Jan 29, 2012
Indicant Weekly Stock Market Report
Volume 01, Issue 05 ISSN 1526 6516 © The
Indicant Stock Market Report
Mutual
Funds – Only One Avoided Non-contrarian
Nearly all of
the mutual funds tracked by the Mid-term Indicant have hold signals. As
stated in past reports, a study of mutual funds can offer added insight to
stock market bias.
For the first
time since early 2007, only one non-contrarian mutual fund is enduring an
avoid signal. This lone avoided fund is
MF#45-Fidelity’s Select Consumer Finance.
It is down by 76.0% since the Mid-term Indicant signaled sell on Jan 26,
2007. This fund has endured an avoid signal now for five years, as of this
weekend. That is an extraordinary long period for a quality mutual fund to
endure an avoid signal. The good news is that it is the only one enduring
that for those tracked by the Mid-term Indicant.
Looking at
its
chart, you will notice it
peaked in early 2005. After crossing above the MTI bearish yellow curve in
2000, you will notice its limited participation in the 2001-2002 stock
market bear. Even though it was bearish during that period, it never fell
below the Mid-term bearish yellow curve during that bear market.
After peaking
in early 2005, it finally contacted that yellow curve in January 2006,
triggering a mid-term sell signal. It lingered just below yellow until
late 2006, where a buy signal occurred. Shortly after that, it endured the
Jan 26, 2007 sell signal. As earlier stated, it is down 76.0% since then.
A study of
economics suggests much of the 1990’s stock market bull was fueled by
rising home prices. After the Y2K stock market bear in 2002-2003, home
prices continued to inflate. Since the 1980’s, home prices have escalated
by a combination of two driving forces; normal pricing elasticity to laws
of demand and supply and phony pricing elasticity to politicians
interfering with normalcy.
The stock market report of August 24, 2008,
Hard Economic Data – Physical Objects, described the high
effort and real value of building a house and the low effort and negative
value of political and government intrusion.
The stock market report of September 28, 2008,
Will Fake Cash Flow Help the Bull, described phony balance
sheet content with abstract valuations of assets.
MF#45-Fidelity’s Select Consumer Finance
price decline by over 70% since falling below MTI-Yellow in early 2007
reflects the consequences of political meddling in capital markets.
Interestingly, one would not be out of line paralleling that Fund’s
performance and your healthcare in the years to come with yet more
political meddling. There is no objective evidence in the annals of
history where any group of people has benefitted even in the smallest way
from political help. On the contrary, history consistently demonstrates
wars, recessions, and other hardships from it. As old people die, new ones
are born to tabula rasa. They then repeat the mistakes of their ancestors.
Their mistake; believing political chit-chat. Universal laws always
overrule them. It is always just a matter of time.
The best
yielding Mutual Fund, based on Mid-term Indicant buy signals, is
MF#33-Fidelity’s Select Computer.
It is up 64.5% since the Mid-term Indicant signaled buy in July 2009.
Politicians do not interfere too much in that industry and thus the high
performance in spite of the fact that the outlook for microcomputers is
mainly bearish. Cloud computers are micros biggest threat. However, that
does not mean this fund will turn bearish.
Of the mutual
funds tracked by the Mid-term Indicant, two are currently at all-time
highs.
MF#49-Fidelity’s Select Leisure and Entertainment
is one of them. It is up 63.8% since the MTI buy signal in August 2009.
Apparently, money is being made in the “soft industry” even though
unemployment remains extraordinarily high. The haves are enjoying more
while the have-nots continue with mere subsistence. That is what happens
with increased socialism. If socialism expands, the fund will eventually
shift bearish, as the “haves” will dwindle in population.
The other
fund with a new all-time high is
MF#96-Vanguard’s Targeted Retirement.
Although it is enjoying an all-time high, it is up by only 16.5% since the
MTI buy signal in July 2009. That is okay as this fund’s holdings contain
ultra conservative investments. Even with that, you can see from its
chart, it participated in the 2008-stock market bear, but has since
rebounded and set new all-time highs in recent weeks.
Several other
funds achieved all-time highs prior to bearish threats in late 2011. Some
are struggling to regain that status, but overall, mutual funds are
configured in favor of the stock market bull. Fund managers tend to buy
the best in their sectors of interest. As long as the better companies
hold up well, the stock market bear cannot dominate. It will be
interesting if the lone avoided non-contrarian fund can earn its way to a
mid-term buy signal.
Keep your eye
on the
daily stock market report.
Whipsawed
– Review of Wild Swings Last Week
This
section highlights last week’s biggest gainers and losers within each
group of stocks and funds tracked by the Mid-term Indicant.
NAS100#85-ILMN was up 42.4%
last week. It is up 44.7% since the Jan 13, 2012 buy signal. That
annualizes at 1,150%. This stock has enjoyed a long-term bullish trend.
Last week’s growth, of course will not continue at that rate. It is simply
aligning itself back to its normal growth pattern after being pestered by
the stock market bear late last year.
NAS100#04-SNDK was down 11.0%
last week, while still maintaining mid-term bullish attributes. It is up
40.2% since the Mar 2010 buy signal.
ISTK#08-RNWKD was up 35.1% last
week. It is still down, however, by 64.1% since the sell signal in July
2007. It is enduring a long-term bearish trend.
ISTK#17-BVSN was down 21.4% and
down by that same amount since last week’s buy signal. This stock is also
enduring a bearish trend, but the previous week’s configuration were
unusual enough to continue holding. Although a high risk buy, okay to buy
more at this point, but with a a solid stop loss. Cheap stocks are cheap
for a reason; usually multiple ones.
DJIA#17-CAT was up 5.3%. It is
up 132.9% since the buy signal in Aug 2009. It is a solid hold as this is
an outstanding company.
DJIA#29-TRV was down 5.7% last
week. It is up 53.6% since the buy signal in Mar 2009. It is enjoying a
solid long-term bullish trend.
