September 2010 Indicant Weekly Stock Market Reports

Sep 26, 2010 Indicant Weekly Stock Market Report

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

The Mid-term Election Year – Part 2

The assertion that the mid-term election year’s traditional stock market bottoming has passed continues gaining momentum. The bull continues strengthening and unleashing yet more buy signals this weekend.

Rumors persist the Fed is elevating stock prices. If they are, the capital markets will eventually punish. Wealth creation, in the end, is the primary driver of stock prices. Without manufacturing, agriculture, or extraction, there is no wealth creation. Sure, demand can drive those sectors into wealth creation, but the products must serve a logical need that fits with increasing the quality of life of earths’ inhabitants.

If prices are falsely elevated with play money, the capital markets will eventually wipe it out. It would be just another bubble similar to the phoniness of the NASDAQ’s peak from the dot com era in the late 1990’s. The dot com companies did not manufacture, farm, or extract. A few contributed to productivity, but most were just hype. The capital markets punished appropriately.

Indicant modeling never cares why the stock market goes up. The models only care if it is going up. If prices cross above certain algorithmic values, buy and hold are signaled. Even if the Federal Reserve confessed to such sinful practices, the Indicant modeling would not care. Prices always eventually decline. When they fall below algorithmic values, the Indicant will signal sell and avoid.

Although rumors persist, it is unlikely the Fed is driving stock prices up. Volume remains unusually low. Of course, pumping money into financial institutions, coupled with financial cronyism can falsely elevate stock prices with guaranteed coverage of losses in the event the stock market soured. This sort of behavior can occur with low volume since the masses are not confounding the conspiracy. All that has to occur is for one to offer a higher price to buy any security at any time, regardless of its real value. This is especially easy to do with low volume. But cronyism is difficult to prove as long as laws are not broken.

Legalities written by people, though, cannot obsolete the laws of nature. Capitalism is more in line with the laws of nature. Socialism is not. It is in line with extinction, as biological cellular structures weaken with the absence of tension, facilitated by socialism. Capitalism, on the other hand, induces significant tension.

Congress would outlaw hurricanes if they could. But, they are puny when compared to a hurricane. So, they write other laws with an obvious bias to vote getting. Over the long run, that sort of behavior will depress stock prices. Giving unearned income only weakens the recipient. As the numbers of such recipients increase, the weaker they become. When the majority becomes weak, the system caves in.

The stock market bull persists, in part, due to an underlying perception that socialistic leanings may be arrested and replaced by an environment friendlier to capitalism.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated 10-buy signals and one sell signal.

The Mid-term Indicant is signaling hold for 218 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 40.8%. That annualizes to 43.2%. The Mid-term Indicant has been signaling hold for these 218-stocks and funds for an average of 49.1-weeks. There were 84-buy signals last weekend.

The Mid-term Indicant is avoiding 87-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 40.7% since the Mid-term Indicant signaled sell an average of 97.8-weeks ago.

One year ago, on Sep 25, 2009, the Mid-term Indicant was holding 187-stocks and funds out of 333 tracked for an average of 19.9-weeks. They were up by an average of 20.8% (annualized at 54.4%). There were 129-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 39.1% since their respective sell signals an average of 77.6-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 98-stocks and funds of the 345-tracked two years ago on Sep 26, 2008. They were up by an average of 156.9% (annualized at 54.5%) since their respective buy signals an average of 149.8-weeks earlier. The Mid-term Indicant was avoiding 242-stocks and funds at that time. They were down an average of 20.4% since their respective sell signals an average of 25.6-weeks earlier.

There were 253-stocks and funds with hold signals on Sep 21, 2007 since their buy signals an average of 125.6-weeks earlier. They were up by an average of 156.1% (annualized at 64.7%). There were 62-avoided stocks and funds at that time. They were down by an average of 9.2% from their respective sell signals an average of 23.0-weeks earlier.

On Sep 22, 2006, the Mid-term Indicant was signaling hold for 307-stocks and funds out of 345-tracked. They were up by an average of 96.8% (annualized at 66.9%) since their 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 by an average of 15.1% since their sell signals an average of 19.6-weeks earlier.

Five years ago, on Sep 23, 2005, there were 225-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 104.5% (annualized at 58.7%) since their respective buy signals an average of 92.6-weeks earlier. There were 86-avoided stocks and funds then. They were down an average of 10.3% since their respective sell signals an average of 23.3-weeks earlier.

On Sep 24, 2004, there were 205-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 69.3%, annualizing at 64.1%, since their respective buy signals an average of 56.3-weeks earlier. There were 90-avoided stocks and funds then. They were down by an average of 28.2% since their sell signals an average of 47.0-weeks earlier.

There were 219-stocks and funds with hold signals on Sep 26, 2003. They were up by an average of 51.8%, annualizing at 89.6%, since their buy signals 30.0-weeks earlier. The 16-avoided stocks and funds 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 a hold signal, enjoying a 17.4% gain since their respective buy signals an average of 20.0-weeks earlier. That annualized at 45.3%. There were 213-avoided stocks at that time. 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.

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

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

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

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

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

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

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

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

Stop Loss Management

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

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

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

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

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 49.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 113.7% and the S&P500 is up 47.9% since then. The small cap index, S&P600, is up 109.1% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 52.8% since its last weekly secular peak on March 9, 2000. The S&P500 is down 24.8% since its similar secular peak on March 23, 2000. The Dow is down by 7.4% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

If socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments. If that holds true, the bull will not be able to gain traction until a post civil strife period. That is, when the so-called social elite are on the streets, begging for food, which would appropriately reflect their contributions to the quality of life.

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

The NASDAQ year-to-date performance was bearish by 39.3% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 39.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 38.1%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 6.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 2.7% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was up 0.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 10.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 18.7% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 33.6% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 10.6% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 23.3% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 16.7% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 19.8% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

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

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

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

The Dow is up 65.9% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 87.7% and the S&P500 is up 69.8% since then. The S&P600, Small Cap Index, is up 96.4% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is no longer suggesting impending bearishness. The bull is gaining some traction at this time.

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

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Dynamics appear to be shifting in favor of robust international economic growth; especially that of Asia. Europe will lag with its old money socialism. The U.S. remains a crap shoot, but biased in favor of very slow growth under the threat of redistributing wealth.

Commodity prices quick-term cycle continues to rise. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are approaching Red Bull status. If they attain Red Bull status, their longer-term forecast will shift away from the current projections of decline.

Gold’s optimistic forecast continues at $1600/oz by 2012. As you can see, it is tracking closely to its high-end forecasted value and it remains a Red Bull to boot. At the same webpage, you will notice oil is less stable, but as stated by the Indicant for several months, it is priced where the Kingdom finds comfort. The high end forecast, though, projects $120/bbl by 2012.

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

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

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

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

The British Pound is no longer a Yellow Bear, but statistical projections continue with a bearish outlook for that currency. However, the Brits are moving from left to right on the political spectrum, which is one reason its pathetic currency is no longer a Yellow Bear.

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

Japanese companies could start lagging Korean companies in competing products. The Japanese are a generation older and probably enduring an increase in dilettante management. China is lagging Korea by a generation. Once the Chinese understand the importance of quality, there will be a return of good products to buy. Buying American made products requires too many trips to the repair shop.

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

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

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

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

Finally, during the past two to three years, more Americans have read the U.S. Constitution in response to political straying from it. Contemporary politicians are dilettantes when compared to the founding fathers, who had real jobs and endured life and death threats during their tenure.

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

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant again signaled buy on Sep 17, 2010. It is up 2.5%, annualizing at 126.0% since then.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 25.9% since then, annualizing at 24.2%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010 following a couple of buy/sell cycles since late 2008. It is up 2.5%, annualized at 128.5%, since the more recent buy signal.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 17, 2010, following a couple of buy/sell cycles since late 2008. It is up 3.3%, annualized at 169.0%, since the most recent buy signal.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. After a few disappointing buy/sell cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep 17, 2010. It is up 2.6% since that buy signal, annualizing at 131.5%.

The Quick-term Indicant signaled, buy, for ETF#03 – Energy and Natural Resources on Sep 15, 2010. It is up 1.6% since then, annualizing at 63.2%. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 57.1% since that buy signal, annualizing at 31.5%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 7.9% since that buy signal, annualizing at 57.1%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

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

All then major indices are up by an average of 11.2% since their bull signals an average of 24.6-weeks ago. That annualizes at 23.7%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $28,482,522. That beats buy and hold performance of $1,652,253 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $135,750. That beats buy and hold’s $112,515 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $203,678. That beats buy and hold’s $82,567 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 66.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009, as the bear remained in hibernation for the most part. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is no longer getting close to a buy signal, as it appears to have succumbed to the stock market bull for the time being

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 275.2% (annualized at 14.5%) since the Long-term Indicant signaled bull 986-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

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

Short-term Indicant Stock Market Report - Summary

Configurations supporting bull remain, but weakening slightly and without any significant threats to the bull. 26-Red Bulls mitigate sustainable bearish threats. The rising NTI Bullish Blue Curve is very aggressive. Prices will eventually fall below NTI Blue. That would be a good position to buy more as long as Pressure remains positive.

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

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

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

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

The eleven existing bulls are up 2.5% since the NTI signaled bull an average of 1.8-weeks ago. That annualizes to 72.0% (due to the recent bull signals).

The Quick-term Bear signaled for contrarian VIX on Sep 16, 2010. It is flat since its bear signal last week.

Although a bit shaky and without volume support, there is no ceiling to stop bullish behavior. Waffling Force Vectors in bullish domains were influential in the bull signals. They remain positioned to resist dominance by the bear. Force is losing a bit of momentum, but remains in healthy bullish domains.

