24, 2008.

ETF#11-Gold and Precious Metals received a sell signal from the Quick-term Indicant on August 12, 2008. It is down 1.9% since this recent sell signal. This ETF’s configurations are very bearish at this time.

ETF#14-Long Government received a buy signal yesterday. That buy signal is somewhat reluctant, but if this bear gains momentum, this fund would be a relatively safe hold. It will not showcase dynamic price movements, but holding through a few dividends would be good if the bear market sustains itself.

This fund has some strategic risk. The dollar’s weakness and inflationary threats will eventually stimulate increased interest rates. With that, this fund, fundamentally, would endure bearish behavior. The contrarian movement to that fundamental prognosis would be high demand for safety purposes, depending on the nature of economic behavior. Do not be surprised at jawboning the dollar up, but the U.S. remains a net-importer and thus the continual downward pressure on the dollar, which fundamentally supports long-term upward pressure on interest rates.

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

Short-term Indicant for Tangential Analysis

Divergence versus Convergence

Bearish convergence occurred this week, following bearish divergence last week. Two more weeks like the last two weeks will invigorate the bear more so.

Indicant Conclusion

As stated the past six weeks, the bear completed its process of inflicting its influence on all pertinent sectors. A nesting place in support of the bear occurred at that time, but it was not final. The problem is that the bottoms in the various sectors did not occur at the same time, suggesting this short-term bull cycle is not sustainable on a mid-term basis. As it turned out, the bullish cycle was a short spurt. It had some early gusto, but expired last week.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/07/08