DJU#15-FE was up 1.8% last
week. This stock is down 5.6% since the buy signal in May 2011. It
plummeted in 2008’s crash and struggling to return to its former solid
bullish cycle. Because it is down with a hold signal, buying again is
okay. The only problem is its declining Force and potential drop below
Yellow. If you buy more, set a stop loss.
DJU#14-CNP was down 3.1%. It is
enjoying a solid bullish cycle, but recently under attack by the utility
bear. It is up 40.9% since the buy signal in Oct 2009. Buying more should
be okay.
MF#28-FSAGX was up 8.5%,
triggering a buy signal. Its Force crossed into bullish domains. This fund
should move bullishly as gold is again configured with bullish attributes
along the short-term cycle.
MF#22-USPIX was down 2.1%. This
purely contrarian fund is down 82.2% since the April 2009 sell signal.
Weekly
Buy/Sell Summary – Stocks and Funds – Mid-term Indicant
Click this sentence for a graphical summary
of what follows
in this section. Simply
scroll down the page to see graphical and detail content of this section.
The Mid-term Indicant generated
eighteen
buy signals and
one
sell signal.
The 170-buy signals in the past 15-weeks
and 51-sell signals the past ten weekends illustrate an unusual bull-bear
battle during the middle of the heart and soul of bullish seasonality. The
stock market is confused as to what it should be; bull, bear, or neutral.
However, the bull holds an edge here as the heart and soul of bullish
seasonality is nearing its end. There are about two weeks remaining, but
that does not mean a bearish cycle will follow. The stock market does not
always respect historical patterns. It certainly disrespected this year’s
heart and soul of bullish seasonality.
The Mid-term
Indicant is signaling hold for 267 of the 331-stocks and funds tracked by
the Indicant. The stocks and funds with hold signals are up an average of
62.1%. That annualizes to 41.9%. The Mid-term Indicant has been signaling
hold for these 267-stocks and funds for an average of 77.1-weeks.
The Mid-term
Indicant is avoiding 38-stocks and funds of 339-tracked by the Indicant.
The avoided stocks and funds are down an average of 34.8% since the
Mid-term Indicant signaled sell an average of 71.6-weeks ago.
One year ago,
on Jan 28, 2011, the Mid-term Indicant was holding 292-stocks and funds
out of 337-tracked for an average of 51.8-weeks. They were up by an
average of 45.2% (annualized at 45.4%). There were 42-avoided stocks and
funds at that time. The avoided stocks and funds were down an average of
45.4% since their respective sell signals an average of 120.0-weeks
earlier one year ago. There were no buy signals and three sell signals on
this weekend last year.
The Mid-term
Indicant was signaling hold for 223-stocks and funds of the 317-tracked
two years ago on Jan 29, 2010. They were up by an average of 22.4%,
annualized at 34.7%, since their respective buy signals an average of
33.6-weeks earlier. The Mid-term Indicant was avoiding 91-stocks and funds
at that time. They were down an average of 45.8% since their respective
sell signals an average of 99.8-weeks earlier. There were zero-buy signals
in addition to 196-buy signals in the prior 27-weeks. There were three
sell signals on this weekend in 2010.
There were
only 23-stocks and funds with hold signals of the 344-tracked by the
Mid-term Indicant on Jan 23, 2009 since their buy signals an average of
69.1-weeks earlier. They were up by an average of 101.8% (annualized at
76.6%). There were 310-avoided stocks and funds at that time. They were
down by an average of 36.5% from their respective sell signals an average
of 35.5-weeks earlier. There were 10-sell signals on this weekend in 2009
in addition to 573-sell signals in the prior 63-weeks, as the bear market
was nearing its eventual depth, but still incomplete in its final
destruction. There was one buy signal on this weekend in 2009.
On Jan 25,
2008, the Mid-term Indicant was signaling hold for 149-stocks and funds
out of 345-tracked. They were up by an average of 173.9% (annualized at
58.0%) since their buy signals an average of 156.0-weeks earlier. The
Mid-term Indicant was avoiding 192-stocks and funds at that time. They
were down by an average of 13.7% since their sell signals an average of
13.5-weeks earlier. There were no buy signals and four-sell signals on
this weekend in 2008 in addition to 178-sell signals in the prior
13-weeks. The Mid-term bull cycle, originating in March 2003, was well
past its peak at this time in 2007, as the democratic congress was
implementing their “take from the productive and give to the
non-productive” policies. A huge number of sell signals continued for the
next several months as the bear market gained momentum throughout most of
2008, through early 2009.
Five years
ago, on Jan 26, 2007, there were 307-hold signals for stocks and funds out
of the 344 tracked by the Mid-term Indicant at that time. They were up an
average of 107.2% (annualized at 60.5%) since their respective buy signals
an average of 92.2-weeks earlier. There were 31-avoided stocks and funds
then. They were down an average of 12.8% since their respective sell
signals an average of 21.3-weeks earlier. There was one buy signal and six
sell signals on this weekend in 2007. The bull was solid, for the most
part, in 2007 until July of that year.
On Jan 27,
2006, there were 280-stocks and funds with hold signals from the listing
of 345-tracked by the Mid-term Indicant at that time. They were up an
average of 118.7%, annualizing at 66.9%, since their respective buy
signals an average of 92.3-weeks earlier. There were 58-avoided stocks and
funds then. They were down by an average of 8.7% since their sell signals
an average of 19.3-weeks earlier. There were no buy signals and no sell
signals on this weekend in 2006.
There were
230-stocks and funds with hold signals on Jan 28, 2005. The Mid-term
Indicant was tracking 320-stocks and funds since then. They were up by an
average of 90.0%, annualizing at 64.5%, since their buy signals 72.6-weeks
earlier. The 90-avoided stocks and funds were down an average of 26.8%
since their respective sell signals an average of 49.1-weeks earlier.
There were no buy signals and no sell signals on this weekend in 2005.
On Jan 30,
2004, there were 282-stocks and funds with a hold signal, enjoying a 67.1%
gain since their respective buy signals an average of 39.7-weeks earlier.