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

Short-term Market Summary

One mild short-term threat to the bull is the VIX’s Force Vector crossing above Vector Pressure last Wed. Adding a bit more concern is the VIX’s Force Vector crossing into bullish domains last Thu. The Force cycle is bullishly mature, suggesting it has consumed too much energy to catapult the VIX into a strong bullish cycle and thus bullish for the stock market.

Most of the major indices Force remains in bullish domains and above positive pressure. The bear cannot gain traction with that configuration on a short-term basis. Keep in mind, it can change, but until it does, the bull remains alive. The Indices will fall below NTI Blue and current configurations suggests that as a buying opportunity. You saw some of that from last Thu with Friday’s strong bullish reaction.

-Tangential Protection – None!

-Reverse Tangential Bearish Detection – This phenomenon is worthy of close monitoring. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link. This is being threatened by explosive Asian economies and the classical pre-election presidential year’s stock market bullishness, which starts on January 1, 2011. Those historical bullish cycles typically originate in the mid-term election year, which concludes on December 31, 2010.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

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

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

Indicant Volume Indicators

Volume indicators remain lethargic, but the NASDAQ is now rising. Coupling that to bullish stock market behavior suggests bullish support. The NYSE is attempting to shift from its lethargic cycle.

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

Sep 23, 2010-Thu-Passive volume again on mild bearishness suggests little stock market interest.

Sep 22, 2010-Wed-Passive volume on mild bearishness suggests very little.

Sep 21, 2010-Tue-Flat volume on flat behavior says little. Bias remains in favor of the bull.

Sep 20, 2010-Mon-Volume flat relative to last week. However, it was healthy enough to retain bullish bias on today’s bullish aggression.

Sep 17, 2010-Fri-Finally, there is a bit of volume. Although maybe a bit premature for excitement, the Indicant Volume Indicator shows bottoming potential. This mild increase in volume could be linked to the historical standard of mid-term election year’s market bottoming ahead of the normally bullish pre-election year.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 3.3% since their buy signals an average of 2.9-weeks ago. This annualizes at 60.1%.

The NTI is avoiding two-ETF’s. They are down by an average of 13.6% since their sell signals an average of 2.4-weeks ago. They are contrarians, QID and VXX.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up 6.9% since their buy signals an average of 9.4-weeks ago. This annualizes at 38.1%.

The Quick-term Indicant is avoiding 2-ETF’s. QID and VXX. They are down by an average of 46.8% since their sell signals an average of 38.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase. Force is not expressing bearish support by remaining in bullish domains, although now shifting south. Twenty-six ETF’s are Red Bulls, mitigating sustainable bearish threats.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy on Sep 15, 2010. It is up 1.6%, annualizing at 63.2%, since then. Force is bouncing north off of Vector Pressure. That is bullish.

ETF#11-Gold and Precious Metals is up 57.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 31.5%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $111.26 and still rising.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 7.9% since the Near-term buy signal, annualizing at 61.9%. Force refused to fall into bearish domains and now higher than Pressure. That is bullish.

GLD and its underlying security, Gold, continue establishing new highs.

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

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 15.0% since those buy signals, annualizing at 35.9%. It fell below NTI Green and enjoyed expected bullish bounce, beginning Sep 14 and lasting until this Friday when it was jolted by the stock market bull. It is unlikely this fund will remain bullish concurrent with stock market bullishness. Its contrarian nature suggest it should shift bearishly as long as the stock market remains bullish. Key attributes to monitor is Force Vector. It finally mounted pressure and used a lot of TLT-bullish energy doing so. This should definitely not be bought, even though the hold signal remains valid, but under sell threat.

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 10.2% since then. Although its Force Vector is at a cyclical minimum, it is vacillating, but now rising a bit, in bearish domains. Although remaining bearish, it is struggling to escape it.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 17.1% since then. As stated on Friday, Sep 10, its Force Vector is bearishly mature, suggesting a bullish response for this fund on the immediate horizon. As you can see, its Force Vector has moved bullishly, but too deep in bearish domains to move the price up. Negative Pressure suggests risks remain too high for signaling buy. Its northerly moving Force Vector is somewhat appealing, but better to not buy with negative pressure. The chart on the right is again configured for non-bearishness. It will most likely enjoy a bullish bounce when the stock market falls to NTI Blue. That does not mean, though, its bullish bounce will be sustainable.

Major ETF Events

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

Sep 23, 2010-VIX Force Vector climbed into bullish domains. It used quite a bit of energy doing so. It is not yet threatening relative to overall stock market bullishness.

Sep 22, 2010-VIX Force Vector eclipsed Vector Pressure. That is a mild threat to the stock market bull. It used a lot of energy doing that. A retreat back below Pressure will be bearish for VIX and bullish for the stock market. If it does not do that, the threat will persist. TLT also continues its bullish bounce off NTI Green, but continuation of bullishness is unlikely if the stock market remains bullish.

Sep 21, 2010-Tue-None, as was the case yesterday.

Sep 17, 2010-Fri-Volume was up today on flat mixed behavior. It will be interesting to see if it continues moving up. Once that occurs, greater obviations of directional stock market intensity will be available.

Current Strategy-Short-term Indicant- Sep 24, 2010-Fri-Same. Sep 23, 2010-Thu-Same. Sep 22-Wed-Same. Sep 21-Tue-Same. Sep 20-Mon-Although shy of volume support, configurations supporting bull continue to strengthen. Prices falling below NTI Blue will be a good spot to buy more.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Contrarian Funds

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

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

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

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

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

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

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

Major ETF Events

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

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

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

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed solid bullish convergence for the third consecutive week. That follows four consecutive weeks of combined bearish convergence/divergence. These past two weeks have evaporated concerns, regarding those four weeks of bearish convergence/divergence. Also, if the stock market enjoys bullish convergence next week, the probability of a long sustainable bull cycle will exceed 87%. The breadth typically has two years when configured during a mid-term election year.

Indicant Conclusion

The encroaching mid-term election year stock market bullishness is nearing. Therefore, it is time to adjust anticipations. The presidential pre-election year’s strong bullish tradition usually begins in the mid-term election year. That usually starts before now. It appears to have started last week. Low volume and a directionless stock market offer potential against traditional stock market behavior. However, there was a bit of a volume shift two Fridays ago. The Indicant Volume Indicator shows some bottoming potential, which suggests increasing volume in coming weeks. With that, obviations of directional intensity should be more available.

As stated the past 51-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The bull continues expressing support in this principle.

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

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/26/2010

Sep 19, 2010 Indicant Weekly Stock Market Report

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

The Mid-term Election Year

The last one was in 2006. It enjoyed bullish behavior until the summer months, where it endured a mild bearish cycle. It configured similarly to the current mid-term year of 2010. The election occurred in November 2006 during a nice bullish cycle. The pre-election year of 2007 enjoyed its normal bullish behavior until November. Click this sentence to see the Dow’s chart. You will notice the Mid-term Indicant signaled its first bear in late 2007 since late 2004.

Politically, the democrats resumed control of Congress in November 2006. Fannie Mae and Freddie Mac were reported as being “just fine” by the democratic majority in 2007/8. Not only are politicians economically illiterate, their ego’s blind them of facts. In essence, the democrats have been in charge of spending since January 2007. The big mistake George W. Bush made was saying to the American voting public, “I hear you” when the democrats resumed control of Congress. He should have asked the American public, “are you stupid?” In hindsight and with complete honesty, the answer is “yes!” One has to wonder why anyone jumps up and down with joy with political jawboning. There is absolutely nothing of value to it.

The Mid-term Election Year of 2002 was interesting. Click this sentence to view its chart. The Dow did in fact find a cyclical bottom in late 2002. It was a bit different due to the strong bearish cycle in the first quarter of 2003. However, that bearish cycle did not fall below the classical mid-term election year’s market bottom in late 2002. Therefore, the historical standard was honored in 2002/3, but the strong Q1-2003 bear cycle was a bit unusual. As you can see, the traditional pre-election year bullishness was enjoyed in 2003. The pre-election year of 2003 was followed by the meandering bear market of 2004/5.

The Mid-term Election Year of 1998 was also classical. Click this sentence to review its chart. The Russian default crisis stimulated the bear in late summer of 1998. As you can see, historical standards were again in conformance with the mid-term cyclical bottom with the stock market’s cyclical bottoming in 1998.

The fourth quarter of the 1994-Mid-term Election Year endured an unusual bearish cycle. Click this sentence to view its chart. Its magnitude was dwarfed by the normal pre-election year and election year bullish behavior in 1995/6 that followed the 1994 phenomenon. By the 1996-election year, democratic president, Bill Clinton, had to abandon most of his socialistic ideals due to the increasing republican control of Congress. Political disharmony and related inaction is very bullish. The 1994-mid-term-election’s market bottoming was even more pronounced because the animosity between the president and congress was very high. The more they disagree and dislike, the more bullish is the stock market.

The mid-term election year of 1990 was an exciting one. It provided a dynamic bear cycle so it could produce a very well defined cyclical bottom with a very classical expression. Click this sentence to view its chart. Look at the bottom part of the chart. You will notice a recession occurred. This was one of those rare instances where the stock market did not do a good job of anticipating the recession. The bear and the recession occurred, simultaneously. You should notice the Gulf War coincided with that particular market bottom. The American voter did a good job during the 1990’s by disallowing the executive and legislative branches being from the same political party.

The 1986 mid-term election year also found a market bottom following one of the strongest bull cycles in stock market history up to that point in time. This was particular interesting, as you will see quite a few significant historical events occurring during that period. Click this sentence to review its chart.

