Some Market Trends, Indicators And Signals FastTrack User Group Meeting Mar 31, 2014 Close Gordon Harms

Secular Bull and Bear Markets

NYSE Margin Debt Who knows, will this pattern repeat again?

Idealized Economic Cycle Economic recovery has started from recession very slowly due to increasing high government debt and uncertainty in government financial policies. Stocks(S&P500) are near new high from 3/9/09 recession low. Commodities are up from recession low but are down from 4/21/11 all time high. Interest rates on Government Bonds are above the 12/17/08 recession low. But remain in very long term down trend.

Idealized Economic Cycle: Estimated Status Economy is in 3, 4. Stocks in 4 from 3/9/09. Commodities in 3 up from recession low. Interest rates in 4 above 12/17/08 recession low.

Cycle of Market Emotions From Hays Advisory

Cycle of Investor Psychology Bob Farrell’s Chart from 2/20/13

Investing Environment Favorable Interest Rate yield curve is positive. World Wide Business recovering slowly. Economic Recovery in U. S. is slow. Commodity Prices trending down from 4/21/11 high. Yearly Seasonality Nov. through Apr. Unfavorable Financial: Government legislative policies uncertain. Monetary Liquidity, Rate of Change of M2 Money Supply.

Money’s Variable Value M2 Money Supply Inflation and Deflation Interest Rates Bonds

M2 Money Supply Rate of Change above mid-channel black line is favorable.

Inflation and Deflation Rates of Change 3 Mo. Sma of Yr/Yr change and the current Yr/Yr change. CPI, Feb, 1.39%, down from 1.42% PPI, Feb, 0.51%, up from 0.10% CPI Yr/Yr: Feb, 1.13% down from 1.58% PPI Yr/Yr: Feb, 0.83% up from 0.54% Average long term CPI Rate of Change is 2.5% Fed Reserve Inflation Rate of Change Goal is 2.0%.

Federal Reserve Discount Rate Near all time low for over five years.

U. S. Gov. 1 Year Bonds Interest Rates Controlled by Federal Reserve Bank not market forces.

Interest Rates U. S. Gov. Bonds From 1998 Interest Rates above 12/17/08 recession lows. Relatively high interest rates at S & P 500 index highs.

U. S. Gov. Bonds Interest Rate Spread Up trend from 7/27/12.

U. S. Government Bonds FastTrack Families Yearly Trend: Favorable from 9/1/1988. Trending up from 1988 with lowest interest rates for more than the last 23 years. Recent Trends: Up over the last six month.

U.S. Government Bonds Family Average One Year Ann is -1.46%, up from -2.40% last month.

Bond Families Averages Returns YR/YR This month close 3/28/14. Prior month close 2/28/14.

High Yield Bonds Family Average One Year Ann is 6.12%, down from 6.42% last month.

Corporate Bonds Family Average One Year Ann is 1.80%, up from 0.65% last month.

Mortgage Bonds Family Average One Year Ann is -0.42%, up from -0.66% last month.

Market Sectors Sector Averages Rankings: Year over Year Family Averages Trends Gold Trends

Sector Family Averages Performance: Returns YR/YR This month close 3/28/14.Prior month close 2/28/14.

Commodity Research Bureau Index. Up from lower low 7/1/13.

Health Family Average One Year Ann is 32.15%, down from 48.73% last month.

Consumer Family Average One Year Ann is 19.17%, down from 27.07% last month.

Realty Family Average One Year Ann is 1.65%, down from 4.61% last month.

Precious Family Average One Year Ann is %, down from % last month.

Gold versus Dollar Gold down and Dollar up from 9/6/11.

Gold Metal Price down from 9/6/11.

Gold XAU-I RSI indicator confirms XAU-I price drop.

Market Indexes - Yearly Trends All near multi year highs. Dow Jones Industrials Standard and Poor’s 500 NASDAQ

DJIA Industrials: Transports confirm rise. Recession Dec 2007 to June Next Presidential cycle low due 2014.

S&P500 Index Price near all time high.

NASDAQ 2 and 4 year cycle lows. Next 4 year low expected mid 2014.

Market Indexes – Monthly Trends S&P500, NASDAQ and Russell2000 MACD trends turned flat. RSI trends are in negative divergence over last two months. OUTLOOK: This might be the beginning of a topping pattern,

S&P500 MONTHLY Indicators show short term divergence.

NASDAQ MONTHLY Indicators show short term divergence.

NASDAQ Nine Month Cycle Lows. Nine month low appeared within expected time interval.

RUSSELL 2000 MONTHLY Indicators confirm high price 12/31/13.

Changes in Weekly Trends February – Mar 3 Close 2000 Indexes. S&P500, NASDAQ and Russell Indicators are in negative divergence at recent price rise. OUTLOOK: Historical price patterns indicate next big weekly move is likely to be down trend, but when? March – Mar 31 Close S&P500, NASDAQ and Russell 2000 Indexes Prices moved down after indicators divergences. OUTLOOK: With indicator divergences lasting over three months, this could the beginning of a topping pattern.

S&P500 Weekly RSI and MACD divergent from recent price rise.

NASDAQ Weekly I ndicators confirm recent price drop.

RUT-I WEEKLY I ndicators confirm recent price drop.

Changes in Daily Trends February – Mar 3 Close S&P500, Nasdaq and Russell Indexes Indicators confirm recent price rise. OUTLOOk: Price rise likely to continue. March – Mar 31 Close S&P500, Nasdaq and Russell Indexes Indicators confirm recent price rise and fall. OUTLOOk: Prices bounced up after the 3/27/14 low.

S&P500 INDEX Indicators confirm recent price drop.

S&P500 Momentum and Beasley score confirm recent price drop.

NASDAQ Price Motion Oscillators confirm recent price rise and fall.

NASDAQ CYCLES Six cycles and price move together.

Russell 2000 Price Motion Oscillators confirm recent price rise and drop.

RUSSELL 2000 CYCLES S ix cycles confirm price drop.

Relative Strength RUT-I vs NASDAQ

Market Breadth- Daily Trends Fidelity Select Funds S&P500 Index NYSE Index Nasdaq Index

Fidelity Select Family Funds Indicators and price move together.

S&P500 VXO-X Volatility is lower at recent price high.

NYSE NHNL New High ratio moving average confirms price motion.

NYSE Breadth AD and Vol Summation Indexes down from 3/10/14 high.

NASDAQ NHNL New High ratio moving average confirms index.

NASDAQ Breadth A D and Vol Summation indexes confirm index changes.

NASDAQ VXN-X Volatility index high confirms lower price.

Market Situation Summary Index Trends Yearly: Trends are near all time highs. Monthly: Price and indicators near all time highs. Weekly: Down trend may have just started. Daily: Prices are up after 3/27/14 low. Indicators Indicators confirm index price rise.

Something To Think About The rule: Any time you have a chance of getting something right, there's a 90% probability you'll get it wrong. Brain: An apparatus with which we think we think. -- Ambrose Bierce