That annualized at 88.0%. There were only six-avoided stocks at that time.
They were down by an average of 27.9% since their sell signals an average
of 42.4-weeks earlier. The Mid-term Indicant was tracking 296 stocks and
funds from 2002 through late 2004. There were zero-buy signals in addition
to 433-buy signals in the prior 45-weeks. The 2003-04 bull market was
48-weeks old on this weekend in 2004. Unfortunately, a meandering bear
market pestered throughout most of 2004.
On Jan 31,
2003, there were 137-stocks and funds with hold signals. They were up
26.5% since their buy signals an average of 22.2-weeks earlier,
annualizing at 62.2%. There were 95-avoided stocks and funds since the
Mid-term Indicant signaled sell an average of 5.3-weeks earlier. The
avoided stocks and funds were down 6.8%. There were seven-buy signals in
addition to 528-buy signals in the prior 27-weeks. Although the stock
market bear remained in effect, its weakness was maturing in favor of the
stock market bull. Some of the Aug. 2002-buy signals retained hold signals
through late 2007 and early 2008, while others endured sell signals before
the conclusion of calendar year 2002 and in early 2003. Energy related buy
signals in Aug 2002, however, held strongly through the December
2002-record-bear for December and lasted until late 2008. There were
57-sell signal on this weekend in 2003, as the heart and soul of bullish
seasonality was expiring and the bull was expressing dynamic timidity in
dominating the stock market. In hindsight, the first quarter of 2003 just
a mere bearish spurt, but threatening enough to signal sell for many
stocks and a few funds.
Summary of
Stocks and Funds with Buy and Sell Signals This past Week
To maintain appropriate security, you can
see the Mid-term Indicant "buy/sell" signals for stocks and funds for this
week by clicking here. It is in
the member’s only section.
As repeatedly
stated, do not hold more than 10% of your investment resources in a single
stock and do not hold more than 20% of your investment resources into a
single mutual fund. Also, never fall in love with a stock or fund. Only
love the value of your portfolio. Never love its contents. Management
stupidity can wreak havoc on any stock or fund at any time. Socio-economic
interference can devastate your holdings from time to time. Governmental
and political behavior can have immediate and long-lasting unfavorable
influences on the capital markets.
Some
companies will perform well, regardless of the depth of stock market
bears. Buy signals will be muted if Congressional action threatens the
capital markets. Legislation, regulation, and politicians are the biggest
threat to the stock market bull and the related quality of life for the
productive and honest.
Comments
about Mid-term Indicant Bull and Bear Signals This Weekend
Recent buy
signals are being triggered with stronger bullish attributes. Several
stocks and funds contain zero evidence of potential stock market bear. The
strong stocks and funds are very strongly bullish and the weak are getting
stronger. Those stocks with a hold signal with paper losses are
potentially excellent buy candidates.
Click the
following link that will take you to the Near-term, Quick-term, and
Short-term Indicant models.
http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm
Stop Loss
Management
The Mid-term
Indicant recommends a trailing stop loss of 8% for holds with less than a
20% unrealized gain. Of course, this includes new buys. Stop losses
shortly after buying are the trickiest. Right after buying, set the stop
loss at the lesser value of 8% or green curve values, depending on your
personal preferences.
For your
longer-term holdings, where you are enjoying triple and quadruple digit
gains, you may want to set your stop at the bearish yellow price. Do not
worry if you stop out. New opportunities always emerge. The idea is to
minimize losses.
Floor traders
are aware of stop loss positions. If prices near those stop losses against
the grain of directional bias, the floor traders will drive the price down
to those stop losses and then buy for themselves and then quickly sell for
profits at your expense. Although seemingly immoral, it is the nature of
free markets and contributes to the desired liquidity of stock markets.
This is one reason why stop losses should be well below prevailing prices
but well above your buy price. That perfection, of course, is not
attainable shortly after buying, which is the most dangerous period for
holding. Use the Blue and Green curves or a combination thereof for stop
loss management shortly after buying.
Long after a
successful buy, monitor prices relative to the bearish yellow curve. That
will minimize the number of trades, while protecting portfolio values.
For new buys,
set stop losses at the blue or green values in the tables. If green is
deeply lagging the prevailing price, you may want to average the blue and
green prices for your stop losses. If the green curve is rising and above
your buy price, set the stop loss just below it. Green is a common
bouncing point. Consider a stop loss a percentage below its value. Once
green passes above your buy price, then adjust your stop losses,
periodically, say weekly, at or just below green. Once yellow passes above
your buy price, you should set the stop loss at the yellow price. That is
a good tactic when longer-term holding positions are supported with
expected fundamentals and your enjoyment of owning a piece of a great
company or fund.
If your stop
loss triggered sell, while Indicant continues signaling hold, normal
advice would be to buy again. However, if the Near-term Indicant is
signaling bear/avoid in related sectors, it is better to wait for specific
buy signals from the Mid-term Indicant. In other words, other
opportunities will emerge.
The ETF’s are signaled on the Near-term,
Quick-term, and Short-term Indicant and are updated daily.
These shorter-term models attempt participation in significant bullish
spurts and rallies, while the Mid-term Indicant is focused on fundamentals
and longer-term technical data.
The
Indicant Stock Market Report’s Secular Market Blend
The Dow is up
73.8% since its secular weekly low on October 9, 2002. The NASDAQ is up
152.8% and the S&P500 is up 69.5% since then. The small cap index, S&P600,
is up 160.5% since October 9, 2002.
All of the
major indices were at new lows on the same week in 2002, which is a common
attribute for bottoming. That will again be an attribute to monitor in
coming months. Configurations shifted in support of normal pre-election
year bullishness twelve weeks ago. The stock market disappointed in the
normally bullish pre-election year. However, the second most bullish year
along the four-year cycle is the election year as the Fed and other
disruptive forces typically stay on the sidelines. Historical standards
favor the stock market bull this year. So far, mid-term and short-term
attributes are supportive of that.