One of the most interesting mid-term election years was that of 1982. The economic stimulus from the great recession in 1978-1981 was by tax relief. This facilitated a return of entrepreneurialism in the U.S. and a return of the teachings of Frederick W. Taylor, Charles Sorenson, and Frank and Lillian Gilbreth. These four folks were behind the scenes during the great period where the earth was graced with the likes of Nicola Tesla, Henry Ford, and Thomas Edison in the early 1900’s. Their contributions continued persisting and do so today.

Fred Taylor developed the concept of high wages/low cost. This led to massive increases in the quality of life through productivity enhancement. He was one of the first industrial engineers and in “private practice.” The government had nothing to do with his success. Productivity is the sole source of improvements in the quality of life. Nothing else does it; not government spending and social programs actual deter it.

Charles Sorenson was Ford’s production man. He developed the highly efficient production line. Henry was smart enough to stay out of his way. Frank and Lillian Gilbreth identified the human therbligs, which added significant improvements to productivity. The efforts of those four people, coupled with entrepreneurial greatness at the turn of the century in 1900 led to all of your enjoyments in life. All enjoyed freedom of expression and self-actualizations offered by a free society. You owe them more than you know.

Those people are mentioned here since the great Shigeo Shingo built upon the principles of those four people through Toyota, Honda, Sony, Mitsubishi, and others after World War II. His efforts culminated into vast product offerings of high quality and low costs during the 1980’s. That facilitated the middle class enjoying more acquisitions and material life pleasures by the 1980’s. That explosive growth in productivity led to the great bull markets in the 1980’s and 1990’s. That productivity contributed to low inflation and thus low interest rates and an explosively bullish stock market. It should be noted that oil prices fell from $36/bbl in 1981 to $9/bbl by the late 1980’s. All of that, combined with political disharmony created a bull market that will not be seen again until those conditions exist again.

Politicians always disrupt productivity growth and thus the reason for the mid-term election year phenomenon of finding market bottoms. Classically, the post election year is typically bearish, which extends into the mid-term year. The post election year is bearish because the incoming administration usually has their way. The political idea is that we need to support the newly elected. That inspires the bear. Employee turnover in congress slows their destruction and thus the reason for the mid-term election year phenomenon of bullishness.

The far right gives Ronald Reagan too much credit for the 1980’s bull market. A politician can do absolutely nothing to enhance the quality of life. An ignorant society will remain ignorant until they are capable of not confusing correlation with causation. Reagan helped with tax reductions, but all that did was undo prior damage. That is something that requires very little talent.

Many pundit idiots point to Bill Clinton’s 1990’s bull market. Bill Clinton had nothing to do with that. The other Bill did. His name was Bill Gates. He unleashed software that was affordable by the masses that enhanced their personal productivity. Ronald Reagan did what a few good politicians do from time to time. He simply undid the damage inflicted by his predecessors. Clinton was not allowed to add more damage because of the antagonistic republican congress led by Newt Gingrich.

Clicking this sentence will take you to a history of the stock market back to 1900. You will notice the mid-term election year finds a market bottom more often than not. Just click any year and study the mid-term election year. There are a few exceptions, but you will find more that find a market bottom than not due to the political relationships with the capitalistic system.

Take another look at the 2002 mid-term chart. This reflects a major concern. The economic damage inflicted after the 2006 mid-term elections that empowered a very high number of socialists, fascists, and communists in government may not be recoverable for a very long period. Their thinking and action is so upside down that the Tea Party was created in response to their massive stupidity. There is always a response to any stimulus. This relates to a physical law; a reaction to every action. This political reaction is inspiring the bull and consistent with the mid-term election year bullish phenomenon at this time.

Notice that second dip in late 2002 on the chart. The Short-term and Mid-term Indicant will signal bear and sell to avoid such a dip in 2010. So be prepared for two more rounds of buying and selling. That may not occur, but in the event it does, be prepared. The bear/sell signals will be executed just in case we endure a repeat of 1930’s mid-term election year. Clicking the link in the previous sentence will show you one of those rare exceptions where the mid-term election year did not find a market bottom. Current political conditions are similar to those then. Any hints of tea party failures will unleash the bear ahead of the mid-term elections in November.

There is one more interesting dynamic. International markets; especially the Asian markets, can be bullish regardless of U.S. elections. Their dependency on the U.S. economy is diminishing.

Keep your eye on the daily stock market report.

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

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

The Mid-term Indicant generated 84-buy signals and no sell signals.

The Mid-term Indicant is signaling hold for 135 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 56.1%. That annualizes to 41.4%. The Mid-term Indicant has been signaling hold for these 135-stocks and funds for an average of 70.4-weeks.

The Mid-term Indicant is avoiding 97-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 37.9% since the Mid-term Indicant signaled sell an average of 89.2-weeks ago.

One year ago, on Sep 18, 2009, the Mid-term Indicant was holding 151-stocks and funds out of 333 tracked for an average of 20.6-weeks. They were up by an average of 26.2% (annualized at 66.4%). There were 130-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 37.1% since their respective sell signals an average of 75.4-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 102-stocks and funds of the 345-tracked two years ago on Sep 19, 2008. They were up by an average of 165.4% (annualized at 58.2%) since their respective buy signals an average of 147.8-weeks earlier. The Mid-term Indicant was avoiding 232-stocks and funds at that time. They were down an average of 14.4% since their respective sell signals an average of 26.4-weeks earlier.

There were 251-stocks and funds with hold signals on Sep 14, 2007 since their buy signals an average of 125.4-weeks earlier. They were up by an average of 149.1% (annualized at 61.8%). There were 91-avoided stocks and funds at that time. They were down by an average of 5.5% from their respective sell signals an average of 17.0-weeks earlier.

On Sep 15, 2006, the Mid-term Indicant was signaling hold for 261-stocks and funds out of 345-tracked. They were up by an average of 112.5% (annualized at 69.8%) since their buy signals an average of 83.8-weeks earlier. The Mid-term Indicant was avoiding 36-stocks and funds at that time. They were down by an average of 14.5% since their sell signals an average of 19.0-weeks earlier.

Five years ago, on Sep 16, 2005, there were 231-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 105.8% (annualized at 60.8%) since their respective buy signals an average of 90.4-weeks earlier. There were 85-avoided stocks and funds then. They were down an average of 9.0% since their respective sell signals an average of 22.6-weeks earlier.

On Sep 17, 2004, there were 186-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 78.2%, annualizing at 68.2%, since their respective buy signals an average of 59.6-weeks earlier. There were 84-avoided stocks and funds then. They were down by an average of 27.3% since their sell signals an average of 46.9-weeks earlier.

There were 271-stocks and funds with hold signals on Sep 19, 2003. They were up by an average of 53.8%, annualizing at 101.7%, since their buy signals 27.7-weeks earlier. The 16-avoided stocks and funds 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 74-stocks and funds with a hold signal, enjoying an 13.9% gain since their respective buy signals an average of 18.1-weeks earlier. That annualized at 40.0%. There were 119-avoided stocks at that time. They were down by an average of 30.4% since their sell signals an average of 14.3-weeks earlier. There were 100-sell signals on this weekend in 2002.

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

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

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

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

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

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

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8% for holds with less than a 20% unrealized gain. Of course, this includes new buys. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stop out. New opportunities always emerge. The idea is to minimize losses.

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 45.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 107.8% and the S&P500 is up 44.9% since then. The small cap index, S&P600, is up 103.3% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 54.1% since its last weekly secular peak on March 9, 2000. The S&P500 is down 26.3% since its similar secular peak on March 23, 2000. The Dow is down by 9.5% 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.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments. If that holds true, the bull will not be able to gain traction until a post civil strife period. That is, when the so-called social elite are on the streets, begging for food, which would appropriately reflect their contributions to the quality of life.

The NASDAQ year-to-date performance was bearish by 36.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 35.4% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 41.0%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 4.7% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 0.7% on this weekend in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was down 1.4% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.9% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 20.9% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 34.9% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

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

The Dow is down 26.1% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 21.6% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 23.8% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The Dow is up 59.8% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. The NASDAQ is up 76.8% and the S&P500 is up 64.0% since then. The S&P600, Small Cap Index, is up 86.7% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant continues suggesting impending bearishness, but the bull continues being obstinate to that suggestion. The Short-term Indicant abandoned its bearish tone on Aug 9, and unfortunately, reasserted it the next day, on Aug 10. The bull is again challenging that bearish bias.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Dynamics appear to be shifting in favor of robust international economic growth; especially that of Asia.

Commodity prices quick-term cycle continues to rise. They are not yet contributory to inflationary pressures. The Dow Jones AIG Commodity Index and Spot Prices are approaching Red Bull status. If they attain Red Bull status, their longer term forecast will shift away from the current projections of decline.

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

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

Fear Metrics: Economics and Terrorism

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 24.6% since then, annualizing at 18.8%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. The Mid-term Indicant signaled buy this weekend following a couple of buy/sell cycles since late 2008.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 20, 2010. It is up 2.0% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. The Near-term and Short-term Indicant again signaled buy on Sep 15, 2010. It is down 1.4% since then. The bear had its way with this ETF and other related with the drilling moratorium. The equipment is now moving overseas with talented personnel. So, earnings will be possible, while the U.S. will become yet more dependent on foreign energy sources. More strategically will be the learning curve losses that is a major geopolitical threat imposed by egomaniacal politicians.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 54.4% since that buy signal, annualizing at 30.4%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 6.1% since that buy signal, annualizing at 56.2%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

The four remaining major indices with already existing bull signals are up by an average of 21.5% since their respective bull signals an average of 59.0-weeks ago. That annualizes at 19.0%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,613,852 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $110,255 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $198,066. That beats buy and hold’s $80,292 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1623.9%, 20.7%, and 146.7%, respectively, for these indices as of this past week.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 61.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is getting close, though. Pressure is moving north, but still remains in bearish domains.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 266.5% (annualized at 14.1%) since the Long-term Indicant signaled bull 985-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Gold is breaking out, while TLT is weakening; its bullish NTI blue curve collapsed this past Thursday, Sep 16. Both are considered “safety net” investment alternatives. Both are contrarian, but TLT is more purely so. Gold can march to its own drumbeat, regardless of stock market direction. TLT tends to move inversely to the stock market. TLT did enjoy the expected bullish bounce off of Green today, albeit mildly so. Nothing has changed from yesterday, so the following is a repeat.

1-Vector Pressure is positive/bullish for all major indices and all other non-contrarian securities. Vacillating Force Vectors in bullish domains are non-bearish at this point.

2-GLD and Gold set new highs on Sep 14. It is breaking out with yet another new record high today. Other commodities are bullish, suggesting increased extraction for manufacturing purposes and thus more wealth creation, albeit mostly from Asia.

3-Fundamentally, Asian economies are moving robustly. European economies (old, lazy, and socialistic) will not perform consistent with bullish expectations. Asian markets can lead international economy. U.S. is no longer capable. U.S. is too soft to lead with nearly half on the dole or in low output unions. European styled socialism is inducing entropic society and U.S. is copying that. This is an interesting and changing dynamic.

4-Stock market is confused, fundamentally, as old rules are no longer applying. U.S. GPD may be irrelevant; China and balance of Asia more relevant, where wealth is being created. U.S. politicians cannot stifle them. Click to view ETF#13-EWH-iShare-Hong Kong. It is also setting new highs.

5-Other Asian related securities are rising and configuring with strong bullish attributes. It can bring along the less competent. U.S. bailouts retained incompetence, which will foster more of the same and even accelerate it. Ma and Pa operations in U.S., which is the primary source of creativity and related productivity, are not being politically supported, but their strength should never be underestimated.

6-Mid-term election year phenomenon of bullishness may be unfolding with Asia taking the lead. Gridlock in Washington D.C. may allow U.S. to participate in the international bull while Europe lags. Recent “anti-political” establishments primary elections and massive readings of the U.S. Constitution are inherently bullish. It is historically significant.

7-Overall, the risks of avoiding are greater than buying, where buy signals were noted. Force Vector behavior and prices relative to NTI Blue are key to monitor. If NTI Green rises, it will replace NTI Blue as a source of key attribute monitoring on the near-term cycle.

8-Of concern is the high probability of a VIX and VXX bullish bounce on the immediate horizon. TLT, which is normally contrarian, remains with bullish configurations, but weakening. Its contrarian nature, along with VIX and VXX, configured bullish potential is somewhat contradictory to points 1-7, but number 7 prevails at this time.

9-All of the above can change quickly. Sell and bear signals will be issued with prices falling below blue and Force falling below Vector Pressure in this cycle. Fundamentally, though, it is unlikely that Asia markets will soften. They are similar to U.S.’s post World War II, which was very bullish.

10-Volume remains absent. Low volume volatility should not be surprising. Sustainability more predictable with volume.

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

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

The eleven existing bulls are up 0.2% since the NTI signaled bull an average of 0.8-weeks ago. That annualizes to 9.8%. Most were signaled this past week.

The Quick-term Bear signaled for contrarian VIX on Sep 16, 2010.

As stated since last Tuesday, new bulls were stimulated by positive Vector Pressure and Red Bull status. Although a bit shaky and without volume support, there is no ceiling to stop bullish behavior. Waffling Force Vectors in bullish domains were also influential in the bull signals.

The Quick-term Indicant is signaling bull for the eleven non-contrarian major indices with the same performance metrics as the Near-term Indicant.

Short-term Market Summary

One fundamental argument favoring the bull is anticipation of high congressional turnover. Its antithesis is souring economic data, such as softening GDP. Those two fundamental battles are underway. Eventually, GDP must elevate to justify bullish expectations. It will be interesting to see if U.S. GPD is a requirement for that.

Fundamental confusion is confronting the stock market’s directionless behavior. Europe continues to lag, while Asian economies are robust. The major market indices are struggling on interpretation; that is, will Asia lift the others or will the U.S. and Europe drag down the Asians? The stock market’s inability to display bearish aggression suggests the former may indeed foment bullishness.

The VIX is poised for a bullish spurt within a few days from now. This is normally bearish for the stock market. However, Red Bulls, positive Vector Pressure, and vacillating Force Vectors inside bullish domains cannot be ignored or even argued with for the major indices. If those bullish attributes acquiesce to the bear, new bear signals will be stimulated. The next bear signals will be a function of Force Vector’s behavior when they interact with Vector Pressure.

Finally, one of the more pure historical standards is mid-term election year bullishness, following a bearish cycle. Although the bear cycle from last May was not that significant, it was a bearish cycle. Therefore, there is a configured qualification for the mid-term election year phenomenon to unfold.

-Tangential Protection – None!

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

Indicant Volume Indicators

Volume indicators remain lethargic, but the cycle may indeed be ending.

Sep 16, 2010-Thu-Nothing new. The Indicant Volume Indicator continues its lethargic cycle. Volume remains uncharacteristically low.

Sep 15, 2010-Wed-Same old story. Seasonally expanding volume remains absent. Interpretative confusion may be the culprit.

Sep 14, 2010-Tue-Volume remains depressed. This is unusual for this time of year. Both volume indicators continue nose-diving. Mixed bias remains, as low volume, coupled to directionless stock market behavior, does not warrant significant trading.

Sep 13, 2010-Mon-Volume was up a tad on bullish aggression, but not enough to anticipate similar bullish sustainability.

Sep 10, 2010-Fri-Low volume accompanied mild bullish behavior, offering no evidence of any exciting or dynamic movements on the immediate horizon.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 30-ETF’s. They are up by an average of 0.9% since their buy signals an average of 1.9-weeks ago. This annualizes at 23.9%.

The NTI is avoiding two-ETF’s. They are down by an average of 9.0% since their sell signals an average of 1.4-weeks ago. They are solid contrarians, QID and VXX.

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

The Quick-term Indicant is signaling hold for 30-ETF’s. They are up 4.4% since their buy signals an average of 8.4-weeks ago. This annualizes at 27.0%.

The Quick-term Indicant is avoiding 2-ETF’s. QID and VXX. They are down by an average of 43.3% since their sell signals an average of 37.6-weeks ago.

Short-term Summary: Bullish pressure continues to increase. Force is not expressing bearish support. Twenty ETF’s are Red Bulls. Although this could inspire the bear to respond, current Force suggests that would be a mere spurt. TLT, which is discussed below may be in trouble. Its behavior at NTI-Green will be interesting and that occurred yesterday, Sep 16. It enjoyed a mild bullish bounce of that Green curve. It is contrarian more than not. It is unlikely it can enjoy bullish behavior simultaneous to that of the stock market. It is discussed below.

Contrarian Funds

ETF#03-Natural Resources. The Near-term and Quick-term Indicant signaled buy this past Wednesday. Its Force Vector is vacillating in bullish domains. That, coupled with positive Vector Pressure, triggered buy.

ETF#11-Gold and Precious Metals is up 54.4% since the QTI signaled buy on December 11, 2008. Annualized growth is at 30.4%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $110.74 and still rising. The QTI buy signal was at $80.65. That stop loss will generate over 20%-gain, but a sell signal is no where near execution.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 6.1% since the Near-term buy signal, annualizing at 56.2%. Force continues hovering in bullish domains with positive (bullish) pressure, supporting its bullishness.

GLD and its underlying security, Gold, again set a new high today, following its record last Tuesday.

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 12.9% since those buy signals, annualizing at 32.6%. It fell below NTI Green this past Thursday and enjoyed a bullish bounce today (Fri). Behavior next week will be interesting. This “safety” investment may no longer be appropriate. Gold, on the other hand, is getting much more favor in “safety.”

The Near-term Indicant and Quick-term Indicant signaled sell for ETF#31-QID on Sep 13, 2010. It is down 3.6% since then. Although its Force Vector is at a cyclical minimum, it is vacillating in deep bearish domains. That is bearish and especially so with negative pressure.

The Near-term Indicant signaled sell on Sep 2, 2010 for ETF#32-VXX. It is down 14.4% since then. As stated on Friday, Sep 10, its Force Vector is bearishly mature, suggesting a bullish response for this fund on the immediate horizon. Negative Pressure suggests risks remain too high for signaling buy. Its bearishly mature Force Vector is somewhat appealing, but better to not buy with negative pressure. The chart on the right is again configured for non-bearishness.

Major ETF Events

Sep 16, 2010-Thu-Gold set yet another record. TLT contacted NTI Green. If TLT does not bounce, a sell signal will be triggered.

Sep 15, 2010-Wed-All non-contrarian ETF’s are now with positive pressure.

Sep 14, 2010-Tue-GLD and underlying commodity, Gold, set a new record high.

Sep 13, 2010-Mon-Force Vectors are not diving south. Some are waffling inside bullish domains with positive pressure. The more bullish ETF’s are Asian related.

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

Current Strategy-Short-term Indicant- Sep 17, 2010-Fri-Same as last Wednesday. Sep 16, 2010-Thu-Same as yesterday. Sep 15, 2010-Wed-Rising Blue, positive Pressure, vacillating Force in bullish domains, and QTI Red Bulls cannot be argued with. Although absent of volume, some measured buying is okay. Some may want to wait for price dips to NTI Blue. Sep 14, 2010-Tue-Gold and other precious metals are in a breakout mode. Asian securities are more appealing than North American and Europe is worse than North America. Can Asian economies shift into leadership mode? Their recent performance and populations suggests, “yes.” Sep 13, 2010-Mon-Force Vector behavior is important at this point. As long as it remains above Vector Pressure, “sustainable” bearish threats will not be able to manifest.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Contrarian Funds

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

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

Major ETF Events

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed solid bullish convergence for the second consecutive week. That follows four consecutive weeks of combined bearish convergence/divergence. These past two weeks have evaporated concerns, regarding those four weeks of bearish convergence/divergence.