The NASDAQ is
down 44.2% since its last weekly secular peak on March 9, 2000. The S&P500
is down 13.8% since its similar secular peak on March 23, 2000. The Dow is
up by 8.0% 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. One should
note that buy and hold so far this century is a loser, as the stock market
has been flat to bearish the last twelve years. Technically, one could
call that a secular bear; albeit a mild one with respect to the Dow, but a
major one in full force for the NASDAQ.
The Dow has
stumbled three times when encountering its 2000 peak value. Will it do
that again? It remains above its 2000 peak for the fourth time this
century for the seventh consecutive week in this attempt to hold above
that level. The S&P500 topped its 2000 peak for a few brief weeks in 2007
and has since drifted bearishly since then including its participation in
the 2008-massive bear market. The 2009-2010 bullish rebound, though, has
not overcome bearish influences so far this century. The NASDAQ has never
come close, as its prior peak price was hype driven. The DOTCOM sector
does not perform agriculture, manufacture, or extract. Therefore, most
companies within that index created no wealth. It remains appropriately
bearish relative to the 2000 phony peak prices.
If socialism
expands, the NASDAQ may not hit its 2000 peak until after 2050 and that
depends on a resumption of entrepreneurial support by politicians.
Significant downsizing of federal governments and related regulatory
shrinkage will stimulate a reassessment of the previous sentence. If the
opposite occurs with increasing federal bureaucracies, the NASDAQ will
never return to its 2000 peak. Look at the resumes of intellectual elites
who argue against these points. You will detect they are pure economic
leeches arguing on behalf of such regulations, which is a source of their
livelihoods. None has ever produced anything of value.
The NASDAQ
was up 12.6% on this weekend in 2001, as the heart and soul of bullish
seasonality was topping out. It finished 2001 down by 21.1%, which was
congruent with standards of post-election-year-bearishness. The heart and
soul of bullish seasonality manifested early in the cycle, floundered
ahead of Santa Claus, and asserted in early 2001. As many of you recall,
the markets succumbed to the stock market bear later that year.
The NASDAQ
was down 0.7% on this weekend in 2002. Some of you recall the dynamic bear
market in 2002, where the NASDAQ finished that year down by 31.5%. The
NASDAQ stock market bear cycle found bottom in October 2002, which was
consistent with historical standards of finding bottoms during mid-term
election years.
The NASDAQ
was down 0.8% on this weekend in 2003. This turned out to be an excellent
buying opportunity. It finished 2003 up by 50.0% in 2003, which was
consistent with historical pre-election year results. It was up on this
weekend in 2004 by 5.6%. The meandering bear market of 2004 dampened
bullish enthusiasm, but the NASDAQ finished 2004 up by 8.6%. This was
congruent with election year bullishness, although shy of magnitude
standards.
It was down
5.9% on this weekend in 2005’s post-election year, which was consistent
with historical standards of losses and/or minimal gains during
post-election years. This was an excellent year, based on post-election
year historical standards of bearishness. Many of you recall that 2004 and
2005 were meandering bear markets.
In 2006, the
NASDAQ was up by 4.5% on this weekend. It finished up in 2006 by 9.5%,
which maintained congruency of historical bullishness for a mid-term
election year. It was up by 0.8% at this time in 2007, finishing that year
up by 9.8%, which was consistent with pre-election year bullishness. The
stock market peaked in 2007 from the 2003 bull leg after democrats took
control of Congress in early 2007. George W. went along with them as
opposed to repelling them. That accelerated the bear and added depth to
its decline. The 2008-bear was already underway at this time of year in
2007.
The NASDAQ
was down by 12.3% on this weekend in 2008. It finished 2008 down by 40.5%.
That was extreme contrarian performance to the standards of historical
election year bullishness. The overall stock market endured the most
bearish presidential election year since related records from 1832.
It was down
4.6% on this weekend in 2009 and finishing that year up by 43.9%. Keep in
mind, the extraordinary bullish cycle in 2009 finished that year down by
20.6% from its prior Mid-term cyclical peak on October 31, 2007. The 2008
bear market more accurately reflected economic fundamentals than the 2009
bull market.
Much of the 2009 bull market correlated
well with declining political popularity.
The NASDAQ
was down 2.1% on this weekend in 2010. It finished 2010 up by 16.9%, which
was consistent with mid-term election year bullishness; especially in the
second half of such years. It was up 3.9% on this weekend in 2011.
Unfortunately, the NASDAQ finished 2011 down by 1.8%. The S&P500 was flat
in 2011 while the DJIA was up by 5.5% that year.
The Dow is up
3.6% this year. The S&P500 is up 4.7% for the year. The NASDAQ is up 8.1%
this year. This is occurring on the tail end of the heart and soul of
bullish seasonality, which suggests its historical standard may be
achieved, albeit with minimal and disappointing magnitude.
The Dow is
down 10.6% since its last weekly closing peak on Oct 9, 2007. The NASDAQ
is down 1.5% since its last cyclical peak on Oct 31, 2007. The S&P500 is
down 15.9% since its Oct 9, 2007 peak. This coincides with political
coziness in Washington D.C., which solidified in early 2007, as George W.
Bush’s liberal tendencies melded well with the newly elected
democratically controlled congress.
Bull market
expirations are not as obviating with simultaneous peaking like bear
markets are with simultaneous bottoming among the major indices. As you
can see, the stock market continues to struggle beyond where it was prior
to the great bear market of 2007-2008. In spite of that, though, a few
indices have eclipsed pre-crash highs, as noted by the S&P600 thirty weeks
ago. That was the second time in this cycle such accomplishment has been
enjoyed by this small cap index.
Eclipsing and
holding above 2007 cyclical peaks remains elusive. As of this past
weekend, all major indices are below their 2007 peaks with the exception
of the NASDAQ100 and the S&P400. This NASDAQ is up 10.0% since its Oct 31,
2007 peak. The S&P400-Mid-cap is above its Jul 31, 2007 peak by 1.7%. This
is the second time since 2009, the midcaps have crossed above its 2007
peak price. The other major indices continue expressing difficulty
justifying an escape from those 2007-peak prices.