Indicant Conclusion

The encroaching mid-term election year stock market bullishness is nearing. Therefore, it is time to adjust anticipations. The presidential pre-election year’s strong bullish tradition usually begins in the mid-term election year. That usually starts before now. Low volume and a directionless stock market offer potential against traditional stock market behavior. However, there was a bit of a volume shift last Friday. The Indicant Volume Indicator shows some bottoming potential, which suggests increasing volume in coming weeks. With that, obviations of directional intensity should be more available.

As stated the past 50-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. Worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The bull continues expressing support in this principle.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/19/2010

Sep 12, 2010 Indicant Weekly Stock Market Report

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

Next Week

Several more Vector Pressures crossed into bullish domains during last week’s relatively flat stock market. That is normally bullish; especially if pressure remains positive.

The NTI Bullish Blue Curve is rising after most collapsed at various times since last May. These rising blue curves are bullish.

The NTI Bearish Green Curve, for the most par is flat to mildly increasing. That is normally non-bearish.

Volume continues ebbing at summertime lows. The government bailout of Wall Street must have included authorization for additional vacations. Regardless, though, volume is not indicating a strong stock market interest in either direction. In other words without it, the stock market will find difficulty stimulating sustainable behavior in either direction.

However, it is possible for new bulls and new bears of significant breadth to originate on low volume. Before sustainability manifests, though, volume must demonstrate increasing interest in the stock market. The Indicant Volume Indicators have been in a lethargic cycle for an unusually long period. It is nearing cyclical lows. It should not be too long before it raises its interest level. In other words, volume should start increasing very soon. With that, the stock market will move more dynamically in one direction or the other. That will assist in the determination of the desired obviation of directional intensity.

September is horrendously bearish; sometimes for no apparent reason. Some of that can be attributable to fear inflicted by a lame duck Congress. Those inflicted with “political disease” can be very dangerous in a land of man-made laws and law-abiding citizens. Lawlessness typically results when the man-made laws are reduced to ridiculous. Many are already there.

Fundamentally, there is little reason to expect a wildly bullish stock market when limiting one’s views to that of North America and Europe. Those two continents are under-performing in work ethics and overall capabilities. Asia, on the other hand, continues to dominate in manufacturing; one of the three wealth building pillars of any economic structure. North American and European politicians do not recognize this. Even if they did, their thoughts would quickly shift to “self benefit,” leaving them blind to the substance of existence.

China’s one-billion capitalists that did not exist thirty years ago. That offers a new variable when viewing economic fundamentals. Their exhilaration with work opportunities is similar to that of the West 200-hundred years ago. That exhilaration is indeed bullish. So, fundamentally, one can assert viable arguments for a bullish outlook, albeit geographically limited.

Fundamentally, though, the West will endure an increasing populace of have-nots. That will encourage more socialism to the delight of politicians. They love socialism because they are more important in socialistic societies. They get to live like kings and queens without having to do too much. Increasing socialism is bearish.

Technical observations are what is needed when viewing the stock market on a short-term basis. The pertinent one to review is the Force Vector at this time. It started falling late last week, but from a highly perched position in bullish domains. If it does not fall into bearish domains and starts vacillating inside bullish domains, the mid-term election year phenomenon of stock market bullishness may indeed start unfolding. Even with September’s notorious propensity to be significantly bearish, the Short-term Indicant will unleash many buy signals with vacillating Force inside bullish domains, coupled with positive Vector Pressure.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 135 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 53.1%. That annualizes to 39.7%. The Mid-term Indicant has been signaling hold for these 135-stocks and funds for an average of 69.4-weeks.

The Mid-term Indicant is avoiding 181-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 18.6% since the Mid-term Indicant signaled sell an average of 62.2-weeks ago.

One year ago, on Sep 11, 2009, the Mid-term Indicant was holding 144-stocks and funds out of 332 tracked for an average of 21.4-weeks. They were up by an average of 24.4% (annualized at 59.1%). There were 166-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 35.3% since their respective sell signals an average of 72.1-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 112-stocks and funds of the 345-tracked two years ago on Sep 12, 2008. They were up by an average of 149.4% (annualized at 56.2%) since their respective buy signals an average of 138.2-weeks earlier. The Mid-term Indicant was avoiding 185-stocks and funds at that time. They were down an average of 21.6% since their respective sell signals an average of 30.0-weeks earlier.

There were 250-stocks and funds with hold signals on Aug 31, 2007 since their buy signals an average of 125.0-weeks earlier. They were up by an average of 148.4% (annualized at 61.7%). There were 86-avoided stocks and funds at that time. They were down by an average of 6.9% from their respective sell signals an average of 16.9-weeks earlier.

On Sep 8, 2006, the Mid-term Indicant was signaling hold for 263-stocks and funds out of 345-tracked. They were up by an average of 112.9% (annualized at 71.3%) since their 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 by an average of 9.1% since their sell signals an average of 24.0-weeks earlier.

Five years ago, on Sep 9, 2005, there were 227-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 109.6% (annualized at 62.5%) since their respective buy signals an average of 91.3-weeks earlier. There were 87-avoided stocks and funds then. They were down an average of 7.9% since their respective sell signals an average of 21.7-weeks earlier.

On Sep 10, 2004, there were 187-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 75.7%, annualizing at 67.2%, since their respective buy signals an average of 58.6-weeks earlier. There were 104-avoided stocks and funds then. They were down by an average of 26.2% since their sell signals an average of 45.6-weeks earlier.

There were 268-stocks and funds with hold signals on Sep 12, 2003. They were up by an average of 51.4%, annualizing at 96.9%, since their buy signals 27.6-weeks earlier. The 16-avoided stocks and funds 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 a hold signal, enjoying an 8.0% gain since their respective buy signals an average of 10.6-weeks earlier. That annualized at 39.3%. There were 101-avoided stocks at that time. They were down by an average of 32.0% since their sell signals an average of 16.9-weeks earlier. There were 29-sell signals.

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

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

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

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

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

As stated the past few weeks, the Long-term and Mid-term attributes have partially succumbed to the stock market bear’s ambition. The bear is having difficulty gaining traction. The bull is resisting what appears to be an impotent bear.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. The S&P500 and the DJIA also shifted to bearish bias on a mid-term basis on Jul 2, 2010. Several stocks and funds also succumbed on Jul 2, 2010 with many of them reversing “reluctant buy signals” earlier this year and last year, as the 2009 bull market was configured as a “sucker rally.” However, the approaching presidential election year may indeed challenge the idea of 2009 being a sucker rally.

Since those bear signals, as noted above, the stock market responded with a bullish spurt. That spurt was anticipated, but magnitude and breadth are not predictable. The bear attacked that bullish spurt during the latter part of August, but the bull recoiled powerfully two weeks ago. The bull has been impressive defending its position and recoiled at nearly every bear’s attempt to gain traction.

Most Mid-term stocks, funds, and indices remain above their bearish yellow curves and thus offering significant resistant values against a bearish onslaught. It is common for such resistance following strong bullish behavior, such as that during most of 2009 and early 2010. The idea of resistance parameters reduces the threat of dynamic bearish behavior.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 5% for holds with less than a 20% unrealized gain. Of course, this includes new buys. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stopped out. New opportunities always emerge. The idea is to minimize losses.

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 43.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 101.2% and the S&P500 is up 42.8% since then. The small cap index, S&P600, is up 98.8% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 55.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 27.4% since its similar secular peak on March 23, 2000. The Dow is down by 10.8% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 31.4% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 32.3% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 36.6%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 5.4% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

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

In 2006, the NASDAQ was down 1.8% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.0% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 16.0% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 32.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 9.7% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one. Its 2012 forecast is now at 0.8%.

Seven weeks ago, Mr. Bernanke stated they are holding at these low rates indefinitely into the future. The interest rates’ sinusoidal waves should not start rising on the immediate horizon. However, they are doing so in China. You should notice a subtle incline on CD rates, although falling last week. Mortgage rates continue to decline. They remain at historically low levels. It will not be a smooth ride, as the Fed will endure conflicting policies between deflation and inflation in the coming months/years.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Interestingly, the Reuter UK Commodities Index has skyrocketed the past few weeks. This offers some evidence of improving economies. That does not mean the U.S. will enjoy economic robustness.

Some prognosticate a future with deflation. The CPI was down slightly in July from June, supporting that supposition. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance, will induce a significant and multi-year stock market bear. Current levels of those tolerances remain safe in U.S. terms. Becoming trickier are the international parameters.

Foreign governments appear to be shifting bias to the so-called right. The lessons of the so-called economic left should be obvious. It always results in economic catastrophe. This recent right leaning is justification to consider a bit more bright economic future. It will be interesting to see if the U.S. has the same view. This will be answered, in part, in the November mid-term elections.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for over a year, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective, as long as China, India, and other countries bias toward capitalistic behavior. One can argue that increasing capitalism on an international scale is bullish for the stock market.