Several
indices have never challenged those peak prices. The weakest index,
S&P100,
continues lagging. It is down by 18.4% since its Oct 9, 2007 weekly
closing peak. As you can see from recent stock market behavior, suspicions
about the 2009-2011 bull leg had merit. It still does. The reason for
those suspicions was near maximal incongruence between political
leadership and the underlying principles of capital markets.
The Dec 12, 2010 Indicant Weekly Stock
Market Report discussed this phenomenon.
Most major
last cyclical bottoms occurred on March 9, 2009. That includes the four
major Dow Indices, the NASDAQ and all of the major S&P Indices. The only
exception is the NASDAQ100. It encountered its last weekly cyclical bottom
on November 20, 2008.
Although
exact simultaneous bottoming did not occur on March 9, 2009, tracking from
that pivot-point has been and will continue to be appropriate. This
inexactness lends credence to the reverse tangential projections with a
short-term view and increasingly so. Consequently, March 9, 2009 is the
pivot date to monitor performance since the March 2009 bottoming from the
2007-2008 bear cycle.
If prices fall below reverse tangential
projections, new pivot points will be defined.
The Dow is up
93.7% since March 9, 2009, which is the “bottoming” pivot date from the
great bear market of 2007/8. The NASDAQ is up 122.0% and the S&P500 is up
94.6% since then. The S&P600, Small Cap Index, is up 144.7% since March 9,
2009. That March 2009-current bull leg was/is indeed powerful, but such
cycles have occurred many times in the past only to be followed by bear
cycles of varying breadth and depth. Such a successor bear cycle may now
be underway, although not expected to continue as Washington DC has a
propensity to stalemate during presidential election years. This is
especially true when the president is unpopular. Both of those conditions
persist and favorable to the stock market bull, but polls are suggesting
it is too close to inspire the stock market bull. That, coupled with
European weakness, confronts the stock market bull.
Keep your eye
on the daily stock market report.
Economic Conditions – Inflation,
Currency, Interest Rates
Click the
above heading for a summary of hard economic indicators.
Although this
paragraph has remained unchanged for a couple of years, do not fall
asleep. It will change. It will be significant and dramatic when it does
change. The markets both free and controlled are not constant. This will
result in a massive bear market, depending on the magnitude of combined
interest rates and inflation. As you have seen the past several weeks, the
potential for a massive and long-lasting bear is possible, as dilettantes,
worldwide, continue converting their currencies to meaningless
expressions. Interestingly, an “instinctive” resistance to this is
manifesting, which could obsolete the previous sentence. Unfortunately,
the dilettantes have not been locked-up, yet. The rate of undoing prior
economic damage by politicians is slowing and may not manifest.
Politicians never optimize. All their solutions are degenerative, as their
goal is simply personal power; nothing else.
As promised by Bernanke in late 2008, the
discount rate (and prime) rate continues holding flat at their depressed
levels. The fed funds closing rate and call money also continue flat and
very depressed. The 2012 forecast suggests values closer to zero than any
other value. Bernanke continues
with his promise of more of the same through 2014, which was extended from
2012 last week. Policy settings typically remain fixed during the second
half of a president’s term. That stability is one reason why the
historical record demonstrates stock market bullishness from the mid-term
election year through the election year. Fortunately, U.S. politicians are
losing influence on the shrinking world stage. Unfortunately, foreign
politicians are made of the same DNA, which is unfavorable to any economic
activity. Unfortunately, the paper currency basis of worldwide economies
is under threat, as the culmination of
OPM disease
by politicians may be approaching the “critical dimension.”
The 3-month T-Bill remains flat and
depressed, along with short-term CD’s.
After yielding zero in the previous 24-weeks, the 3-month T-Bill was
trading at 0.3% the last two weeks.
The
Euro
jumped to Red Bull status 54-weeks ago. It lost Red Bull status 19-weeks
ago with a continuing sharp drop against the greenback. You can see it has
a triple camelback with negative (bearish) trend. It is now a Yellow Bear
and appears readying for a yellow bear cycle.
The
Canadian dollar
is solidly entrenched in cycle of weakness. The CA$ moved above Red three
weeks ago. It remains as a Red Bull (bearish for the CA$).
The
Japanese Yen
continues strengthening, although bearish the past several weeks. The
Japanese yen remains extraordinarily strong due to that country’s superior
management in the private sector. It appears to be attempting a weakening
cycle, but the country’s resiliency and significant productivity offers
significant confrontation to weakening. However, it crossed into
neutrality last week and threatening a bearish cycle against the
greenback.
Gold’s optimistic 2012 forecast has been
elevated to $1800/oz.
After
a few weeks of falling below Red, it is again a Red Bull. Despite solid
bearish behavior in ten of the past 18-weeks, it continues trading above
the 2012 yearend forecast curve, but getting close to losing that lofty
position. The $2,000/oz.-forecast by 2014 remains challenged, based on
political dynamics. For example, reduced government spending should
strengthen paper currencies and with that, the price of gold would
decrease. So far, this thesis remains weak. It may take a few more years
before this political influence manifests. Statistical bullishness remains
intact along the mid-term cycle. At the same webpage, you will notice oil
is less stable with a mild, but with deepening bearish bias. It fell below
yellow 24-weeks ago on souring economic news, but rebounded 14-weeks ago.
Despite periodic days of depressed behavior, it is holding up well. It
escaped Yellow Bear status, as expected, and again with Red Bull status.
As you can see, it has endured a similar bearish cycle in the past. With a
strategic perspective, such cycles were obviously irrelevant. Printing
more paper currencies will continue elevating the price of gold and other
precious metals.
Commodity
prices continue falling from their recent record highs due to souring
economic forecast. None are Red Bulls, but they were significantly bullish
last week. Their potential contribution to inflationary pressures remains
absent, as all those tracked are now Yellow Bears. Their mid-term cycles
are no longer bullish and remain under attack by the commodities bear.