Commodities rose last week. Some even skyrocketed, while others remain in a tamed configuration. Gold is obviously anticipating significant inflationary behavior with paper currencies and or economic chaos. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

The Gold Bull was attacked by the Gold Bear the past few weeks due to, in part, to currency exchange rates and their recent volatility. Gold was encountering some near-term duress, while its long-term projections remain bullish. The Near-term Indicant signaled buy for GLD four weeks ago, while the Quick-term Indicant has been signaling hold since late 2008. Even with a misbehaving dollar, the Gold Bear cannot find traction on a near-term and quick-term basis. The Mid-term, on other hand, is afraid of U.S. dollar mischievousness.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. That suggests deflation will be first, but logic supports the opposite argument. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands, as opposed to some yawning government bureaucrat and their corrupt partners.

Gold is again shifting into a near-term bullish cycle. The optimistic 2012 forecasted price of gold is holding at $1600 in spite of bearishness a few weeks ago. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value. Short-term attributes are no longer confronting the gold bull.

As stated 102-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake. The July-Aug bullish spurt also turned out to be a fake as well.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity. That would be non-bearish and potentially bullish, depending on the breadth and depth of the economic damage created by the 2006-current Congress.

As stated the past 54-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current mid-term bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

We may renew participation in the current bullish spurt. The stock market is certainly anticipating an outcome in the mid-term elections. Based on the bear’s inability to regain influence, suggests the stock market is sensing a rout to current congressional leadership. That is contributing to bullish obstinacy to bearish ambition. Historical standards suggest bullish renewal in October or early November. Until then, watch out; maintain a vigilant watch and do not be surprised at being surprised.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is up 18.3% since the Jul 2, 2010 sell signal. Declining Vector Pressure is reason for avoidance. Force crossed above Pressure five weeks ago and a buy signal could be nearing.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 19.4% since then, annualizing at 18.8%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but flat until the sell signal on Jul 2, 2010. It is up 8.2% since that sell signal. Falling Vector Pressure in bearish domains suggest continued avoidance.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is up 5.7% since the May 21 sell signal. Falling Vector Pressure continues suggesting avoidance.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 8.6% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. Vector Pressure continues moving more deeply into bearish domains.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 6.4% since the Jun 4, 2010 sell signal. Vector Pressure is diving and penetrating bearish domains.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 20, 2010. It is up 2.0% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on Aug 12, 2010. It is up 4.5% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 50.9% since that buy signal, annualizing at 28.7%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 3.7% since that buy signal, annualizing at 41.5%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 8.3% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 3.9% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals on Jul 2, 2010. They are up 8.5% and 8.0%, respectively, since those bear signals.

The Mid-term Indicant signaled bear for the NASDAQ and S&P600 on Aug 13, 2010. The NADSDAQ is up 3.2% while the S&P600 is up 4.0% since then.

The four remaining major indices retaining bull signals are up by an average of 19.4% since their respective bull signals an average of 58.0-weeks ago. That annualizes at 17.4%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,591,780 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $108,684 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $198,066. That beats buy and hold’s $77,756 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1647.2%, 22.4%, and 154.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA, S&P500, and the NASDAQ.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 261.4% (annualized at 13.8%) since the Long-term Indicant signaled bull 984-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

Pressure is very near penetrating bullish domains. Prices are already above Blue. That is a bullish configuration. The primary attribute confronting that are the bearishly shifting Force Vectors. There movement is very immature. Wavering Force in bullish domains will be inspirational to the bull; especially if Pressure expands into bullish domains. The bear will be significantly stimulated with a rapid drop in Force back into bearish domains. This should be clear next week. The Near-term Indicant and Quick-term Indicant cannot signal bear/avoid with current configurations, coupled with positive Pressure.

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

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

The two bulls are down by an average of 1.8% since the NTI signaled bull an average of 12.0-weeks ago. The two bulls are the Dow Utilities and contrarian VIX. The ten bears are up by an average of 2.2% since their bear signals 4.2-weeks ago.

The Dow Utilities proximity to QTI Red and positive Pressure offers a source of potential resistance to the bear. The Utilities Index continues expressing obstinacy to the bear’s ambition, although it was mildly bearish two of the past three bullish days. The VIX is paralleling overall stock market configurations with rising NTI Blue. That contradiction should be arrested soon.

The Quick-term Indicant signaled no new bulls and no new bears. There are two major indices with a bull signal. They are the same as NTI’s performance.

Short-term Market Summary

One fundamental argument favoring the bull is anticipation of high congressional turnover. Its antithesis is souring economic data, such as softening GDP. Those two fundamental battles are underway. Of course, the mid-term to long term bull requires GDP support, regardless of anything else.

Threatening to the bear signals is positive pressure for all the major indices, except the S&P100 and the NASDAQ. That is an unusual combination. If Force vacillates in bullish domains, the Near-term and Quick-term Indicant will be forced to signal bull. Force is declining and thus the reason for not signaling bull now.

-Tangential Protection – None!

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

Indicant Volume Indicators

Volume indicators remain lethargic. Some of this lethargy is traced to seasonal behavior. Volume typically accelerates during the first week of September, removing some of its esoteric relationship during the summer months. Volume continue ebbing at summertime lows and not offering its contribution to obviations of directional intensity.

Sep 10, 2010-Fri-Low volume accompanied mild bullish behavior, offering no evidence of any exciting or dynamic movements on the immediate horizon.

Sep 9, 2010-Thu-Volume remains unseasonably low. It is as if vacations are continuing. Today’s mild bullish was accompanied with mild volume, offering little evidence of a sustainable bull market in the offing.

Sep 8, 2010-Wed-Volume was up a bit on today’s mild stock market bullish behavior. However, volume continues ebbing at low levels and remains in support of bearish bias.

Sep 7, 2010-Tue-Depressed volume on bearish aggression does not justify a bias shift. It remains bearish. Interestingly, volume remains seasonally depressed.

Sep 3, 2010-Fri-Light volume accompanied bullish behavior, offering little reason to shift from bearish to bullish bias. This is the last day of seasonal volume. It will pick up next week. That will enhance volume’s contribution to obviations of directional intensity.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 7-ETF’s. They are up by an average of 2.0% since their buy signals an average of 6.1-weeks ago. This annualizes at 17.2%.

The NTI is avoiding 25-ETF’s. They are up by an average of 3.2% since their sell signals 3.6-weeks ago.

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

The Quick-term Indicant is signaling hold for 17-ETF’s. They are up 6.1% since their buy signals an average of 13.8-weeks ago. This annualizes at 23.2%.

The Quick-term Indicant is avoiding 15-ETF’s. They are down by an average of 0.6% since their sell signals an average of 7.4-weeks ago.

Short-term Summary: Vector Pressure remains mixed, but no longer increasingly favoring the bear. Twenty-one ETF’s are enjoying positive (bullish) pressure, which is an increase by eleven from one week ago. That increase is challenging the non-bullish prognosis. Force Vector are now shifting back to the south. This should invoke non-bullish to bearish behavior. If not, the bearish bias will evaporate. Combined Force and Pressure should provide evidentiary attributes next week.

Contrarian Funds

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

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

Major ETF Events

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

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

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

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market was mixed last week, following a week of solid bullish convergence. That follows four consecutive weeks of combined bearish convergence/divergence. Although the stock market did not endure solid bearish convergence in those four weeks, those mild divergent behavioral patterns are justification for being conservative and challenging to all hold positions. Strong bullish behavior two weeks ago on low volume is not justification for assuming its continuation. Make certain your stop losses are properly established.

Indicant Conclusion

As stated the past 49-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. The expiration of the Near-term Bull, Quick-term Bull, and parts of the Mid-term Bull continue suggesting this is an increasingly irrelevant observation, relative to more worldly dynamics. However, worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The problem confronting that line of thinking is on the immediate horizon. Right now, the bull and bear are expressing timidity.

The antithesis to owning stocks at this time is declining GDP. Corporate earnings are easier with inclining GDP. Depressed corporate earnings’ projections usually inspire the bear.

It would not be surprising, however, for the bull to resume once the outcome of the mid-term elections is smelled by the stock market. A huge number of losing congressional incumbents should offer bullish inspiration. The stock market typically smells this around October-November, which coincides with the heart and soul of bullish seasonality. Between now and then, choppy stock market behavior should be viewed as the least-worse case.

If Force does not fall into bearish domains next week, the probability of dynamic stock market bearish behavior will significantly reduced.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

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09/12/2010

Sep 05, 2010 Indicant Weekly Stock Market Report

Historical Abnormalities and Next Week

The presidential election year is historically bullish. An investment of $10,000 in 1832 and holding only in presidential election years would have enjoyed an account balance of $95,473 at the end of 2004.

That balance plummeted to $63,203 in 2008’s stock market bear. That was the worst presidential election year on record. That was certainly an abnormality.

The presidential post election year of 2009 was also abnormal. An 1832 investment of $10,000 and holding only during presidential post election years endured a balance of only $4,195 by the end of 1981. That is an amazing decline in stock market valuations covering nearly 150-years.

The reason is clear for this decline. Recently elected politicians invoke social programs, for the most part, during their first year in office. Their invigorated egos from their recent election overrule legislative passivity. That results in stock market bears.

The 1980’s and 1990’s enjoyed heightened political disagreements between the legislative and executive branches of government. That led to a string of abnormal bullish stock markets in the presidential post election years of 1985, 1989, 1993, and 1997. Those years enjoyed double-digit gains. That paltry $4,195 accelerated to an account balance of $9,484 by 1997. Even with those double-digit gains, though, the original 1832 investment of $10,000 held only during presidential post election years was still a loser.

The 2009 presidential post election year enjoyed an 18.1% gain shoving the 1832 investment to $10,343. After 178-years of stock market investing, only in presidential post election years, $343 profits were accumulated. Including inflation, though, there is no profit and the $10,343 is less than today’s pocket cash.

The presidential pre-election year is the most bullish. That $10,000 investment in 1832 enjoyed an account balance of $302,066 as of the end of 2007 if only investing during presidential pre-election years. The presidential pre-election year is significantly more bullish than the other three years.