Scrolling
down a bit on the aforementioned webpage, the
CRB Bridge Futures
fell prey to bearish economic pressures the past few months. It is
approaching Yellow Bear status, but it continues resisting that condition
with a strong rebound in six of the last ten weeks.
Commodity
prices, overall, are favoring potential for a bearish cycle. If it
manifests, some elements of inflationary threats will be dampened.
Mortgage rates continue moving bearishly.
They did not find comfort at their first Red Curve interaction since late
2008 on Feb 11, 2011. They continue along a bearish cycle.
The
consumer price index
and
producer price index
are computing with unfavorable results. Inflationary threats are
detectable. However, the combined absolute value of interest rates and
inflation or deflation remains relatively safe at this time. The CPI was
down last month, dampening inflationary concerns, but elevating the
potential for deflation, albeit mildly so.
Overall, hard
economic data is supportive of lackluster economic behavior and currently
non-threatening toward inflation or deflation. Stability in their prices
or even mild bullish behavior could very well be inspirational to the
stock market bull.
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,
but had to signal sell on Dec 16, 2011 for a disappointing loss of around
15%. It received a new buy signal this weekend.
Fidelity Gold, Fund #28
also received a buy signal this weekend.
Vanguard Energy #18, VGENX,
was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003
until its sell signal on October 3, 2008. The Mid-term Indicant signaled
buy on Sep 17, 2010, following a couple of buy/sell cycles since late
2008. It received a buy signal on Oct 28, 2011 after missing an 18%
opportunity due to rapid bullishness ahead of Force Vector justification
to signal buy. It is down 7.1% since that buy signal. This condition
offers even yet a greater buying opportunity. It was bullish the past two
weeks.
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 Oct 28, 2011 after missing about 20% of
opportunity. The Mid-term Indicant had to signal sell on Dec 16, 2011. The
MTI missed a 10% growth spurt, as the Mid-term Indicant signaled buy on
Jan 13, 2012. It is up 7.3% since then, annualizing at 187.9%.
State Street Research Global #9, SSGRX,
was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant
sell on October 3, 2008. It was down 18.4% since that sell signal and the
buy signal on January 8, 2010. The Mid-term Indicant signaled sell on Nov
25, 2011. It is up 4.3% since the MTI sell signal on Nov 25, 2011. It
received a buy signal this weekend.
Fidelity Energy #39, FSENX,
was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003
and the sell signal on October 3, 2008. After a few disappointing buy/sell
cycles since late 2008, the Mid-term Indicant again signaled, buy, on Sep
17, 2010 and was basically flat until the Mid-term Indicant signaled sell
on Sep 30, 2011. It again signaled buy on Oct 28, 2011 after missing about
24% of opportunity. Unfortunately, the Mid-term Indicant had to signal
sell on Dec 16, 2011. The MTI missed an approximate 10% growth spurt until
a buy signal on Jan 13, 2012. It is up 4.1% since then, annualizing at
106.2%.
The Near-term
and Quick-term signaled buy for
ETF#03 – Energy and Natural Resources
on Jan 3, 2012. It is up by 0.6% since those buy signals, annualizing at
9.1%. It was up 242.4% (annualized at 44.8%) since the Quick-term buy
signal on March 26, 2003 until the September 2008 sell signal. It was up
over 25.0%, annualized at 29.0% from its Quick-term buy signal on Sep 15,
2010 and the Quick-term sell signal on Aug 8, 2011. It was down slightly
between the Dec 1, 2011 buy signal and the sell signal on Dec 14, 2011.
The
Quick-term Indicant signaled sell for the
GLD-ETF#11
on December 28, 2012. It was up about 90.0% since the previous buy signal
in Dec 2008 and annualizing at 30.5%. It is up 7.1% since the most recent
buy signal on Jan 5, 2012, annualized at 116.1%. It gained 81.4% from its
August 3, 2005 buy signal until the September 8, 2008 sell signal. Its
annualized gain during that hold period amounted to 27.1%. The Near-term
Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell
signal on Feb 4, 2010. It received a sell signal from the Near-term
Indicant on Jul 27, 2010, but received a new buy signal on Aug 9, 2010. It
was up by 12.0% since that buy signal, annualizing at 28.0% at the time of
the Near-term sell signal on Jan 20, 2011. It was up 2.0% since that sell
signal when the Near-term Indicant signaled buy on Fri, Feb 18, 2011. The
near-term model lost an opportunity of about 2% between Jul 27 and Aug 9,
2010. It enjoyed an approximate 7.0% gain since the Near-term Indicant buy
signal on Feb 18, 2011. The NTI signaled buy on Jul 6, 2011. It was up
about 10% until the NTI signaled sell on Sep 23, 2011. It was flat since
that sell signal and its most recent buy signal on Oct 26, 2011. It was
down slightly from that Oct 26, 2011 buy signal until the sell signal on
Dec 12, 2011. It is up 7.1% since the Jan 5, 2012 Near-term buy signal,
annualizing at 116.1% since then.
Mid-term Indicant Positions – Ten U.S.
Indices
There were no new
bull signals and no new bear signals.
The Mid-term
Indicant is signaling bull for all ten of the major indices. They are up
by an average of 10.7%, since their bull signals an average of 17.5-weeks
ago, annualizing at 31.7%.
The Mid-term Indicant Dow Jones Industrial
Average performance is at
$32,179.797. That beats buy and hold performance of $1,926,131 on a
$10,000 investment in the Dow stocks in 1900. The
MTI S&P500
is at $137,978. That beats buy and hold’s $128,937 on a December 31, 1971
$10,000 investment. The
MTI-NASDAQ
is at $224,618. That beats buy and hold’s $97,661 on an October 18,
1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by
1,570.7%, 7.0%, and 130.0%, respectively, for these indices as of this
past week.