There is good reason for this. It follows the mid-term election year, where the incumbent president typically loses congressional seats. In essence, the executive branch is weakened. Legislative accomplishments slow. The incumbent president starts feeling sorry for himself and loses his verve. Those two elements are extraordinarily bullish for the stock market. A sulking and ineffective politician will generally invigorate the stock market bull.

Summarizing, 2008 was extraordinarily abnormal. 2009 was abnormal, but only to the extent that 2008 was abnormal. 2009 was bullish only because its predecessor year was bearish. The question is, will 2010 be normal or abnormal?

The last presidential pre-election year enduring a bearish stock market was FDR’s 1939. It was bearish by only 2.9%. With abnormalities in 2008 and 2009, should one expect a third consecutive year of abnormal stock market behavior? Each abnormality elevates the probability of resuming normalcy. With that, one could reasonably expect 2011 to be bullish.

If 2010 finishes down, which is not uncommon for mid-term election years, then 2011 could easily be bullish; not because it was really bullish, but more due to its predecessor year being bearish. Since 2010 is already down for the year, the traditional cyclical bottom could be behind us.

Historically significant is the mid-term election year finding cyclical stock market bottoms. That occurred in 2002, again in 2006, and in nearly every mid-term election year since 1832. With that, the stock market tends to shift bullishly during the mid-term election year in anticipation of the profoundly bullish pre-election year. With that, one can expect a stock market bull in 2011.

However, many do not care about 2011. They want to know what is going to happen next week. In the absence of a crystal ball, one clue can be garnished by the resumption of normal volume next Tuesday. Vacations are over. If dynamic bearishness parallels volume jumps, the traditional mid-term cyclical bottom is in front of us. The opposite behavior suggests the traditional bottom is behind us. The Indicant Volume Indicator has been in a lethargic cycle for several weeks. It is one of the longest cycles on record. It is due to rise and should start doing so next week. Its behavior, coupled to stock market behavior will heighten potential obviations of the stock market’s directional intensity.

Keep your eye on the daily stock market report.

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

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

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

The Mid-term Indicant is signaling hold for 135 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 52.7%. That annualizes to 40.0%. The Mid-term Indicant has been signaling hold for these 135-stocks and funds for an average of 68.4-weeks.

The Mid-term Indicant is avoiding 181-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 18.7% since the Mid-term Indicant signaled sell an average of 61.2-weeks ago.

One year ago, on Sep 4, 2009, the Mid-term Indicant was holding 143-stocks and funds out of 332 tracked for an average of 20.5-weeks. They were up by an average of 21.4% (annualized at 54.3%). There were 173-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 34.5% since their respective sell signals an average of 68.2-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 159-stocks and funds of the 345-tracked two years ago on Sep 5, 2008. They were up by an average of 121.0% (annualized at 58.9%) since their respective buy signals an average of 106.8-weeks earlier. The Mid-term Indicant was avoiding 159-stocks and funds at that time. They were down an average of 20.3% since their respective sell signals an average of 31.4-weeks earlier.

There were 256-stocks and funds with hold signals on Aug 31, 2007 since their buy signals an average of 122.9-weeks earlier. They were up by an average of 146.6% (annualized at 62.0%). There were 87-avoided stocks and funds at that time. They were down by an average of 5.6% from their respective sell signals an average of 15.8-weeks earlier.

On Sep 1, 2006, the Mid-term Indicant was signaling hold for 229-stocks and funds out of 345-tracked. They were up by an average of 119.5% (annualized at 68.2%) since their buy signals an average of 91.1-weeks earlier. The Mid-term Indicant was avoiding 82-stocks and funds at that time. They were down by an average of 8.3% since their sell signals an average of 23.2-weeks earlier.

Five years ago, on Sep 2, 2005, there were 225-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 106.9% (annualized at 60.7%) since their respective buy signals an average of 91.5-weeks earlier. There were 91-avoided stocks and funds then. They were down an average of 9.0% since their respective sell signals an average of 21.2-weeks earlier.

On Sep 3, 2004, there were 184-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 75.3%, annualizing at 67.1%, since their respective buy signals an average of 58.3-weeks earlier. There were 106-avoided stocks and funds then. They were down by an average of 27.7% since their sell signals an average of 44.4-weeks earlier.

There were 264-stocks and funds with hold signals on Sep 5, 2003. They were up by an average of 51.6%, annualizing at 96.9%, since their buy signals 27.7-weeks earlier. The 18-avoided stocks and funds were down an average of 8.0% since their respective sell signals an average of 13.5-weeks earlier.

On Sep 6, 2002, there were 188-stocks and funds with a hold signal, enjoying a 5.8% gain since their respective buy signals an average of 8.7-weeks earlier. That annualized at 35.1%. There were 75-avoided stocks at that time. They were down 41.5% since their sell signals an average of 21.7-weeks earlier. There were 29-sell signals.

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

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

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

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

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

As stated the past few weeks, the Long-term and Mid-term attributes have partially succumbed to the stock market bear’s ambition. The stock market bull challenged bearish bias from last week, but the bias has not yet changed. Pressure remains in bearish domains.

Since those bear signals, as noted above, the stock market responded with a bullish spurt. That spurt was anticipated, but magnitude and breadth are not predictable. The bear attacked that bullish spurt the during the latter part of August, but the bull recoiled powerfully this past week. The bull has been impressive defending its position and recoiled at nearly every attempt of the bear’s gaining traction.

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

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

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 5% for holds with less than a 20%-unrealized gain. Of course, this includes new buys. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price. Do not worry if you stopped out. New opportunities always emerge. The idea is to minimize losses.

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

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

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

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 41.6% since its secular weekly low on October 9, 2002. The NASDAQ is up 97.5% and the S&P500 is up 40.3% since then. The small cap index, S&P600, is up 98.0% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming. That will again be an attribute to monitor in coming months if the stock market moves bearishly by significant amounts.

The NASDAQ is down 56.4% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.6% since its similar secular peak on March 23, 2000. The Dow is down by 12.0% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 26.9% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 35.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 38.7%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 7.9% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 1.6% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness. Many of you will recall that August 2005 was when the Quick-term Indicant identified the next strong bullish cycle.

In 2006, the NASDAQ was down 0.6% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 7.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 12.0% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 25.8% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was up 6.5% on this weekend last year, finishing 2009 up by 18.8%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 27.1% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 23.1% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 24.1% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The Dow is up 57.6% since March 9, 2009, which is the “bottoming” pivot date from the great bear market of 2007/8. Last week’s report erroneously stated the Dow’s performance. The NASDAQ is up 73.4% and the S&P500 is up 61.1% since then. The S&P600, Small Cap Index, is up 86.0% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant is now suggesting impending bearishness. The Short-term Indicant abandoned its bearish tone on Aug 9, and unfortunately, reasserted it the next day, on Aug 10. The bull is again challenging that bearish bias.

Great Britain and Germany are reportedly displaying spending constraints and leaning to the so-called right. If that proves to be real and sustainable, then the above paragraph may be viewed at some future point as too strongly worded. The key here is objective economic evidence, as opposed to political verbosity. It is hoped that their success is ultimately proven real. That would suggest a continuation of bullish sustainability. Remember, stock markets require proof in the end.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

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

Six weeks ago, Mr. Bernanke stated they are holding at these low rates indefinitely into the future. The interest rates’ sinusoidal waves should not start rising on the immediate horizon. However, they are doing so in China. You should notice a subtle incline on CD rates, although falling last week. Mortgage rates continue to decline. They remain at historically low levels. It will not be a smooth ride, as the Fed will endure conflicting policies between deflation and inflation in the coming months/years.

As stated 101-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake. The July-Aug bullish spurt also turned out to be a fake as well.

As stated the past 53-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current mid-term bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. It is up 17.1% since the Jul 2, 2010 sell signal. Declining Vector Pressure is reason for avoidance. Force crossed above Pressure four weeks ago and a buy signal could be nearing.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 20.1% since then, annualizing at 19.9%. Positive Vector Pressure and Red Bull status are reasons for holding.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It received a buy signal on July 31, 2009 but flat until the sell signal on Jul 2, 2010. It is up 8.1% since that sell signal. Falling Vector Pressure in bearish domains suggest continued avoidance.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003 until the next sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is up 3.2% since the May 21 sell signal. Falling Vector Pressure continues suggesting avoidance.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 9.0% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. Vector Pressure continues moving more deeply into bearish domains.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 5.3% since the Jun 4, 2010 sell signal. Vector Pressure is diving and penetrating bearish domains.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on Aug 20, 2010. It is up 1.4% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on Aug 12, 2010. It is up 3.9% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 51.1% since that buy signal, annualizing at 29.2%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a sell signal from the Near-term Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It is up 3.8% since that buy signal, annualizing at 54.7%. The near-term model lost an opportunity of about 2% between Jul 27 and Aug 9.

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

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

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 9.6% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 3.2% since the Jun 4 bear signal. The S&P500 and DJIA received Mid-term bear signals on Jul 2, 2010. They are up 7.9% and 8.0%, respectively, since those bear signals.

The Mid-term Indicant signaled bear for the NASDAQ and S&P600 on Aug 13, 2010. The NADSDAQ is up 2.8% while the S&P600 is up 5.3% since then.

The four remaining major indices retaining bull signals are up by an average of 19.1% since their respective bull signals an average of 57.0-weeks ago. That annualizes at 17.4%.

The Mid-term Indicant Dow Jones Industrial Average performance is at $27,820,542. That beats buy and hold performance of $1,589,522 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $133,022. That beats buy and hold’s $108,190 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $198,066. That beats buy and hold’s $77,453 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1650.2%, 23.0%, and 155.7%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform. That opportunity may now be manifesting with the bear signals for the DJIA, S&P500, and the NASDAQ.