The
Indicant’s percentage advantage over buy and hold does not change during
bull signals. The advantage changes only during bear signals. That is
because the buy and hold model has to keep holding, while the Mid-term
Indicant model avoids bear markets. The only purpose of the Mid-term
Indicant model is to avoid bear markets. That is why it beat buy and hold
by approximately 2,000% covering the past 100+ years. It will not be
surprising to see the Mid-term Indicant outperform buy and hold by over
3,000% before the end of this decade. The stock market did not succumb to
the bear during the post-election year, 2009, which is the historical
standard.
Click here for a tour of the Mid-term
Indicant for major market indices.
Mid-term
Indicant Positions - NASDAQ100 Stocks
Click here to see NASDAQ100 report card
history.
Click here
for
Mid-term Indicant Table of NASDAQ 100
Stocks.
Mid-term
Indicant Positions - Dow Jones 30 Industrial Stocks
Click here to see Dow 30 report card
history.
Click here
for
Mid-term Indicant - Table of Dow Jones
Industrial Average Stocks.
Mid-term
Indicant Positions - Dow Jones 15 Utility Stocks
Click here to see Dow Utilities Report Card
history.
Click here
for
Mid-term Indicant - Dow Jones Utility
Stocks Table.
Mid-term
Indicant Positions - Indicant Selected Stocks
Click here to see Indicant Select Stock
Report Card history.
Click here
for
Mid-term Indicant Table of Indicant
Selected Stocks.
Mid-term
Indicant Positions - Mutual Funds
Click here to see Mutual Fund Report Card
history.
Click here for the Mid-term Table of Mutual
Funds.
The Mid-term
Indicant signaled sell for
MF#22-ProFunds Ultra Short
on April 3, 2009. It is down 82.2% since then. Although this is
classically a post-election-year hold, the Mid-term Indicant was unable to
signal buy in 2009, as the stock market bear remained in hibernation for
the most part. The Short-term Bull displayed attributes of a thoroughbred
in 2009 and thus no opportunities were available to shorting the stock
market since the April 3, 2009 sell signal, which approximates the normal
time to buy this fund.
Click here for Mid-term Indicant Table of
Mutual Funds
Remember
never to keep more than 20% of your investment resources into a single
mutual fund. Sector investing in mutual funds is an extremely good way to
mix your investments.
Long Term Indicant Positions - Dow Jones
Industrial Average
The blue-chip
Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991.
Keep in mind the Long-term Indicant generated only five bull/bear cycles
since 1920.
The Dow is up
337.4% (annualized at 16.6%) since the Long-term Indicant signaled bull
1,056-weeks ago. Economic data is the primary influence on the Long-term
Indicant. Recessions, deflation, inflation, and unreasonable interest
rates have not been strong enough to signal bear since that bull signal,
including relative performance since that bull signal. Even with today’s
economy and stock market position, the 1991 investor is still up triple
digit amounts, which remains above average performance when considering
long-term planning.
Influencing
parameters in the LTI include prior bull cycles. The great bull market in
the 1990’s was powerful enough to offset the 2008-2009 recessionary bear
market in this long-term modeling.
The
Short-term Indicant Stock Market Report
The Indicant website maintains the last
twelve months of daily reports on an annual basis.
These weekly reports are maintained on the website for much longer
periods. Beginning in March 2006, the daily stock market report for the
last trading day of each week is included in this weekly report. This
allows web-based retention records of the daily report for much longer
than the last twelve months. This report is in the next section and a mere
repeat of the daily report you received on the last trading day of the
week, which is usually on Friday evening or Saturday afternoon.
Short-term
Indicant Stock Market Report – Summary
Despite mild
bearishness this Friday, comments below remain the same as this past
Thursday.
Although not
yet robust, both Indicant Volume Indicators are again shifting north,
offering potential for increasing stock market interest. This could be
inspirational to both bull and bear, but current configurations favor the
bull. Of course that can change, but it is what it is right now.
The remainder
of this section remains the same from last Monday.
The stock
market bull is gaining momentum along the short-term cycle, but without
significant volume support. Although not dynamically stimulating, a bull
is a bull and to be enjoyed.
Bearish
unanimity exists with pure contrarians indices and ETF’s are enduring
avoid signals. Bullish unanimity also exists as all non-contrarians are
appropriately enjoying bull or hold signals.
The stock
market bull remains without volume support. That is okay, but will
eventually be required for a dynamic bull.
Near-term,
Quick-term, Short-term Indicant Stock Market Details
Index
Report Card Summary
The Near-term
Indicant signaled no new bulls and no new bears.
Click this sentence to see table leading
to the charts.
The Near-term
Indicant is signaling bull for all eleven non-contrarian indices. They are
up by an average of 4.8% since their bull signals an average of 5.0-weeks
ago, annualizing at 49.9%. The lone near-term bear, contrarian VIX, is
down 39.5% since its bear signal 8.4-weeks ago.
The
Quick-term Indicant signaled no new bull and no new bears.
The eleven
Quick-term bulls are up by an average of 4.9% since their bull signals an
average of 5.3-weeks ago, annualizing at 48.5%. Contrarian VIX is the lone
Quick-term bear. It is down 39.5% since its bear signal on Nov 29, 2011.
Indicant Volume Indicators
No changes to
this paragraph for several weeks. Both IVI’s sloped downward on recent
bullishness, which suggests a lack of bullish inspiration. This is
troubling. Adding to that concern is the NASDAQ’s IVI falling into low
interest domains during the most recent near-term bull cycle. The NYSE did
the same in early November 2011. Some of that, however, was due to
seasonally depressed volume. Volume is past a standard minimum, suggesting
increased volume support for prevailing bias. You will notice a mild
movement to the north in recent days.
Jan 27-Fri-Low
volume on mild bearishness does not scare the stock market bull.
Jan
26-Thu-Increasing volume on mild bearish behavior suggests increased stock
market interest while not obviating directional intensity at this time.
Jan
25-Wed-Relative to recent history, volume was up on bullish behavior,
adding support for prevailing bullish bias.
Jan
24-Tue-Light volume during this stock market pause is not disrupting
bullish bias.