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

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

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

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

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

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

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

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

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

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

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

The Mid-term Indicant signaled sell for MF#22-ProFunds Ultra Short on April 3, 2009. It is down 60.6% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID, which occurred a few weeks ago, but has endured a couple of “fluttering” steps since then. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal. It is getting close, though. Pressure is moving north, but still remains in bearish domains.

Click here for Mid-term Indicant Table of Mutual Funds

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

Long Term Indicant Positions - Dow Jones Industrial Average

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

The Dow is up 260.9% (annualized at 13.8%) since the Long-term Indicant signaled bull 983-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

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

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

The battle between mid-term election year bullishness late in the year and souring economic data continues.

Vector Pressure, for the most part, is not supportive of sustainable bullish behavior. Some are challenging bear and avoid signals, but they remain a minority.

VXX and VIX are not supportive of stock market bullishness, as they remain configured with their own bullish potential. The VIX fell below QTI Bearish Yellow. It almost never finds comfort there. That suggests VIX bullishness and stock market bearishness.

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

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

The two bulls are down by an average of 2.8% since the NTI signaled bull an average of 11.0-weeks ago. The two bulls are the Dow Utilities and contrarian VIX. The ten bears are up by an average of 2.1% since their bear signals 3.2-weeks ago.

The Dow Utilities proximity to QTI Red and positive Pressure offers a source of potential resistance to the bear. The VIX fell below QTI Yellow. Its strongly positive pressure prevented its NTI and QTI bear signal.

The Quick-term Indicant signaled no new bulls and no new bears. There are two major indices with a bull signal. They are the same as NTI’s performance.

Short-term Market Summary

One fundamental argument favoring the bull is anticipation of high congressional turnover. Its antithesis is souring economic data, such as softening GDP. Those two fundamental battles are underway. Of course, the mid-term to long term bull requires GDP support, regardless of anything else.

The only non-contrarian major index with positive Vector Pressure is the Dow Utilities. Its Force Vector crossed into bullish domains. Surprisingly, it was the only major index that was bearish today and it is the only non-contrarian index with a bull signal.

The other bull, contrarian VIX, endured a collapsing NTI Bullish Blue curve, challenging its bullish position. It is retaining the bull signal since its pressure is positive and a bearishly mature Force Vector.

The remaining indices with bear signals are all enduring negative (bearish) pressure. Thus, they continue receiving bear signals. Force moved north the past three days with some piercing pressure from the south. It will be interesting to see if the resting bear does more than yawn about that. It certainly yawned this past Thursday and Friday. The bear may be resting before it attacks again, but running the risk of inspiring the bull.

-Tangential Protection – None!

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

Indicant Volume Indicators

Volume indicators remain lethargic. Some of this lethargy is traced to seasonal behavior. Volume typically accelerates during the first week of September, removing some of its esoteric relationship during the summer months. The Indicant Volume Indicator should shift out of its lethargic cycle a day or two after labor day. That typically coincides with bullish behavior during mid-term election years. However, September and early October tend to be inspirational to the bear. The current lethargic volume cycle has extraordinary breadth and an uninterrupted lethargic cycle. It should shift into a robust cycle after Labor Day. With that, there will be more valid relationships and stronger obviations of directional stock market intensity. (Recent chronological observations are expressed below in reverse order).

Sep 2, 2010-Thu-Light volume on mild bullishness means very little with respect to the stock market’s cyclical inspirations.

Sep 1, 2010-Wed-Volume was seasonally aggressive on dynamic bullish stock market behavior. This is mildly discerning to the bearish themes contained herein. However, the bias remains in favor of the bear.

Aug 31, 2010-Tue-Volume was a bit more aggressive on today’s flat stock market behavior; lost souls wishing and hoping on a wing and a prayer. Bearish bias prevails.

Aug 30, 2010-Mon-Volume was very passive on today’s bearish aggression. It was fractional to last Friday’s volume on bullish aggression. That relationship is inconsistent with the bearish theme contained herein. However, the bias remains in favor of the bear.

Short-term ETF Report Card, Status, and Charts

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

The Near-term Indicant is signaling hold for 7-ETF’s. They are up by an average of 2.2% since their buy signals an average of 5.1-weeks ago. This annualizes at 21.9%.

The NTI is avoiding 25-ETF’s. They are up by an average of 3.1% since their sell signals 2.6-weeks ago.

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

The Quick-term Indicant is signaling hold for 17-ETF’s. They are up 6.1% since their buy signals an average of 12.8-weeks ago. This annualizes at 24.9%.

The Quick-term Indicant is avoiding 15-ETF’s. They are down by an average of 0.8% since their sell signals an average of 6.4-weeks ago.

Short-term Summary: As stated last Tuesday, the bear continues nudging the bull out of its way, some potential resistance points remain available to the bull. Bullish aggression in the latter part of this past week displayed the power of some of those points of resistance.

Vector Pressure remains mixed, but no longer increasingly favoring the bear. Only ten ETF’s are enjoying positive (bullish) pressure. That remains non-bullish.

Force Vectors escaped their laterally moving behavior with last Thursday’s bullish behavior. Several more penetrated bullish domains. Their bullish cycle is somewhat mature. The bearish bias stated herein will be threatened if they continue to rise and find comfort in bullish domains.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on Aug 12, 2010. It is up 1.4% since then. The Quick-term Indicant signaled sell on Aug 20, 2010 due to falling below Yellow and negative Vector Pressure, even with increasing Force. It is up 3.9% since the QTI sell signal. It moved above yellow last Thursday, but Pressure remains in bearish domains. Force moved into bullish domains last Thursday, threatening the avoid signal. Negative pressure and maturing Force justifies continued avoidance.

ETF#11-Gold and Precious Metals is up 51.1% since the QTI signaled buy on December 11, 2008. Annualized growth is at 29.2%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $109.85 and still rising. The QTI buy signal was at $80.65. That stop loss will generate over 20%-gain, but nowhere near execution.

The Near-term Indicant signaled buy on Aug 9, 2010. Force is in bullish domains. Pressure crossed into bullish domains several days ago, granting the gold bull passage to its ambition. It is up 3.8% since the Near-term buy signal, annualizing at 54.7%. Force continues hovering in bullish domains with positive (bullish) pressure, supporting its bullishness.

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

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 15.1% since those buy signals, annualizing at 42.0%. This fund took it on the chin the past three days. However, its hold signal is not being threatened. It is simply cooling off, which is easy for contrarian funds to do on stock market bullishness.

The Near-term Indicant and Quick-term Indicant signaled buy for ETF#31-QID on Aug 20, 2010. It is down 5.3% since that buy signal. Its Force Vector fell into bearish domains last Thursday. The hold signal is no longer solid. Positive pressure and a bearishly mature Force Vector justify continued holding.

The Near-term Indicant signaled sell last Thursday for ETF#32-VXX. Its Force Vector is bearishly mature, suggesting a bullish response for this fund on the immediate horizon. Even with that, risks remain too high for holding.

Major ETF Events

Sep 2, 2010-Thu-Several more Force Vectors moved into bullish domains today, threatening the avoid signals. However, the majority on non-contrarians remain in bearish domains. That, coupled with bullishly maturing Force Vectors disallows buy signals.

Sep 1, 2010-Wed-The storm may not be dynamic bearishness. However, even with today’s dynamic bullishness, most short-term attributes remain bearish. Twelve Force Vectors crossed into bullish domains, threatening bearish bias. Today’s behavior cannot be identified as phony. It offers bullish potential, but support attributes are not yet supportive of it being one of sustainability.

Aug 31, 2010-Tue-Flat behavior did not provide major events. It could be the quiet before the storm.

Aug 30, 2010-Mon-Today’s bearish aggression was consistent with fundamentals and technicals.

Aug 27, 2010-Fri-Bullish behavior was technically and fundamentally without merit. The weak indices, such as dilettante infested S&P100 Index, are very bearish. Solid bulls do not discriminate against such elements.

Current Strategy-Short-term Indicant- Sep 3, 2010-Same. Sep 2, 2010-Same. Sep 1, 2010-Same. Aug 31, 2010-Tue-Same. Aug 30, 2010-Mon-Cash is good. Shorting is better, but with more risk. As long as QID and similar ETF’s Vector Pressure remains in bullish domains, the stock market will not allow the bull to dominate.

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

Other links:

Short-term Indicant for DJIA and NASDAQ

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

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

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

Divergence versus Convergence

The stock market enjoyed strong bullish convergence last week, following four consecutive weeks of combined bearish convergence/divergence. Although the stock market did not endure solid bearish convergence in those four weeks, those mild divergent behavioral patterns are justification for being conservative and challenging to all hold positions. Last week’s strong bullish behavior on low volume is not justification for assuming its continuation. Make certain your stop losses are properly established.

Indicant Conclusion

As stated the past 47-weeks, low interest rates impose narrowed alternative investment opportunities. That narrowed alternative suggests more demand for common stocks. The expiration of the Near-term Bull, Quick-term Bull, and parts of the Mid-term Bull continue suggesting this is an increasingly irrelevant observation, relative to more worldly dynamics. However, worldly events may be adjusting in support of the original premise; that is, where else can one put their money to work? The stock market, of course! The problem confronting that line of thinking is on the immediate horizon.

The antithesis to owning stocks at this time is declining GDP. Corporate earnings are easier with inclining GDP. Depressed corporate earnings’ projections usually inspire the bear.

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

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

The daily updates are on the following link.

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

Hyperlinks

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

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

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

Happy Investing,

www.indicant.net

09/05/2010