Jan
23-Mon-Volume was a bit depressed on mild volume in support of the stock
market bull. Remember, configurations support a pause and mild bearishness
lends good support for that thesis.
Short-term ETF Report Card, Status, and
Charts
The Near-term
Indicant generated no buy signals and no sell signals.
The Near-term
Indicant is signaling hold for 29-ETF’s. They are up by an average of 5.8%
since their buy signals an average of 4.7-weeks ago, annualizing at 64.1%.
The NTI is
avoiding three-ETF’s. They are down by an average of 17.0% since their
sell signals an average of 4.8-weeks ago.
The
Quick-term Indicant generated no buy signals and no sell signals.
The
Quick-term Indicant is signaling hold for 29-ETF’s. They are up by an
average of 6.5% since their buy signals an average of 6.2-weeks ago. This
annualizes at 54.5%.
The
Quick-term Indicant is avoiding three-ETFs. They are down by an average of
17.0% since their QTI sell signals an average of 4.8-weeks ago.
Contrarian
Funds
ETF#03-Natural Resources.
The Quick-term Indicant and Near-term
Indicant signaled buy on Jan 3, 2012. It crossed above NTI Blue with Force
Vector support for additional bullishness. It is up 0.6% since then,
annualizing at 9.1%. Force remains in bullish domain. It has been bullish
in five of the last eight trading days and bearish the past two days.
ETF#11-Gold and Precious Metals
received a buy signal from both the
Near-term and Quick-term models on Jan 5, 2012. Price climbed above NTI
Blue and Force climbed into bullish domains. It is up 7.1% since those buy
signals, annualizing at 116.1%. Force is oscillating in bullish domains,
which is bullish.
Click this sentence for additional
charting and current forecasting of the actual price of gold.
As the U.S. dollar strengthens, gold is in trouble along the short-term
cycle. However, it is again ignoring all made man objects, both physical
and abstract, in favor of a universal production, as gold was derived from
meteorites and a lot more difficult to produce than paper money. Of
course, it is more valuable and increasingly so.
ETF#14-TLT-Long Government
received sell signals from the Near-term
Indicant and Quick-term Indicant on Friday, January 20, 2012. Price fell
below NTI Green with weak Force. This contrarian EFT should fall in the
face of stock market bullishness. Do not be surprised at price contraction
to QTI Yellow. It is up 0.9% since those sell signals.
ETF#31-QID
received sell signals from both the Near-term and Quick-term Indicant on
Dec 23, 2011, as Force crossed below Pressure and into bearish domains. It
is down 14.3% since those sell signals. Force is increasing, which offers
some bullish hope for this ETF, but recent stock market bullish attributes
are strengthening and not friendly to expectations of contrarian
bullishness.
The
Quick-term and Near-term Indicant signaled sell on Nov 30, 2011 for
ETF#32-VXX.
It is down 37.6% since those sell signals.
Major ETF
Events
Jan 27-Fri-No
major events, but bull is gaining momentum despite bearish behavior today.
Jan
26-Thu-Increasing volume suggests increasing stock market interest.
Jan
25-Wed-Nothing major other than the bull defeating the bear after the
state of the union address, which had a capitalistic undertone. That was
contrary to the first three. Of course, it is a smoke screen, but the
verbiage was friendlier to capitalistic endeavors.
Jan
24-Tue-Still moving through a pausing phase.
Jan
23-Mon-None.
Current
Strategy-Short-term Indicant-Jan
26, 2011-As stated for several days, stock market Force Vectors continue
flattening with some accelerating in bullish domains, adding to bullish
potential. Contrarian VIX is poised for a bullish bounce that counters
bullish bias, but non-threatening to the bullish bias.
Reverse
Tangential Projections
Click this sentence to the table,
highlighting RTP’s (Reverse Tangential Projections).
The values and magnitudes are
expressed in the table on the website.
Keep in mind there is 100% confidence in
these bearish projections.
Click the
Short-term Indicant
to see the combined table of the Near-term Indicant, Quick-term, and
Short-term Indicant. The table has links to charts for each. Each chart
contains all three models and there are two separate buy and sell signals
for the Near-term and/or Quick-term Indicant.
The tour is
still being developed, but most of you are now familiar with the Near-term
bull/bear cycles as well as the tangential protections and reverse
tangential bearish detectors.
Click
Quick-term Indicant, Near-term, and
Short-term for all 31-ETF’s.
Other links:
Short-term Indicant for DJIA and NASDAQ
Short-term Indicant Tables for the Dow
Jones Industrial Average Index
Short-term Indicant Table for the NASDAQ
Composite Index
Indicant Volume Indicator
Near-term, Quick-term, and Short-term
Indicant for Major Indices
Divergence
versus Convergence
The stock
market enjoyed bullish convergence for four consecutive weeks through
weekending, Oct 28, 2011. That would normally influence continued bullish
behavior. That bullish phenomenon remains irrelevant. Unfortunately, the
stock market endured four consecutive weeks of combined bearish
convergent/divergent behavior during late Nov. That remains relevant, but
diminishing in importance, as the stock market enjoyed bullish convergence
last week.
Indicant
Conclusion
As stated the
past ten weeks, the NASDAQ100 again toppled its 2007 peak 16-weeks ago
along the Mid-term cycle. That was the fourth time it has done that this
year. Each time it retreated. The NAS100 crossed above 2007’s cyclical
peak again eight weeks ago. That was the fifth time it has done that this
year. It did not hold above that level. It was flat with its Oct 2007 peak
seven weeks ago, but above 2007’s peak six weeks ago. That is the seventh
time the NASDAQ crossed above its 2007 peak. This fluttering needs to be
abandoned before the stock market bull can regain dominance. The stock
market continues finding legitimate justification to be higher than it was
in late 2007.
Until all of
the major indices cross above their 2007 peaks, observations regarding
their inabilities to do so will continue to be relevant. So, this is
important to monitor, even though the Mid-term Indicant is signaling bull
for all of the major indices.
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
01/29/2012